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

                                    FORM 10-Q

/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
       ACT OF 1934
                   FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                                        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
       (Address and zip code of Registrant's principal executive offices)

                                 (949) 367-8616
               (Registrants telephone number, including area code)



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.
                                                     --

As of May 1, 2000, there were 7,658,321 shares of Common Stock of the Registrant
outstanding  and  8,284,584  Redeemable  Warrants of the Registrant outstanding.



<PAGE>



                 CHICAGO PIZZA & BREWERY, INC. AND SUBSIDIARIES



                                                                          PAGE
                                                                          ----

PART I.    FINANCIAL INFORMATION


Item   1.    Consolidated Financial Statements
1

     Consolidated Balance Sheets -
          March 31, 2000 (Unaudited) and December 31, 1999                   1

     Unaudited Consolidated Statements of  Operations -
          Three Months Ended March 31, 2000 and
          March 31, 1999                                                     2

     Unaudited Consolidated Statements of Cash Flows -
          Three Months Ended March 31, 2000 and
          March 31, 1999                                                     3

     Notes to Consolidated Financial Statements                              4


Item  2.     Management's Discussion and Analysis of Financial
                Condition and Results of Operations                          5


Item 3.  Quantitative and Qualitative Disclosures about Market Risk          8
8


PART II.     OTHER INFORMATION


Item 1.     Legal Proceedings     `                                          8


Item 2.     Changes in Securities                                            9


Item 3.     Defaults Upon Senior Securities                                  9


Item 4.     Submission of Matters to a Vote of
               Security Holders                                              9


Item 5.     Other Information                                                9


Item 6.     Exhibits and Reports on Form 8-K                                   9



     SIGNATURES




<PAGE>
3


                          PART I. FINANCIAL INFORMATION


ITEM 1. CONSOLIDATED FINANCIAL INFORMATION

<TABLE>
<CAPTION>

                               CHICAGO PIZZA & BREWERY, INC.
                                CONSOLIDATED BALANCE SHEETS


                                                  MARCH 31,        
                                                    2000           DECEMBER 31,
                                                (UNAUDITED)           1999
                                                ------------       ------------        
      
                                  ASSETS:
   <S>                                         <C>                 <C>
   Current assets:                                                                                       -             - 
   Cash and cash equivalents                   $    444,497         $  188,811 
   Accounts receivable                              142,079            141,968 
   Inventory                                        471,271            455,880 
   Prepaids and other current assets                342,230            271,854 
                                               --------------      -------------

   Total current assets                           1,400,077          1,058,513 

   Property and equipment, net                   14,956,121         12,529,913 

   Other assets                                     371,546            353,595 
   Intangible assets, net                         5,160,703          5,202,085 
                                               --------------      --------------

   Total assets                                $ 21,888,447        $ 19,144,106 
                                               ==============      ==============

                   LIABILITIES AND SHAREHOLDERS' EQUITY:


   Accounts payable                            $  2,196,513         $  1,114,757 
   Accrued expenses                               1,895,724            1,710,984 
   Current portion of notes payable
       to related parties                           357,321              350,341
   Current portion of long-term debt                280,152              284,919 
   Current portion of obligations
       under capital lease                          125,270              146,942
                                               --------------       --------------

   Total current liabilities                      4,854,980            3,607,943 

   Notes payable to related parties               1,276,908            1,368,807 
   Long-term debt                                 2,006,864              687,331 
   Obligations under capital lease                    8,342               22,574 
   Other liabilities                                212,702              109,131 
                                               --------------       --------------

   Total liabilities                              8,359,796            5,795,786 
                                               --------------       --------------

   Commitments and contingencies

   Minority interest in partnership                 256,582              249,159 

   Shareholders' equity:
   Preferred stock, 5,000,000 shares
      authorized, none issued or
      outstanding
   Common stock, no par value, 60,000,000
      shares authorized and 7,658,321 shares
      issued and outstanding as of
      March 31, 2000 and December 31, 1999         16,076,132         16,076,132
   Capital surplus                                    975,280            975,280 
   Accumulated deficit                             (3,779,343)        (3,952,251)
                                                 --------------     --------------

   Total shareholders' equity                      13,272,069         13,099,161 
                                                 --------------     --------------

   Total liabilities and shareholders' equity    $ 21,888,447       $ 19,144,106 
                                                 ==============     ==============

   The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                        1    


<PAGE>

<TABLE>
<CAPTION>

                                           CHICAGO PIZZA & BREWERY, INC.
                                  UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                  FOR THE THREE MONTHS ENDED MARCH 31,
                                                  ------------------------------------

                                                        2000                  1999
                                                    ------------          ------------
<S>                                                 <C>                   <C>
Revenues . . . . . . . . . . . . . . . . . . . . .  $10,178,645           $ 8,092,403 
Cost of sales. . . . . . . . . . . . . . . . . . .    2,801,755             2,224,396 
        Gross profit . . . . . . . . . . . . . . .    7,376,890             5,868,007 

Costs and expenses:
Labor and benefits . . . . . . . . . . . . . . . .    3,687,975             2,977,630 
Occupancy. . . . . . . . . . . . . . . . . . . . .      833,937               709,223 
Operating expenses . . . . . . . . . . . . . . . .    1,107,196               907,763 
Preopening costs . . . . . . . . . . . . . . . . .      146,109               195,202 
General and administrative . . . . . . . . . . . .      913,049               663,694 
Depreciation and amortization. . . . . . . . . . .      425,881               354,205 
                                                    ------------          ------------
Total cost and expenses. . . . . . . . . . . . . .    7,114,147             5,807,717 
                                                    ------------          ------------
        Income from operations . . . . . . . . . .      262,743                60,290 

Other income (expense):
Interest expense . . . . . . . . . . . . . . . . .      (78,179)              (67,258)
Interest income. . . . . . . . . . . . . . . . . .        3,253                 9,927 
Other income (expense), net. . . . . . . . . . . .       (1,162)                  768 
                                                    ------------          ------------
        Total other income (expense) . . . . . . .      (76,088)              (56,563)
                                                    ------------          ------------
        Income before minority interest,
                income taxes and change in
                accounting . . . . . . . . . . . .      186,655                 3,727

Minority interest in partnership . . . . . . . . .       (7,423)               (9,657)
                                                    ------------          ------------
        Income (loss) before income taxes and
                change in accounting. . . . . . .       179,232                (5,930)
Income tax expense . . . . . . . . . . . . . . .         (6,323)               (1,615)
                                                    ------------          ------------
        Income (loss) before change in
                accounting. . . . . . . . . . . .       172,909                (7,545)
Cumulative effect of change in accounting. . . . .                           (106,175)
                                                    ------------          ------------
        Net income (loss). . . . . . . . . . . . .  $   172,909           ($  113,720)
                                                    ============          ============
Net income (loss) per share:
        Basic and dilutive:
Income (loss) before cumulative effect of
    change in accounting . . . . . . . . . . . . .       $ 0.02               ($ 0.00)
Cumulative effect of change in accounting. . . . .                            ($ 0.02)
                                                    ------------          ------------
        Net income (loss). . . . . . . . . . . . .       $ 0.02               ($ 0.02)
                                                    ============          ============ 

Weighted average number of shares outstanding:
        Basic. . . . . . . . . . . . . . . . . . .    7,658,321             6,824,988 
                                                    ============          ============

        Dilutive . . . . . . . . . . . . . . . . .    7,665,388             6,824,988 
                                                    ============          ============


The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                          2


<PAGE>

<TABLE>
<CAPTION>

                                            CHICAGO PIZZA & BREWERY, INC.
                                   UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                             FOR THE THREE MONTHS ENDED MARCH 31,
                                                             ------------------------------------

                                                                      2000             1999
                                                                 ------------     ------------
<S>                                                              <C>              <C>

Cash flows provided by (used in) operating activities:
Net income (loss). . . . . . . . . . . . . . . . . . . . . . .   $   172,909      ($  113,720)
Adjustments to reconcile net income (loss) to net cash
      provided by operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . .       425,881          354,205 
Change in accounting principle . . . . . . . . . . . . . . . .                        106,175 
Minority interest in partnership . . . . . . . . . . . . . . .         7,423            9,657 
Loss on sale of assets . . . . . . . . . . . . . . . . . . . .         1,000 
Changes in assets and liabilities:
    Accounts receivable. . . . . . . . . . . . . . . . . . . .          (111)          51,265 
    Inventory. . . . . . . . . . . . . . . . . . . . . . . . .       (15,391)         (22,934)
    Prepaids and other current assets. . . . . . . . . . . . .       (70,376)        (125,825)
    Other assets . . . . . . . . . . . . . . . . . . . . . . .       (19,340)          (3,558)
    Accounts payable . . . . . . . . . . . . . . . . . . . . .     1,081,756          242,465 
    Accrued expenses . . . . . . . . . . . . . . . . . . . . .       184,740          139,387 
    Other liabilities. . . . . . . . . . . . . . . . . . . . .       103,571           (3,242)
                                                                 ------------     ------------

       Net cash provided by operating activities . . . . . . .     1,872,062          633,875 
                                                                 ------------     ------------

Cash flows used in investing activities:
Purchases of equipment . . . . . . . . . . . . . . . . . . . .    (2,810,319)      (1,220,770)
                                                                 ------------     ------------

Cash flows provided by (used in) financing activities:
Proceeds from sale of common stock . . . . . . . . . . . . . .                      1,000,000 
Loan proceeds. . . . . . . . . . . . . . . . . . . . . . . . .     1,390,500          699,604 
Payments on related party debt . . . . . . . . . . . . . . . .       (84,919)         (88,439)
Payments on debt . . . . . . . . . . . . . . . . . . . . . . .       (75,734)         (69,786)
Capital lease payments . . . . . . . . . . . . . . . . . . . .       (35,904)         (30,067)
                                                                 ------------     ------------

       Net cash provided by financing activities . . . . . . .     1,193,943        1,511,312 
                                                                 ------------     ------------

       Net increase in cash and cash equivalents . . . . . . .       255,686          924,417 

Cash and cash equivalents, beginning of period . . . . . . . .       188,811        1,490,705 
                                                                 ------------     ------------

Cash and cash equivalents, end of period . . . . . . . . . . .   $   444,497      $ 2,415,122 
                                                                 ============     ============




The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>



                                         3


<PAGE>

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


BASIS OF PRESENTATION

     The  accompanying  unaudited  consolidated  financial statements of Chicago
Pizza  & Brewery, Inc. and its subsidiaries (the "Company") for the three months
ended  March  31,  2000 and 1999 have been prepared in accordance with generally
accepted  accounting principles, and with the instructions to Form 10-Q and Rule
10-01  of  Regulation  S-X.  These financial statements have not been audited by
independent  accountants,  but  include  all  adjustments  (consisting of normal
recurring  adjustments) which are, in Management's opinion, necessary for a fair
presentation  of  the  financial condition, results of operations and cash flows
for  such  periods.  However,  these  results  are not necessarily indicative of
results  for  any  other  interim  period  or  for  the  full  year.

     Certain information and footnote disclosures normally included in financial
statements in accordance with generally accepted accounting principles have been
omitted  pursuant  to  requirements  of  the  Securities and Exchange Commission
(SEC).  A  description  of the Company's accounting policies and other financial
information  is  included  in  the  audited consolidated financial statements as
filed with the SEC on Form 10-K for the year ended December 31, 1999. Management
believes  that  the  disclosures  included in the accompanying interim financial
statements  and  footnotes  are adequate to make the information not misleading,
but should be read in conjunction with the consolidated financial statements and
notes  thereto  included in the Form 10-K. The accompanying consolidated balance
sheet  as  of  December  31,  1999  has  been derived from the audited financial
statements.


ORGANIZATION

Chicago  Pizza  &  Brewery,  Inc. (the "Company" or "BJ's") owns and operates 27
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  current focus is on the development of the larger footprint
BJ's  restaurants  in  high  profile locations with favorable demographics.  The
Company  opened  a  BJ's  Pizza  &  Grill in Valencia, California in March 2000.
During  the  first  quarter  2000, the Company acquired a restaurant location in
West Covina, California and anticipates opening a BJ's Pizza, Grill & Brewery in
early  summer  2000.  The  Company  also  signed during the first quarter 2000 a
sublease  to  develop  a  BJ's Pizza & Grill in Burbank, California and acquired
selected  assets,  including  the  liquor license, of the previous restaurant at
this  location.  The expected opening of this BJ's Pizza & Grill is early summer
2000.  The  Company entered into a new lease for an existing restaurant location
in  Huntington Beach, California and anticipates opening a BJ's Pizza & Grill in
mid-summer  2000.  The Company is currently in negotiations for additional sites
in  California,  Arizona  and  Washington.

RECENTLY ISSUED ACCOUNTING STANDARDS

     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 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.

                                       4


<PAGE>
     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.

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 and to not 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.

LONG-TERM  CONSTRUCTION  LOAN

          In  February  2000,  the Company entered into an agreement with a bank
for  a  collateralized term loan for a maximum amount of $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  at  the  Company's  preference, 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. A net-profit recapture is to be applied to the final year of the term loan
if  the  Company's  profits  for  the  year  ending  December  31,  2000  exceed
$2,000,000.  Net  profit  in  excess of this amount is to be applied to the debt
outstanding  at  that  time  under  this  loan agreement. At March 31, 2000, the
outstanding  principal  balance under this borrowing arrangement was $1,390,500.
The  weighted  average  interest  rate from the date of initial drawdown through
March  31,  2000  was  9.60  percent.  The  Company paid a one percent loan fee.

     In  conjunction  with  the  loan  agreement, the Company granted a security
interest to the bank in all of  the Company's inventory, accounts, equipment and
general  intangibles,  whether  now owned or hereinafter acquired. Also included
under  this  security  agreement are all proceeds, including insurance proceeds,
from  the  sale,  destruction,  loss  or other disposition of the collateralized
property.  The security interest extends to all records and data relating to the
secured  property  as  well  as  the  computer  software required to maintain or
process  any  such  records  and  data.



ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

     The  following  discussion  and analysis should be read in conjunction with
the  Company's  Unaudited  Consolidated  Financial  Statements and notes thereto
included  elsewhere  in  this  Form 10-Q.  Except for the historical information
contained  herein,  the  discussion  in  this Form 10-Q 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-Q should be read as being applicable to all
related  forward-looking statements wherever they appear in this Form 10-Q.  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 and in the Company's annual report as
reported  on  Form  10-K  dated December 31, 1999 including, without limitation:
(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.

                                       5     

<PAGE>

RESULTS OF OPERATIONS

Three-Month Period Ended March 31, 2000 Compared to Three-Month Period Ended
March 31, 1999.

Revenues.  Total revenues for the three months ended March 31, 2000 increased to
$10,179,000  from  $8,092,000  for the comparable period in 1999, an increase of
$2,087,000  or  25.8%.  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 an increase in revenues
of  $1,976,000  during  the  first  quarter  of  2000.

An  increase in the BJ's restaurants same store sales for the comparable periods
of  $523,000,  or  9.0%.  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
November  1999.

The  increase  in revenues resulting from the above factors was partially offset
by:

The closing 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 of these locations in mid-year of
1999 reduced first quarter of 2000 revenues by $354,000 when compared with 1999,
when  they  were  open  the  entire  three-month  period.

A  decrease  in  the  Pietro's  restaurants  same store sales for the comparable
periods  of  $50,000,  or  4.0%.

     Cost  of  Sales.  Cost of food, beverages and paper (cost of sales) for the
restaurants  increased  to  $2,802,000 for the three months ended March 31, 2000
from  $2,224,000  for  the comparable period of 1999, an increase of $578,000 or
26.0%.  This  increase was in line with the 25.8% increase in revenues discussed
above.  As a percentage of sales, cost of sales was stable at 27.5% for both the
2000  and 1999 three-month periods. The Company's same-store cost of sales, as a
percentage  of  sales, improved to 27.3% during the three months ended March 31,
2000 from 28.3% for the comparable period of 1999. The improvement in same store
cost  of sales was partially offset by the higher food costs associated with the
opening  of the new restaurants in Woodland Hills and La Mesa, California.  As a
percentage  of their revenues, these new stores collectively incurred food costs
of 29.0% for the first quarter of 2000. A higher cost of sales percentage in the
early months of operations is in line with the Company's experience when opening
new  restaurants.

     Labor.  Labor  costs  for  the  restaurants  increased to $3,688,000 in the
three  months  ended March 31, 2000 from $2,978,000 for the comparable period in
1999,  an  increase  of  $710,000  or 23.8%.  As a percentage of revenues, labor
costs  decreased to 36.2% in the 2000 period from 36.8% in the 1999 period.  The
overall  increase  is  attributable  to  the  opening  of  the  new  California
restaurants;  labor  costs  at  these  three  restaurants  totaled $984,000. The
decrease  as a percentage of sales was primarily due to increased sales and more
efficient  staffing  of  the Arcadia, California restaurant, which was opened in
January  1999.  The  Company intentionally overstaffs new restaurants during the
startup  phase  of  operations  to allow for newly trained employees, an initial
higher  customer  count and to ensure a good dining experience by its customers.
Same-store  labor  costs  increased  $187,000,  or  7.5%,  to $2,680,000 for the
quarter  ended March 31, 2000 from $2,493,000 for the comparable period of 1999.
As  a percentage of revenues same-store labor costs for the three months of 1999
increased  to  35.7%  from  35.5%  for the comparable period of 1999. Management
feels  the increase in same-store labor costs as a percentage of revenues is due
primarily  to  a  4.0%  decrease in sales at the northwest Pietro's restaurants.

     Occupancy.  Occupancy  costs  increased to $834,000 during the three months
ended  March  31,  2000  from  $709,000 during the comparable period in 1999, an
increase  of  $125,000,  or 17.6%.  As a percentage of revenues, occupancy costs
decreased  to 8.2% in the 2000 period from 8.8% in the 1999 period.  The primary
reason  for  the percentage decrease in occupancy costs relative to revenues was
the  increase  in comparable store sales. Additionally, the two Northwest stores
closed  during  the second quarter of 1999 experienced a combined occupancy cost
percentage  of  14.2%  for  the  three-month  period  ended  March  31,  1999.

                                       6

<PAGE>

     Operating  Expenses.  Operating expenses increased to $1,107,000 during the
three  months ended March 31, 2000 from $908,000 during the comparable period in
1999,  an increase of $199,000 or 21.9%.  As a percentage of revenues, operating
expenses  decreased  to  10.9% in the 2000 period from 11.2% in the 1999 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 $913,000 during the three months ended March 31, 2000 from $664,000
during  the  comparable  period  in 1999, an increase of $249,000 or 37.5%. As a
percentage  of  revenues  general  and administrative expenses increased to 9.0%
from  8.2%  of  the  comparable  period  of  1999.  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.

     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 three month period
ending  March  31,  2000,  the  Company  incurred  costs  of  $146,000  due  to
preparations  for  the opening of its new restaurant in Valencia, California and
the  restaurants  being  developed in West Covina and Burbank, California. 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 increased to
$426,000 during the three month period ended March 31, 2000 from $354,000 during
the  comparable  period  in 1999, an increase of $72,000 or 20.3%. This increase
was  primarily  due  to  the  addition  of  restaurant  equipment, furniture and
improvements  and  brewery  equipment  totaling  $4,458,000  for the restaurants
opened  in  Arcadia,  Woodland  Hills  and  La  Mesa,  California.

     Interest  Expense. Interest expense increased to $78,000 during the quarter
ended  March  31,  2000  from  $67,000  during the comparable period in 1999, an
increase of $11,000 or 16.4%.  This increase was primarily due to the additional
debt  incurred  by  the  Company to finance equipment for the new restaurants in
Arcadia,  Woodland  Hills  and  Valencia, California, as well as the restaurants
being  constructed  in  West  Covina,  Burbank and Huntington Beach, California.
Interest  expense related to these projects was $31,000 during the first quarter
of  2000;  this amount was partially offset by reduced interest expense on older
debt  due  to  normal  principal  amortization.


LIQUIDITY  AND  CAPITAL  RESOURCES

     The Company's operating activities, as detailed in the Consolidated
Statement of Cash Flows, provided $1,872,000 net cash during the three months
ended March 31, 2000, a $1,238,000, or 195.3%, increase over the $634,000
generated in the comparable period of the prior year. Since the completion of
the Company's initial public offering in October of 1996, the Company has
invested in restaurant development. Capital expenditures for the acquisition of
restaurant and brewery equipment and leasehold improvements to develop new
restaurants totaled $2,810,000 and $1,221,000 for the three months ended March
31, 2000 and 1999, respectively, an increase of  $1,589,000, or 130.1%. These
expenditures were required to develop the new restaurant in Valencia,
California, as well the development of the three restaurants currently under
construction and scheduled for various opening dates through mid-summer 2000.
Debt reduction, including the principal portion of capitalized lease payments,
for the quarter ended March 31, 2000 and 1999 totaled $197,000 and $188,000,
respectively.

                                       7


<PAGE>

     The  Company intends to continue the development of additional restaurants.
Management  believes  that  the  funds  available  under  the  existing  credit
facilities  described  previously  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.


I
TEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK.

     The  Company  is  exposed  to market risk from changes in commodity prices,
since  many  of  the  food  products  purchased  by  the Company are affected by
commodity  pricing,  and,  therefore,  are  vulnerable  to  unpredictable  price
fluctuations. Over the recent past, the Company has experienced price volatility
in  such  products as cheese and produce. The Company buys a significant portion
of  its  product  from  a  distributor,  and has only minimal forward purchasing
agreements  with  other  suppliers.  Material  changes in commodity prices could
negatively  affect  the  Company's  margins  in  the  short-term.

     Longer-term  changes  in  commodity  pricing  would  affect  most  of  the
restaurant  industry  as well the Company. The Company most likely would be able
to  mitigate  increased  commodity  prices  by  increasing  menu prices, thereby
passing them through to consumers, and by varying its menu product mix. However,
competitive  circumstances  could limit menu pricing and/or mix strategies, and,
in those circumstances, commodity price fluctuations would negatively impact the
Company's margins. Management believes, however, that were such circumstances to
occur,  they  would  not  materially impact the Company's results of operations.


                           PART II.  OTHER INFORMATION


ITEM 1.  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.

     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.

                                       8


<PAGE>

     A settlement agreement has been offered by the landlord, which contemplates
a  one-time  payment  by  the Company to the landlord of $40,000 and other minor
considerations. If a settlement agreement is not completed, the case may proceed
to trial. The Company has not made an accrual for any possible settlement amount
and  does  not  believe  the  lawsuit will have a material adverse effect on its
consolidated  financial  position  or  consolidated  results  of  operations.


ITEM  2.  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

     None.


ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES

     None.


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

     None.



ITEM  5.  OTHER  INFORMATION

     None.


ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)     Exhibits

     3.1     Amended  and  Restated  Articles  of  Incorporation  of  the
      Company, as amended  incorporated  by  reference  to the Company's
      Registration Statement on Form  SB-2,  effective  October  8, 1996 (SEC
      File No. 333-5182-LA), referred to as  the  "Registration  Statement".

     3.2     Bylaws  of the Company, as amended, incorporated by reference to
      Exhibit of  Form  10-Q  dated  March  31,  2000.

     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  4.4.  of  the  Registration  Statement).


<PAGE>

     10.1     Assignment  and  Assumption  Agreement of Real Estate Lease, dated
       March  30,  2000  between Chicago Pizza & Brewery, Inc., C & P Properties
       #1 and Performance  Restaurant  Group,  Inc.  for  a  BJ's  Pizza & Grill
       restaurant in Burbank,  California.

     10.2     Loan Agreement, Security Agreement and Promissory Note between
     Chicago Pizza & Brewery, Inc. and Washington Mutual Bank dba WM Business
     Bank for a secured $4,000,000 credit facility for restaurant development.

                                       9


<PAGE>

     27.1     Financial Data Schedule

(b)     Reports on Form 8-K

               The Company filed no reports on Form 8-K during the quarter ended
        March  31,  2000.























                                       10


<PAGE>


SIGNATURES

In  accordance with the requirements 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.
                                       (Registrant)


May 11, 2000                       By:  /s/ PAUL A. MOTENKO
                                       --------------------
                                        Paul A. Motenko
                                        Co-Chief Executive Officer, Vice
                                        President, Secretary and Co-Chairman
                                        of the Board of Directors



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



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






<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Chicago
Pizza & Brewery, Inc.'s Consolidated Financial Statements for the three-month
periods ended March 31, 2000 and 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>                     <C>
<PERIOD-TYPE>                   3-MOS                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-2000             DEC-31-1999
<PERIOD-START>                             JAN-01-2000             JAN-01-1999
<PERIOD-END>                               MAR-31-2000             MAR-31-1999
<CASH>                                             444                     189
<SECURITIES>                                         0                       0
<RECEIVABLES>                                      142                     142
<ALLOWANCES>                                         0                       0
<INVENTORY>                                        471                     456
<CURRENT-ASSETS>                                 1,400                   1,059
<PP&E>                                          19,545                  13,810
<DEPRECIATION>                                   4,589                   3,303
<TOTAL-ASSETS>                                  21,888                  19,257
<CURRENT-LIABILITIES>                            4,855                   3,619
<BONDS>                                          4,055                   3,439
<PREFERRED-MANDATORY>                                0                       0
<PREFERRED>                                          0                       0
<COMMON>                                        16,076                  16,076
<OTHER-SE>                                     (2,804)                 (3,420)
<TOTAL-LIABILITY-AND-EQUITY>                    21,888                  19,257
<SALES>                                         10,179                   8,092
<TOTAL-REVENUES>                                10,179                   8,092
<CGS>                                            2,802                   2,224
<TOTAL-COSTS>                                    7,114                   5,808
<OTHER-EXPENSES>                                   (1)                       0
<LOSS-PROVISION>                                     0                       0
<INTEREST-EXPENSE>                                  78                      67
<INCOME-PRETAX>                                    179                     (6)
<INCOME-TAX>                                         6                       2
<INCOME-CONTINUING>                                173                     (8)
<DISCONTINUED>                                       0                       0
<EXTRAORDINARY>                                      0                       0
<CHANGES>                                            0                   (106)
<NET-INCOME>                                       173                   (114)
<EPS-BASIC>                                       0.02                  (0.02)
<EPS-DILUTED>                                     0.02                  (0.02)
        

</TABLE>





     LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT AND THIRD AMENDMENT OF LEASE

This Lease Assignment and Assumption Agreement and Third Amendment of Lease
dated March 30, 2000 is hereby made a part of that certain LEASE and FIRST
ADDENDUM TO LEASE dated September 16, 1983, the SECOND ADDENDUM TO LEASE
AGREEMENT dated October 20,1983, the SECOND ADDENDUM TO LEASE AGREEMENT dated
February 20, 1984, AMENDMENT TO LEASE dated July 16, 1992, ASSIGNMENT CONSENT
dated December 7, 1993, SECOND AMENDMENT TO LEASE dated September 20, 1995 and
ESTOPPEL CERTIFICATE dated September 20, 1995, (collectively hereinafter
referred to as "the Lease") for the real property located at 107 South First
Street, Burbank California (hereinafter the "Premises"), by and between C & P
Properties #1, a California limited partnership (hereinafter, "Landlord"),
Performance Restaurant Group, Inc. a Ohio corporation (hereinafter, "Assignor"),
and Cl&ago Pizza & Brewery, Inc., a California corporation (hereinafter,
"Tenant").

It  is  agreed  that should there be any conflict between the provisions of This
Lease  Assignment and Assumption Agreement and Third Amendment of Lease and that
certain  LEASE  and FIRST ADDENDUM TO LEASE dated September 16, 1983, the SECOND
ADDENDUM TO LEASE AGREEMENT dated October 20, 1983, the SECOND ADDENDUM TO LEASE
AGREEMENT  dated  February  20,  1984,  AMENDMENT  TO LEASE dated July 16, 1992,
ASSIGNMENT  CONSENT  dated  December  7,  1993,  SECOND AMENDMENT TO LEASE dated
September  20,  1995  and  ESTOPPEL  CERTIFICATE  dated  September 20, 1995, the
provisions of this Lease Assignment and Assumption Agreement and Third Amendment
of  Lease  shall  prevail.

IT IS AGREED:

A)  Assignment,  Assumption  and ConsentTenant hereby agrees to assume of all of
    ------------------------------------
the  obligations under the Lease, and Landlord hereby consents to the assignment
of the Lease to Tenant by Assignor. Upon full execution of this Lease Assignment
and  Assumption  Agreement and Third Amendment of Lease, Tenant shall assume any
and  all  rights  and  obligations  under  the  Lease.  Such Assignment shall be
effective  as  of  March30,2000  (hereinafter,  the  "Assignment  Date").
                   --------

IT  IS  FURTHER AGREED THAT THE FOLLOWING SECTIONS OF THE LEASE WILL BE MODIFIED
AS  PROVIDED  HEREIN:


<PAGE>
B)  Section 1. of the Lease dated September 16, 1983, is hereby stricken in it's
entirety,  and  replaced  with  the  following:

"  1.  Premises.The Premises consists of the following: approximately 21,000 sq.
       ---------
ft.  of  land  as more particularly described in Exhibit "B" attached hereto and
incorporated herein by this reference and depicted in red on the revised Exhibit
"A";  the  improvements  (hereinafter  defined)  thereon  as herein provided; an
exclusive  right of use the parking spaces around the Restaurant within the area
depicted  in  green on the revised Exhibit "X'; and a non-exclusive right to use
no less than 150 parking spaces within the adjacent office parking area depicted
in
  yellow  on the revised Exhibit "N' for use on weekends and on weekdays after
5:30  PM,  as  provided  for  in  section  5  herein."

Q.  Section  2 of the Lease dated September 16, 1983, is hereby stricken in it's
entirety,  and  replaced  with  the  following:

2. "Construction.
   --------------

     2.1 Plans. Assignor has previously constructed or cause to be constructed,
a
building, landscaping and related improvements (collectively the "Improvements")
for
the Premises according to plans and specifications previously prepared by
Assignor.
The Improvements consist of a restaurant, cocktail lounge, discotheque and patio
in a
building containing ' approximately 11,000 sq. ft. Tenant may make certain
improvements, modifications or alterations to the premises at its sole cost and
expense,
subject to Landlord's approval, according to plans and specifications to be
prepared by
Tenant at its expense (hereinafter, "Plans").

     2.2  Approval  ofPlans.  Landlord  shall  have 15 days after receipt of the
          ------------
Plans  from Tenant within which to review and approve them. If Landlord notifies
Tenant of Landlord's disapproval of the Plans, then Landlord shall advise tenant
of  the  reasons  for  the  disapproval  and  the  items  that must be modified,
whereupon Landlord and Tenant shall meet and confer so as to modify the plans to
be  acceptable  to  both  Landlord  and  tenant.  Upon  approval of the Plans by
Landlord  and  Tenant,  Tenant  shall submit the Plans to the City and all other
necessary  governmental  authorities  and shall proceed diligently to obtain all
requisite  governmental  approvals. If modifications are required to obtain such
governmental  approvals,  Tenant  shall prepare such modifications and the Plans
shall  be  resubmitted  for  governmental  approval.

     2.3  Construction.  Tenant  shall cause construction of any modification or
alteration  of  the  Improvements  to be commenced as soon as possible after the
obtaining  of governmental approval. Tenant shall undertake such construction in
a  manner  that  does  not adversely effect the operation OF THE ADJACENT OFFICE
WILDING, or impede or restrict access and traffic flow to and from the Premises.




2


<PAGE>
     2.4  Construction  Costs.Tenant  shall pay any and all cost associated with
          --------------------
the  improvement,  modification  ' or alteration of the Premises, and shall keep
the  Premises  free  of mechanics' and materialmens' liens. Landlord is not, nor
shall  Landlord  be  construed  to  be,  the  agent  of  Tenant  for any purpose
whatsoever.  At its expense, Tenant shall have the right at any time to post the
Prernises  with appropriate notices of liquor license application, other notices
as  Tenant  may  deem appropriate, and lawful signs in size, content and at such
locations as tenant may deem appropriate to advertise the pending opening of the
restaurant.  During  construction,  Landlord  shall  have  the  right to conduct
inspections  and  review  construction  progress."

D).  Late  Charges,Section 3 of the Assignment Consent dated December 3, 1993 is
     --------------
hereby  stricken  in  it's  entirety,  and  replaced  with  the  following:

"3.  Late  Charges.  Tenant  hereby  acknowledges that late payment by Lessee to
Lessor  of  Base  Rent,  or  other sums due hereunder will cause Lessor to incur
costs  not  contemplated  by  tl-~s  Lease,  the  exact  amount of which will be
extremely  difficult  to  ascertain. Such costs include, but are not limited to,
processing  and  accounting  charges,  and  late charges which may be imposed on
Lessor  by  the terms of any mortgage or trust deed covering the Office Building
Project. Accordingly, if any installment of Base Rent, or any other sum due from
Lessee shall not be received by Lessor or Lessor's designee within ten (10) days
after  written  notice  such  amount  is  past  due,  then,  without any further
requirement for notice to Lessee, Lessee shall pay to Lessor a late charge equal
to  6%  of  such  overdue amount. The parties hereby agree that such late charge
represents  a  fair  and  reasonable  estimate of the costs Lessor will incur by
reason of late payment by Lessee. Acceptance of such late charge by Lessor shall
in no event constitute a waiver of Lessee's default with respect to such overdue
amount,  nor prevent Lessor from exercising any of the other rights and remedies
granted  hereunder."

E) Parking,Section 5 (Termination Provisions) (including subsections 5.1 through
   --------
5.10)  of  the  Lease  dated  September  16,  1983,  is  hereby stricken in it's
entirety,  and  replaced  with  the  following:

"5. Parking.
    --------

5.1 Parking During Daytime OperationsDuring Daytime Operations (11:00 AM through
    ---------------------------------
3:00 PM, Monday through Friday) Tenant shall have the exclusive right to use the
parking  spaces  around  the Restaurant within the area depicted in green on the
revised ExIdbit "N'. During Daytime Operations, Tenant shall engage the services
of  a  qualified  valet  service  to park the cars of restaurant patrons in said
parking  spaces  on  a  "mandatory  valet"  basis.




3


<PAGE>
5.2  Parking  During  Evening  and  Weekend OperationsDuring Evening and Weekend
     -------------------------------------------------
Operations  (5:30  PM  through  Midnight Monday through Friday and on weekends),
Tenant  shall  have  the  exclusive  right  of use the parking spaces around the
Restaurant within the area depicted in green on the revised Exhibit "N', and the
non-exclusive  right  to use no less than 150 parking spaces within the adjacent
office  parking  area  depicted  in  yellow  on  the revised Exhibit "A". During
Evening  and Weekend Operations, Tenant shall engage the services of a qualified
valet service to park the cars of restaurant patrons in said parking spaces on a
"non-mandatory valet" basis, whereby restaurant patrons would have the option of
either  valet  parking,  or "self parking" their vehicles. However, in the event
that  Landlord  determines  in  it's  sole  discretion  that  "self  parking' by
restaurant  patrons is creating operational problems, increases insurance rates,
or  other  problems as Landlord may perceive, then Landlord shall have the right
to  require  Tenant  to  eliminate  patron "self parking", and require mandatory
valet  service  during  Evening and Weekend Operations as well as during Daytime
Operations.

5.3  Valet  Parking Service QualificationsTenant shall engage the services of an
     -------------------------------------
experienced  and  reputable  valet  parking  service who shall thereafter be the
subcontractor  of  Tenant. Prior to the commencement of operations, Tenant shall
secure  from  the valet parking service sub-contractor evidence of Comprehensive
General Liability Insurance with a Broad Form Liability Endorsement in an amount
of not less than $1,000,000 per occurrence of bodily injury and property damage,
Workers  Compensation  and  Employer Liability Coverage at statutory limits, and
other  insurance  coverage  as  may  be  reasonably  required by Landlord naming
Landlord  as  an  additional  insured,  and valet parking service sub-contractor
shall  keep such insurance coverage in full force and effect throughout the term
of  this  Lease,  Further.  Tenant  shall  ensure  that  valet  parking  service
sub-contractor  complies with any and all reasonable rules and regulation issued
by  Landlord."

F).  Use,Section  6 of the Lease dated September 16, 1983, is hereby stricken in
     ----
it's  entirety,  and  replaced  with  the  following:

"  6.  Use  Tenant may use the Premises for the operation of a restaurant, micro
brewery,  cocktail  lounge  and  other  uses  incidental  thereto.  After  the
Commencement  date,  Tenant  shall  keep the Premises open for business not less
than 350 days each calendar year, from 11:00 am to 11:00 PM, however tenant may,
at  Tenants option, extend its hours past 11: 00 PM but in no event shall Tenant
remain  open past 2: 00 AM. This provision shall not apply if the Premises shall
be  closed  and  the  business  temporarily  discontinued on account of strikes,
walkouts,  damage to building or equipment, the suspension or loss of the liquor
or  other  governmental  permits  or  licenses  or  any  other  cause beyond the
reasonable  control  of  Tenant, whether permit of the same or any other nature.
Tenant  may close for any reasonable period to remodel or renovate the premises.
Tenant  shall  not use or permit the use of the Premises in any manner that will
create  waste  or  violate  applicable  law."

4


<PAGE>
G).  Minimum  Annual  Rent,Section 7.1 of the Lease dated September 16, 1983, is
     ----------------------
hereby  stricken  in  it's  entirety,  and  replaced  with  the  following:

     7.1 Minimum Annual RentTenant shall pay to Landlord, at Landlord's address,
     -----------------------
a  minimum  annual  rent  of  $210,000.00,  payable  in  twelve  equal  monthly
installments  of  $17,500.00  each,  on the first day of each month of the lease
term.  Such Minimum Annual Rent shall be paid by Assignor through the Assignment
Date,  and  shall  be  paid  by  Tenant  thereafter."

H). Gross SalesDefined, Sub-section 7.2.2 of the Lease dated September 16, 1983,
    -----------
is  hereby  stricken  in  it's  entirety,  and  replaced  with  the  following:

     '72.2  Gross  Sales  DefinedThe term "Gross Sales" shall mean the aggregate
            ---------------------
amount of all sales, whether for cash, credit, or otherwise, of food, beverages,
goods,  articles,  any other merchandise and all charges for services performed,
made  and  rendered  in,  about  or  in  connection with the Premises by Tenant,
including  off-Premises  sales  and  moneys derived at or away from the Premises
made  in  connection  with  the  operation  thereof,  plus the net amount of all
receipts  by  Tenant  from all sales made or performed by means of mechanical or
other  vending devices except tobacco vending machines and pay telephones. Gross
sales  shall  be  reduced by uncollectable accounts previously included in Gross
sales,  but not to exceed one percent (1%) of sales, per year. Gross Sales shall
not  include  any federal, state, municipal or other sales, value added, retail,
excise  or  similar  taxes  paid  or  incurred  by Tenant whether such taxes are
collected  from  customers  or  absorbed  by  Tenant;  discounts  from  sales to
employees;  complimentary  meals;  tips  or  gratuities;  proceeds  of insurance
policies  received  by  Tenant;  condemnation  awards;  bulk  and  intercompany
transfers  of  food  or  inventory;  proceeds  from  the sale of used restaurant
equipment,  fixtures  or any other property that is not merchandise; or payments
for  gift  certificates  or  like  vouchers."

1)  Sales  Statements  and  Adjustments,Sub-section  7.2.3  of  the  Lease dated
    ------------------------------------
September  16,  1983, is hereby stricken in it's entirety, and replaced with the
   ----
following:

"7.2.3  Sales  Statements  and  AdjustmentsWithin  45 days after the end of each
        -----------------------------------
threemonth  period  of each Lease Year (a "Lease Quarter"), Tenant shall deliver
to  Landlord a statement signed by an officer or manager of Tenant setting forth
Tenant's  Gross  Sales  for  the  prior  Lease  Quarter  and Tenant shall pay to
Landlord the percentage rent due for that Lease Quarter as provided in Paragraph
7.2.  1.  In calculating the percentage rent that is due, tenant shall base such
calculations  on  Tenant's  accumulated  business  volume and accumulated rental
payments  from the beginning of each Lease year. If such calculations shall show
a percentage rental owing for the preceding Lease Quarter, then Tenant shall pay
such  amount  with  the  statement  of  Tenant's  Gross

5


<PAGE>
Sales.  If  such  accumulated rent calculation shall show a credit due tenant on
account  of percentage rent paid for preceding Lease Quarters of the Lease Year,
then  Landlord shall reimburse Tenant for such amounts due and if Landlord shall
fail  to  make such reimbursement forthwith, then without limitation upon any of
the  rights  that  Tenant  may  have,  Tenant shall have the right to deduct the
amounts  from the next rental payments of any kind due to Landlord as they shall
fall  due.  Within  60  days  after  the  close of each lease Year, Tenant shall
furnish  to  Landlord  a statement of Tenant's Gross Sales for such entire Lease
Year  and  a  computation  of  the rent previously remitted to Landlord for such
Lease  Year. If the rent theretofore paid by Tenant for such Lease Year shall be
less  than  the total amount of rent so computed to be due, Tenant shall pay the
difference  to Landlord at that time. If such cumulative calculations shall show
a  credit  due  tenant  on  account  of percentage rent paid for preceding Lease
Quarters  of  the  Lease  Year,  then  Landlord  shall reimburse Tenant for such
amounts  due,  and  if landlord shall fail to make such reimbursement forthwith,
then  without limitation to any other rights which Tenant may have, Tenant shall
have  the  right  to  deduct  the  amounts  from the next rental payments due to
Landlord  as they shall fall due. Notwithstanding the forgoing, during the first
Lease  year,  the last year of the Lease Term, or during any other partial Lease
Year,  including  any  year  after a period in which the Restaurant facility has
been  closed,  the  Percentage Rent due shall be calculated based upon a partial
year  basis,  whereby  the  Percentage  Rent due shall be equal to the amount by
which  six  percent  (6%)  of  Tenants  monthly  Gross Sales exceed the Tenant's
Minimum Monthly Rent due for the same period. Tenant shall keep at the Premises,
or  at  the  p~incipal  offices  of  Tenant  full and accurate books of account,
records,  cash  receipts, and other pertinent data showing its Gross Sales. Such
books of account, records, cash receipts, and other pertinent data shall be kept
for  a  period  of two years after the end of the Lease Year to which such items
are  applicable.  Landlord  shall  be  entitled during the term of this Lease to
inspect and examine other pertinent data so that Landlord can ascertain Tenant's
Gross  Sales.  Tenant  shall  cooperate  fully  with  Landlord  in  making  the
inspection.  Landlord  shall  also  be entitled; once during each Lease year and
once  within  60  days  after  expiration  or  termination  of this Lease, to an
independent  audit  of  Tenant's  books  of account, records, cash receipts, and
other  pertinent  data  to determine Tenant's Gross Sales, by a certified public
accountant  to  be  designated  by  Landlord.  The audit shall be limited to the
determination  of  Gross  sales,  shall  be  conducted at the place at which the
aforesaid  books  are usually kept, and shall be paid for by Landlord, except in
any  case  when  Tenant has understated sales by three percent or more, in which
case,  Tenant shall pay Landlord's reasonable costs of audit. If the audit shows
that  there  is  any  deficiency  in  the  payment  of  any percentage rent, the
deficiency,  plus interest thereon at the rate of ten percent per annum from the
due date to the date of payment, shall become immediately due and payable unless
the deficiency is 10 percent or more, in which event, unless it is the result of
an  unavoidable  error,  Tenant  shall  pay  Landlord  twice  the amount, of the
deficiency.  Landlord  shall  keep  any  information gained from such statement,
inspection  or audit confidential and shall not disclose such information to any
other  person.




6


<PAGE>
J).  Common  Areas,Sub-section  8.4  of  the  Lease dated September 16, 1983, is
     --------------
hereby  stricken  in  it's  entirety,  and  replaced  with  the  following:
    -

"8.4 Common AreasExcept as provided in Paragraphs 8.2 and 8.4, there shall be no
     ------------
charge,  fee, or special assessment imposed on or payable by Tenant in regard to
the  common areas of the Commercial Complex provided, however, that at its cost,
Tenant  shall  keep  the  Premises  and  grounds (as outlined red on the revised
Exhibit  "A") clean, well kept and well landscaped, and shall keep its exclusive
Parking Area outlined in green on Exhibit "A" in a clean and swept condition and
Landlord  shall remove debris and bottles from the nonexclusive Parking Area for
which Tenant shall pay to Landlord a fee of $250.00 per month. Such fee shall be
paid  with  Rent."

K).  Notice,Section 19 of the Lease dated September 16, 1983, is hereby stricken
     -------
in  it's  entirety,  and  replaced  with  the  following:

"19. Notice Any notice, demand, request, consent, approval or communication that
either  party desires or is required to give the other party or any other person
in  connection herewith shall be in writing and either served personally or sent
by  certified  mail, with return receipt requested or by a nationally recognized
overnight  delivery  service.  Any notice, demand, request, consent, approval or
communication  that  either  party  desires  or is required to give to the other
party  shall  be  addressed  to the other party at the address set forth herein.
Either  party  may change its address by notifying the other party of the change
address.

Tenant:                            Landlord:
Chicago Pizza & Brewery, Inc.      C & P Properties #1, a California
A California Corporation           limited liability company
26131 Marguerita Pkwy, Ste. A      101 South First Street #400
Mission Viejo, California 92692    Burbank, CA 91502
Attn: President                    Attn: Michael Cusumano

Notice shall be deemed communicated upon the firstto occur of (i) actual receipt
of the notice, or (ii) 24 hours after the time of mailing, if mailed as provided
in  this  paragraph."

L).  Surrender  ofPremises,  Sub-section  25.1  of the Lease dated September 16,
     -------------
1983,  is  hereby  stricken  in  it's entirety, and replaced with the following:

"25.1  Surrender  of  PremisesOn  expiration  or termination of the term, Tenant
       -----------------------
shall  surrender  to  Landlord the Premises and all of Tenant's improvements and
alterations in good condition (except for ordinary wear and tear occurring after
the last necessary maintenance made by Tenant and destruction to the Premises as
discussed  herein),  and, except for alterations or improvements that Tenant has
the  right  to  remove under any provisions of this Lease. Tenant may remove all
its  Trade  Fixtures  within  a  thirty  (30)

7


<PAGE>
day period prior to the above-stated time. Tenant shall perform all restorations
made  necessary  by  the  removal  of  any  alterations,  improvements, or Trade
Fixtures  within  the  time  periods  stated  in  this  paragraph."

M). Common AreaSub-section 26.1 of the Lease dated September 16, 1983, is hereby
    -----------
stricken  in  it's  entirety,  and  replaced  with  the  following:

"26.1  Commercial  Complex.The  Premises  is  located  within and is part of the
       --------------------
Commercial  Complex  as  described  in  Recital  A. The Commercial Complex shall
include  the Premises, the Parking Area, additional parking, an office building,
driveways,  sidewalks  and  other  common area as depicted on revised Exhibit A.
Tenant  shall  have  the  right to use the driveways, sidewalks and other common
area  (collectively, "Common Area") jointly with other tenants of the Commercial
Complex  during  the  lease  terms  without  any  additional  charge  or  fee."

N).  Exhibit  A  Exhibit A is hereby deleted in it's entirety, and replaced with
the  revised  Exhibit  'A'  and  attached  hereto.

0). Exhibit C Exhibit C is hereby deleted in its entirety.

P). Section 30, Transfer Costs.The following Section 30 is added to the Lease.
                ---------------

"30.  Transfer  CostsThe  assignment, assumption and transfer of this Lease from
      ---------------
Assignor  to  Tenant  and  the  related  modification  of  this  Lease  is being
undertaken  by Landlord as an accommodation to Assignor and Tenant, and Landlord
shall  assume  no  cost  associated  herewith. Further, any and all direct third
party  costs incurred by Landlord associated with the assignment, assumption and
transfer  of  this  Lease  to  Tenant,  or t1iis Lease Assignment and Assumption
Agreement  and  Third  Amendment  of  Lease,  (such as fee charged by Landlord's
Lender,  legal  fees, etc.) shall, be reimbursed to Landlord equally by Assignor
and Tenant. In addition to any such fees which shall be reimbursed from Assignor
and  Tenant  to Landlord, Assignor shall pay to Landlord a "Transfer Fee" in the
amount  of  $5,000.00 to reimburse Landlord for it's internal costs and expenses
associated  with  drafting  this  Lease  Assignment and Assumption Agreement and
Third Amendment of Lease, and in consideration of the modifications made to this
Lease.  Said  Transfer Fee shall be paid concurrently with the execution of this
Agreement."

P). Section 3 1. Headings. The following Section 31 is added to Lease.



8


<PAGE>
"3  1.  Headings.  The  headings  for  paragraphs,  article and sections of this
Agreement  are  inserted for convenience only and do not constitute part of this
Agreement  and  shall  not  be  used  in  it's  construction."

Q). Section 32. Mutual Contribution. The following Section 32 is added to Lease.

"32.  Mutual  Contribution.  This Agreement has been drafted on the basis of the
parties  Mutual  contributions of language and it is not to be construed against
any  party  as  being  the drafter (or causing the drafting) of this Agreement."

Except  as  modified  herein,  the  provisions of the Lease shall remain in full
force  and  effect  in  accordance  with  the  terms  provided  therein.

Landlord

C  &  P  Properties  #1,  a  California  limited  partnership
by  Charles  Cusumano  Corporation,  a  California  corporation
it's general partner

by Charles P.Cusumano

President

Assignor

Performance Restaurant Group, Inc. an Az corporation

by_

it's  President
     ----------

Tenant

Chicago Pizza & Brewery, INC., A CALIFORNIA CORPORATION

by  /s/Ernest T. Klinger
    --------------------

it's    President
        ---------


<PAGE>
2

3
     LEASE AGREEMENT
     ---------------
4

5

6

7

    CHARLES P. CUSUMANO and DIANNA J. CUSUMANO,
8   husband and wife,
9   collectively, Landlord
11

12
13
14

15

BOBBY MCGEEIS CONGLOMERATION OF LONG BEACH, INC.,

16 a California corporation, Tenant


<PAGE>
LEASE INDEX
-----------

2

Paragraph     Description                  Page

3

              Premises                        1

4

     2.       Construction                    1
                                
5

          2.1          Plans                  1

6

          2.2          Approval of Plans      2

7

          2.3          Construction           2

8

          2.4          Construction Costs     3

9

          2.5          Warranty               3

10

     3.          Term                         3

11

          3.1          Primary Term           3

12

          3.2          Lease Year             3

13

          3.3          Commencement Date      3

14

          3.4          Extension Term         4

15

     4.     Guaranty                          4

16

     5.     Termination conditions            4

17

     5.1     Zoning                           4

18

     5.2     Approvals                        4

19

     5.3     Parking                          4

20

     5.4     Licenses                         5

21

     5.5     Title                            5

22

     5.6     Tests                            5

23

     5.7     Utilities                        5

24

     5.8     construction                     5

25

     5.9     Access                           5

     26
               5.10     signs                 5
     27
     28     6.          Use                   5
     29     7.          Rent                  6

     7.1     Minimum Annual Rent   1          6

30

31

32

          -i-


<PAGE>
          7.2     PERCENTAGE RENT             6
          7.3     PREPAID Rent     a

2

     8.          Taxes; Assessments           8

3

          8.1     Personal Property Taxes     8

4

          8.2     Real Property Taxes         8

5

          8.3     Substitute Taxes            9

6

          8.4     Common Areas                9

7

     9.          utilities and services       9

8

     10.          Trade Fixtures              9

9

     11.          Alterations                 9

10

     12.          Maintenance and Repair     10

11     1 '
     13.          Exculpation; Indemnity; Insurance     10

12

          13.1     Exculpation of Landlord     10

13

          13.2     Indemnity                   10

14

13.3     Public Liability and Property

     15
                    Damage Insurance               10
     16
               13.4     Tenant's Fire Insurance    11
     17
               13.5     Fire Insurance for Improvements     11
     18
               i3.6     Payment of Premiums        11
     19
               13.7     Waiver of Subrogation      11
     20
               13.8     other Insurance Matters    12
     21
          14.          Destruction of Premises     12
     22
     23          14.1     Risk Covered by Insurance     12

     14.2     Risk Not Covered by Insurance     .   12

24

          14.3     Termination                      12
     25
     26     14.4     Proration                      13
          14.5     Restoration of Premises          13
     27

28     14.6     Procedure for Restoring

     Premises                                       14

29

30

31

32


<PAGE>
     15.          Condemnation                      15
          15.1     Definitions                      15

2

15.2     Parties' Rights and obligations

3

          to be Governed by Lease                   15

4

     15.3     Total Taking                          15

5     1
     15.4     Partial Taking                        16

6

15.5     Restoration of and Addition to

7

               Premises and other Areas              17

8

          15.6     Award - Distribution              17

9

     16.          Assignment                         17

10

          16.1     Voluntary                         17

11     n

          16.2     Involuntary     is

12

     17.          Default                            18

13

          17.1     Tenant's Default                  18

14

          17.2     Landlord's Remedies               19

15

          17.3     Appointment of Receiver           19

16

          17.4     Landlord's Default                19

18.     Subordination; Estoppel; Quiet

18

               Enjoyment                             19

19

          18.1     Subordination                     19

20

          18.2     Estoppel Certificates             20

21

          18.3     Quiet Enjoyment                   20

22

     19.          Notice                             20

23

     20.          waiver                             21

24

     21.          Quitclaim Deed                     21

25

     22.          Sale or Transfer of Premises       21

26

     23.          Attorneys' Fees                    21

27
28 24.     Waiver of Landlord's Lien - Tenant's
29     Property                                      21

30
31
32
     -iii-


<PAGE>
25.     Surrender of Premises; Holding

               Over                                  22
                          
2

          25.1     Surrender of Premises             22

3

          25.2     Holding over                      22

4

     26.          Common Area                        22

5     1

          26.1     Commercial Complex                22

6

          26.2     Maintenance                       23

7

     27.          Memorandum of Lease                23

8

     28.          Miscellaneous Provisions           23

9

          28.1     Time of Essence                   23

10

          28.2     Consent of Parties                23

11

          28.3     Corporate Authority               23

12

          28.4     Successors                        23

13

28.5     Rent Payable in United States

14

     Currency                                        24

15

28.6     Status of Parties on

     1'
                    Termination of Lease             24
     17
               28.7'     Exhibits                    24
     18
               28.8     Negation of Partnership      24
     19
     20          28.9     Brokerage                  24
          29.          Interpretation of Lease       24
     21
               29.1     State Law                    24
     22

23     29.2     integrated Agreement;

     modification                                    24

24

29.3     Provisions are Covenants and

     25
                    Conditions                       24
     26
               29.4     Definitions                  24
     27
     28          29.5     Captions                   25
     29          29.6     Singular and Plural                25
     30          29.7     Joint and Several Obligations-     25
               29.8     Serveability     25
     31
     32     30.          Addresses of Landlord and Tenant    26

-iv-


<PAGE>
I     LEASE AGREEMENT

2     THIS LEASE IS EXECUTED AS of the L     day of

     September,     1983, by and between CHARLES P. CUSUMANO and
3     DIANNA J.     CUSUMANO, husband and wife, dealing with their
     community property, collectively as the "Landlord," and BOBBY
4     McGEE'S CONGLOMERATION OF LONG BEACH, INC., a California
     corporation, as the "Tenant."
5
     RECITALS:
6
          A. Landlord is negotiating with the. Redevelopment
7     Agency of the City of Burbank (the "Agency") to enable
     Landlord to serve as the developer of a commercial office,
8     restaurant and parking complex (the "Commercial Complex") to
     be construct6d on approximately 88,000 sq. ft. of land within
9     the City Centre Redevelopment Project (the "Centre") of the
     City of Burbank,. California. The Commercial Complex is
10     depicted in the site plan attached hereto as Exhibit "All and

11     incorporated herein by this reference.

          B.     Landlord anticipates and shall exercise their
12     best efforts     and due diligence to cause a Disposition and
     Development Agreement and all other requisite instruments
13     (collectively     "Agency Development Agreements") to be entered
     into between     Landlord and the Agency within 120 days of this
14     date and by which Landlord shall acquire fee title to and
     shall be     allowed     to commence the construction of the
15     commercial complex.
16          C.     Tenant has agreed to construct and operate the
     restaurant portion of the Commercial Complex in accordance

17     with the-provisions of this Lease.

1

18  THEREFORE, in consideration of the Recitals and the
      mutual' covenants herein contained, Landlord leases to Tenant

19     the Premises (hereinafter described) for the purposes and

20     pursuant to the provisions herein set forth.

AGREEMENTS:
-----------

21
         1.     Premises.
22
      The Premises consists of the following: approx--
23 imately 21,000 sq. ft. of land as more particularly described

     in Exhibit "B" attached hereto and incorporated herein by
24 this reference and depicted in red on Exhibit "All; the

Improvements (hereinafter defined) which shall be constructed

25     thereon as herein provided; an exclusive right of use and easement in the
75 parking spaces to be constructed by Land

26     lord as closely to the Premises as is feasible approximately within the
area depicted in green on Exhibit "All; and a non

27     exclusive right of use and easement in the 135 parking spaces to be
constructed by Landlord approximately within the area

28     depicted in blue on Exhibit "A".

29     2.     Construction.

30          2.1 Plans. Subject to Landlord's obligation
     to pay its portion of the Improvements Cost as defined in

31     Exhibit "C" attached hereto and incorporated herein by this reference,
Tenant shall construct, or cause to be

32     constructed, a building, landscaping and related improvements
(collectively the "Improvements") for the Premises according


<PAGE>
I     to plans and specifications     (the "Plans") to be prepared by
     Tenant at its expense and to be submitted to Landlord within
2     30 days of this date. The Improvements shall be designed so
     as to accommodate the operation of a restaurant, cocktail
3     lounge and discotheque in a building containing approximately
     11,000 sq. ft.     In addition, in the areas depicted in green
4     and blue on Exhibit "All (the "Parking Area"),     at their
     expense, Landlord shall construct a parking area sufficient
5     to accommodate at least 210 automobiles, 76 within the area
     depicted in green (for the exclusive use of Tenant) and 135
6     within the area depicted in blue (for the nonexclusive,
     shared use of Tenant). The Parking Area and necessary
7     paving, striping, driveways and landscaping shall be built in
     a manner satisfactory to Tenant, in accordance with the
8     requirements of the Agency and the standards generally
     applicable to the Centre and shall be completed on or before
9     the completion of the Improvements. Landlord shall
     bear all of the costs of constructing the Parking Area and
10     none of those costs shall be included within the Improvements
     Cost.
          2.2 Approval of Plans. Landlord shall have
12     15 days after receipt of the Plans from Tenant within which
     to review and approve them. If Landlord fails to notify
13     Tenant in writing within such 15-day period of Landlord's
     disapproval of the Plans, the Plans shall be deemed approved.
14     If Landlord notifies Tenant of Landlord's disapproval of the
     Plans within such 15-day period, then Landlord shall advise
15     Tenant of the reasons for the disapproval and the items that
     must be modified, whereupon Landlord and Tenant shall meet
16     and confer so as to modify the plans to be acceptable to both
     Landlord and Tenant. If for any reason Landlord and Tenant
17     are unable to agree upon the Plans within 60 days of this
     date, then upon written notice issued by either party to the
18     other at any time thereafter and prior to the approval of the
     Plans by both Landlord and Tenant, this Lease shall terminate
19     without further liability to either party. Upon approval of
     the Plans by Landlord and Tenant, Landlord promptly shall
20     submit the Plans to the Agency and all other necessary
     governmental     authorities and shall proceed diligently to
21     obtain all requisite governmental approvals. If modifica-tions are
22      required to obtain such governmental approvals, and
22     if such modifications are acceptable to Tenant, Tenant shall
     prepare such modifications     and the Plans shall be resubmitted
23     by Landlord for governmental approval. If Tenant does not
     approve the modifications required for governmental approval
24     or such approval     is not obtained within 90 days of this date,
     then at any time     thereafter and prior to such approval, by
25     written notice to Landlord, Tenant may terminate this Lease.
     Tenant shall not unreasonably withhold its approval of such
26     modifications,     albeit if     the aggregate cost of the
     modifications          required for governmental approval exceeds
27     $50,000.00, Tenant may     approve or disapprove them in
28     its sole discretion.
          2.3 Construction. Tenant shall cause
29     construction of the Improvements to be commenced as soon as
     possible after     the obtaining of governmental approval.
30     subject to extension for causes beyond Tenant's control, if
     construction of the Improvements does not commence within 130
31     days of this date,     or if construction is not completed within
     six months after the date of commencement of construction,
32     Landlord shall have the right at any time thereafter, so long
               -2-


<PAGE>
I     as the construction has not been commenced or completed, as applicable,
within the time specified, either (a) to

2     terminate this Lease upon 30 days' written notice to Tenant, whereupon, if
the failure is that of commencement, Tenant and

3     Landlord shall be released of all obligations hereunder, or if the failure
is that of completion, Landlord shall

4     reimburse Tenant in cash for the Tenant's Improvements Costs (as defined
in Exhibit previously paid by Tenant, if

5     any, and upon Tenant's receipt of such payment, this Lease shall terminate
and the parties shall be -released of all

6     further obligations hereunder; or (b) as an alternative to termination,
upon written notice to Tenant, Landlord may

7     extend Tenant's time for commencement or completion, as applicable,
whereupon Tenant shall pay $250.00 for each day

8     of such delay in commencement or completion, as applicable. The
improvements shall be deemed to have been completed when

9     Tenant's- architect has certified that the Improvements have been
substantially completed in accordance with the Plans.

10

2.4 Construction Costs.Upon the condition
                 ------

11     that Landlord timely pays its portion of the Improvements Cost as
provided in Exhibit "C", Tenant shall keep the

12     Premises free of mechanics' and materialmens' liens. Landlord is not, nor
shall Landlord be construed to be, the

13     agent of Tenant for any purpose whatsoever. At its expense, Tenant shall
have the right at any time to post the Premises

14     with appropriate notices of liquor license application, other notices as
Tenant may deem appropriate, and lawful signs in

15     size, content and at such locations as Tenant may deem appropriate to
advertise the pending opening of the

16     restaurant. During construction, Landlord shall have the right to conduct
inspections, review construction progress

17     and otherwise proceed as provided in Exhibit "C".

18     2.5 Warranty.     Tenant shall cause the

     Improvements to be constructed in a good and workmanlike

19     manner in compliance with the Plans and all applicable laws, regulations
and permits. Tenant's contractor shall fully and

20     unconditionally guarantee for one year following the date of completion
all materials and workmanship involved in

21     constructing the Improvements. Any repairs to or reconstruction of the
Improvements during that one-year

22     period shall be at the sole cost of Tenant or Tenant's

23     contractor, unless caused by the negligence of Landlord.

3.     Term.
       -----

24

3.1 Primary Term.This Lease shall be for a
    -------------

25     primary term of twenty-five years, beginning on the Commencement Date and
ending on the last day of the twenty-fifth

26     consecutive Lease Year thereafter.

27          3.2     Lease Year. The term "Lease Year" shall
     mean the fiscal year employed by Tenant for accounting

28     purposes, except that the first Lease Year shall begin on the
Commencement Date and expire on the expiration of the next

29     succeeding complete fiscal year of Tenant.

30          3.3     Commencement Date. The Commencement Date
     of this Lease shall     be the first to occur of the following:

31

3.3.1     the date on which Tenant shall

32     open the Premises fqr business to the public; or,

-3-


<PAGE>
     1                         3.3.2     the date which is 30 days follow-
          ing the date of the completion     of the Improvements and the
     2     Parking Area and the issuance of certificates of occupancy
          therefor by all applicable governmental authorities in form
     3     acceptable to Tenant.
     4     In order to avoid any subsequent controversy as to
          the exact "Commencement Date," the parties hereto agree,
     5     within 30 days after the Commencement Date, to execute a
          declaration in recordable form confirming the commencement
     6     and expiration dates of the primary term.
     7                    3.4     Extension Term.     Landlord grants to
          Tenant the option to extend the primary term for one
     8     additional term of five years following expiration of the
          primary term by giving notice of exercise of the option at
     9     least six months, but not more than one year, prior to the
          expiration of the primary term. The extension shall be upon
     10     the same terms and conditions herein contained except the
          minimum     annual     rent shall     be the     "market"* rate then
     11     prevailing in comparable     facilities     within the Centre,
          however, if Landlord and Tenant     cannot agree as to such rate,
     12     it shall be established by a mutually acceptable appraiser
          and, provided further, if Landlord and Tenant cannot agree as
     13     to an appraiser,     then they each shall select an appraiser
          who, in turn,     shall select a third appraiser, which third
     14     appraiser's decision shall be binding. The minimum annual
          rent for     the     extension term shall     not be less than
     15     $240,000.00 per year.
     16          4.     Guaranty.     Tenant's     obligations under this
          Lease shall be guaranteed by Bobby McGee's, U.S.A., Inc., an
     17     Arizona     corporation, through its     execution below as
          guarantor.     However, the guaranty shall cease and be of no
     18     further force or effect if at          any time on or after 7;j
years
          from this date, Tenant's net worth exceeds $3 million, as
     19     established     pursuant to generally     accepted accounting
     20     principles.
               5.     Termination Conditions.     Tenant shall be
     21     entitled to terminate this          Lease     by notice to Landlord
          unless, prior to the expiration          of 120 days from this date,
     22     Tenant shall have received evidence satisfactory to it that
          each of     the     following conditions     precedent has been
     23     satisfied:
     24                    5.1     Zoning.     The Premises are zoned for use
     25     as a restaurant, discotheque and cocktail lounge;
                         5.2     Approvals. All     permits and licenses
     26     necessary for the construction and contemplated operation and
          use of the Improvements have been obtained from the requisite
     27     governmental authorities;
     28                    5.3     Parkinq.     At least 75 exclusive and 135
          nonexclusive parking spaces within the Parking Area will be
     29     available for use by Tenant, its employees, agents, customers
          and guests,     on or before the time the Improvements are
     30     scheduled to be completed (albeit          as to the 135
nonexclusive
          parking spaces, they need only be available from 5:00 p.m. to
     31     2:00 a.m. each day);
     32
                                   -4-


<PAGE>
     5.4 Licenses. Tenant will be able timely to obtain from appropriate
governmental authorities all permits

2     and licenses for the on-premises sale and consumption of wine, beer,
cocktails and other alcoholic beverages and for

3     the operation and use of the Premises as a restaurant,

4     discotheque and cocktail lounge;

5.5 Title. Landlord shall have executed the

5     Agency Development Agreements and shall have acquired fee title to the
Premises subject only to such exceptions as are

6     satisfactory to Tenant and, in that regard, at its cost, Landlord shall
deliver a preliminary or condition of title

7     report for the Premises to Tenant within 15 days of the date hereof and
shall provide Tenant with a complete copy of the

8     Agency Redevelopment Agreements within 10 days of their execution;

9

5.6 Tests. The results of soil and

10     engineering tests to be obtained by Landlord at its expense are
acceptable to Tenant for the construction of the

11     Improvements;

12     5.7 Utilities. Gas,     electricity,     sewer,

     water and other utilities     connections will be available

13     within 5 feet of the Premises at no cost to Tenant and with

14     capacity and supply sufficient for Tenant's intended use;

5.8 Construction. Tenant has approved the

15     cost of constructing the Improvements as estimated in writing by the
contractor and Tenant has confirmed that Landlord has

16     funds sufficient to pay Landlord's $970,000.00 portion of the

17     Improvements Cost as required by Exhibit "C";

5.9 Access. The City of Burbank shall

18     provide or certify in writing to Tenant, that it shall provide ingress to
and egress from the Premises, satisfactory

19     to Tenant;

20          5.10 Signs.     The City shall certify in writing
     to Tenant, in a form satisfactory to Tenant, that Tenant may

21     construct: (i) a 36-foot billboard sign; and, (ii) a monument sign on the
Premises, which signs shall be located

22     at sites mutually agreeable to Landlord, Tenant and the City, and shall
have a top elevation not less then that of the

23     signs on the adjacent properties known as "Restaurant Row".

24     In the event that Tenant terminates this Lease for
     failure of any of the foregoing conditions, the parties shall

25     be released of all further obligations hereunder and all funds, if any,
paid by Tenant immediately shall be refunded

26     to Tenant. The foregoing conditions are for the benefit of

27     Tenant and may be waived in writing by Tenant at any time.

28     6. Use. Tenant may use the Premises for the

     operation     of a restaurant, discotheque, cocktail lounge and

29     other uses incidental thereto. After the Commencement Date, Tenant shall
keep the Premises open for business not less than 350 days each calendar year,
from 11:00 a.m. to 2:00

30     p.m. during the days that luncheon is served and from 5:00 p.m. to 2:00
a.m. when luncheon is not served. Tenant shall

31     be open for lunch Monday through Friday and may be open for

32     lunch or brunch on Saturday and Sunday. This provision shall not apply if
the Premises shall be closed and the business

-5-


<PAGE>
          temporarily discontinued on account of strikes, walkouts,
          damage to building or equipment, the suspension or loss of
     2     the liquor or other governmental permits or licenses or any
          other cause beyond the reasonable control of Tenant, whether
     3     of the same or any other nature. Tenant shall not use or
          permit the use of the Premises in any manner that will create
     4     waste or violate applicable law.
     5          7.     Rent.
     6               7.1     Minimum     Annual Rent. Tenant shall pay to
          Landlord,     at Landlord's address, a minimum annual rent of
     7     $160,000.00, payable in twelve equal monthly installments of
          $13,333.34 each, on the first day of each month of the lease
     8     term.     If the Commencement Date is the first day of the
          month, then Tenant shall pay the first monthly installment of
     9     rent on-the Commencement Date.     Otherwise, the first monthly
          installment of rent shall     be due on the first day of the
     10     month following the Commencement Date and shall include
          additional rent for the period between the Commencement Date
     11     and the first day of the following month based on the amount
          of the monthly installment          of the minimum rent and a 30-day
     12     month.     Upon the termination of this Lease, the minimum
          annual rent shall be prorated to the date of termination and
     13     Landlord shall repay immediately to Tenant all minimum annual
     14     rent prepaid and unearned.
                    7.2     Percentage Rent.
     15
                         7.2.1     Percentage Rent Rate. In addition
     16     to minimum annual rent, Tenant shall pay to Landlord as
          percentage rent, a sum equal to the amount by which six
     17     percent of Tenant's Gross     Sales made from or upon the
          Premises 'during each Lease Year exceeds the minimum annual
     18     rent for such Lease Year. The percentage rent shall be
          payable quarterly, 45 days     after the end of each three-month
     19     period during the lease term, subject to adjustment at the
     20     end of each Lease Year as provided in Paragraph 7.2.3.
                         7.2.2     Gross Sales Defined. The term
     21     "Gross Sales" shall mean the aggregate amount of all sales,
          whether for cash, credit or otherwise, of food, beverages,
     22     goods, articles, any other     merchandise and all charges for
          services performed,     made     and rendered in, about or in
     23     connection     with the Premises by Tenant, including
          off-Premises sales and monies derived at or away from the
     24     Premises made in connection with the operation thereof, plus
     25     the net amount of all receipts by Tenant from all sales made
          or performed by means of mechanical or other vending devices
          except tobacco vending machines and pay telephones. Gross
     26     Sales shall not include any federal, state, municipal or
          other sales, value added, retail, excise or similar taxes
     27     paid or incurred by Tenant      whether such taxes are collected
          from customers or absorbed by Tenant; discounts from sales to
     28     employees; complimentary meals; tips or gratuities; proceeds
          of insurance policies received by Tenant; condemnation
     29     awards; bulk and intercompany transfers of food or inventory;
          proceeds from the sale of used restaurant equipment, fixtures
     30     or any other property that     is not merchandise; or payments
     31     for gift certificates or like vouchers.

7.2.3     Sales Statements and Adjustments.
          ---------------------------------

32     Within 45 days after the end of each three-month period of

_6-


<PAGE>
1     each Lease Year (a "Lease Quarter"), Tenant shall deliver to
     Landlord a statement signed by an officer or manager of
2     Tenant setting forth Tenant's Gross sales for the prior Lease
     Quarter and Tenant shall pay to Landlord the percentage rent
3     due for that Lease Quarter as provided in Paragraph 7.2.1.
     In calculating the percentage rent that is due, Tenant shall
4     base such calculation on Tenant's accumulated business volume
     and accumulated rental payments from the beginning of each
5     Lease Year. If such calculations shall show a percentage
     rental owing for the preceding Lease Quarter, then Tenant
6     shall pay such amount with the statement of Tenant's Gross
     Sales. If such accumulated rent calculation shall show a
7     credit due Tenant on account of percentage rent paid for
     preceding Lease Quarters of the Lease Year, then Landlord
8     shall reimburse Tenant for such amounts due and if Landlord
     shall fail to make such reimbursement forthwith, then without
9     limitation upon any of the rights that Tenant may have,
     Tenant shall have the right to deduct the amounts from the
10     next rental payments of any kind due to Landlord as they
     shall fall due. Within 45 days after the close of each Lease
11     Year, Tenant shall furnish to Landlord a statement of
     Tenant's Gross Sales for such entire Lease Year and a
12     computation of the rent previously remitted to Landlord for
     such Lease Year. If the rent theretofore paid by Tenant for
13     such Lease Year shall be less than the total amount of rent
     so computed to be due , Tenant shall pay the difference to
14     Landlord at that time if such cumulative calculations shall
     show a credit due Tenant on account of percentage rent paid
15     for preceding Lease Quarters of the Lease Year, then Landlord
     shall reimburse Tenant for such amounts due, and if Landlord
16     shall fail to make such reimbursement forthwith, then without
     limitation to any other rights which Tenant may have, Tenant
17     shall have the right to deduct the amounts from the next
     rental payments due to Landlord as they shall fall due.
18     Tenant, shall keep at the Premises, or at the principal
     offices of BOBBY McGEE'S U.S.A., INC., full and accurate
19     books of account, records, cash receipts, and other pertinent
     data showing its Gross Sales. Such books of account,
20     records, cash receipts, and other pertinent data shall be
     kept for a period of two years after the end of the Lease
21     Year to which such items are applicable. Landlord shall be
     entitled during the term of this Lease to inspect and examine
22     all Tenant's books of account, records, cash receipts, and
     other pertinent data so that Landlord can ascertain Tenant's
23     Gross Sales. Tenant shall cooperate fully with Landlord in
     making the inspection. Landlord shall also be entitled, once
24     during each Lease Year and once within 60 days after
     expiration or termination of this Lease, to an independent
25     audit of Tenant's books of account, records, cash receipts,
     and other pertinent data to determine Tenant's Gross Sales,
26     by a certified public accountant to be designated by
     Landlord. The audit shall be limited to the determination of
27     Gross Sales, shall be conducted at the place at which the
     aforesaid books are usually kept, and shall be paid for by
28     Landlord, except in any case when Tenant has understated
     sales by three percent or more, in which case, Tenant shall
29     pay Landlord's reasonable costs of audit. If the audit shows
     that there is any deficiency in the payment of any percentage
30     rent, the deficiency, plus interest thereon at the rate of
     ten percent per annum from the due date to the date of
31     payment, shall become immediately due and payable unless the
     deficiency is 10 percent or more, in which event, unless it
32     is the result of unavoidable error, Tenant shall pay Landlord
          -7-


<PAGE>
twice the amount of the deficiency. Landlord shall keep any information gained
from such statements, inspection or audit

2     confidential and shall not disclose such information to any

     other person.
3
          7.3     Prepaid Rent.
4
               7.3.1 Tenant shall deposit with Landlord
5     the sum of $33,325.00 upon the execution of this Lease by
     Landlord (the "Initial Deposit"). Upon the commencement of

6     the construction of the Improvements, Tenant shall deposit with Landlord
the sum of $33,325.00 (the "Additional

7     Deposit"). Landlord and Tenant agree that the initial and
     Additional Deposits automatically shall be applied by

8     Landlord and credited to Tenant in payment of the initial minimum-annual
rents as they become due hereunder.

9

7.3.2     In the event this Lease is

10     cancelled because the contingencies set forth herein are not satisfied or
for any other reason other than the default of

11     Tenant, the Initial and the Additional Deposits less such amounts as
previously have been applied pursuant hereto, if

12     any, shall be refunded and paid by Landlord to Tenant within 10 days of
Landlord's receipt of a written demand therefore

13     from Tenant and Landlord shall have no further right or

14     interest in the Deposits.

8.     Taxes; Assessments.
       -------------------

15

8.1 Personal Property Taxes.Tenant shall
    ------------------------

16     pay before delinquency all taxes, assessments, license fees and other
charges ("taxes") that are levied and assessed

17     against Tenant's Trade Fixtures installed or located in or on the
Premises and that become payable during the Lease term.

18     on demand by Landlord, Tenant shall furnish Landlord with

19     satisfactory evidence of such payments.

8.2 Real PropertyTaxes. Tenant shall pay
    -------------

20     before delinquency any and all real property taxes that become due during
the Lease term with respect to the

21     Premises, 50 percent of such taxes on the Parking structure within the
Commercial Complex and 50 percent of such taxes on

22     the land within the Commercial Complex (excluding the Premises). If any
tax bill or statement is received by

23     Landlord, Landlord shall forward a copy thereof to Tenant and Landlord's
failure to do so shall excuse Tenant from the

24     obligation of payment thereof until Tenant receives such statement.
Landlord shall forward such statement within the

25     time required for Tenant to contest any increase in taxes and to avoid
penalties and late charges and, if Landlord fails to

26     do so, Landlord shall pay such increase, penalty or late charge, as
applicable. Landlord agrees to attempt to have

27     the Premises assessed separately from other property not covered by this
Lease, but in the event the Premises are not

28     so separately assessed, then and in such event, the taxes on the Premises
shall be apportioned on the basis of the ratio

29     between the square footage of the land within the Premises and the total
square footage of all land within the parcel

30     assessed. Tenant shall have the right to seek a reduction of, or contest,
any taxes that are to be paid by Tenant

31     hereunder. Tenant shall bear the cost of such actions or

32     proceedings, shall. hold Landlord harmless from any damage

-8-


<PAGE>
arising therefrom and shall pay any final judgment that may be rendered therein.

2

8.3 Substitute Taxes. Tenant shall not be

3     required to pay any municipal, county, state or federal income or
franchise taxes of Landlord, or any municipal,

4     county, state or federal estate, succession, inheritance or transfer taxes
of Landlord. If, at any time during the term,

5     the laws concerning the methods of real property taxation prevailing on
the effective date hereof are changed so that a

6     tax or excise on rents or any other such tax, however described, is levied
or assessed against Landlord as a direct

.7     substitution, in whole or in part, for any real property taxes or
assessments otherwise due, Tenant shall pay before

8     delinquency (but only to the extent that it can be ascertained that there
has been a substitution and that, as a

9     result, Tenant has been relieved from the payment of real property taxes
which Tenant would otherwise have been

10     obligated to pay), the substitute tax, assessment, or excise on rents.

11

8.4 Common Areas.Except as provided in
    -------------

12     Paragraph 8.2, there shall be no charge, fee, or special assessment
imposed on or payable by Tenant in regard to the

13     common areas of the Commercial Complex provided, however, that at its
cost, Tenant shall keep its exclusive Parking

14     Area outlined in green on Exhibit "All in a clean and swept condition and
shall remove debris and bottles from the

15     nonexclusive Parking Area outlined in blue on Exhibit "A".

16 9. Utilities and Services.     Tenant shall pay for
     all utilities and services furnished to or used by it on the

17     Premises', including, without limitation, gas, electricity, water.,
telephone service, trash collection and sewer service.

18     At it~s expense, Landlord shall provide the necessary mains and conduits
for gas, electricity, sewer, water and telephone

19     to within five feet of the Premises.

20          10. Trade Fixtures.     Tenant shall have the right
     to erect,     install, maintain and  operate on the Premises such

21     improvements, equipment, trade and business fixtures, signs and other
personal property (collectively "Trade Fixtures")

22     as Tenant may deem appropriate for the operation of the Premises. The
Trade Fixtures shall remain the property of

23     Tenant. Tenant shall provide Landlord with a written description of such
Trade Fixtures at the Commencement Date and

24     thereafter within a reasonable time after the installation of additional
Trade Fixtures.

25

11.     Alterations. At its sole cost and expense,

26     Tenant shall have the right to make any nonstructural alterations,
additions or improvements to the Premises

27     (collectively "Alterations") it deems necessary or appropriate in
connection with the requirements of its

28     business, without the necessity of obtaining the written consent of
Landlord and without the payment of any additional

29     rent, provided that any such Alterations shall not materially injure,
deface or impair the value of the Premises. Tenant

30     shall not make any material or structural Alterations without the prior
written consent of Landlord. Any Alterations made

31     by Tenant to the Premises shall remain on and be surrendered with the
Premises. upon expiration or termination of the

32     Lease, except such Alterations as may be removed without

-9-


<PAGE>
1     substantial damage to the Premises, which may be removed by Tenant within
30 days following the termination of this

2     Lease. If Tenant makes any Alterations to the Premises, they shall not be
commenced until 10 days after Landlord has

3     received notice from Tenant stating the date of commencement of the
installation of the Alterations so that Landlord can

4     post and record an appropriate notice of non-responsibility. Tenant shall
be solely responsible, at Tenant's expense, for

5     any and all Alterations to the Premises. Any such Alterations shall be
made in compliance with-applicable law.

6

12.     Maintenance and Repair.
        -----------------------

7

Except as provided in Paragraphs 14, 15 and 26,

8     during the term hereof, at its sole cost and expense, Tenant shall
maintain or cause to be maintained and kept in good

9     state of -repair and in a clean and sanitary condition, the

Premises and the -exclusive Parking Area outlined in green on

10     Exhibit "All including the paving, striping and lighting for the latter.

11

13.     Exculpation; Indemnity; Insurance.
        ----------------------------------

12

13.1 Exculpation of Landlord.Except for
     ------------------------

13     damage caused by the acts or omissions of Landlord, its agents,
contractors or others for whom Landlord is

14     responsible, Landlord shall not be liable to Tenant for any damage
resulting from any fire or casualty; or the plumbing,

15     gas, water, steam, sprinklers or other pipe and sewage system; or the
bursting, running, or leaking of any tank,

16     washstand, closet, or waste, or other pipes, in or about the Premises;
water being upon or coming through any roof,

17     skylight,, vent, trap door or otherwise; or for any damage arising from
the acts of neglect of occupants of the

18     Premises, of adjacent property, or of the public. Landlord shall not be
liable in damages or otherwise for any

19     interruption of service of any water, gas, electricity, heated water,
steam or chilled water, or of any other service

20     to the Premises, caused by fire, accident, riot, strike, labor disputes,
acts of God, the making of repairs or

21     improvements, or any other causes beyond the control or

22     responsibility of Landlord.

13.2 Indemnity.Tenant shall indemnify and
     ----------

23     hold harmless Landlord from any and all claims arising out of the
negligence of Tenant, or its contractors, licensees,

24     agents, servants or employees, and from and against all costs, expenses,
and liabilities incurred in connection with

25     any claims or proceedings brought thereon; provided, however, that
Landlord shall be liable for such damage if it results

26     from the negligence or misconduct of Landlord or those for whom it is
responsible, and Landlord shall hold Tenant

27     harmless from all damages resulting from any such negligence ?r
misconduct. A party's obligation under this paragraph to

28     indemnify and hold the other party harmless shall be limited to the sum
that exceeds the amount of insurance proceeds, if

29     any, received by the party being indemnified.

30          13.3 Public Liability and Property Damage
                 ------------------------------------
     Insurance. At     its sole cost, Tenant shall maintain public
     ---------

31     liability and property damage insurance with liability limits
     of Two Million Dollars ($2,000,000.00) per occurrence, and

32     property damage limits of not less than one HurAred Thousand

_10-


<PAGE>
Dollars ($100,000.00) per occurrence, against all liability of Tenant and its
representatives arising out of, or in connection with, Tenant's use or occupancy
of the Premises. ~11 public liability and property damage insurance shall

3     insure performance by Tenant of the indemnity provisions of Paragraph
13.2. Both parties shall be named as ccoinsureds,

4     and the policy shall contain cross-liability endorsements.

5     13.4 Tenant's Fire Insurance;     At its sole

     cost, Tenant shall maintain on all its Trade     Fixtures in, on,

6     or about the Premises, a policy of standard fire and extended coverage
insurance, with vandalism and malicious mischief

7     endorsements, to the extent of at least 80 percent of their

8     replacement value.

13.5 Fire Insurance for Improvements.At its
     --------------------------------

9     sole cost, Tenant shall maintain on the building and improvements that are
a part of the Premises, a policy or

10     policies of standard fire and extended coverage insurance, with vandalism
and malicious mischief endorsements, to the

11     extent of one hundred percent of replacement value excluding the cost of
excavations, foundations, footings, and

12     underground tanks, conduits, pipes, pilings and other underground items.
The insurance policy or policies, or a

13     certificate of insurance evidencing such policy or policies,

14     shall be issued in the names of Tenant and Landlord as their interests
appear. The insurance policy or policies, or the certificate of insurance, shall
provide that any proceeds

15     shall be made payable as stipulated herein.

16          13.6 Payment of Premiums. Tenant shall pay
     the premiums for maintaining any and all of the insurance

17     required by this Lease. Tenant's obligation to pay the insurance costs
shall be prorated for any partial year at the

18     commencement and expiration or termination of the term.

19 13.7 Waiver of Subrogation.     To the extent of
     the insurance proceeds paid with respect thereto, the parties

20     release each other and each other's respective authorized representatives
from any claims for injury to any person or

21     damage to the Premises and to the fixtures, personal property,
improvements and alterations of either Landlord or

22     Tenant in or on the Premises, that are caused by or result from risks
insured against under any insurance policies

23     carried by the parties and in force at the time of any such damage. Each
party shall cause each insurance policy

24     obtained by it to provide that the insurance company waives all right of
recovery by way of subrogation against either

25     party in connection with any damage covered by any policy. To the extent
of the insurance proceeds paid with respect

26     thereto, neither party shall be liable to the other for any damage caused
by fire or any other risks insured against

27     under any insurance policy required by this Lease. If any

28     insurance policy cannot be obtained with a waiver of subrogation, the
party undertaking to obtain the insurance

29     Shall notify the other party and the other party shall have a period of
10 days after receiving the notice to locate a company that is reasonably
satisfactory to the other party

30     and that will issue the insurance with a waiver of

31     subrogation. If the insurance cannot be obtained, the other party is
relieved of the obligation to obtain a waiver of subrogation rights with respect
to the particular insurance

32


<PAGE>
     I     involved and this paragraph shall have no application
          thereto.
     2
                    13.8 Other Insurance Matters. All the insur-
     3     ance required under this Lease shall:
     4                    13.8.1 Be issued by insurance companies
          authorized to do business in the State where the Premises are
     5     located, with a financial rating of at least B-11 status as
          rated in the most recent edition of Best's Insurance Reports.
     6
                         13.8.2 Be issued as a primary policy or,
     7     in the alternative, be issued as a part of a -so-called
          "blanket policy."
     8
                         13.8.3 Contain an endorsement requiring
     9     10 days'     written notice from the insurance company to both
          parties before cancellation or change in the coverage, scope
     10     or amount     of any policy.
     11          Each policy, or a certificate of the policy,
          together     with evidence of payment of premiums, shall be
     12     deposited     with the other party at the commencement of the
          term and, on renewal of the policy, not less than 20 days
     13     before expiration of the term of the policy.
     14          14.     Destruction of Premises.
     15               14.1 Risk Covered by Insurance. Subject to
          the provisions of Paragraph 14.3 below, if, during the term,
     16     the Improvements are totally or partially destroyed by a
          casualty covered and proceeds paid under the insurance
     17     described in Paragraph 13, Tenant shall at its expense (not
          to exceed the insurance proceeds received by Tenant) repair
     18     such destruction as soon as reasonably possible and this
          Lease shall continue in full force and effect.
     19
                    14.2 Risk Not Covered by Insurance. Subject
     20     to the provisions of Paragraph 14.3 below, if during the
          term, the Improvements are totally or partially destroyed by
     21     a casualty not covered by the insurance described in
          paragraph 13 or the proceeds of applicable insurance are
     22     insufficient to pay all the costs of restoration, at its
          option, Tenant may either (a) repair such damage as soon as
     23     reasonably possible at its expense, in which event this Lease
          shall continue in full force and effect, or (b) give written
     24     notice to Landlord within 30 days after the date of the
          occurrence of such destruction of Tenant's intention to
     25     cancel and terminate this Lease as of the date of the
          occurrence of such destruction. If Tenant elects to cancel
     26     and terminate this Lease, Landlord shall have the right
          within ten days after the receipt of such notice to give
     27     written notice to Tenant of Landlord's intention to effect
          restoration at Landlord's expense, in which event, this Lease
     28     shall continue in full force and effect and Landlord shall
          complete     such restoration forthwith. If Landlord does not
     29     give such     notice within such ten-day period, this Lease shall
          be cancelled and terminated effective as of the date of the
     30     occurrence of such destruction.
     31               14.3 Termination. In addition to and
          independent of the provisions of Paragraphs 14.1 and 14.2
     32     above, in the event of a destruction of the Premises, by

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<PAGE>
1     written notice to Landlord, Tenant may terminate this Lease

2     if any of the following events occur:

14.3.1 applicable laws do not permit

3     restoration to substantially the condition existing prior to the
destruction; or,

4

14.3.2 the restoration cannot be

5     completed within 280 days after the date of destruction; or,

6     -14.3.3 Landlord     fails     to     complete

     restoration within ninety days after it elects to do so

7     pursuant to Paragraph 14.2 above (by notice 'E-o"Landlord at

8     any time prior to the completion of restoration).

14.4 Proration.Upon termination of this
     ----------

9     Lease pursuant to the provisions of this paragraph, any advance rental or
other advance payments made by Tenant to

10     Landlord shall be prorated as of the termination date with the unearned
portion returned to Tenant in cash; the

11     insurance proceeds applicable to the Improvements constructed and paid
for by Landlord shall be paid to Landlord; the

12     insurance proceeds applicable to the Trade Fixtures and other property of
Tenant shall be paid to Tenant; and the insurance

13     proceeds derived from policies not required by this Lease shall be paid
to the party that procured the policies and

14     paid the premiums.

15     14.5 Restoration of Premises.

16     14.5.1 Adjustment of Minor Loss. If,

during the term, the Premises are destroyed by a risk covered

17     by the insurance described in Paragraph 13 and this Lease is not
terminated, provided the total amount of loss does not

18     exceed One Hundred Thousand Dollars ($100,000.00), Tenant shall make the
loss adjustment with the insurance company

19     insuring the loss. The proceeds shall be paid directly to Tenant for the
purpose of making the restoration of the

20     Premises.

21     14.5.2     Adjustment of Major Loss. If,

     during the term, the Premises are destroyed by a risk covered

22     by the insurance described in Paragraph 13, and the total amount of loss
exceeds One Hundred Thousand Dollars

23     ($100,000.00), if this Lease is not terminated, Tenant shall make the
loss adjustment with the insurance company insuring

24     the loss and on receipt of the proceeds shall immediately pay them to any
appropriate institution (Insurance Trustee) named

25     by Landlord and Tenant. If the Premises are destroyed by a risk not
covered by the insurance described in Paragraph 13

26     or such insurance proceeds are insufficient to pay all the costs of
restoration, if this Lease is not terminated, then

27     the party or parties that have the obligation to restore the Premises (as
provided in Paragraph 14.2 above), shall deposit

28     with the Insurance Trustee their respective contributions toward the cost
of restoration. All sums deposited with the

29     Insurance Trustee shall be held for the following purposes and the
Insurance Trustee shall have the following powers and

30     duties:

31     The sums shall be paid in installments by the

     Insurance     Trustee to the contractor as construction

32     progresses, for payment of the cost of restoration. A ten

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<PAGE>
percent retention fund shall be established that will be paid to the contractor
on completion of restoration, payment of

2     all costs, expiration of. all applicable lien periods, and proof that the
Premises are free of all mechanics' liens and

3     lienable claims.

4     Payments shall be made on presentation of

     certificates or vouchers from the architect or engineer

5     showing the amount due. If the Insurance Trustee, in its reasonable
discretion, retains an architeat or engineer to

6     supervise construction and to authorize progress payments, the reasonable
expenses and charges of the architect or

7     engineer retained by the Insurance Trustee shall be paid by the Insurance
Trustee out of the trust fund.

8

If the sums held by the Insurance Trustee are not

9     sufficient to pay the actual cost of restoration, the party or parties
obligated to fund the restoration shall deposit

10     the amount of the deficiency with the Insurance Trustee within 20 days
after request by the insurance Trustee

11     indicating the amount of the deficiency.

12     Any sums not disbursed by the Insurance Trustee
     after restoration has been completed and final payment has

13     been made to the contractor shall be delivered to Landlord in proportion
to Landlord's contribution to the trust fund, and

14     the balance, if any, shall be paid to Tenant.

15     All actual costs and charges of the Insurance

     Trustee shall be paid proportionately by the party or parties

16     obligated to fund the restoration.

17     ! if the Insurance Trustee resigns or for any reason
     is unwilling to act or continue to act, Landlord and Tenant

18     promptly shall substitute a new trustee in the place of the designated
Insurance Trustee. The new Trustee must be an

19     institutional lender or title company doing business in the

20     city where the Premises are located.

Both parties promptly shall execute all documents

21     and perform all acts reasonably required by the Insurance

22     Trustee to perform its obligations under this paragraph.

14.6 Procedure for Restoring Premises.within
                   -------------------

23     30 days after the date that it is obligated to restore the Premises, the
party obligated to fund the restoration, at its

24     cost, shall prepare final plans and specifications and working drawings
complying with laws that will be applicable

25     to the restoration of the Premises. The plans and specifications and
working drawings must be approved by

26     Landlord and Tenant. Each party shall have 30 days after receipt of the
plans and specifications and working drawings

27     either to approve or disapprove the plans and specifications and working
drawings and shall notify the other of its

28     objections and proposed solution to each objection. The plans and
specifications and working drawings shall be

29     subject to approval of the appropriate governmental bodies and they will
be prepared in such a manner as to obtain that

30     approval. The restoration shall be accomplished as follows:

31          14.6.1 Unless otherwise provided above,
     the party obligated     to restore shall complete the restoration

32     within 90 days after final plans and specifications and

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<PAGE>
     1     working drawings have been approved by the appropriate
          governmental authorities and all required permits have been
     2     obtained (subject to extension for delays resulting from
     3     causes beyond reasonable control).
               14.6.2 The party obligated to restore
     4     shall retain a licensed contractor who is bondable. The
          contractor shall be required to carry public liability and
     5     property damage     insurance, standard fire, and extended
          coverage insurance with vandalism and malicious mischief
     6     endorsements, during the period of construction in accordance
          with Paragraph 13. Such insurance shall contain waiver of
     7     subrogation clauses in favor of Landlord and  Tenant in
     8     accordance with the provisions of Paragraph 13.
               14.6.3 The party obligated to restore
     9     shall     notify the other of the date of commencement of the
          restoration not later than ten days before commencement to
     10     enable the posting     and recording of notices of
     11     non-responsibility.
               14.6.4 The restoration shall be
     12     accomplished in a     manner that will cause the least
     13     inconvenience, annoyance and disruption at the Premises.

14.6.5 On completion of the restoration,

14     a notice of completion shall be recorded in the county in which the
Premises is located (if permitted by applicable

15     law).

16          15.     Condemnation.
17               15.1 Definitions.
18                    15.1.1 "Condemnation" means (a) the
     exercise of any     governmental power, whether by legal
19     proceedings or otherwise by a condemnor, and (b) a voluntary
     sale or transfer to any condemnor, either under threat of
20     condemnation or while legal proceedings for condemnation are
21     pending.
                    15.1.2 "Date of taking" means the date
22     the condemnor          has the right to possession of the property
23     being condemned.
                    15.1.3 "Award" means all compensation,
24     sums or anything of value awarded, paid or received on a
25     total of partial     condemnation.
                    15.1.4 "Condemnor" means any public or
26     quasi-public authority, private corporation or individual
27     having the power of condemnation.
               15.2     Parties' Rights and obligations to be
28     Governed by Lease. If during the term of this Lease, there
     ~s any taking of all or any part of the Premises or any
29     interest     in this lease by condemnation, the rights and
     obligations of the parties shall be determined pursuant to
30     this Paragraph 15.

     31     15.3 Total Taking. If the Premises is totally
                 ------------

taken by condemnation, this Lease shall terminate on the date

32     of taking, subject to the provisions of this Paragraph 15.

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<PAGE>
1     15.4 Partial Taking.

2     15.4.1 Effect on Lease.

3          a. Taking of Improvements.
     If any portion (but less than all) of the building or other

4     Improvements on the Premises is taken by condemnation, this Lease shall
remain in effect, except that Tenant can elect to

5     terminate this Lease if in its opinion the remaining portion of the
Premises is rendered unsuitable for Tenant's continued

6     use of the Premises. If Tenant elects to , terminate this
     Lease, Tenant must exercise its right to terminate pursuant

7 'to this paragraph by giving notice to Landlord within 30 days after the
nature and the extent of the taking have been

8     finally determined. If Tenant elects to terminate this Lease, as provided
in this paragraph, Tenant also shall

9     notify Landlord of the date of termination, which date shall not be
earlier than 30 days, nor later than 90 days, after

10     Tenant has notified Landlord of its election to terminate; except that
this Lease shall terminate on the date of the

11     taking if the date of taking falls on a date before the date of
termination as designated by Tenant. If Tenant does not

12     terminate this Lease within the 30-day period, this Lease shall continue
in full force and effect, except that the

13     minimum annual rent shall be reduced according to Paragraph 15.4.2.

14

b.     Taking of Parking. If the
       ------------------

15     Parking Area is taken by condemnation, this Lease shall remain in full
force and effect, except that, if ten percent

16     or more of the Parking Area of the Premises is taken by condemnation,
Tenant shall have the election to terminate

17     this Lease. If Tenant elects to terminate this Lease, it shall give
notice to the Landlord within 30 days after the

18     nature and extent of the taking have been finally determined. Tenant,
shall notify Landlord of the date of termination,

19     which date shall not be earlier than 30 days or later than 90 days after
Tenant has notified Landlord of its election to

20     terminate; except that this Lease shall terminate on the date of taking
if the date of taking falls on a date before the

21     date of termination designated in the notice from Tenant. if this Lease
is not terminated within the 30-day period, it

22     shall continue in full force and effect, except that the minimum annual
rent shall be reduced according to Paragraph

23     15.4.2.

24          15.4.2     Effect on Rent. If any portion
     of the Improvements     is taken     by condemnation and this Lease

25     remains in full force and effect, on the date of the taking, the minimum
annual rent shall be reduced by an amount that is

26     in the same ratio to minimum annual rent as the total number of square
feet in the Improvements taken bears to the total

27     number of square feet therein immediately before the date of taking. If
any portion of the Parking Area is taken by

28     condemnation and this Lease remains in full force and effect, on the date
of taking the minimum annual rent shall be

29     reduced by the amount that is in the same ratio as the total number of
parking spaces taken bears to the total number of

30     such spaces immediately before the date of taking.

31

32

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<PAGE>
                         15.5 Restoration of and Addition to Premises
                              and Other Areas.
     2
                              15.5.1          Landlord's Election to Prevent
                                              ------------------------------
     3     Lease Termination.     If, within 30 days after the date that
     -     -----------------
          the nature and extent of the taking are finally determined,
     4     Landlord notifies Tenant that Landlord, at its cost, will add
          on to the remaining Premises (including parking) so that the
     5     area and approximate layout of the Premises (including
          parking) will be substantially the same after the date of
     6     taking as they were before the date of taking, and Landlord
          commences the restoration immediately and completes the
     7     restoration within 90 days after Landlord notifies Tenant,
          this Lease shall continue in full force and effect without
     8     any reduction in minimum annual rent, except the abatement or
     9     reduction made pursuant to Paragraphs 15.4.2 and 15.5.3.
                              15.5.2          Restoration of Premises. if
                                              -----------------------
     10     there is a partial taking of the Premises and this Lease
          remains in full force and effect pursuant to Paragraph 15.4,
     11     Tenant shall accomplish all necessary restoration under the
          same procedures specified' in Paragraph 14.6, except that
     12     Tenant or the Insurance Trustee, as applicable, shall receive
          from Landlord in cash at the time of the award an amount
     13     equal to all of the costs of the restoration of the Premises.
     14                         15.5.3 Temporary Abatement or Reduc-
          tion of Rent. Except for any percentage rent, rent shall be
     15     abated or reduced during the period from the date of taking
          until     the completion of     restoration, but all other
     16     obligations of Tenant under the Lease shall remain in full
          force and effect. The abatement or reduction of rent shall
     17     be for such time and in proportion to the extent to which
          Tenant's use of the Premises is impaired.
     18
               ' 1          15.6 Award Distribution. The award shall
                                 ------------------
     19     belong to and be paid to the parties as their interests
     20     appear in accordance with applicable law.
                    16.     Assignment.
     21
                         16.1 Voluntary.     Tenant shall not voluntarily
                              ---------
     22     sell or assign its interest in this Lease or in the Premises,
          or sublease all or any part of the Premises, or allow any
     23     other person or entity (except Tenant's authorized
          representatives) to occupy or use all or any part of the
     24     Premises, without first obtaining Landlord's prior written
          consent, which consent shall not be unreasonably withheld.
     25     Any sale, assignment or sublease to a party of equal or
          better financial standing than Tenant would be one which
     26     Landlord would, be expected to approve.                         Any
sale,
assignment
          or sublease which requires but does not receive Landlord's
     27     prior written consent shall be voidable by Landlord and, at
          Landlord's election, shall constitute a default. No such
     28     consent to any sale, assignment or sublease shall constitute
     29     a further waiver of the provisions of this paragraph.
          Landlord's consent to a sublease shall not relieve Tenant
          from liability under this Lease. Any sale or assignment with
     30     Landlord's consent     shall     relieve Tenant from liability
          hereunder, otherwise a sale or assignment shall not relieve
     31     Tenant from liability hereunder.

32

-17-


<PAGE>
                         16.2 Involuntary. No interest of Tenant in
          this Lease shall be  assignable by operation of law. Each of
     2     the following     acts shall be considered an involuntary
     3     assignment:
                              16-2.1 If Tenant is or becomes bankrupt
     4     or insolvent,     makes     an assignment for the benefit of
          creditors, or institutes a proceeding under the Bankruptcy
     5     Act in which Tenant is the bankrupt; or,
     6                         16.2.2 If a writ of attachment or
          execution is levied on this Lease, provided that-Tenant shall
     7     have 60 days in which to cause the writ of attachment or
          execution to be removed; or,
     8
                              16.2.3 If, in any proceeding or action
     9     to which Tenant is a party, a receiver is appointed with
          authority to take possession of the Premises, provided that,
     10     if any involuntary proceeding in bankruptcy is brought
          against Tenant or if a receiver is appointed, Tenant shall
     11     have 60 days in which to have the involuntary proceedings
          dismissed or the receiver removed.
     12
                    Any involuntary assignment not cured within 30 days
     13     after notice to Tenant by Landlord shall constitute a default
          by Tenant and Landlord shall have the right to elect to
     14     terminate this Lease, in which case this Lease shall not be
          treated as an asset of Tenant.
     15
               17.     Default.
     16

17.1 Tenant's Default.The occurrence of any
     -----------------

17     of the following events shall constitute a default by Tenant:
18               17.1.1 The failure to pay rent when due
     if such failure continues for 10 days after written notice by
19     Landlord to Tenant;
20               17.1.2 The failure to perform any other
     provision of this Lease, if the failure to perform is not
21     cured within 20 days after written notice by Landlord to
     Tenant.     If the default cannot reasonably be cured within 20
22     days, Tenant shall not be in default of this Lease if Tenant
     commences to cure the default within the 20-day period and
23     diligently and in good faith continues to cure the default;
24     or,
               17.1.3 The abandonment of the Premises
25     (failure to occupy and operate the Premises for any 15
     consecutive day period shall be deemed an abandonment if
26     without Landlord's written consent; provided, however, that
     failure to occupy and operate the Premises due to the
27     suspension or loss of the liquor license or other requisite
     permit or license or other prohibition or governmental
28     regulation     [including, without limitation, energy
     conservation or shortage)     for a period of less than six
29     months in any one Lease Year shall not be an abandonment).
     The failure to occupy or operate the Premises as a result of
30     a destruction or condemnation shall not be an abandonment.
31          Notices given under this paragraph shall specify
     the alleged default and the applicable Lease provisions, and
32     shall demand that Tenant perform the provisions of this Lease

-18-


<PAGE>
          and pay the rent that is in arrears, as the case may be,
     2     within the applicable period of time, or quit the Premises.
               17.2 Landlord's Remedies. In the event of a
     3     default by Tenant, Landlord may at any time thereafter: (a)
          choose not to re-enter but to hold Tenant responsible for all
     4     terms of this Lease;     (b) re-enter the Premises, terminate
          this Lease and hold Tenant responsible for all actual (but
     5     not any consequential or punitive) damages resulting from the
          default; or (c) re-enter the Premises, keep this Lease
     6     intact, and attempt to relet the Premises on behalf of Tenant
          as Tenant's agent. Upon re-entering the Premises, Landlord
     7     may relet the Premises or any part thereof for-such term and
          at such rental as Landlord may deem advisable with the right
     8     to make alterations     and repairs to the Premises. Landlord
          may remove therefrom all persons and property. Should
     9     Landlord elect to re-enter as herein provided, rentals
          received by Landlord shall be applied against the rental and
     10     other indebtedness due from Tenant hereunder. Should rentals
          received from such reletting during any month be less than
     11     that agreed to be paid during that month by Tenant, then
          Tenant shall immediately  pay and be liable for such
     12     deficiency to Landlord. Should Landlord at any time
          terminate this Lease for any default, Landlord may recover
     13     from Tenant the reasonable cost of recovering the Premises
          and the worth at the time of such termination of the rent
     14     reserved in this Lease for the remainder of the term over the
          then reasonable rental value of the Premises for the
     15     remainder of the term.
     16          17.3 Appointment of Receiver. If Tenant is in
          default of this Lease, Landlord shall have the right to have
     17     a receiver appointed to collect rent. Neither the filing of
          a petition for the appointment of a receiver, nor the
     18     appointment itself, shall constitute an election by Landlord
          to terminate this Lease.
     19
     20          17.4 Landlord's Default. If Landlord shall
          fail to observe or perform any of the provisions of this see
     21     Lease to be performed by Landlord and such failure is not
          cured within 10 days after notice has been given by Tenant to
          Landlord, then Landlord shall be in default and without
     22     further notice, Tenant may at any time thereafter: recover
          all damageS resulting from the default whether by offset or
     23     against rental or otherwise; effect a cure on Landlord's
          behalf and all costs and expenses so incurred by Tenant
     24     together with interest at the rate of ten percent per annum
          shall be due and payable by Landlord on demand by Tenant; or
     25     pursue any other right or remedy provided by law.

,

26     18.     Subordination; Estoppel; Quiet Enjoyment

27          18.1 Subordination. Subject to the provisions
     of paragraph 18.3, this Lease is and shall be subordinate to
28     any encumbrance now of record or recorded after the date of
29     this Lease affecting the Premises, provided such encumbrance
     evidences the non-disturbance protections of Tenant set forth
     below. Such subordination shall be effective without any
30     further act of Tenant. Tenant shall, from time to time on
     request from Landlord, execute and deliver any documents or
31     instruments that may be required by a lender to effectuate
32     any subordination. As long as Tenant performs its
     obligations under -this Lease, and is not in default
               _19-


<PAGE>
4





     hereunder, no foreclosure of, deed given in lieu of
     foreclosure of, or sale under the encumbrance, and no other
2     steps or procedures taken under the encumbrance, shall affect
     Tenant's rights under this Lease, and this Lease shall
3     continue in full force and effect as a direct Lease between
     Tenant and any person succeeding to Landlord's interest
4     hereunder (and such successor shall be deemed to have assumed
     all of Landlord's obligations hereunder).
5
               18.2 Estoppel Certificates.  Each party,
6     within 10 days after notice from the other party, shall
     execute and deliver to the other party, in recordable form, a
7     certificate stating that this Lease is unmodified and in full
     force and effect, or in full force and effect as modified,
8     and stating the modifications. The certificate shall also
     state the amount of minimum annual rent, the dates to which
9     the rent-has been paid in advance, and the amount of any
     prepaid rent.     Failure to deliver the certificate within the
10     10 days shall be conclusive upon the party failing to deliver
     the certificate for the benefit of the party requesting the
11     certificate and any successor to the party requesting a
     certificate, that this Lease is in full force and effect and
12     has not been modified, except as may be represented by the
     party requesting the certificate.
13
               18.3 Quiet Enjoyment. Landlord represents and
14     warrants that within 120 days of this date, they will be the
     owner in fee simple of the Premises, that they alone have the
15     full right to lease the Premises, and that Tenant, on paying
     the rent and performing the obligations hereunder, shall
16     peaceably and quietly hold and enjoy the Premises during the
     term without any hindrance, molestation or ejection by
17     Landlord. During the term, Landlord shall not grant, create
     or suffer to exist any claim, lien, encumbrance, easement,
18     restriction or other charge or exception to the title to the
     Premises     without the prior written consent of Tenant.
19     Further, Landlord warrants that the Premises does not violate
     any applicable building code, zoning ordinance or other
20     applicable law at the time this Lease is executed. If it is
     determined that this warranty has been violated, then
21     Landlord promptly shall rectify such violation at its sole
     cost and expense.
22
          19.     Notice.
23
          Any notice, demand, request, consent, approval or
24     communication that either party desires or is required to
     give the other party or any other person in connection
25     herewith shall be in writing and either served personally or
     sent by certified mail, with return receipt requested. Any
26     notice, demand, request, consent, approval or communication
     that either party desires or is required to give to the other
27     party shall be addressed to the other party at the address
     set forth herein in Paragraph 30. Either party may change
28     its address by notifying the other party of the change of
     address. Notice shall be deemed communicated upon the first
29     to occur of (i) actual receipt of the notice, or (ii) 48
     hours after the time of mailing, if mailed as provided in
30     this paragraph.
31
32
                    20-


<PAGE>
20.     Waiver.
        -------

2     No delay or omission in the exercise of any right
     or remedy by either party hereto on any default by the other

3     party hereto shall impair such a right or remedy or be construed as a
waiver. The receipt and acceptance by

4     Landlord of delinquent rent shall not constitute a waiver of any other
default; it shall constitute only a waiver of

5     timely payment for the particular rent payment involved. Landlord's
consent to or approval of any act by Tenant

6     requiring Landlord's consent or approval shall not be deemed to waive or
render unnecessary Landlord's con-sent to or

7     approval of any subsequent act by Tenant. Any waiver by Landlord or Tenant
of any default must be in writing and

8     shall not be a waiver of any other default concerning the

9     same or any other provision of this Lease.

10     21. Quitclaim Deed.

Tenant shall execute and deliver to Landlord on the

11     expiration or termination of this Lease, immediately on Landlord's
request, a quitclaim deed to the Premises, in

12     recordable form, designating Landlord as transferee.

13          22.     Sale or Transfer of Premises.     If Landlord
     sells or     transfers all or any portion of the Premises, on the

14     consummation of the sale or transfer, Landlord shall be released from any
liability with respect to the sold or

15     transferred property thereafter (but not previously) accruing under this
Lease. Any such sale or transfer of the Premises

16     by Landlord, except to Tenant, shall be conditioned upon and subject to
Landlord's successor assuming this Lease in its

17     entirety, In the event of any such sale, Tenant and Landlord's successor
shall execute in recordable form a

18     declaration and amendment to this Lease, whereby Landlord's successor
will assume all of Landlord's position, benefits,

19     rights, obligations, and duties under this Lease and whereby Landlord's
successor and Tenant shall be in privity of

20     contract under this Lease.

21     23. Attorneys' Fees.

22          If either party becomes a party to any litigation
     concerning this Lease or the Premises by reason of any act or

23     omission of the other party or its authorized representatives, and not by
any act or omission of the party

24     that becomes a party to that litigation or any act or omission of its
authorized representatives, the party that

25     causes the other party to become involved in the litigation shall be
liable to that party for reasonable attorneys' fees

26     and court costs incurred by it in the litigation. if either party
commences an action against the other party out of or

27     in connection with this Lease, the prevailing party shall be

28     entitled to have and recover from the losing party reasonable attorneys'
fees and costs of suit.

29     24. waiver of Landlord's Lien - Tenant's Property.

30
     Within ten days after receipt of a written demand

31     from Tenant, Landlord shall execute and deliver any document required by
any supplier, lessor or lender in connection with

32     the installation on the Premises of Tenant's Trade Fixtures and by which
Landlord waives any rights it may have or

-21-


<PAGE>
          acquire with respect to that property, provided the supplier,
          lessor or lender agrees, in writing, that, upon expiration or
     2     termination of this Lease, it will remove that property from
          the Premises within 10 days of the expiration of the term or
     3     within 30 days after termination of the term, but, if it does
          not so remove the property, it shall have waived any rights
     4     it may have to the property.
     5     25.-. Surrender of Premises; Holding over.
     6     25.1 Surrender of Premises.
     7     25.1.1 On expiration or termination of
          the term, Tenant shall surrender to Landlord the Premises and
     8     all of Tenant's improvements and alterations in good
          condition (except for ordinary wear and tear occurring after
     9     the last necessary maintenance made by Tenant and destruction
          to the Premises. as discussed herein), and, except for
     10     alterations or improvements that Tenant has the right to
          remove under any provisions of this Lease. Tenant may remove
     11     all its Trade Fixtures within the above-stated time. Tenant
          shall perform all restorations made necessary by the removal
     12     of any alterations, improvements, or Trade Fixtures within
          the time periods stated in this paragraph.
     13
          25.1.2 Landlord can elect to retain or
     14     dispose of, in any manner, any alteration, improvement or
          Trade Fixtures that Tenant does not remove from the Premises
     15     on expiration or termination of the term as allowed or
          required by this Lease by giving at least 10 days' notice to
     16     Tenant. Title to any such alterations, improvements or
          Tenant's Trade Fixtures that Landlord elects to retain or
     17     dispose of on expiration of the ten-day period shall vest in
          Landlord. Tenant waives all claims against Landlord for any
     18     damage to Tenant resulting from Landlord's retention or
          disposition of any such alterations, improvements or Trade
     19     Fixtures.
     20     25.2 Holding Over. If Tenant remains in
          possession of the Premises after expiration or termination of
     21     the term, such possession by Tenant shall be deemed to be a
          month-to-month tenancy terminable on 30 days' notice given at
     22     any time by either party. During any such month-to-month
          tenancy, Tenant shall pay all rent required by this Lease,
     23     and, if percentage rent is required by this Lease, it shall
          be paid monthly on or before the 15th day of each month for
     24     Gross Sales during the preceding month. All provisions of
          this Lease, except those pertaining to term and options to
     25     extend, if any, shall apply to the month-to-month tenancy.
     26     26. 'Common Area.
     27     26.1 Commercial Complex. The Premises is
          located within and is to be a part of the Commercial Complex
     28     as described in Recital A. The Commercial Complex shall
          include the Premises, the Parking Area, additional parking,
     29     an office building, driveways, lanes, sidewalks and other
          common areas substantially as shown on Exhibit "A". Tenant
     30     shall have a right of use and easement in the Parking Area,
          additional parking, driveways, lanes, sidewalks and other
     31     common areas (collectively the "Common Area") jointly with
          the other tenants -of the Commercial Complex at all times
     32     during the lease term without any additional charge or fee of
               -22-


<PAGE>
1     any kind to be paid by Tenant. In addition, as provided in
     Paragraphs 1 and 2.1, the area depicted in green on Exhibit

2     "All shall contain not less than 75 parking spaces for the exclusive use
of Tenant, its employees, agents, customers and

3     guests, and the area depicted in blue on Exhibit "All shall contain not
less than 135 parking spaces for use by Tenant,

4     its employees, agents, customers and guests, in common with the other
tenants of the Commercial Complex. Landlord shall

5     bear the cost of the construction of the Common Area and Tenant shall have
no obligation to contribute thereto.

6

26.2 Maintenance. Except as provided in

7     Paragraph 8.4, and except for repairs resulting from the negligence of
Tenant, its employees or customers, Tenant

8     shall have no responsibility to maintain or repair the Common Area.
Landlord shall maintain the common Area in a neat,

9     clean and orderly condition, properly surfaced, striped, lighted and
landscaped with adequate security and sufficient

10     casualty and liability insurance naming Tenant as an additional insured.
Landlord shall repair any damage to the

11     Common Area promptly, such that at all times the Common Area shall be in
good, first-class working order, condition and

12     repair and available for use by Tenant. Landlord shall not alter or
modify the Common Area so as to impair Tenant's

13     access to the Premises or the Parking Area and, without Tenant's prior
written consent, Landlord shall not

14     substantially modify the Commercial Complex from that depicted in Exhibit
"A".

15

27.     Memorandum of Lease.
        --------------------

16

A Memorandum of Lease shall, upon the request of

17     either Landlord or Tenant, be executed by the parties and recorded in the
Office of the appropriate County Recorder.

18     The Memorandum of Lease shall expressly state that it is executed
pursuant to the provisions contained in this Lease

19     and is not intended to vary the terms and conditions of this Lease. in
the event that Landlord or Tenant shall terminate

20     this Lease pursuant to the provisions contained herein for any cause
other than Landlord's breach thereof, Tenant shall

21     forthwith prepare, execute, acknowledge and deliver to

22     Landlord a Release and Cancellation of this Lease.

23     28.     Miscellaneous Provisions.

28.1 Time of Essence.Time is of the essence
          -----------

24     of each provision of this Lease.

25 28.2 Consent of Parties. Whenever consent or
     approval of either party is required, other than as specifi-

26     cally set forth to the contrary herein, that party shall not

27     unreasonably withhold such consent or approval.

28     28.3 Corporate Authority. If either party or
     a guarantor is a corporation, that party  or guarantor shall

29     deliver to the other party on the execution of this Lease, a certified
copy of a resolution of its board of directors authorizing the execution of this
Lease and naming the

30     officers that are authorized to execute this Lease on behalf

31     of the corporation.

28.4 Successors. This Lease shall be binding

32 on and inure to the benefit of the parties and their successors, except as
provided otherwise in this Lease. -23


<PAGE>
28.5 Rent Payable inUnited States Currency.
          ----------       ----------------

Rent and all other sums payable under this Lease must be paid

2     in lawful currency of the United States of America.

3     28.6 Status of Parties on Termination of Lease
     Except as provided otherwise in this Lease, if a party elects

4     to terminate this Lease as allowed in this Lease, on the date this Lease
is terminated, the parties shall be released from

5     further liabilities and obligations and Landlord shall return to Tenant
any unearned rent, as long as Tenant is not in

6     default an the date the Lease terminates.

7     28.7 Exhibits. All exhibits referred to

     herein, whether or not attached to this Lease, are

8     incorporated herein by reference.

9          28.8 Negation of Partnership. Nothing in this
     Lease shall be construed to render the Landlord in any way,

10     or for any purpose, a partner, joint venturer, or associate with Tenant,
nor shall this Lease be construed to authorize

11     either Landlord or Tenant to act for the other, except as expressly
stated herein. The only relationship between the

12     parties hereto is that of Landlord and Tenant.

13          28.9 Brokerage. Tenant has not employed a
     finder or broker in connection with this Lease and agrees to

14     indemnify and hold Landlord harmless from any brokerage commission or
finder's fee arising as a result of the

15     employment of any finder or broker by Tenant. Similarly,

Landlord shall pay and be responsible for any finder's fee or

16     brokerage commission arising as a result of the employment of such finder
or broker by Landlord and agrees to indemnify and

17     hold Tenant harmless with respect thereto.

18     29.     Interpretation of Lease.

19          29.1 State Law. This Lease shall be construed
     and interpreted in accordance with the laws of the state of

20     California.

21          29.2 Integrated Agreement; Modification. This
     Lease contains all the agreements of the parties concerning

22     the Premises and cannot be amended or modified, except by a

23     written agreement.

     29.3 Provisions are Covenantsand Conditions.
          ------------------------    -----------

24     All provisions, whether covenants or conditions, on the part of Landlord
and Tenant shall be deemed to be both covenants

25     and conditions.

26          29.4 Definitions. As used in this Lease, the
     following words and phrases shall have the following

27     meanings:

28          a.     Authorized Representative.     Any
     officer, agent, employee or independent contract- retained.

29     or employed by either party, acting within authority given him by that
party.

30

b.     CommencementDate. The date the
       ------------

31     lease term commences as described in Paragraph 3.3.

32

-24-


<PAGE>
1     C. Damage.     Any material     injury,

     deterioration or loss to a person or property caused by

2     another's acts or omissions. Damage includes death.

3     d. Destruction. Any material damage to

4     or disfigurement of the premises.

e.     Encumbrance.Any deed of trust,
       ------------

5     mortgage or other written security device or agreement affecting the
Premises, and the note or ather obligation

6     secured by it, that constitutes security for the payment of a

7     debt or performance of an obligation.

f.     Hold Harmless.To defend and indem-
       --------------

8     nify from all liability,- losses, penalties, damages as defined herein,
costs, expenses (including, without

9     limitation, attorneys' fees), causes of action, claims or
     judgments arising out of or related to any damage to any

10     person or property.

11          9-     Lease Year. Except for the first
     Lease Year, a period of twelve consecutive calendar months as

12     described in Paragraph 3.2.

13          h.     Person. One or more human beings,
     legal entities, or other artificial persons, including,

14     without limitation, partnerships, corporations, trusts, estates,
associations and any combination of human beings,

15     legal entities, or other artificial persons.

16     i.     Restoration. The reconstruction,

     rebuilding, rehabilitation and repairs that are necessary to

17     return destroyed portions of the Premises and other property to a
complete architectural unit in substantially equal or

18     better physical condition than as immediately before the destruction.

19

j.     Successor.Assignee, transferee,
       ----------

20     personal representative, heir, or other person or entity

.succeeding lawfully and pursuant to the provisions of this

21     Lease to the rights or obligations of either party.

22          k.     Tenant's Trade Fixtures. Tenant's
     equipment,     furniture, merchandise and all other property.-

23     placed in the Premises by Tenant, including without limitation, any
property installed in or on the Premises by

24     Tenant for purposes of trade, merchandise or related use.

25     29.5 Captions. The captions in this Lease
     shall have no effect on its interpretation.

26

29.6 Singular and Plural.When required by
     --------------------

27     the context of this Lease, the singular shall include the

28     plural and the plural shall include the singular.

29.7 Joint and Several obligations. "Party"
     ------------------------------

29     shall mean Landlord or Tenant; and, if more than one person or entity is
Landlord or Tenant, the obligations imposed on

30     that party shall be joint and several.

31     29.8 Severability.     The     unenforceability,

32     invalidity or illegality of any provision hereof shall not

-25-


<PAGE>
render the other provisions unenforceable, invalid or illegal.

2

30.     Addresses of Landlord andTenant:
        -------------------------

3
     Landlord     Tenant
4
     1723 West Magnolia Boulevard          Suite 500
5     Burbank, California 91506     2701 East Camelback
          Phoenix,,-Arizona 85016
6

Executed by the parties hereto effective on the

7     date first above written.

8 LANDLORD:                   TENANT:
  ---------                   -------
9                             BOBBY McGEE'S CONGLOMERATION
                              OF LONG BEACH, INC.
10 CHARLES P. CUSUMANO
11
                              By
12 DIANNA J. CUSUMANO

13                            It's President

                              GUARANTOR:
                              ----------
14
                              BOBBY McGEE'S, U.S.A., INC.
15

16                            By
                              Robert F. Sikora
17                            President

18

19

20

21

22
23
24
25
26
27
28
29
30
31
32

-26-


<PAGE>
EXHIBIT B








LEGAL DESCRIPTION


Beginning at the most northerly corner of Lot 2 6f Block 68 of the Town of
Burbank Tract in the City of Burbank, County-of Los Angeles, State of
California, as per map recorded in Book 17f Pages 19 to 22, et seq. of
Miscellaneous Records in the office of the County Recorder of said county, said
corner being the southerly corner of the intersection of Olive Avenue, 100 feet
wide, and First Street, 80 feet wide, as said intersection is shown on said map;
thence South 410 16' 02' West along the southeasterly line of said Olive Avenue
a distance of 6 feet to the TRUE POINT OF BEGINNING, thence North 480 41' 53"
West a distance of 28.00 feet7,to a, point on a line 28.00 feet northwesterly of
and parallel with the southeasterly line of said Olive Avenue; thence South 410
16' 02" West along said parallel line

- distance of 262.97 feet to a point; thence South 520 261 53" East

- distance of 335.23 feet to a point of tangency of a curve concave
northerly having a radius of 40 feet; thence southeasterly, easterly
and northeasterly along said curve a distance of 60.23 feet to a point
of tangency on a line that is 19 feet southeasterly of and parallel
with the north , westerly line of Angeleno Avenue, 80.00 feet wide, as
shown on said map; thence North 410 16' 48" East along said parallel
line a distance of 171.12 feet to a point of tangency of a curve
concave westerly having a radius of 30 feet; thence northeasterly,
northerly and.northwesterly along said curve a distance of 47.11 feet
to a point of tangency on a line 6.00 feet southwesterly of and
parallel with the southwesterly line of said First Street; thence
North 480 411 53" West along said parallel line a distance of 313.99
feet to the True Point of Beginning.



Checked by
Approved by
-----------


<PAGE>
------
FIRST ADDENDUM TO LEASE AGREEMENT
--------------



DATE:     September 16. , 1983.
PARTIES:     (1)     CHARLES p. CUSUMANO and DIANNA J. CUSUMANO,
          husband and wife (collectively the "Landlord").
     (2)     BOBBY MCGEE'S CONGLOMERATION OF LONG BEACH, INC.,
          a California corporation (the "Tenant").

RECITALS:                    Landlord and Tenant are parties to that certain
          A.
               Lease Agreement, dated September 16, 1983,
               concerning the premises therein described situate
               in Burbank, California.
     -     B.     Landlord and Tenant wish to amend the Lease
               Agreement so as to confirm certain assurances
               that were provided by Landlord as an inducement
               for Tenant to enter into the Lease Agreement.

AGREEMENTS:     Landlord and Tenant agree as follows:

1.     The following new Paragraph 3.5 is added to the Lease Agreement:

     "3.5     Termination for Insufficient Sales.
              ---------------------------- ------
If at the end of the 84th month of the lease
term, Tenant's annual Gross Sales from the
Premises (as defined in Paragraph 7.2.2) for
the immediately preceding 12 months are less
than $4.5 million, then upon written notice
issued by Tenant to Landlord on or before
the last day of the 85th month of the lease
term, this Lease shall terminate on the last
day of the 90th month of the lease term, at
which time, in addition to removing its
Trade Fixtures and exercising such other
rights as are provided to Tenant by the terms
of this Lease, Landlord shall pay to Tenant
a cash termination payment of $200,000.00.
In order to assure Tenant's receipt of the
termination payment, within 15 days after
Landlord receives Tenant's notice of the
termination of this Lease as herein provided,
Landlord shall deliver to Tenant a $200,000.00
unconditional, irrevocable letter of credit
issued to Tenant by a state or national bank
acceptable to Tenant. If Landlord fails to
provide the letter of credit within the time
required, Tenant's obligation to pay minimum
annual rent, percentage rent, taxes and any
other sums (collectively "Rent required
by this Lease shall cease and abate, and
Tenant shall not be required to pay any
such Rent for the remainder of the lease term.


<PAGE>
SECOND AMENDMENT OF LEASE

This SECOND AMENDMENT TO LEASE, dated September 20, 1995 and herewith made a
part of that certain LEASE and FIRST ADDENDUM TO LEASE AGREEMENT dated September
16,1983, the SECOND ADDENDUM TO LEASE AGREEMENT dated February 20, 1984 the
AMENDMENT TO LEASE dated July 16, 1992, the EXHIBIT A, PROMISSORY NOTE dated
July 16, 1992, for the Premises located at 107 South First Street, Burbank,
California, by and between Charles P. Cusumano (Landlord") and Performance
Restaurant Group, Inc. ("Tenant") which has been assigned the above referenced
Lease, Addendums, Amendments and Promissory Note from BOBBY MCGEE'S
CONGLOMERATION OF LONG BEACH, INC., a California corporation by order of the
U.S. Bankruptcy Court for the District of Arizona in Case #9303092PHXGBN.

It is agreed that should there be any conflict between the provisions of this
SECOND AMENDMENT TO LEASE, and the provisions of this Lease, FIRST or SECOND
ADDENDUMS TO LEASE, the AMENDMENT TO LEASE or the EXHIBIT A, PROMISSORY NOTE,
the provisions of this SECOND AMENDMENT TO LEASE shall prevail.

Whereas a dispute had arisen between the parties to the lease concerning the
effectiveness of the provisions of the FIRST ADDENDUM to LEASE AGREEMENT dated
September 16, 1983; and whereas in consideration of this Amendment all claims
and disputes have been resolved including any claim for back rent except as set
forth in paragraph 2 hereof.

IT IS FURTHER AGREED:

1. Minimum Annual Rent:The Minimum Annual Rent for the Premises required under
   --------------------
Paragraph 7.1 of the Lease shall be $210,000.00 per year, payable at $17,500.00
per month commencing January 1, 1995.

2. Additional Rent: Tenant shall pay to Landlord on or before October 1, 1995,
$25,534.97 as additional rent for the months of January through September of
1995 giving
full credit for base and percentage rent paid by Tenant in 1995.

3. Assumption and Consent:Tenant hereby agrees to the assumption of all
   -----------------------
obligations under the Lease as modified by this Second Amendment to Lease, as of
   -----
December 15, 1993 (the date of the United States Bankruptcy Court Order
approving assignment of the Lease to Tenant); and Landlord hereby consents to
the assignment of the Lease to Tenant on said terms and conditions.


<PAGE>
LANDLORD               TENANT
                       Performance Restaurant Group, Inc.


Charles P. Cusumano     John R. Radonovich
                        Chief Financial Officer
Dated: 10-3-95          Dated: 10-2-95
       -------                 -------





                            BUSINESS LOAN AGREEMENT

Borrower:     Chicago Pizza & Brewery, Inc.
              26131 Marguerite Parkway, Suite A
              Mission Viejo, CA 92692


Lender:     Washington Mutual Bank dba WM Business Bank
            Los Angeles Business Banking Center
            1000 Wilshire Boulevard, Suite 100
            Los Angeles, CA 90017

THIS  BUSINESS  LOAN  AGREEMENT  dated  February  15, 2000, Is made and executed
between  Chicago  Pizza  & Brewery, Inc. ("Borrower") and Washington Mutual Bank
dba  WM Business Bank ("Lender") on the following terms and conditions. Borrower
has  received  prior commercial loans from Lender or has applied to Lender for a
commercial  loan  or  loans  or  other financial accommodations, including those
which  may  be  described  an any exhibit or schedule attached to this Agreement
("Loan").  Borrower  understands  and agrees that: (A) In granting, renewing, or
extending  any  Loan,  Lender  is  relying  upon  Borrower's  representations,
warranties,  and  agreements  as  set  forth In this Agreement, and (B) all such
Loans shall be and remain subject to the terms and conditions of this Agreement.

TERM.  This  Agreement  shall  be  effective  as of February 15, 2000. and shall
continue  in full force and effect until such time as all of Borrower's Loans in
favor of Lender have been paid in full, in principal,
 interest, costs, expenses,
attorneys'  fees,  and  other  fees  and  charges,  or  until February 15, 2001.

Collateral  Records.  Borrower  does now, and at all times hereafter shall, keep
correct  and  accurate  records of the Collateral, all of which records shall be
available  to  Lender  or Lender's representative upon demand for inspection and
copying at any reasonable lime.The above is an accurate and complete list of all
locations  at  which  Borrower  keeps  or  maintains business records concerning
Borrower's  collateral.

Collateral  Schedules.  Concurrently  with  the  execution  and delivery of this
Agreement, Borrower shall execute and deliver to Lender schedules of in form and
substance satisfactory to the Lender. Thereafter supplemental schedules shall be
delivered  according  to  the  following  schedule:

CONDITIONS  PRECEDENT  TO  EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment  to Lender's satisfaction of all of the conditions set forth in this
Agreement  and  in  the  Related  Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the
Loan:  (1)  the  Note;  (2)  Security  Agreements  granting  to  Lender security
interests  in  the  Collateral;  (3)  financing  statements  perfecting Lender's
Security  Interests;  (4)  evidence of insurance as required below; (5) together
with  all such Related Documents as Lender may require for the Loan; all in form
and  substance  satisfactory  to  Lender  and  Lender's  counsel.

Borrower's  Authorization.  Borrower  shall  have provided in form and substance
satisfactory  to  Lender  properly  certified  resolutions, duly authorizing the
execution and delivery of this Agreement, the Note and the Related Documents, In
addition,  Borrower  shall have provided such other resolutions, authorizations,
documents  and  instruments  as  Lender  or  its  counsel,  may  require.

Payment  of  Fees  and  Expenses.  Borrower  shall have paid to Lender all fees,
charges,  and other expenses which are then due and payable as specified in this
Agreement  or  any  Related  Document.

REPRESENTATIONS  AND WARRANTIES. The representations and warranties set forth in
this  Agreement,  in  the  Related Documents, and in any document or certificate
delivered  to  Lender  under  this  Agreement  are  true  and  correct.

No  Event  of  Default.  There  shall  not  exist  at  the time of any Advance a
condition  which  would  constitute  an Event of Default under this Agreement or
under  any  Related  Document.

REPRESENTATIONS  AND  WARRANTIES. Borrower represents and warrants to Lender, as
of  the  date  of  this  Agreement,  as of the date of each disbursement of loan
proceeds,  as of the date of any renewal, extension or modification of any Loan,
and  at  all  times  any  Indebtedness  exists:

Organization.  Borrower  is  a corporation for profit which is, and at all times
shall  be,  duly  organized, validly existing, and in good standing under and by
virtue  of  the  laws of the State of California. Borrower is duly authorized to
transact  business  in  all  other  states  in which Borrower is doing business,
having  obtained  all necessary filings, governmental licenses and approvals for
each  state  in which Borrower is doing business. Specifically, Borrower is, and
at  all times shall be, duly qualified as a foreign corporation in all states in
which  the  failure  to  so  qualify would have a material adverse effect on its
business  or  financial  condition. Borrower has the full power and authority to
own its properties and to transact the business in which it is presently engaged
or  presently  proposes  to  engage.  Borrower  maintains  an  office  at  26131
Marguerite  Parkway,  Suite  A,  Mission  Viejo,  CA  92692, Unless Borrower has
designated  otherwise  in  writing,  the principal office is the office at which
Borrower  keeps  its  books  and  records  including  its records concerning the
Collateral.  Borrower  will  notify  Lender  of  any  change  in the location of
Borrower's  principal office. Borrower shall do all things necessary to preserve
and  to  keep in full force and effect its existence, rights and privileges, and
shall  comply  with  all  regulations,  rules,  ordinances, statutes, orders and
decrees  of any governmental or quasi-governmental authority or court applicable
to  Borrower  and  Borrower's  business  activities.

ASSUMED  BUSINESS NAMES. Borrower has filed or recorded all documents or filings
required  by  law  relating  to  all  assumed  business  names used by Borrower.
Excluding  the name of Borrower, the following is a complete list of all assumed
business  names  under  which  Borrower  does  business:  None.

Authorization. Borrower's execution, delivery, and performance of this Agreement
and  all the Related Documents have been duly authorized by all necessary action
by  Borrower and do not conflict with, result in a violation of, or constitute a
default  under  (1)  any  provision  of  Borrower's articles of incorporation or
organization,  or  bylaws,  or  any  agreement  or other instrument binding upon
Borrower  or  (2)  any  law,  governmental  regulation,  court  decree, or order
applicable  to  Borrower  or  to  Borrower's  properties.

Financial  Information.  Each  of  Borrower's  financial  statements supplied to
Lender  truly  and completely disclosed Borrower's financial condition as of the
date  of  the  statement,  and  there  has  been  no  material adverse change in
Borrower's  financial  condition  subsequent  to  the  date  of  the most recent
financial  statement  supplied  to  Lender.  Borrower has no material contingent
obligations  except  as  disclosed  in  such  financial  statements.

Legal  Effect.  This  Agreement  constitutes,  and  any  instrument or agreement
Borrower  is  required  to  give  under  this  Agreement  when  delivered  will
constitute,  legal,  valid,  and  binding  obligations  of  Borrower enforceable
against  Borrower  in  accordance  with  their  respective  term.

Hazardous  Substances.  Except  as  disclosed  to  and acknowledged by Lender in
writing,  Borrower  represents  and  warrants  that:  (1)  During  the period of
Borrower's  ownership  of  Borrower's  Collateral,  there  has  been  no  use,
generation,  manufacture,  storage,  treatment,  disposal,  releaseor threatened
release  of  any Hazardous Substance by any person on, Linder, about or from any
of  the  Collateral. (2) Borrower has no knowledge of, or reason to believe that
there  has  been  (a) any breach or violation of any Environmental Laws; (b) any
use,  generation,  manufacture,  storage,  treatment,  disposal,  release  or
threatened  release  of  any  Hazardous  Substance  on, under, about or from the
Collateral by any prior owners or occupants of any of the Collateral; or (c) any
actual  or threatened litigation or claims of any kind by any person relating to
such  matters. (3) Neither Borrower nor any tenant, contractor, agent or other a
uthorized user of any of the Collateral shall use, generate, manufacture, store,
treat,  dispose  of  or release any Hazardous Substance on, under, about or from
any  of  the  Collateral; and any such activity shall be conducted in compliance
with all applicable federal, state, and local laws, regulations, and ordinances,
including  without limitation all Environmental Laws. Borrower authorizes Lender
and  its  agents to enter upon the Collateral to make such inspections and tests
as  Lender  may  deem appropriate to determine compliance of the Collateral with
this  section of the Agreement. Any inspections or tests made by Lender shall be
at  Borrower's expense and for Lender's purposes only and shall not be construed
to  create  any responsibility or liability on the part of Lender to Borrower or
to  any  other  person.  The representations and warranties contained herein are
based  on Botrower's due diligence in investigating the Collateral for hazardous
waste  and  hazardous  substances.  Borrower  hereby (1) releases and waives any
future claims against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws, and (2) agrees to
indemnify  and  hold  harmless  Lender  against  any  and  all  claims,  losses,
liabilities,  damages,  penalties,  and  expenses  which  Lender may directly or
indirectly  sustain  or  sutler  resulting  from a breach of this section of the
Agreement  or  as  a  consequence  of any use, generation, manufacture, storage,
disposal, release or threatened release of a hazardous waste or substance on the
properties.  The  provisions  of  this  section  of the Agreement, including the
obligation  to  indemnify, shall survive the payment of the Indebtedness and the
termination,  expiration  or  satisfaction  of  this  Agreement and shall not be
affected  by  Lender's  acquisition  of  any  interest in any of the Collateral,
whether  by  foreclosure  or  otherwise.

Litigation  and  Claims.  No  litigation,  claim,  investigation, administrative
proceeding or similar action (including those for unpaid taxes) against Borrower
is  pending  or threatened, and no other event has occurred which may mateiially
adversely  affect  Borrower's  financial  condition  or  properties,  other than
litigation,  claims,  or  other  events, if any, that have been disclosed to and
acknowledged  by  Lender  in  writing.

Taxes.  To  the  best of Borrower's knowledge, all of Borrower's tax returns and
reports  that  are or were required to be filed, have been filed, and all taxes,
assessments  and other governmental charges have been paid in full, except those
presently  being  or  to  be contested by Borrower in good faith in the ordinary
course  of  business  and  for  which  adequate  reserves  have  been  provided.

Information.  All information heretofore or contemporaneously herewith furnished
by  Borrower  to Lender for the purposes of or in connection with this Agreement
or  any  transaction  contemplated  hereby  is,  and  all  information hereafter
furnished  by  or  on  behalf  of  Borrower  to  Lender  will  be,


<PAGE>
                             BUSINESS LOAN AGREEMENT
                                   (Continued)

Page 2

true  and  accurate  in  every  material  respect  on  the date as of which such
information  is  dated  or certified; and none of such information is or will be
incomplete  by  omitting  to  state  any  material  fact  necessary to make such
information  not  misleading.

Lien  Priority.  Unless  otherwise  previously  disclosed  to Lender in writing,
Borrower  has  not entered into or granted any Security Agreements, or permitted
the  filing  or  attachment of any Security Interests on or affecting any of the
Collateral  directly  or  indirectly  securing  repayment of Borrower's Loan and
Note,  that  would  be  prior  or  that  may  in any way be superior to Lender's
Security  Interests  and  rights  in  and  to  such  Collateral.

BINDING  EFFECT. This Agreement, the Note, all Security Agreements (if any), and
all  Related  Documents  are  binding  Upon the signers thereof, as well as upon
their  successors,  representatives  and assigns, and are legally enforceable in
accordance  with  their  respective  terms,

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will:

NOTICES  OF  CLAIMS AND LITIGATION. Promptly inform Lender in writing of (1) all
material adverse changes in Borrower's financial condition, and (2) all existing
and  all  threatened  litigation,  claims,  investigations,  administrative
proceedings  or  similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial condition
of  any  Guarantor.

Financial  Records.  Maintain  its  books  and  records in accordance with GAAP,
applied on a consistent basis, and permit Lender to examine and audit Borrower's
books  and  records  at  all  reasonable  times.

Financial Statements. Furnish Lender with the following:

(1)  Annual  Statements.  As  soon  as  available,  but  in  no event later than
one-hundred-twenty  (120)  days  after  the  end of each fiscal year, Borrower's
balance  sheet  and  income statement for the year ended, audited by a certified
public  accountant  satisfactory  to  Lender.

(2) INTERIM STATEMENTS. As soon as available, but in no event later than 45 days
after  the  end  of each fiscal quarter, Borrower's balance sheet and profit and
loss  statement  for  the  period  ended,  prepared  by  Borrower.

All  financial  reports  required  to  be provided under this Agreement shall be
prepared  in  accordance with GAAP, applied on a consistent basis, and certified
by  Borrower  as  being  true  and  correct.

ADDITIONAL INFORMATION. Furnish such additional information and statements, as
Lender may request from time to time.

FINANCIAL COVENANTS AND RATIOS. Comply with the following covenants and ratios:

TANGIBLE NET WORTH REQUIREMENTS. Maintain a minimum Tangible Net Worth of not
less than: $8,000,000.00. Other Net
Worth
requirements are as follows: starting with the December 31, 1999 accounting
period.

Except as provided above, all computations made to determine compliance with the
requirements  contained  in  this  paragraph  shall  be  made in accordance with
generally  accepted  accounting  principles,  applied on a consistent basis, and
certified  by  Borrower  as  being  true  and  correct.

Insurance.  Maintain  fire and other risk insurance, public liability insurance,
and  such  other  insurance  as  Lender  may  require with respect to Borrower's
properties  and  operations,  in  form,  amounts,  coverages  and with insurance
companies  acceptable  to Lender. Borrower, upon request of Lender, will deliver
to  Lender  from  time to time the policies or certificates of insurance in form
satisfactory  to  Lender,  including  stipulations  that  coverages  will not be
cancelled  or  diminished without at least ten (10) days prior written notice to
Lender.  Each  insurance policy also shall include an endorsement providing that
coverage in favor of Lender will not be impaired in any way by any act, omission
or  default  of  Borrower  or  any other person. In connection with all policies
covering  assets in which Lender holds or is offered a security interest for the
Loans,  Borrower  will  provide  Lender with such lender's loss payable or other
endorsements  as  Lender  may  require.

Insurance  Reports.  Furnish  to Lender, upon request of Lender, reports on each
existing  insurance  policy  showing  such  information as Lender may reasonably
request,  including  without  limitation  the  following:  (1)  the  name of the
insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties
insured;  (5)  the  then current properly values on the basis of which insurance
has  been  obtained,  and  the  manner  of determining those values; and (6) the
expiration  date of the policy. In addition, upon request of Lender (however not
more  often  than  annually),  Borrower  will  have  an  independent  appraiser
satisfactory  to  Lender  determine,  as  applicable,  the  actual cash value or
replacement  cost of any Collateral. The cost of such appraisal shall be paid by
Borrower.

Other  Agreements. Comply with all terms and conditions of all other agreements,
whether  now  or  hereafter  existing,  between Borrower and any other party and
notify Lender immediately in writing of any default in connection with any other
such  agreements.

Loan  Proceeds. Use all Loan proceeds solely for Borrower's business operations,
unless  specifically  consented  to  the  contrary  by  Lender  in  writing.

TAXES, CHARGES AND LIENS. Pay and discharge when due all of its indebtedness and
obligations,  including  without limitation all assessments, taxes, governmental
charges,  levies  and  liens, of every kind and nature, imposed upon Borrower or
its  properties,  income, or profits, prior to the date on which penalties would
attach,  and  all  lawful  claims that, it unpaid, might become a lien or charge
upon  any  of  Borrower's  properties,  income,  or  profits.

PERFORMANCE. Perform and comply, in a timely manner, with all terms, conditions,
and provisions set forth in this Agreement, in the
Relate

Documents,  and  in  all  other  instruments and agreements between Borrower and
Lender.  Borrower  shall  notify Lender immediately in writing of any default in
connection  with  any  agreement.

Operations.  Maintain  executive and management personnel with substantially the
same  qualifications  and  experience  as  the  present executive and management
personnel;  provide  written  notice  to  Lender  of any change in executive and
management  personnel;  conduct its businesh affairs in a reasonable and prudent
manner.

Compliance with Governmental Requirements. Comply with all laws, ordinances, and
regulations,  now  or  hereafter  in  effect,  of  all  governmental authorities
applicable  to  the conduct of Borrower's properties, businesses and operations,
and to the use or occupancy of the Collateral, including without limitation, the
Americans  With  Disabilities  Act.  Borrower may contest in good faith any such
law,  ordinance,  or  regulation  and withhold compliance during any proceeding,
including  appropriate  appeals,  so  long  as  Borrower  has notified Lender In
writing  prior  to  doing  so and so long as, in Lender's sole opinion, Lender's
interests in the Collateral ate riot jeopardized. Lender may require Borrower to
post  adequate  security or a surety bond, reasonably satisfactory to Lender, to
protect  Lender's  interest.

Inspection.  Permit  employees  or  agents  of  Lender at any reasonable time to
inspect  any  and  all  Collateral  for  the  Loan or Loans and Borrower's other
properties  and  to examine or audit Borrower's books, accounts, and records and
to  make  copies  and  memoranda  of Borrower's books, accounts, and records. If
Borrower  now  or at any time hereafter maintains any records (including without
limitation  computer  generated  records  and computer software programs for the
generation  of  such records) in the possession of a third party, Borrower, upon
request  of Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of any records
it  may  request,  all  at  Borrower's  expense.

COMPLIANCE  CERTIFICATES.  Unless waived in writing by Lender, provide Lender at
least  annually  and  at  the time of each disbursement of Loan proceeds, with a
cerlificate  executed by Borrower's chief financial officer, or other officer or
person  acceptable to Lender, certifying that the representations and warranties
set  forth  in  this  Agreement  are  true  and  correct  as  of the date of the
certificate  and  further certifying that, as of the date of the certificate, no
Event  of  Default  exists  under  this  Agreement.

ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all respects with
any  and all Environmental Laws; not cause or permit to exist, as a result of an
intentional  or  unintentional  action  or omission on Borrower's part or on the
part  of  any  third  party,  on property owned and/or occupied by Borrower, any
environmental  activity  where damage may result to the environment, Unless such
environmental activity is pursuant to and in compliance with the conditions of a
permit  issued  by  the  appropriate  federal,  state  or  local  governmental
authorities;  shall  furnish  to  Lender promptly and in any event within thirty
(30)  days  after receipt thereof a copy of any notice, summons, lien, citation,
directive,  letter  or  other  communication  from  any  governmental  agency or
instrumentality  concerning  any intentional or unintentional action or omission
on  Borrower's part in connection with any environmental activity whether or not
there  is  damage  to  the  environment  and/or  other  natural  resources,

ADDITIONAL  ASSURANCES.  Make,  execute  and  deliver  to Lender such promissory
notes,  mortgages,  deeds of trust, 'security agreements, assignments, financing
statements,  instruments,  documents  and  other  agreements  as  Lender  or its
attorneys may reasonably request to evidence and secure the Loans and to perfect
all  Security  Interests.

LENDER'S  EXPENDITURES.  If  any  action  or  proceeding is commenced that would
materially  affect  Lender's  interest in the Collateral or if Borrower fails to
comply  with any provision of this Agreement or any Related Documents, including
but  not limited to Borrower's failure to discharge or pay when dLIG any amounts
Borrower  is  required  to  discharge or pay under this Agreement or any Related
Documents,  Lender on Borrower's behalf may (but shall not be obligated to) take
any  action  that  Lender  deems  appropriate,  including  but  not  limited  to
discharging  or  paying  all  taxes, liens, security interests, encumbrances and
other  claims,  at  any  time  levied or placed on any Collateral and paying all
costs  for  insuring,  maintaining  and  preserving  any  Collateral  All  such
expenditures  incurred  or  paid  by  Lender  for  such  purposes will then bear
interest  at  the  rate charged under the Note from the date incurred or paid by
Lender  to  the  date  of repayment by Borrower. All Such expenses will become a
part of the Indebtedness and, at Lender's option, will (A) be payable on demand;
(B)  be added to the balance of the Note and be apportioned among and be payable
with  any  installment


<PAGE>
                             BUSINESS LOAN AGREEMENT
                                   (Continued)

Page 3

payments  to  become  due during either (1) the term of any applicable insurance
policy;  or  (2)  the remaining term of the Note; or (C) be treated as a balloon
payment  which  will  be  due and payable at the Note's maturity. Any Collateral
also  will  secure  payment of these amounts. Such right shall be in addition to
all  other  rights  and  remedies  to which Lender may be entitled upon Default.

NEGATIVE  COVENANTS.  Borrower  covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

     Indebtedness  and  Liens:  (1) Except for trade debt incurred in the normal
course  of  business  and indebtedness to Lender contemplated by this wed money,
including  capital  leases, (2) sell, transfer, mortgage, assign, pledge, lease,
grant  a  security interest in, or enccumber any of Borrower's assets (except as
allowed  as  permitted  liens),,  or  (3)  sell  with recourse any of Borrower's
accounts,  except  to  Lender.

Transfer and Liens. Fail to continue to own all of Borrower's assets, except for
routine  transfers,  use  or  depletion  in  the  ordinary  course of Borrower's
business.  Borrower  agrees not to create or grant to any person, except Lender,
any  lion,  SOCurity  interest, encumbrance, cloud on title, mortgage, pledge or
similar  interest  in any of Borrower's property, even in the ordinary course of
Borrower's  business.  Borrower  agrees not to sell, convoy, grant, lease, give,
contribute,  assign,  or otherwise transfer any of Borrower's assets, except for
sales  of  inventory  or  leases  of  goods in the ordinary course of Borrower's
business.

CONTINUITY  OF  OPERATIONS.  (1) Engage in any business activities substantially
different  than  those  in  which  Borrower  is  presently  engaged,  (2)  cease
operations,  liquidate,  merge,  transfer, acquire or consolidate with any other
entity,  change  its  name,  dissolve  or transfer or sell Collateral out of the
ordinary course of business, or (3) pay any dividends on Borrower's stock (other
than dividends payable in its stock), provided, however that notwithstanding the
foregoing,  but  only  so  long  as  no  Event  of  Default  has occurred and is
continuing  or  would  result  from  the  payment of dividends, it Borrower is a
"Subchapter  S Corporation" (as defined in the Internal Revenue Code of 1986, as
amended), Borrower may pay cash' dividends on its stock to its shareholders from
time to time in amounts necessary to enable the shareholders to pay income taxes
and  make  estimated  income  tax  payments  to  satisfy their liabilities under
federal  and state law which arise solely from their status as Shareholders of a
Subchapter  3  Corporation  because  of  their ownership of shares of Borrower's
stock,  or  purchase  or retire any of Borrower's outstanding shares or alter or
amend  Borrower's  capital  structure.

LOANS,  ACQUISITIONS  AND  GUARANTIES.  (1)  Loan, invest in or advance money or
assets,  (2) purchase, create or acquire any interest in any other enterprise or
entity,  or  (3)  incur  any obligation as surely or guarantor other than in the
ordinary  course  of  business.

CESSATION  OF  ADVANCES.  If  Lender has made any commitment to make any Loan to
Borrower,  whether  under  this  Agreement  or under any other agreement, Lender
shall  have no obligation to make Loan Advances or to disburse Loan proceeds if:
(1) Borrower or any Guarantor is in default under the terms of this Agreement or
any  of  the  Related  Documents  or  any  other  agreement that Borrower or any
Guarantor  has  with  Lender;  (2)  Borrower  or  any  Guarantor  dies,  becomes
incompetent  or  becomes  insolvent,  files  a petition in bankruptcy or similar
proceedings,  or  is  adjudged  a  bankrupt; (3) there occurs a material adverse
change  in  Borrower's  financial  condition,  in the financial condition of any
Guarantor,  or  in  the  value  of  any Collateral securing any Loan; or (4) any
Guarantor  seeks,  claims  or otherwise attempts to limit, modify or revoke such
Guarantor's guaranty of the Loan or any other loan with Lender; or (5) Lender in
good  faith  deems  itself  insecure, even though no Event of Default shall have
occurred.

RIGHT  OF  SETOFF.  To the extent permitted by applicable law, Lender reserves a
right  of  setoff  in  all  Borrower's  accounts  with Lender (whether checking,
savings,  or  some  other  account).  This  includes all accounts Borrower holds
jointly  with  someone  else  and  all accounts Borrower may open in the future.
However,  this does not include any IRA or Keogh accounts, or any trust accounts
for  which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent  permitted  by  applicable law, to charge or setoff all sums owing on the
Indebtedness  against  any  and  all  such  accounts.

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

PAYMENT DEFAULT. Borrower fails to make any payment when due under the Loan.

OTHER  DEFAULTS.  Borrower  fails  to  comply with or to perform any other term,
obligation,  covenant  or condition contained in this Agreement or In any of the
Related Documents or to comply with or to perform any term, obligation, covenant
or  condition  contained  in  any  other  agreement between Lender and Borrower.

FALSE STATEMENTS. Any warranty, representation or statement made or furnished to
Lender  by  Borrower  or on Borrower's behalf under this Agreement, the Note, or
the Related Documents is false or misleading in any material respect, either now
or  at  the  time  made  or furnished or becomes false or misleading at any time
thereafter.

INSOLVENCY.  The  dissolution  or termination of Borrower's existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of creditors, any type of
creditor  workout, or the commencement of any proceeding under any bankruptcy or
insolvency  laws  by  or  against  Borrower.

DEFECTIVE  COLLATERALZATION.  This  Agreement  or  any  of the Related Documents
ceases  to  be  in  full  force  and effect (including failure of any collateral
document  to create a valid and perfected security interest or lien) at any time
arid  for  any  reason.

CREDITOR  OR  FORFEITURE  PROCEEDINGS. Commencement of foreclosure or forfeiture
proceedings,  whether  by  judicial  proceeding,  self-help, repossession or any
other  method, by any creditor of Borrower or by any governmental agency against
any  collateral  securing  the  Loan.  This  includes  a  garnishment  of any of
Borrower's  accounts,  including  deposit  accounts,  with Lender. However, this
Event of Default shall not hpply if there is a good faith dispute by Borrower as
to  the  validity  or  reasonableness  of  the  claim  which is the basis of the
creditor  or forfeiture proceeding and it Borrower gives Lender wrinen notice of
the  creditor  or  forfeiture  proceeding  and  deposits with Lender monies or a
surely  bond  for the creditor or forfeiture proceeding, in an amount determined
by  Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

EVENTS  AFFECTING  GUARANTOR. Any of the preceding events occurs with respect to
any  Guarantor  of  any  of  the  Indebtedness  or any Guarantor dies or becomes
incompetent,  or  revokes  or  disputes the validity of, or liability under, any
Guaranty  of  the Indebtedness . In the event of a death, Lender, at its option,
may,  but  shall  not  be  required  to, permit the Guarantor's estate to assume
unconditionally  the  obligations  arising  under  the  guaranty  in  a  manner
satisfactory  to  Lender,  and,  in  doing  so,  cure  any  Event  of  Default.

CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.

ADVERSE  CHANGE.  A  material  adverse  change  occurs  in  Borrower's financial
condition, or Lender believes the prospect of payment or performance of the Loan
is  impaired.

INSECURITY. Lender in good faith believes itself insecure.

Right  to Cure. If any default, other than a default on Indebtedness, is curable
and if Borrower or Grantor, as the case may be, has not been given a notice of a
similar default within the preceding twelve (12) months, it may be cured (and no
Event of Default will have occurred) if Borrower or Grantor, as the case may be,
after  receiving  written notice from Lender demanding cure of such default: (1)
cure the default within fifteen (15) days; or (2) if the cure requires more than
fifteen  (15)  days,  immediately  initiate steps which Lender deems in Lender's
sole discretion to be sufficient to cure the default and thereafter continue and
complete  all reasonable and necessary steps sufficient to produce compliance as
soon  as  reasonably  practical.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise  provided  in this Agreement or the Related Documents, all commitments
and  obligations  of Lender under this Agreement or the Related Documents or any
other  agreement  immediately  will  terminate (including any obligation to make
further  Loan  Advances  or  disbursements),  and,  at  Lender's  option,  all
Indebtedness  immediately will become due and payable, all without notice of any
kind  to  Borrower,  except  that in the case of an Event of Default of the type
described  in  the  "Insolvency"  subsection  above,  such acceleration shall be
automatic  and  not  optional. In addition, Lender shall have all the rights and
remedies  provided  in  the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Lender's rights
and  remedies  shall  be  cumulative  and  may  be  exercised  singularly  or
concurrently.  Election by Lender to pursue any remedy shall not exclude pursuit
of  any  other remedy, and an election to make expenditures or to take action to
perform  an  obligation  of Borrower or of any Grantor shall not affect Lender's
right  to  declare  a  default  and  to  exercise  its  rights  and  remedies.

YEAR 2000. Unless Lender has provided Borrower with a written waiver of the
following "Year 2000" provisions, the following provisions shall apply:

Borrower  represents, warrants and covenants that it has, or will have by a date
that  is acceptable to Lender: (i) undertaken a detailed inventory, review, arid
assessment  of  all  areas  within  its  business  and  operations that could be
adversely  affected  by  the  failure of Borrower to be Year 2000 compliant on a
timely basis, (ii) developed a detailed plan and timeline and committed adequate
resources  for  becoming  Year  2000  compliant  on  a  timely  basis, and (iii)
implemented  that  plan  in  accordance  with  that  timetable  in  all material
respects.  Borrower  covenants  and agrees that Borrower shall from time to time
upon  Lender's  request  furnish periodic updates to Lender regarding Borrower's
progress  on  its  Year 2000 compliance efforts, and provide copies to Lender of
any  internal  and  third-parly  assessments  of Borrower's Year 2000 compliance
efforts.  Borrower  covenants  to  be and reasonably anticipates that it will be
Year  2000  compliant  on  a  timely  basis.

I


<PAGE>
                             BUSINESS LOAN AGREEMENT
                                   (CONTINUED)

PAGE 4

Borrower has made (or will make, by a date acceptable to Lender) written inquiry
(or,  if  acceptable  to  Lender,  oral  Inquiry)  of each of its key suppliers,
vendors, and customers as to whether such persons will be Year 2000 compliant in
all  material respects on a timely basis. Based on that inquiry, and to the best
of  Borrower's  knowledge  only, Borrower believes that all such persons will be
Year  2000 compliant in all material respects on a timely basis. For purposes of
this  provision,  "key  suppliers,  vendors,  and  customers"  refers  to  those
suppliers, vendors, and customers of Borrower whose business failure would, with
reasonable  probability,  result  in  a material adverse change in the business,
properties,  condition  (financial  or  otherwise), or prospects of Borrower, or
Borrower's  ability  to  repay  the  indebtedness  evidenced  by  this  Note.

"Year  2000  compliant"  means,  with  regard  to any entity, that all software,
embedded microchips, and other processing capabilities utilized by, and material
to  the  business  operations or financial condition of, such entity are able to
interpret  and manipulate data on and involving all calendar dates correctly and
without  causing any abnormal ending scenario, including in relation to dates in
and  after  the  Year  2000.

It  shall  be  an  event  of  default  under  this Note if (x) any of Borrower's
representations  and  warranties  regarding  Year  2000  shall  cease to be true
(whether  or  not  true  when made) and, as a result, Lender reasonably believes
that  Borrower's  financial  condition  or  its ability to pay its debts as they
become  due  will  thereby  be materially impaired, (y) Borrower fails to comply
with  any  of  its  Year  2000  covenants, or (z) Borrower fails to be Year 2000
compliant  in  any  material  respect  on  a  timely  basis.

DEBT  COVERAGE RATIO. Debt Coverage Ratio to be at least 2.00 to 1.00, tested on
a  quarterly  basis.  "Debt Coverage Ratio" shall mean the ratio of Cash Flow to
Debt  Service.  "Cash  Flo\&?'shall  mean  all  revenues  after  taxes,  plus
depreciation and amortization. "Debt Service" shall mean the current portion due
on  all  indebtedness.

ADDITIONAL FINANCIAL PROVISIONS. Borrower agrees that while this Agreement is in
effect, Borrower shall comply with the following:

Annual  submission  of  SEC  form  10K  due within 120 days of each Year end and
Quarterly  submission  of  SEC  10Q  form  due  within  60  days of quarter end.

Submission of quarterly and year end operating statements for each location
within 45 days of period end.

Annual projection for the following twelve month period, will be due by January
31, 2001 for the period starling January 1, 2001  hrough December 31, 2001.

Quarterly Mystery Shopping Report due within 45 days of quarter end.

ADDITIONAL FINANCIAL COVENANTS. Borrower agrees that while this Agreement is in
effect, Borrower shall comply with the following:

Maximum  Dividends/Distributions shall not be more than 10% of Net Profit on the
December 31, 1999 fiscal year end Certified Public Accountant audited statement,

No additional third party debt above $160,000.00 without Lender approval.

Net  Profit  re-capture is to be applied to the final year of proposed term loan
it  fiscal  year end 2000 profits exceed $2,000,000.0o. The projected annual Net
Profit  amount for determining the following year's re-capture base is to be set
by Lender within 30 days of receipt of Borrower prepared projections. Net Profit
in excess of $2,000,000.00 is to be applied to Lender debt obligations. Covenant
adjusted  annually  based  on  Borrower  projections.

Sale of selected Pietro's locations is allowed.

FEES. A commitment fee of 1.00% (40,000.00) is to be paid on the date of the
first advance.

LEVERAGE RATIO. Maintain a maximum Leverage Ratio of 1.00 to 1.00. This Leverage
Ratio  will  be  evaluated  as of quarter end. "Leverage Ratio" shall mean total
liabilites  less  subordinated  debt divided by Net Worth less intangible assets
plus  subordinated  debt.

CAPITAL  EXPENDITURES.  Make or contract to make capital expenditures, including
leasehold  improvements,  and  any  fiscal  year  in  excess  of  $5,500,000.00.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

Amendments. This Agreement, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this  Agreement.  No  alteration  of  or  amendment  to  this Agreement shall be
effective  unless  given in writing and signed by the party or parties sought to
be  charged  or  bound  by  the  alteration  or  amendment.

ATTORNEYS'  FEES;  EXPENSES.  Borrower agrees to pay upon demand all of Lender's
costs  and  expenses,  including  Lender's  attorneys'  fees  and Lender's legal
expenses,  incurred in connection with the enforcement of this Agreement. Lender
may  hire or pay someone else to help enforce this Agreement, and Borrower shall
pay  the  costs  and  expenses  of  such enforcement. Costs and expenses include
Lender's  attorneys'  fees and legal expenses whether or not there is a lawsuit,
including  attorneys'  fees  and  legal  expenses  for  bankruptcy  proceedings
(including  efforts  to  modify  or  vacate  any  automatic stay or injunction),
appeals,  and  any  anticipated POSt-jUdgment collection services. Borrower also
shall  pay  all  court  costs and such additional fees as may be directed by the
Court.

CAPTION  HEADINGS.  Caption  headings  in  this  Agreement  are  for convenience
purposes  only  and  are not to be used to interpret or define the provisions of
this  Agreement.

CONSENT  TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's sale or
transfer,  whether  now  or later, of one or more participation interests in the
Loan  to one or more purchasers, whether related or unrelated to ~.ender. Lender
may  provide,  without any limitation whatsoever, to any one or more purchasers,
or  potential  purchasers,  any  information  or knowl4dge Lender may have about
Borrower  or  about  any  other matter relating to the Loan, and Borrower hereby
waives  any  rights  to  privacy Borrowe~ may have with respect to such matters.
Borrower  additionally  waives  any  and  all  notices  of sale of participation
interests,  as  well  as  all  notices  of  any repurchase of such participation
interests.  Borrower  also  agrees that the purchasers of any such participation
interests  will  be  considered  as the absolute owners of such interests in the
Loan  and  will have all the rights granted under the participation agreement or
agreements  governing the sale of such participation interests. Borrower further
waives  all  rights  of  offset  or  counterclaim  that it may have now or later
against  Lender  or  against  any purchaser of such a participation interest and
unconditionally  agrees  that  either  Lender  or  such  purchaser  may  enforce
Borrower's  obligation  under the Loan irrespective of the failure or insolvency
of  any  holder  of  any  interest in the Loan. Borrower further agrees that the
purchaser  of  any  such  participation  interests  may  enforce  its  interests
irrespective  of  any personal claims or defenses that Borrower may have against
Lender.

GOVERNING  LAW.  THIS  AGREEMENT  WILL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE  WITH  FEDERAL  LAW  AND  THE  LAWS  OF THE STATE OF CALIFORNIA. THIS
AGREEMENT  HAS  BEEN  ACCEPTED  BY  LENDER  IN  THE  STATE  OF  CALIFORNIA.

NO  WAIVER BY LENDER. Lender shall not be deemed to have waived any rights under
this  Agreement  unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate as
a  waiver of such right or any other right. A waiver by Lender of a provision of
this  Agreement  shall  not  prejudice  or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any other provision
of  this Agreement. No prior waiver by Lender, nor any course of dealing between
Lender  and  Borrower,  or  between  Lender  and any Grantor, shall constitute a
waiver  of  any  of  Lender's  rights  or of any of Borrower's or any Grantor's,
obligations  as  to  any  future transactions. Whenever the consent of Lender is
required  under  this  Agreement,  the granting of such consent by Lender in any
instance  shall  not constitute continuing consent to subsequent instances where
such  consent  is  required  and  in  all  cases  such consent may be granted or
withheld  in  the  sole  discretion  of  Lender.

Notices.  Any notice required to be given under this Agreement shall be given in
writing,  and shall be effective when actually delivered, when actually received
by  telefacsimile  (unless  otherwise  required  by  law), when deposited with a
nationally  recognized  overnight  courier, or, if mailed, when deposited in the
United  States  mail,  as  first  class,  certified  or  registered mail postage
prepaid,  directed  to the addresses shown near the beginning of this Agreement.
Any  party  may  change  its  address for notices under this Agreement by giving
formal  written  notice to the other parties, specifying that the purpose of the
notice is to change the party's address. For notice purposes, Borrower agrees to
keep  Lender  informed  at  all  times  of  Borrower's  current  address. Unless
otherwise  provided  or required by law, if there is more than one Borrower, any
notice  given  by  Lender  to  any  Borrower is deemed to be notice given to all
Borrowers.

Severability.  If  a court of competent jurisdiction finds any provision of this
Agreement  to be illegal, invalid, or unenforceable as to any circumstance, that
finding  shall  not  make  the  offending  provision  illegal,  invalid,  or
unenforceable as to any other circumstance. If feasible, the offending provision
shall be considered modified so that it becomes legal, valid and enforceable. If
the  offending  provision  cannot be so modified, it shall be considered deleted
from  this  Agreement.  Unless  otherwise  required  by  law,  the  illegality,
invalidity,  or  unenforceability  of  any provision of this Agreement shall not
affect  the  legality, validity or enforceability of any other provision of this
Agreement.

SUBSIDIARIES  AND  AFFILIATES  OF  BORROWER.  To  the  extent the context of any
provisions  of this Agreement makes it appropriate, including without limitation
any  representation,  warranty  or covenant, the word "Borrower" as used in this
Agreement  shall  include  all  of  Borrower's  subsidiaries  and  affiliates.
Notwithstanding  the  foregoing  however,  under  no  circumstances  shall  this
Agreer-nent  be  construed to require Lender to make any Loan or other financial
accommodation  to  any  of  Borrower's  subsidiaries  or  affiliates.

SUCCESSORS  AND  ASSIGNS. All covenants and agreements contained by or on behalf
of  Borrower shall bind Borrower's successors and assigns and shall inure to the
benefit of Lender, its successors and assigns. Borrower shall not, however, have
the  right  to  assign  Borrower's  rights  under




<PAGE>
                             BUSINESS LOAN AGREEMENT
                                   (Continued)

PAGE 5

SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and agrees that
in  extending  Loan  Advances,  Lender  is  relying  on  all  representations,
warranties,  and  covenants  made  by  Borrower  in  this  Agreement  or  in any
certificate  or  other  instrument  delivered  by  Borrower to Lender under this
Agreement  or  the Related Documents. Borrower further agrees that regardless of
any  investigation  made  by  Lender,  all  such representations, warranties and
covenants  will survive the extension of Loan Advances and delivery to Lender of
the  Related  Documents, shall be continuing in nature, shall be deemed made and
redated  by  Borrower at the time each Loan Advance is made, and shall remain in
full  FORCE  AND effect until such time as Borrower's Indebtedness shall be paid
in  full,  or  until  this  Agreement shall be terminated in the manner provided
above,  whichever  is  the  last  to  occur.

TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
Agreement.

DEFINITIONS.  The following capitalized words and terms shall have the following
meanings  when  used  in  this  Agreement.  Unless  specifically  stated  to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the  plural,  and  the  plural  shall  include  the singular, as the context may
require.  Words and terms not otherwise defined in this Agreement shall have the
meanings  attributed  to  such  terms in the Uniform Commercial Code. Accounting
words  and terms not otherwise defined in this Agreement shall have the meanings
assigned  to them in accordance with generally accepted accounting principles as
in  effect  on  the  date  of  this  Agreement:

Advance.  The  word  "Advance" means a disbursement of Loan funds made, or to be
made,  to  Borrower  or  on  Borrower's  behalf  on a line of credit or multiple
advance  basis  under  the  terms  and  conditions  of  this  Agreement.

Agreement.  The  word  "Agreement"  means  this Business Loan Agreement, as this
Business  Loan  Agreement may be amended or modified from time to time, together
with  all  exhibits  and schedules attached to this Business Loan Agreement from
time  to  time.

Borrower. The word "Borrower" means Chicago Pizza & Brewery, Inc., and all other
persons and entities signing the Note in whatever capacity.

Collateral.  The  word  "Collateral"  means  all  properly and assets granted as
collateral  security  for  a  Loan,  whether  real or personal property, whether
granted  directly  or  indirectly,  whether  granted  now  or in the future, and
whether  granted  in  the  form  of  a  security  interest, mortgage, collateral
mortgage,  deed  of  trust,  assignment,  pledge, chattel mortgage, crop pledge,
chattel  mortgage,  collateral  chattel  mortgage, chattel trust, factor's lien,
equipment  trust,  conditional  sale, trust receipt, lien, charge, lien or title
retention  contract,  lease  or consignment intended as asecurity device, or any
other security or lien interest whatsoever, whether created by law, contract, or
otherwise,

Default. The word "Default" means the Default set forth in this Agreement in the
section titled "Default".

ENVIRONMENTAL  LAWS.  The  words  "Environmental  Laws"  mean any and all state,
federal  and  local  statutes,  regulations  and  ordinances  relating  to  the
protection  of human health or the environment, including without limitation the
Comprehensive  Environmental  Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments
and  Reauthorization  Act  of  1986,  Pub. L. No. 99-499 ("SARA"), 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., Chapters 6.5
through  7.7  of  Division  20 of the California Health and Safety Code, Section
25100, et seq., or other applicable state or federal laws, rules, or regulations
adopted  pursuant  thereto.

Event of Default. The words "Event of Default" mean any of the Events of Default
set  forth  in  this  Agreement  in  the  Default  section  of  this  Agreement.

GAAP. The word "GAAP" means generally accepted accounting principles.

GRANTOR.  The  word  "Grantor"  means  each  and  all of the persons or entities
granting  a  Security Interest in any Collateral for the Loan, Including without
limitation  all  Borrowers  granting  such  a  Security  Interest.

GUARANTOR. The word "Guarantor' means any guarantor, surety, or accommodation
party of any or all of the Loan.

GUARANTY. The word "Guaranty" means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or pan of the Note.

INDEBTEDNESS.  The  word  "Indebtedness" means the indebtedness evidenced by the
Note  or  Related  Documents, including all principal and interest together with
all  other indebtedness and costs and expenses for which Borrower is responsible
under  this  Agreement  or  under  any  of  the  Related  Documents.

LENDER. The word "Lender'means Washington Mutual Bank dba WM Business Bank, its
successors and assigns.

LOAN.  The word "Loan" means any and all loans and financial accommodations from
Lender  to  Borrower  whether  now or hereafter existing, and however evidenced,
including  without limitation those loans and financial accommodations described
herein  or  described on any exhibit or schedule attached to this Agreement from
time  to  time.

NOTE.  The  word  "Note"  means  the  Note executed by Borrower in the principal
amount  of $4,000,000.00 dated February 15, 2000, together with all renewals of,
extensions  of,  modifications  of,  refinancings  of,  consolidations  of,  and
substitutions  for  the  note  or  credit  agreement.

PERMITTED  LIENS.  The  words  "Permitted  Liens"  mean  (1)  liens and security
interests securing Indebtedness owed by Borrower to Lender; (2) liens for taxes,
assessments,  or  similar  charges either not yet due or being contested in good
faith;  (3) liens of materialmen, mechanics, warehousemen, or carriers, or other
like  liens  arising in the ordinary course of business and securing obligations
which are not yet delinquent; (4 purchase money liens or purchase money security
interests  upon  or in any property acquired or held by Borrower in the ordinary
course  of  business  to  secure  indebtedness  outstanding  on the dale of this
Agreement  or  permitted  to  be  incurred under the paragraph of this Agreement
titled  "Indebtedness  and Liens"; (5) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by the Lender in
writing;  and  (6)  those  liens  and  security interests which in the aggregate
constitute  an  immaterial and insignificant monetary amount with respect to the
net  value  of  Borrower's  assets.

RELATED  DOCUMENTS.  The  words  "Related  Documents" mean all promissory notes,
credit  agreements,  loan  agreements,  environmental  agreements,  guaranties,
security  agreements,  mortgages,  deeds  of  trust,  security deeds, collateral
mortgages,  and  all other instruments, agreements and documents, whether now or
hereafter  existing,  executed  in  connection  with  the  Loan.

SECURITY  AGREEMENT.  The  words  "Security  Agreement" mean and include without
limitation  any agreements, promises, covenants, arrangements, understandings or
other  agreements,  whether  created by law, contract, or otherwise, evidencing,
governing,  representing,  or  creating  a  Security  Interest.

Security  Interest.  The words "Security Interest" mean, without limitation, any
and all types of collateral security, present and future, whether in the form of
a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment,
pledge,  crop  pledge,  chattel  mortgage,  collateral chattel mortgage, chattel
trust,  factor's lien, equipment trust, conditional sale, trust receipt, lien or
title retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever whether created by law, contract,
or  otherwise.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS
DATED FEBRUARY 15, 2000.

BORROWER:

CHICAGO PIZZA & BREWERY, INC.


By:

ERNEST T. KLINGER     PRESIDENT OF CHICAGO PIZZA &
BREWERY, INC.

LENDER:

WASHINGTON MUTUAL BANK dba WM BUSINESS BANK

X
     AUTHORIZED SIGNER



<PAGE>
                                 PROMISSORY NOTE

Borrower:     CHICAGO PIZZA & BREWERY, INC.
              26131 MARGUERITE PARKWAY, SUITE A
              MISSION VIEJO, CA 92692


Lender:     WASHINGTON MUTUAL BANK DBA WM BUSINESS BANK
            LOS ANGELES BUSINESS BANKING Center
            1000 WILSHIRE BOULEVARD, SUITE 100
            LOS ANGELES, CA 90017

Principal Amount: $4,000,000.00     Initial Rate: 10.750%
Date of Note: February 15, 2000

PROMISE  TO  PAY.  Chicago Pizza & Brewery, Inc. ("Borrower") promises to pay to
Washington  Mutual  Bank  dba  WM  Business Bank ("Lender"), or order, In lawful
money  of  the  United States of America, the principal amount of Four Million &
00/100  Dollars  ($4,000,000.00) or so much as may be outstanding, together with
interest  on  the unpaid outstanding principal balance of each advance. Interest
shall  be  calculated  from  the  date  of  each advance until repayment of each
advance.

PAYMENT. Borrower will pay this loan In one payment of all outstanding principal
plus  all  accrued  unpaid  Interest on February 15, 2001. In addition, Borrower
will  pay regular monthly payments of all accrued unpaid Interest due as of each
payment date, beginnin4 March 31, 2000, with all subsequent interest payments to
be  due  on  the  last  day of each month after that. Unless otherwise agreed or
required  by  applicable  law,  payments will be applied first to accrued unpaid
interest,  then  to principal, and any remaining amount to any unpaid collection
costs  and late charges. The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by
the  actual  number  of days the principal balance is outstanding. Borrower will
pay  Lender at Lender's address shown above or at such other place as Lender may
designate  in  writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time  to  time  based  on  changes  in  an independent index which is the annual
interest  rate,  adjusted  daily, published from time to time in The Wall Street
Journal  (Western  Edition) as the "Prime Rate" in the "Money Rates" section, as
of  any  date  of  determination (the "Index"). The Index is not necessarily the
lowest  rate  charged  by  Lender on its loans. It the Index becomes unavailable
during  the  term  of  this  loan, Lender may designate a substitute index after
notice  to  Borrower.  Lender  will  tell  Borrower  the current Index rate upon
Borrower's request. The interest rate change will not occur more often than each
day.  Borrower  understands  that  Lender may make loans based on other rates as
well.  The  Index  currently  is  8.750%. The interest rate to be applied to the
unpaid  principal  balance  of  this  Note will be at a rate of 2.000 percentage
points over the Index, resulting In an initial rate of 10.750%. NOTICE: Under no
circumstances  will the interest rate on this Note be more than the maximum rate
allowed  by  applicable  law.

PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are  earned  fully  as of the dale of the loan and will not be subject to refund
upon  early  payment  (whether  voluntary  or as a result of default), except as
otherwise  required  by  law. Except for the foregoing, Borrower may pay without
penalty  all  or  a  portion  of  the  amount owed earlier than it is due. Early
payments  will  not,  unless agreed to by Lender in writing, relieve Borrower of
Borrower's  obligation  to continue to make payments of accrued unpaid interest,
Rather,  early  payments  will reduce the principal balance due. Borrower agrees
not  to  send  Lender  payments  marked  "paid  in full", "without recourse", or
similar language. If Borrower sends such a payment, Lender may accept it without
losing  any  of  Lender's  rights  under  this  Note,  and  Borrower will remain
obligated  to  pay any further amount owed to Lender. All written communications
concerning  disputed  amounts,  including  any check or other payment instrument
that indicates that the payment constitutes "payment in full" of the amount owed
or that is tendered with other conditions or limitations or as full satisfaction
of  a disputed amount must be mailed or delivered to: Washington Mutual Bank dba
WM  Business Bank, Los Angeles Business Banking Center, 1000 Wilshire Boulevard,
Suite  100,  Los  Angeles,  CA  90017.

LATE  CHARGE.  It  a  payment  is 11 days or more late, Borrower will be charged
5.000%  of  the  unpaid  portion  of  the regularly scheduled payment or $25.00,
whichever  Is  greater.

INTEREST  AFTER DEFAULT. Upon Borrower's failure to pay all amounts declared due
pursuant  to this section, including failure to pay upon final maturity, Lender,
at  its  option,  may,  if permitted under applicable law, increase the variable
interest  rate  on  this  Note  to  8.000  percentage  points  over  the  Index.

DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:

PAYMENT DEFAULT. Borrower fails to make any payment when due under this Note.

OTHER  DEFAULTS.  Borrower  fails  to  comply with or to perform any other term,
obligation,  covenant  or  condition  contained  in  this  Note or in any of the
related documents or to comply with or to perform any term, obligation, covenant
or  condition  contained  in  any  other  agreement between Lender and Borrower.

FALSE STATEMENTS. Any warranty, representation or statement made or furnished to
Lender  by  Borrower  or  on  Borrower's  behalf  under this Note or the related
documents  is  false or misleading in any material respect, either now or at the
lime  made  or  furnished or becomes false or misleading at any time thereafter.

INSOLVENCY.  The  dissolution  or termination of Borrower's existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's properly, any assignment for the benefit of creditors, any type of
creditor  wotkoul, or the commencement of any proceeding under any bankruptcy or
insolvency  laws  by  or  against  Borrower.

CREDITOR  OR  FORFEITURE  PROCEEDINGS. Commencement of foreclosure or forfeiture
proceedings,  whether  by  judicial  proceeding,  self-help, repossession or any
other  method, by any creditor of Borrower or by any governmental agency against
any  collateral  securing  the  loan.  This  includes  a  garnishment  of any of
Borrower's  accounts,  including  deposit  accounts,  with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to  the  validity  or  reasonableness  of  the  claim  which is the basis of the
creditor or forfeiture proceeding and it Borrower gives Lender written notice of
the  creditor  or  forfeiture  proceeding  and  deposits with Lender monies or a
surety  bond  for the creditor or forleiture proceeding, in an amount determined
by  Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

EVENTS  AFFECTING  GUARANTOR. Any of the preceding events occurs with respect to
any  guarantor,  endorser,  surety,  or  accommodation  party  of  any  of  the
indebtedness  or any guarantor, endorser, surety, or accommodation party dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any  guaranty  of  the  indebtedness  .  In the event of a death, Lender, at its
option,  may,  but  shall  not  be required to, permit the guarantor's estate to
assume  unconditionally  the  obligations arising under the guaranty in a manner
satisfactory  to  Lender,  and,  in  doing  so,  cure  any  Event  of  Default.

CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.

ADVERSE  CHANGE.  A  material  adverse  change  occurs  in  Borrower's financial
condition,  or  LENDER  BELIEVES  THE PROSPECT OF PAYMENT OR performance of this
Note  is  impaired.

INSECURITY. Lender in good faith believes itself insecure.

CURE PROVISIONS. If any default, other than a default in payment, is curable and
if  Borrower  has  not  been given a notice of a breach of the same provision of
this Note within the preceding twelve (12) mooths, it may be cured (and no event
of  default will have occurred) if Borrower, after receiving written notice from
Lender demanding cure of such default: (1) cures the default within fifteen (15)
days;  or  (2)  it  the  cure  requires more than fifteen (15) days, immediately
initiates  steps which Lender deems in Lender's sole discretion to be sufficient
to  cure  the  default and thereafter continues and completes all reasonable and
necessary  steps  sufficient  to  produce  compliance  as  soon  as  reasonably
practical.

LENDER'S  RIGHTS.  Upon  default, Lender may declare the entire unpaid principal
balance  on  this Note and all accrued unpaid interest immediately due, and then
Borrower  will  pay  that  amount.

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
the loan if Borrower does not pay. Borrower will
pay Lender
that amount. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses, whether or
not ther e is a
lawsuit, including attorneys' fees, expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), and
appeals. Borrower also will pay any court costs, in addition to all other sums
provided by law.

GOVERNING  LAW.  THIS  NOTE  WILL  BE  GOVERNED  BY,  CONSTRUED  AND ENFORCED IN
ACCORDANCE  WITH  FEDERAL LAW AND THE LAWS OF THE STATE OF CALIFORNIA. THIS NOTE
HAS  BEEN  ACCEPTED  BY  LENDER  IN  THE  STATE  OF  CALIFORNIA.

DISHONORED  ITEM  FEE.  Borrower  will pay a fee to Lender of $12.50 if Borrower
makes  a  payment  on Borrower's loan and the check or preauthorized charge with
which  Borrower  pays  is  later  dishonored.

RIGHT  OF  SETOFF.  To the extent permitted by applicable law, Lender reserves a
right  of  setoff  in  all  Borrower's  accounts  with Lender (whether checking,
savings,  or  some  other  account).  This  includes all accounts Borrower holds
jointly  with  someone  else  and  all accounts Borrower may open in the luture.
However,  this does not include any IRA or Keogh accounts, or any trust accounts
for  which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent  permitted  by  applicable law, to charge or setoff all sums owing on the
Indebtedness  against  any  and  all  such  accounts.


<PAGE>
                                 PROMISSORY NOTE
                                   (Continued)

PAGE 2

LINE  OF  CREDIT.  This Note evidences a straight line of credit. Once the total
amount  of principal has been advanced, Borrower is not entitled to further loan
advances.  Advances  under  this  Note,  as  well as directions fbr payment from
Borrower's  accounts, may be requested orally or in writing by Borrower or by an
authorized  person.  Lender may, but need not, require that all oral requests be
confirmed  in  writing.  Borrower  agrees  to be liable for all sums either: (A)
advanced  in  accordance  with  the  instructions of an authorized person or (B)
credited to any of Borrower's accounts with Lender. The unpaid principal balance
owing  on this Note at any time may be evidenced by endorsements on this Note or
by  Lender's  internal records, including daily computer print-outs. Lender will
have  no  obligation  to  advance  funds under this Note it: (A) Borrower or any
guarantor  is  in  default  under  the  terms of this Note or any agreement that
Borrower  or  any  guarantor  has  with  Lender, including any agreement made in
connection  with  the signing of this Note; (B) Borrower or any guarantor ceases
doing  business  or  is  insolvent; (C) any guarantor seeks, claims or otherwise
attempts  to  limit, modify or revoke such guarantor's guarantee of this Note or
any  other loan with Lender; (D) Borrower has applied funds provided pursuant to
this  Note  for purposes other than those authorized by Lender; or (E) Lender in
good  faith  believes  itself  insecure.

YEAR 2000. Unless Lender has provided Borrower with a written waiver of the
following "Year 2000" provisions, the following provisions shall apply:

Borrower  represents, warrants and covenants that it has, or will have by a date
that  is  acceptable to Lender: (i) undertaken a detailed inventory, review, and
assessment  of  all  areas  within  its  business  and  operations that could be
adversely  affected  by  the  failure of Borrower to be Year 2000 compliant on a
timely basis, (ii) developed a detailed plan and timeline and committed adequate
resources  for  becoming  Year  2000  compliant  on  a  timely  basis, and (iii)
implemented  that  plan  in  accordance  with  that  timetable  in  all material
respects,  Borrower  covenants  and agrees that Borrower shall from time to time
upon  Lender's  request  furnish periodic updates to Lender regarding Borrower's
progress  on  its  Year 2000 compliance efforts, and provide copies to Lender of
any  internal  and  third-party  assessments  of Borrower's Year 2000 compliance
efforts.  Borrower  covenants  to  be and reasonably anticipates that it will be
Year  2000  compliant  on  a  timely  basis.

Borrower has made (or will make, by a date acceptable to Lender) written inquiry
(or,  if  acceptable  to  Lender,  oral  inquiry)  of each of its key suppliers,
vendors, and customers as to whether such persons will be Year 2000 compliant in
all  material respects on a timely basis. Based on that inquiry, and to the best
of  Borrower's  knowledge  only, Borrower believes that all such persons will be
Year  2000 compliant in all material respects on a timely basis. For purposes of
this  provision,  "key  suppliers,  vendors,  and  customers"  refers  to  those
suppliers, vendors, and customers of Borrower whose business failure would, with
reasonable  probability,  result  in  a material adverse change in the business,
properties,  condition  (financial  or  otherwise), or prospects of Borrower, or
Borrower's  ability  to  repay  the  indebtedness  evidenced  by  this  Note.

"Year  2000  compliant"  means,  with  regard  to any entity, that all software,
embedded microchips, and other processing capabilities utilized by, and material
to  the  business  operations or financial condition of, such entity are able to
interpret  and manipulate data on and involving all calendar dates correctly and
without  causing any abnormal ending scenario, including in relation to dates in
and  after  the  Year  2000.

It  shall  be  an  event  of  default  under  this Note if (x) any of Borrower's
representations  and  warranties  regarding  Year  2000  shall  cease to be true
(whether  or  not  true  when made) and, as a result, Lender reasonably believes
that  Borrower's  financial  condition  or  its ability to pay its debts as they
become  due  will  thereby  be materially impaired, (y) Borrower fails to comply
with  any  of  its  Year  2000  covenants, or (z) Borrower fails to be Year 2000
compliant  in  any  material  respect  on  a  timely  basis.

TERM  OUT  PERIOD.  Borrower  and  Lender agree that at maturity any outstanding
balance  on  the  non-revolving line of credit shall be converted to a term loan
for  36  months with a rate of Wall Street Journal Prime plus 3% floating on the
full  amount  or  Wall Street Journal Prime plus 3% fixed on the full amount for
the  first year, 2% for the second year, or a 1% prepayment penaly for the third
year.

PAYMENT  ON DEMAND. Borrower will pay this loan on demand, if no demand is made,
in  one payment of all outstanding principal plus all accrued interest unpaid on
February  15,  2001.

ADDENDUM "A". An exhibit, tilled "Addendum "A"," is attached to this Note and by
this  reference is made a part of this Note just as If all the provisions, terms
and  conditions  of  the  Exhibit  had  been  fully  set  forth  in  this  Note.

SUCCESSOR  INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon  Borrower's  heirs,  personal  representatives, successors and assigns, and
shall  inure  to  the  benefit  of  Lender  and Lender's successors and assigns.

GENERAL  PROVISIONS.  Lender  may  delay or forgo enforcing any of its rights or
remedies  under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive any
applicable  statute  of limitations, presentment, demand for payment, and notice
of  dishonor.  Upon  any  change in the terms of this Note, and unless otherwise
expressly  stated  in  writing,  no party who signs this Note, whether as maker,
guarantor,  accommodation  maker  or endorser, shall be released from liability.
All  such  parties agree that Lender may renew or extend (repeatedly and for any
length  of  lime)  this loan or release any party or guarantor or collateral; or
impair,  fail  to  realize  upon  or  perfect  Lender's security interest in the
collateral;  and  take  any  other action deemed necessary by Lender without the
consent  of  or  notice  to  anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the party
with  whom  the  modification is made. The obligations under this Note are joint
and  several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

CHICAGO PIZZA & BREWERY, INC.



ERNEST T. KLINGER, PRESIDENT OF CHICAGO PIZZA &
BREWERY, INC.


<PAGE>

                                  ADDENDUM "A"

                               LIBOR/RATE ADDENDUM


     This Addendum A is attached to and made a part of the Promissory Note (the
"Note") dated February 15, 2000, between Chicago Pizza & Brewery, Inc.
("Borrower") and Washington Mutual Bank, doing business as WM Business Bank
('Lender'). This Addendum is subject to all the terms and conditions of the
remainder of the Note.

LENDER AND BORROWER agree as follows:

I . Advances under the Note shall bear interest at the "Applicable Interest
Rate."The Applicable Interest Rate means, for the period from and including the
date hereof and including the Maturity Date, a rate per annum at Borrower's
option equal to one of the following:

     a.            PRIME RATE: the interest rate described in the "Variable
                   -----------
Interest Rate" section of the Note.

     b.     LIBOR RATE: an interest rate (rounded upward to the next 1/100 of
            -----
1.0%) equal to the sum of (i) the LIBOR Base Rate, and (ii) the LIBOR Spread.
For purposes of this definition:

     (1)     "LIBOR BASE RATE" means, with respect to a particular LIBOR
Advance, the rate (expressed as a decimal) reported as the London Interbank
Offered Rate in the Money Rates section of the Wall Street Journal published on
the Business Day next preceding the date such LIBOR advance is made (which rate
may be reported as of an earlier date) for maturities equal to the requested
Interest Period. If the Wall Street Journal ceases reporting London Interbank
Offered Rates comparable to those currently reported, the LIBOR Base Rate
applicable hereunder shall be modified, and Lender shall select another
reasonably comparable rate or index.

(ii)     "LIBOR SPREAD" means three point five percent (3.5%) per year.

2.     Definitions: As used in this Addendum, the following terms shall have
       ------------
the meanings set forth below:

     BUSINESS DAY: means a day on which banks are not required or authorized to
  close in Los Angeles, California and on which dealings are carried on in the
London Interbank market.


<PAGE>
     "INTEREST PERIOD" means, for each LIBOR Advance, the period beginning on
     -----------------
the date such LIBOR Advance is made or continued as and ending on (but
excluding) the day which numerically corresponds to such date one, two, three
0r six months thereafter, (or, if such month has no numerically corresponding
day, on the last Business Day of such month), as the Borrower may select in its
relevant request pursuant to Section 3 or 4, below, provided, however, that i)
the Borrower shall not be permitted to select Interest Periods to be in effect
at any one time which have expiration dates occurring on more than six (6)
different date: ii) if such Interest Period would otherwise end on a day which
is not a business Day, such Interest Period shall end on the Next following
Business Day (less such next following Business Day is the first day of a
calendar month in which case such Interest Period shall end on the Business Day
next preceeding such numerically corresponding day); i1i) no Interest period
for any LIDOR advance may end later than the stated Maturity Date.

     "LIBOR BORROWING REQUEST" means a request made by Borrower for a LIBOR
Advance pursuant to the provisions of this Addendum.

3.     LIBOR BORROWING REQUEST. Each request by Borrower for a LIBOR Advance
       ------------------------
shall conform to the following:

     a.     Each request for a LIBOR Advance shall be made by Borrower in the
manner specified by Lender and shall be submitted to Lender so as to be received
by Lender not later than 11:00 a.m. on the third Business Day prior to the date
of the proposed borrowing.

     b.     Each LIBOR Advance shall be in the minimum amount of Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00) or multiples of ($250,000.000)
subject to the maximum amount available under the Note and the Loan Agreement.

     C.     Each LIBOR Borrowing Request shall specify the Interest Period for
the requested LIBOR Advance.

4.     REPAYMENT/PREPAYMENT.Borrower shall repay the outstanding principal
       ---------------------
amount     of each LIBOR Advance, together with any accrued and unpaid interest
thereon,
on the     last day of the Interest Period for such LIBOR Advance, as the case
may be, unless
Borrower elects to continue/convert such Advance, and gives notice to Lender not
less
than three Business Days prior to the last day of the Interest Period that all
or any portion
greater     than $250,000.00 of such Advance shall be converted into an Advance
bearing
interest     under a different option hereunder, or continued as an Advance of
the same type
as that for which the Interest Period is then ending. Notwithstanding anything
to the contrary contained in the Note, including without limitation the Section
entitled "Prepayment," neither the principal balance of any LIBOR Advance may be
prepaid prior to the last day of the applicable Interest Period.
                                       2.


<PAGE>
5.     UNAVAILABILITY OF SELECTED RATE. Notwithstanding any election of a LIBOR
       -------------------------------
Advance for an Interest Period pursuant to this Addendum, if-

     a.     on or prior to the determination OF THE APPLICABLE INTEREST RATE FOR
such Advance, the Lender determines (which determination shall be conclusive and
binding) that quotations of interest yates for the relevant deposits are not
being provided in the relevant market in the relevant amount and Interest
Period-, or

     b.     on or prior to the first day of an Interest Period, the Lender
determines (which determination shall be conclusive and binding) that, as a
result of conditions in or generally affecting the relevant market, the rates of
interest or the basis on which the applicable interest rate is to be computed do
not accurately reflect the cost to the Lender of making or maintaining such
Advance for such Interest Period; then Lender shall give the Borrower prompt
notice thereof by telephone and the reques by the Borrower for such Advance for
such Interest Period shall not be effective, and such Advance shall be made as
an Advance bearing interest at the most favorable rate available to Borrower
under either remaining interest rate option hereunder.

6.     INCREASED COSTS. If, due to either (i) the introduction after the date
       ----------------
of this
Addendum of or any change after the date of this Addendum (including any change
by way of imposition or increase of reserve requirements or assessments) in or
in the interpretation of any law or regulation, or (ii) the compliance with any
guideline or request issued or made after the date of this Addendum by any
central bank- or other governmental authority (whether or not having the force
of law), there shall be any increase in the cost to the Lender of making, or
maintaining LIBOR Advances, then the Borrower shall from time to time, upon
demand by the Lender, pay to the Lender additional amounts sufficient to
reimburse the Lender for all such increased costs. A certificate as to the
amount of such increased costs, submitted to the borrower by the Lender, shall
be conclusive and binding absent manifest error.

7. INCREASED CAPITAL REQUIREMENTS.  If either (1) the introduction after the
   -------------------------------
date of
this Addendum of, or the application after the date of this Addendum as a result
of phase-
in or transitional rues of, or any change after the date of this Addendum in or
in the
interpretation of, any law or regulation or (ii) compliance by the Lender with
any
guideline or request issued or made after the date of this Addendum or deemed
applicable
after the date hereof as a result of phase-in or transitional rules by any
central bank or
other governmental authority (whether or not having the force of law) affects
the amount
of capital required to be based upon the making of LIBOR Advances pursuant to
this
Addendum, then, upon demand by the Lender, the Borrower shall immediately pay to
the
Lender, from time to time as specified by the Lender the costs of maintairu'nc,
such
increased capital. A certificate as to such amounts submitted to the Borrower by
the
Lender shall be conclusive and binding absent manifest error.

     3.


<PAGE>
8.     ILLEGALITY. Notwithstanding any other provision of this Addendum, if the
       -----------
introduction of or any change in or in the interpretation of any law or
regulation shall
make it     unlawful, or any central bank or other governmental authority shall
assert that it
is unlawful, for the Lender to make or maintain LIBOR Advances, Lender may, by
notice
to the Borrower, suspend the right of the borrower to elect such Advances and,
if
necessary in the reasonable opinion of the Lender to comply with such law or
regulation,
convert     all outstanding LIBOR Advances (as the case may be) to Advances
bearing
interest     at the most favorable rate available to Borrower under either
remaining interest
rate option hereunder.

9.     DEFAULT RATE. Notwithstanding anything to the contrary contained in the
       -------------
Note,
including without limitation the Section of the Note entitled "Lender's Rights,"
in the
event of any default under the Note, all outstanding LIBOR Advances shall
thereafter
during     the continuance of such default bear interest at a rate equal to six
percent (6.000%)
in excess of the LIBOR Rate-


THIS ADDENDUM IS DATED this

17th day of  February, 2000

Borrower:

Chicago Pizza & Brewery, Inc.

By -

Ernest T. Klinger.

Its:
President

LENDER:

WASHINGTON MUTUAL BANK, doing business as WM Business Bank

By:

Its:     Vice President


<PAGE>
                          COMMERCIAL SECURITY AGREEMENT

Grantor:     CHICAGO PIZZA & BREWERY, INC.
             26131 Marguerite Parkway, Suite A
             Mission Viejo, CA 92692

Lender:     WASHINGTON MUTUAL BANK DBA WM BUSINESS BANK
            LOS ANGELES BUSINESS BANKING CENTER
            1000 WILSHIRE BOULEVARD, SUITE 100
            LOS ANGELES, CA 90017

THIS COMMERCIAL SECURITY AGREEMENT dated February 15, 2000, Is made and executed
between Chicago Pizza & Brewery, Inc. ("Grantor") and Washington Mutual Bank dba
WM  Business  Bank  ("Lender").

GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a security Interest In the Collateral to secure the Indebtedness and agrees that
Lender  shall  have  the  rights  stated  in  this Agreement with respect to the
Collateral,  In  addition  to  all  other  rights  which Lender may have by law.

COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means
the following described property, Whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which
Grantor is giving to Lender a security interest for the
payment of the Indebtedness and performance of all other obligations under the
Note and this Agreement:

ALL INVENTORY, CHATTEL PAPER, ACCOUNTS, EQUIPMENT AND GENERAL INTANGIBLES

In  addition, the word "Collateral" also includes all the following, whether now
owned  or  hereafter  acquired,  whether  now existing or hereafter arising, and
wherever  located:

(A)  All  accessions,  attachments,  accessories,  tools,  parts,  supplies,
replacements  and  additions  to any of the collateral described herein, whether
added  now  or  later.

(B) All products and produce of any of the property described in this Collateral
section.

(C) All accounts, general intangibles, instruments, rents, monies, payments, and
all other rights, arising out of a sale, lease, or other disposition of any of
the property described in this Collateral section.

(D)  All  proceeds  (including  insurance  proceeds) from the sale, destruction,
loss,  or  other disposition of any of the property described in this Collateral
section,  and  sums  due  from  a  third  party who has damaged or destroyed the
Collateral  or from that party's insurer, whether due to judgment, settlement or
other  process.

(E)  All  records  and  data  relating  to any of the property described in this
Collateral  section,  whether  in  the form of a writing, photograph, microfilm,
microfiche,  or  electronic  media, together with all of Grantor's right, title,
and  interest  in  and  to  all  computer  software required to utilize, create,
maintain,  and  process  any  Such  records  or  data  on  electronic  media.

Despite  any  other provision of this Agreement, Lender is not granted, and will
not  have,  a  nonpurchase  money  security  interest in household goods, to the
extent  such  a  security  interest  would  be  prohibited by applicable law. In
addition,  if  because Of the type of any Property, Lender is required to give a
notice  of the right to cancel under Truth in Lending for the Indebtedness, then
Lender  will not have a security interest in such Property unless and until such
a  notice  is  given.

RIGHT  OF  SETOFF.  To the extent permitted by applicable law, Lender reserves a
right  of  setoff  in  all  Grantor's  accounts  with  Lender (whether checking,
savings,  or.  some  other  account).  This  includes all accounts Grantor holds
jointly  with  someone  else  and  all  accounts Grantor may open in the future.
However,  this does not include any IRA or Keogh accounts, or any trust accounts
for  which  setoff would be prohibited by law. Grantor authorizes Lender, to the
extent  permitted  by  applicable law, to charge or setoff all sums owing on the
Indebtedness  against  any  and  all  such  accounts.

GRANTOR'S  REPRESENTATIONS  AND  WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect  to  the  Collateral,  Grantor  represents  and warrants to Lender that:

PERFECTION  OF SECURITY INTEREST. Grantor agrees to execute financing statements
and  to  take  whatever  other  actions  are  requested by Lender to perfect and
continue  Lender's  security interest in the Collateral. Upon request of Lender,
Grantor  will  deliver  to  Lender  any  and  all of the documents evidencing or
constituting  the  Collateral,  and Grantor will note Lender's interest upon any
and  all  chattel  paper  If  not  delivered to Lender for possession by Lender.

NOTICES  TO  LENDER.  Grantor  will notify Lender in writing at Lender's address
shown  above (or such other addresses as Lender may designate from time to time)
prior  to  any  (1)  change  in  Grantor's name, (2) change in Grantor's assumed
business  name(s),  (3)  change  in the management of Grantor, (4) change in the
authorized  signer(s),  (5)  change  in  Grantor's principal office address, (6)
conversion  of  Grantor  to  a  new or different type of business entity, or (7)
change in any other aspect of Grantor that directly or indirectly relates to any
agreements  between  Grantor  and  Lender. No change in Grantor's name will take
effect  until  after  Lender  has  been  notified.

NO  VIOLATION. The execution and delivery of this Agreement will not violate any
law  or  agreement  governing  Grantor  or  to which Grantor is a party, and its
certificate  or articles of incorporation and bylaws do not prohibit any term or
condition  of  this  Agreement.

ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of accounts,
chattel  paper,  or  general  intangibles,  as defined by the Uniform Commercial
Code,  the  Collateral  is enforceable in accordance with its terms, is genuine,
and  fully  complies  with  all applicable laws and regulations concerning form,
content and manner of preparation and execution, and all persons appearing to be
obligated  on  the Collateral have authority and capacity to contract and are in
fact  obligated  as they appear to be on the Collateral. At the time any Account
becomes  subject to a security interest in favor of Lender, the Account shall be
a  good  and  valid  account  representing an undisputed, bona fide indebtedness
incurred  by  the  account  debtor,  for  merchandise  held  subject to delivery
instructions  or previously shipped or delivered pursuant to a contract of sale,
or  for services previously performed by Grantor with or for the account debtor.
So long as this Agreement remains in effect, Grantor shall not, without Lender's
prior  written  consent,  compromise, settle, adjust, or extend payment under or
with  regard  to  any  such Accounts. There shall be no setoffs or counterclaims
against any of the Collateral, and no agreement shall have been made under which
any  deductions  or  discounts  may  be claimed concerning the Collateral except
those  disclosed  to  Lender  in  writing.

LOCATION OF THE COLLATERAL. Except in the ordinary course of Grantor's business,
Grantor  agrees to keep the Collateral (or to the extent the Collateral consists
of  intangible  property  such  as  accounts or general intangibles, the records
concerning  the  Collateral)  at  Grantor's address shown above or at such other
locations  as  are  acceptable  to  Lender.  Upon Lender's request, Grantor will
deliver  to  Lender in form satisfactory to Lender a schedule of real properties
and  Collateral  locations  relating  to Grantor's operations, including without
limitation  the  following: (1) all real property Grantor owns or is purchasing;
(2)  all real property Grantor is renting or leasing; (3) all storage facilities
Grantor  owns,  fents,  leases,  or  uses;  and  (4)  all other properties where
Collateral  is  or  may  be  located.

REMOVAL  OF THE COLLATERAL. Except in the ordinary course of Grantor's business,
including  the  sales of inventory, Grantor shall not remove the Collateral from
its  existing  location  without  Lender's prior written consent. Grantor shall,
whenever  requested,  advise  Lender  of  the  exact location of the Collateral.

TRANSACTIONS  INVOLVING  COLLATERAL.  Except  for  inventory  sold  or  accounts
collected  in the ordinary course of Grantor's business, Grantor shall not sell,
offer to sell, or otherwise transfer or dispose of the Collateral. While Grantor
is  not in default under this Agreement, Grantor may sell inventory, but only in
the ordinary course of its business and only to buyers who quality as a buyer in
the  ordinary  course  of  business.  A sale in the ordinary course of Grantor's
business  does not include a transfer in partial or total satisfaction of a debt
or  any  bulk  sale.  Grantor  shall not pledge, mortgage, encumber or otherwise
permit the Collateral to be Subject to any lien, security interest, encumbrance,
or  charge,  other  than  the  security interest provided for in this Agreement,
without  the  prior  written consent of Lender. This includes security interests
even  if junior in right to the security interests granted under this Agreement.
Unless  waived  by  Lender,  all proceeds from any disposition of the Collateral
(for  whatever  reason)  shall  be  held  in  trust  for Lender and shall not be
commingled  with  any  other funds; provided however, this requirement shall not
constitute  consent  by  Lender  to any sale or other disposition. Upon receipt,
Grantor  shall  immediately  deliver  any  such  proceeds  to  Lender.

TITLE.  Grantor  represents  and  warrants to Lender that Grantor holds good and
marketable title to the Collateral, free and clear of all liens and encumbrances
except  for  the  lien of this Agreement. No financing statement covering any of
the  Collateral  is  on file in any public office other than those which reflect
the  security  interest  created  by  this  Agreement  or  to  which  Lender has
specifically  consented.  Grantor shall defend Lender's rights in the Collateral
against  the  claims  and  demands  of  all  other  persons.

REPAIRS  AND  MAINTENANCE.  Grantor  agrees  to  keep and maintain, and to cause
others  to keep and maintain, the Collateral in good order, repair and condition
at  all  times while this Agreement remains in effect. Grantor further agrees to
pay  when  due  all  claims  for  work done on, or services rendered or material
furnished  in  connection with the Collateral so that no lien or encumbrance may
ever  allach  to  or  be  filed  against  the  Collateral.

INSPECTION OF COLLATERAL. Lender and Lender's designated representatives and
agents shall have the right at all reasonable times to examine and



<PAGE>
                          COMMERCIAL SECURITY AGREEMENT
                                   (Continued)

PAGE 2

inspect the Collateral wherever located.

TAXES,  ASSESSMENTS  AND LIENS. Grantor will pay when due all taxes, assessments
and  liens  upon the Collateral, its use or operation, upon this Agreement, upon
any  promissory  note  or  notes evidencing the Indebtedness, or upon any of the
other  Related  Documents. Grantor may withhold any such payment or may elect to
contest  any  lien  if  Grantor  is  in  good  faith  conducting  an appropriate
proceeding  to contest the obligation to pay and so long as Lender's interest in
the Collateral is not jeopardized in Lender's sole opinion. It the Collateral is
subjected  to  a  lien which is not discharged within fifteen (15) days, Grantor
shall  deposit  with  Lender  cash,  a sufficient corporate surely bond or other
security  satisfactory  to  Lender  in  an  amount  adequate  to provide for the
discharge of the lien plus any interest, costs, attorneys' fees or other charges
that  could  accrue as a result of foreclosure or sale of the Collateral, In any
contest  Grantor  shall  defend  itself  and  Lender and shall satisfy any final
adverse  judgment  before enforcement against the Collateral. Grantor shall name
Lender  as  an additional obligee under any surety bond furnished in the contest
proceedings.  Grantor  further  agrees to furnish Lender with evidence that such
taxes,  assessments,  and  governmental and other charges have been paid in full
and  in  a  timely manner. Grantor may withhold any such payment or may elect to
contest  any  lien  if  Grantor  is  in  good  faith  conducting  an appropriate
proceeding  to contest the obligation to pay and so long as Lender's interest in
the  Collateral  is  not  jeopardized.

COMPLIANCE  WITH  GOVERNMENTAL  REQUIREMENTS. Grantor shall comply promptly with
all laws, ordinances, rules and regulations of all governmental authorities, now
or hereafter in effect, applicable to the ownership, production, disposition, or
use of the Collateral. Grantor may contest in good faith any such law, ordinance
or  regulation  and  withhold  compliance  during  any  proceeding,  including
appropriate appeals, so long as Lender's interest in the Collateral, in Lender's
opinion,  is  not  jeopardized.

HAZARDOUS  SUBSTANCES. Grantor represents and warrants that the Collateral never
has  been,  and  never  will  be so long as this Agreement remains a lien on the
Collateral,  used  in violation of any Environmental Laws or for the generation,
manufacture, storage, transportation, treatment, disposal, release or threatened
release of any Hazardous Substance. The representations and warranties contained
herein  are based on Grantor's due diligence in investigating the Collateral for
Hazardous  Substances.  Grantor hereby (1) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes liable
for  cleanup  or  other  costs  under  any Environmental Laws, and (2) agrees to
indemnify  and  hold  harmless  Lender  against  any  and  all claims and losses
resulting  from a breach of this provision of this Agreement. This obligation to
indemnify  shall survive the payment of the Indebtedness and the satisfaction of
this  Agreement.

MAINTENANCE  OF CASUALTY INSURANCE. Grantor shall procure and maintain all risks
insurance,  including  without  limitation  fire,  theft  and liability coverage
together  with  such  other  insurance as Lender may require with respect to the
Collateral,  in  form,  amounts,  coverages  and  basis reasonably acceptable to
Lender  and  issued  by  a company or companies reasonably acceptable to Lender.
Grantor,  upon  request  of Lender, will deliver to Lender from time to time the
policies  or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at least
ten  (10)  days' prior written notice to Lender and not including any disclaimer
of  the  insurer's  liability  for failure to give such a notice. Each insurance
policy  also  shall  include  an endorsement providing that coverage in favor of
Lender  will  not  be  impaired  in  any  way by any act, omission or default of
Grantor  or any other person. In connection with all policies covering assets in
which  Lender  holds  or  is  offered  a security interest, Grantor will provide
Lender  with  such  loss payable or other endorsements as Lender may require. If
Grantor  at any time fails to obtain or maintain any insurance as required under
this Agreement, Lender may (but shall not be obligated to) obtain such insurance
as  Lender  deems  appropriate,  including if Lender so chooses "single interest
insurance,"  which  will  cover  only  Lender's  interest  in  the  Collateral.

APPLICATION  OF  INSURANCE PROCEEDS. Grantor shall promptly notify Lender of any
loss or damage to the Collateral. Lender may make proof of loss it Grantor fails
to do so within fifteen (15) days of the casualty. All proceeds of any insurance
on  the  Collateral, including accrued proceeds thereon, shall be held by Lender
as  part  of  the Collateral. It Lender consents to repair or replacement of the
damaged  or  destroyed  Collateral,  Lender  shall,  upon  satisfactory proof of
expenditure,  pay or reimburse Grantor from the proceeds for the reasonable cost
of repair or restoration. It Lender does not consent to repair or replacement of
the  Collateral,  Lender shall retain a sufficient amount of the proceeds to pay
all  of  the  indebtedness,  and  shall pay the balance to Grantor. Any proceeds
which  have  not  been  disbursed  within six (6) months after their receipt and
which  Grantor  has not committed to the repair or restoration of the Collateral
shall  be  used  to  prepay  the  Indebtedness.

INSURANCE  RESERVES. Lender may require Grantor to maintain with Lender reserves
for  payment  of  insurance premiums, which reserves shall be created by monthly
payments  from Grantor of a sum estimated by Lender to be sufficient to produce,
at  least  fifteen (15) days before the premium due date, amounts at least equal
to  the  insurance  premiums  to be paid. It fifteen (15) days before payment is
due,  the  reserve  funds  are  insufficient,  Grantor shall upon demand pay any
deficiency  to  Lender.  The  reserve funds shall be held by Lender as a general
deposit  and  shall  constitute  a non-interest-bearing account which Lender may
satisfy  by  payment of the insurance premiums required to be paid by Grantor as
they  become  due.  Lender does not hold the reserve funds in trust for Grantor,
and  Lender  is  not  the agent of Grantor for payment of the insurance premiums
required  to  be paid by Grantor. The responsibility for the payment of premiums
shall  remain  Grantor's  sole  responsibility.

INSURANCE  REPORTS.  Grantor,  upon  request  of Lender, shall furnish to Lender
reports  on each existing policy of insurance showing such information as Lender
may reasonably request including the following: (1) the name of the insurer; (2)
the  risks  insured; (3) the amount of the policy; (4) the property insured; (5)
the then current value on the basis of which insurance has been obtained and the
manner  of determining that value; and (6) the expiration date of the policy, In
addition,  Grantor  shall  upon  request  by Lender (however not more often than
annually)  have  an  independent  appraiser satisfactory to Lender determine, as
applicable,  the  cash  value  or  replacement  cost  of  the  Collateral.

GRANTOR'S  RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as  otherwise  provided  below  with  respect  to  accounts,  Grantor  may  have
possession  of  the  tangible  personal  property  and beneficial use of all the
Collateral  and  may  use  it  in  any  lawful manner not inconsistent with this
Agreement  or the Related Documents, provided that Grantor's right to possession
and  beneficial  use  shall  not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's Security interest in
such  Collateral. Until otherwise notified by Lender, Grantor may collect any of
the  Collateral  consisting of accounts. At any time and even though no Event of
Default  exists,  Lender  may exercise its rights to collect the accounts and to
notify  account  debtors  to make payments directly to Lender for application to
the  Indebtedness.  If  Lender  at  any  time  has possession of any Collateral,
whether  before  or  after  an  Event of Default, Lender shall be deemed to have
exercised  reasonable  care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the circumstances, but
failure  to  honor  any request by Grantor shall not of itself be deemed to be a
failure  to  exercise  reasonable care. Lender shall not be required to take any
steps  necessary to preserve any rights in the Collateral against prior parties,
nor  to  protect, preserve or maintain any security interest given to secure the
Indebtedness.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor failsto
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due
any amounts Grantor is required to discharge or pay under this Agreement or any
Related Documents, Lender on Grantor's behalf may (but shall not be obligated
to) take any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on the Collateral
and paying all costs for insuring, maintaining and preserving the Collateral All
such expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become a part
of the indebtedness and, at Lender's option, will (A) be payable on demand; (B)
be added to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity. The Collateral also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

PAYMENT DEFAULT. Grantor fails to make any payment when due under the
Indebtedness.

OTHER  DEFAULTS.  Grantor  fails  to  comply  with or to perform any other term,
obligation,  covenant  or condition contained in this Agreement or in any of the
Related Documents or to comply with or to perform any term, obligation, covenant
or  condition  contained  in  any  other  agreement  between Lender and Grantor.

FALSE STATEMENTS. Any warranty, representation or statement made or furnished to
Lender  by Grantor or on Grantor's behalf under this Agreement, the Note, or the
Related  Documents is false or misleading in any material respect, either now or
at  the  time  made  or  furnished  or  becomes  false or misleading at any time
thereafter.

DEFECTIVE  COLLATERALIZATION.  This  Agreement  or  any of the Related Documents
ceases  to  be  in  full  force  and effect (including failure of any collateral
document  to create a valid and perfected security interest or lien) at any time
and  for  any  reason.

INSOLVENCY.  The  dissolution  or  termination of Grantor's existence as a going
business,  the insolvency of Grantor, the appointment of a receiver for any part
of  Grantor's property, any assignment for the benefit of creditors, any type of
creditor  workout, or the commencement of any proceeding under any bankruptcy or
insolvency  laws  by  or  against  Grantor.

CREDITOR  OR  FORFEITURE  PROCEEDINGS. Commencement of foreclosure or forfeiture
proceedings,  whether  by  judicial  proceeding,  self-help, repossession or any
other  method,  by any creditor of Grantor or by any governmental agency against
any  collateral securing the Indebtedness. This includes a garnishment of any of
Grantor's accounts, including deposit accounts, with Lender. However, this Event
of Default shall not apply it there is a good faith dispute by Grantor as to the
validity  or  reasonableness  of the claim which is the basis of the creditor or
forfeiture proceeding and it Grantor gives Lender written notice of the creditor
or  forfeiture  proceeding  and deposits with Lender monies or a surety bond for
the creditor oi forfeiture proceeding, in an amount determined by Lender, in its
sole  discretion,  as  being  an  adequate  reserve  or  bond  for  the dispute.


<PAGE>
                          COMMERCIAL SECURITY AGREEMENT
                                   (Continued)

Page 3

EVENTS  AFFECTING  GUARANTOR. Any of the preceding events occurs with respect to
guarantor,  endorser,  surety, or accommodation party of any at the Indebtedness
or  guarantor,  endorser,  surety,  or  accommodation  party  dies  or  becomes
incompetent,

ADVERSE  CHANGE.  A  material  adverse  change  occurs  in  Grantor's  financial
condition,  or  Lender  believes  the  prospect of payment or performance of the
Indebtedness  is  impaired.

INSECURITY. Lender in good faith believes itself insecure.

CURE PROVISIONS. If any default, other than a default in payment, is curable and
if Grantor has not been given a notice of a breach of the same provision of this
Agreement within the preceding twelve (12) months, it may be cured (and no event
of  default  will have occurred) if Grantor, after receiving written notice from
Lender demanding cure of such default: (1) cures the default within fifteen (15)
days;  or  (2)  if  the  cure  requires more than fifteen (15) days, immediately
initiates  steps which Lender deems in Lender's sale discretion to be sufficient
to  cure  the  default and thereafter continues and completes all reasonable and
necessary  steps  sufficient  to  produce  compliance  as  soon  as  reasonably
practical.

RIGHTS  AND  REMEDIES  ON  DEFAULT.  If  an  Event  of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party  under  the  California  Uniform  Commercial Code. In addition and without
limitation,  Lender  may  exercise  any  one or more of the following rights and
remedies:

ACCELERATE  INDEBTEDNESS.  Lender may declare the entire Indebtedness, including
any  prepayment  penalty which Grantor would be required to pay, immediately due
and  payable,  without  notice  of  any  kind  to  Grantor.

Assemble  Collateral. Lender may require Grantor to deliver to Lender all or any
portion  of  the  Collateral  and  any  and  all certificates of title and other
documents relating to the Collateral. Lender may require Grantor to assemble the
Collateral  and  make  it  available  to  Lender  at a place to be designated by
Lender.  Lender also shall have full power to enter upon the property of Grantor
to  take  possession  of  and  remove the Collateral. If the Collateral contains
other  goods  not covered by this Agreement at the time of repossession, Grantor
agrees  Lender  may take such other goods, provided that Lender makes reasonable
efforts  to  return  them  to  Grantor  after  repossession.

SELL  THE  COLLATERAL. Lender shall have full power to sell, lease, transfer, or
otherwise  deal  with the Collateral or proceeds thereof in Lender's own name or
that  of  Grantor.  Lender  may sell the Collateral at public auction or private
sale.  Unless  the  Collateral threatens to decline speedily in value or is of a
type  customarily  sold  on  a  recognized  market,  Lender  will  give  Grantor
reasonable notice of the time after which any private sale or any other intended
disposition  of  the  Collateral  is  to be made. The requirements of reasonable
notice  shall be met if such notice is given at least fifteen (15) days, or such
lesser  time  as  required  by  state  law,  before  the  time  of  the  sale or
disposition.  All  expenses  relating  to  the  disposition  of  the Collateral,
including  without  limitation  the  expenses  of  retaking,  holding, insuring,
preparing  for  sale  and  selling  the  Collateral,  shall become a part of the
Indebtedness  secured  by  this  Agreement  and shall be payable on demand, with
interest  at  the  Note  rate  from  date  of  expenditure  until  repaid.

APPOINT  RECEIVER.  Lender  shall have the right to have a receiver appointed to
take  possession of all or any part of the Collateral, with the power to protect
and  preserve the Collateral, to operate the Collateral preceding foreclosure or
sale,  and to collect the Rents from the Collateral and apply the proceeds, over
and  above  the cost of the receivership, against the Indebtedness. The receiver
may serve without bond if permitted by law. Lender's right to the appointment of
a  receiver  shall  exist  whether  or  not the apparent value of the Collateral
exceeds the Indebtedness by a substantial amount. Employment by Lender shall not
disqualify  a  person  from  serving  as  a  receiver.

COLLECT  REVENUES,  APPLY ACCOUNTS. Lender, either itself or through a receiver,
may  collect  the  payments,  rents,  income,  and revenues from the Collateral.
Lender  may  at  any  lime  in  Lender's discretion transfer any Collateral into
Lender's  own  name or that of Lender's nominee and receive the payments, rents,
income,  and  revenues  therefrom  and  hold  the  same  as  security  for  the
Indebtedness  or  apply  it  to  payment  of  the  Indebtedness in such order of
preference  as  Lender  may  determine.  Insofar  as  the Collateral consists of
accounts,  general  intangibles, insurance policies, instruments, chattel paper,
chases  in action, or similar properly, Lender may demand, collect, receipt for,
settle,  compromise, adjust, sue for, foreclose, or realize on the Collateral as
Lender may determine, whether or not Indebtedness or Collateral is then due. For
these  purposes,  Lender  may, on behalf of and in the name of Grantor, receive,
open  and dispose of mail addressed to Grantor; change any address to which mail
and  payments  are  to be sent; and endorse notes, checks, drafts, money orders,
documents  of  title,  instruments and items pertaining to payment, shipment, or
storage  of  any Collateral. To facilitate collection, Lender may notify account
debtors  and  obligors  on  any  Collateral to make payments directly to Lender.

OBTAIN  DEFICIENCY.  If  Lender  chooses  to  sell any or all of the Collateral,
Lender may obtain a judgment against Grantor for any deficiency remaining on the
Indebtedness  due  to  Lender after application of all amounts received from the
exercise of the rights provided in this Agreement. Grantor shall be liable for a
deficiency  even  if  the  transaction described in this subsection is a sale of
accounts  or  chattel  paper.

OTHER  RIGHTS  AND  REMEDIES. Lender shall have all the rights and remedies of a
secured  creditor under the provisions of the Uniform Commercial Code, as may be
amended  from  time to time. In addition, Lender shall have and may exercise any
or  all  other  rights  and remedies it may have available at law, in equity, or
otherwise.

ELECTION  OF  REMEDIES.  Except  as  may be prohibited by applicable law, all of
Lender's  rights  and remedies, whether evidenced by this Agreement, the Related
Documents,  or  by  any  other writing, shall be cumulative and may be exercised
singularly  or  concurrently.  Election  by
Lender  to  pursue  any remedy will not bar any other remedy, and an election to
make  expenditures  or  to take action to perform an obligation of Grantor under
this  Agreement,  after  Grantor's failure to perform, shall not affect Lender's
right  to  declare  a  default  and  exercise  its  remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

AMENDMENTS. This Agreement, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this  Agreement.  No  alteration  of  or  amendment  to  this Agreement shall be
effective  unless  given in writing and signed by the party or parlies sought to
be  charged  or  bound  by  the  alteration  or  amendment.

ATTORNEYS'  FEES;  EXPENSES.  Grantor  agrees to pay upon demand all of Lender's
costs  and  expenses,  including  Lender's  attorneys'  fees  and Lender's legal
expenses,  incurred in connection with the enforcement of this Agreement. Lender
may  hire  or pay someone else to help enforce this Agreement, and Grantor shall
pay  the  costs  and  expenses  of  such enforcement. Costs and expenses include
Lender's  attorneys'  fees and legal expenses whether or not there is a lawsuit,
including  attorneys'  fees  and  legal  expenses  for  bankruptcy  proceedings
(including  efforts  to  modify  or  vacate  any  automatic stay or injunction),
appeals,  and  any  anticipated  post-judgment collection services. Grantor also
shall  pay  all  court  costs and such additional fees as may be directed by the
court.

CAPTION  HEADINGS.  Caption  headings  in  this  Agreement.  are for convenience
purposes  only  and  are not to be used to interpret or define the provisions of
this  Agreement.

GOVERNING  LAW.  THIS  AGREEMENT  WILL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE  WITH  FEDERAL  LAW  AND  THE  LAWS  OF THE STATE OF CALIFORNIA. THIS
AGREEMENT  HAS  BEEN  ACCEPTED  BY  LENDER  IN  THE  STATE  OF  CALIFORNIA.

PREFERENCE  PAYMENTS.  Any  monies Lender pays because of an asserted preference
claim  in  Grantor's  bankruptcy  will become a part of the Indebtedness and, at
Lender's  option,  shall  be  payable  by Grantor as provided in this Agreement.

NO  WAIVER BY LENDER. Lender shall not be deemed to have waived any rights under
this  Agreement  unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate as
a  waiver of such right or any other right. A waiver by Lender of a provision of
this  Agreement  shall  not  prejudice  or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any other provision
of  this Agreement. No prior waiver by Lender, nor any course of dealing between
Lender  and  Grantor,  shall constitute a waiver of any of Lender's rights or of
any of Grantor's obligations as to any future transactions. Whenever the consent
of  Lender  is  required  under  this Agreement, the granting Of Such consent by
Lender  in  any  instance  shall not constitute continuing consent to subsequent
instances  where  such  consent is required and in all cases such consent may be
granted  or  withheld  in  the  sole  discretion  of  Lender.

NOTICES.  Any notice required to be given under this Agreement shall be given in
writing,  and shall be effective when actually delivered, when actually received
by  telefacsimile  (unless  otherwise  required  by  law), when deposited with a
nationally  recognized  overnight  courier, or, if mailed, when deposited in the
United  States  mail,  as  first  class,  certified  or  registered mail postage
prepaid,  directed  to the addresses shown near the beginning of this Agreement.
Any  party  may  change  its  address for notices under this Agreement by giving
formal  written  notice to the other parties, specifying that the purpose of the
notice  is to change the party's address. For notice purposes, Grantor agrees to
keep Lender informed at all times of Grantor's current address. Unless otherwise
provided or required by law, it there is more than one Grantor, any notice given
by  Lender  to  any  Grantor  is  deemed  to  be  notice  given to all Grantors.

POWER  OF  ATTORNEY.  Grantor  hereby  appoints  Lender as Grantor's irrevocable
attorney-  i  n-f  act  for  the purpose of executing any documents necessary to
perfect  or  to continue the security interest granted in this Agreement. Lender
may  at any time, and without further authorization from Grantor, file a carbon,
photographic  or  other  reproduction  of  any  financing  statement  of of this
Agreement  for  use  as a financing statement. Grantor will reimburse Lender for
all  expenses  for  the  perfection  and  the  continuation of the perfection of
Lender's  security  interest  in  the  Collateral.

WAIVER  OF  CO-OBLIGOR'S  RIGHTS.  It  more than one person is obligated for the
Indebtedness,  Grantor irrevocably waives, disclaims and relinquishes all claims
against such other person which Grantor has or would otherwise have by virtue of
payment  of the Indebtedness or any part thereof, specifically including but not
limited  to  all  rights  of  indemnity,  contribution  or  exoneration.



<PAGE>
                          COMMERCIAL SECURITY AGREEMENT
                                   (Continued)

Page 4

SEVERABILITY.  If  a court of competent jurisdiction finds any provision of this
Agreement  to be illegal, invalid, or unenforceable as to any circumstance, that
finding  shall  not  make  the  offending  provision  illegal,  invalid,  or
unenforceable as to any other circumstance. If feasible, the offending provision
shall be considered modified so that it becomes legal, valid and enforceable. It
the  offending  provision  cannot be so modified, it shall be considered deleted
from  this  Agreement.  Unless  otherwise  required  by  law,  the  illegality,
invalidity,  or  unenforceability  of  any provision of this Agreement shall not
affect  the  legality, validity or enforceability of any other provision of this
Agreement.

SUCCESSORS  AND  ASSIGNS. Subject to any limitations stated in this Agreement on
transfer  of  Grantor's interest, this Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns. If ownership of the
Collateral becomes vested in a person other than Grantor, Lender, without notice
to  Grantor, may deal with Grantor's successors with reference to this Agreement
and  the  Indebtedness  by  way  of  forbearance  or extension without releasing
Grantor  from  the  obligations  of  this  Agreement  or  liability  under  the
Indebtedness.

SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations, warranties, and
agreements  made  by  Grantor  in this Agreement shall survive the execution and
delivery  of  this Agreement, shall be continuing in nature, and shall remain in
full force and effect until such time as Grantor's Indebtedness shall be paid in
full.

TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
Agreement.

DEFINITIONS.  The following capitalized words and terms shall have the following
meanings  when  used  in  this  Agreement.  Unless  specifically  stated  to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the  plural,  and  the  plural  shall  include  the singular, as the context may
require.  Words and terms not otherwise defined in this Agreement shall have the
meanings  attributed  to  such  terms  in  the  Uniform  Commercial  Code:

ACCOUNT.  The  word  "Account"  means a trade account, account receivable, other
receivable,  or other right to payment for goods sold or services rendered owing
to  Grantor  (or  to  a  third  party  grantor  acceptable  to  Lender),

AGREEMENT.  The  word  "Agreement"  means this Commercial Security Agreement, as
this Commercial Security Agreement may be amended or modified from time to time,
together  with  all  exhibits and schedules attached to this Commercial Security
Agreement  from  time  to  time.

BORROWER. The word "Borrower' means Chicago Pizza & Brewery, Inc., and all other
persons and entities signing the Note in whatever capacity.

COLLATERAL.  The  word  "Collateral"  means  all  of  Grantor's right, title and
interest in and to all the Collateral as described in the Collateral Description
section  of  this  Agreement.

DEFAULT. The word "Default" means the Default set forth in this Agreement in the
section titled "Default".

ENVIRONMENTAL  LAWS.  The  words  "Environmental  Laws"  mean any and all state,
federal  and  local  statutes,  regulations  and  ordinances  relating  to  the
protection  of human health or the environment, including without limitation the
Comprehensive  Environmental  Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. ("CERCLN'), the Superlund Amendments
and  Reauthorization  Act  of  1986,  Pub. L. No. 99-499 ("SARA"), the Hazardous
Materials  Transportation  Act,  49  U.S.C.  Section 1801, el seq., the Resource
Conservation  and  Recovery  Act,  42 U.S.C. Section 6901, et seq., Chapters 6.5
through  7.7  of  Division  20 of the California Health and Safety Code, Section
25100, et seq., or other applicable state or federal laws, rules, or regulations
adopted  pursuant  thereto.

EVENT OF DEFAULT. The words "Event of Default" mean any of the Events of Default
set  forth  in  this  Agreement  in  the  Default  section  of  this  Agreement.

GRANTOR. The word "Grantor" means Chicago Pizza & Brewery, Inc.

HAZARDOUS  SUBSTANCES.  The  words  "Hazardous  Substances" mean materials that,
because  of  their  quantity,  concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to human health
or  the  environment  when  improperly  used,  treated,  stored,  disposed  of,
generated,  manufactured, transported or otherwise handled. The words "Hazardous
Substances" are used in their very broadest sense and include without limitation
any  and  all hazardous or toxic substances, materials or waste as defined by or
listed  under  the  Environmental  Laws.  The  term  "Hazardous Substances" also
includes,  without  limitation,  petroleum  and  petroleum  by-products  or  any
fraction  thereof  and  asbestos.

INDEBTEDNESS.  The  word  "Indebtedness" means the indebtedness evidenced by the
Note  or  Related  Documents, including all principal and interest together with
all  other  indebtedness and costs and expenses for which Grantor is responsible
under  this  Agreement  or  under  any  of  the  Related  Documents.

LENDER. The word "Lender"means Washington Mutual Bank dba WM Business Bank, its
successors and assigns.

NOTE. The word "Note" means the Note executed by Grantor in the principal amount
of  $4,000,000.00  dated  February  15,  2000,  together  with  all renewals of,
extensions  of,  modifications  of,  refinancings  of,  consolidations  of,  and
substitutions  for  the  note  or  credit  agreement.

RELATED  DOCUMENTS.  The  words  "Related  Documents" mean all promissory notes,
credit  agreements,  loan  agreements,  environmental  agreements,  guaranties,
security  agreements,  mortgages,  deeds  of  trust,  security deeds, collateral
mortgages,  and  all other instruments, agreements and documents, whether now or
hereafter  existing,  executed  in  connection  with  the  Indebtedness,

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED FEBRUARY 15, 2000.

GRANTOR:

     CHICAGO PIZZA & BREWERY, INC.
BY:
     Ernest T. Klinger, President of Chicago Pizza &
          Brewery, Inc.


. 

<PAGE>
                CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL

Corporation: Chicago Pizza & Brewery, Inc.
             26131 Marguerite Parkway, Suite A
             Mission Viejo, CA 92692


Lender:     Washington Mutual Bank dba WM Business Bank
            Los Angeles Business Banking Center
            1000 Wilshire Boulevard, Suite 100
            Los Angeles, CA 90017

1, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:

THE CORPORATION'S EXISTENCE. The complete and correct name of the Corporation is
Chicago  Pizza & Brewery, Inc. ("Corporation"). The Corporation is a corporation
for  profit  which  is,  and  at  all  times  shall  be, duly organized, validly
existing,  and  in  good standing under and by virtue ofthe laws of the State of
California. The Corporation is duly authorized to transact business in all other
states in which the Corporation is doing business, having obtained all necessary
filings,  governmental  licenses  and  approvals  for  each  state  in which the
Corporation  is  doing  business.  Specifically,  the Corporation is, and at all
times  shall  be, duly qualified as a foreign corporation in all states in which
the  failure  to so qualify would have a material adverse effect on its business
or  financial condition. The Corporation has the full power and authority to own
its  properties and to transact the business in which it is presently engaged or
presently  proposes  to  engage.  The  Corporation  maintains an office at 26131
Marguerite Parkway, Suite A, Mission Viejo, CA 92692. Unless the Corporation has
designated otherwise in writing, the principal office is the office at which the
Corporation  keeps  its books and records. The Corporation will notify Lender of
any  change  in  the  location  of  the  Corporation's  principal  office.  The
Corporation  shall do all things necessary to preserve and to keep in full force
and  effect  its  existence,  rights  and  privileges, and shall comply with all
regulations, rules, ordinances, statutes, orders and decrees of any governmental
or  quasi-governmental  authority or court applicable to the Corporation and the
Corporation's  business  activities.

RESOLUTIONS ADOPTED. At a meeting of the Directors of the Corporation, or it the
Corporation  is  a  close  corporation  having  no  Board of Directors then at a
meeting  of the Corporation's shareholders, duly called and hold on February 15,
2000,  at  which  a  quorum  was present and voting, or by other duly authorized
action  in  lieu of a meeting, the resolutions set forth in this Resolution were
adopted.

OFFICERS. The following named persons are officers of Chicago Pizza & Brewery,
Inc.:



NAMES                 TITLES            AUTHORIZED   ACTUAL SIGNATURES
-----                 ------            ----------   -----------------

ERNEST T. KLINGER     PRESIDENT                  Y   /s/Ernest T. Klinger

PAUL A. MOTENKO       COCHIEF EXECUTIVE OFFICER  Y   /s/Paul A. Motenko

JEREMIAH J. HENNESSY  COCHIEF EXECUTIVE OFFICER  Y   /s/Jeremiah J. Hennessy

ACTIONS AUTHORIZED. Any one (1) of the authorized persons listed above to
any agreements of any nature with
Lender, and those agreements will bind the Corporation. Specifically, but
without limitation, any one (1) of such authorized persons are authorized,
empowered, and directed to do the following for and on behalf of the
Corporation:

BORROW  MONEY.  To borrow from time to time from Lender, on such terms as may be
agreed  upon between the Corporation and Lender, such sum or sums of money as in
their  judgment  should  be  borrowed,  without  limitation.

EXECUTE NOTES. To execute and deliver to Lender the promissory note or notes, or
other evidence of the Corporation's credit accommodations, on Lender's forms, at
such  rates  of interest and on such terms as may be agreed upon, evidencing the
sums  of  money  so borrowed or any of the Corporation's indebtedness to Lender,
and  also  to  execute  and  deliver to Lender one or more renewals, extensions,
modifications, refinancings, consolidations, or substitutions for one or more of
the  notes,  any  portion  of  the  notes,  or  any  other  evidence  of  credit
accommodations.

GRANT  SECURITY.  To  mortgage,  pledge,  transfer,  endorse,  hypothecate,  or
otherwise encumber and deliver to Lender any property now or hereafter belonging
to  the  Corporation  or  in  which the Corporation now or hereafter may have an
interest,  including  without  limitation  all  real  property  and all personal
property  (tangible  or  intangible)  of  the  Corporation,  as security for the
payment  of any loans or credit accommodations so obtained, any promissory notes
so  executed  (including  any  amendments  to  or  modifications,  renewals, and
extensions  of  such  promissory notes), or any other or further indebtedness of
the  Corporation to Lender at any time owing, however the same may be evidenced.
Such  property may be mortgaged, pledged, transferred, endorsed, hypothecated or
encumbered at the time such loans are obtained or such indebtedness is incurred,
or  at  any  other time or times, and may be either in addition to or in lieu of
any properly theretofore mortgaged, pledged, transferred, endorsed, hypothecated
or  encumbered.

EXECUTE  SECURITY  DOCUMENTS.  To  execute  and  deliver  to Lender the forms of
mortgage,  deed  of  trust, pledge agreement, hypothecation agreement, and other
security  agreements and financing statements which Lender may require and which
shall  evidence  the terms and conditions under and pursuant to which such liens
and  encumbrances, or any of them, are given; and also to execute and deliver to
Lender  any  other  written  instruments,  any  chattel  paper,  or  any  other
collateral,  of any kind or nature, which Lender may deem necessary or proper in
connection  with  or  pertaining  to  the  giving of the liens and encumbrances.
Notwithstanding  the  foregoing,  any  one  of  the above authorized persons may
execute,  deliver,  or  record  financing  statements.

NEGOTIATE  ITEMS.  To  draw, endorse, and discount with Lender all drafts, trade
acceptances,  promissory notes, or other evidences of indebtedness payable to or
belonging  to  the Corporation or in which the Corporation may have an interest,
and either to receive cash for the same or to cause such proceeds to be credited
to  the Corporation's account with Lender, or to cause such other disposition of
the  proceeds  derived  therefrom  as  they  may  deem  advisable.

FURTHER  ACTS.  In  the  case  of  lines  of  credit, to designate additional or
alternate  individuals as being authorized to request advances under such lines,
and  in  all cases, to do and perform such other acts and things, to pay any and
all  fees  and  costs,  and  to  execute  and  deliver  such other documents and
agreements  as the officers may in their discretion deem reasonably necessary or
proper  in  order  to  carry  into  effect  the  provisions  of this Resolution.

ASSUMED  BUSINESS  NAMES. The Corporation has filed or recorded all documents or
filings  required  by  law  relating  to  all assumed business names used by the
Corporation.  Excluding the name of the Corporation, the following is a complete
list  of  all  assumed business names under which the Corporation does business:
NONE.

NOTICES  TO  LENDER.  The  Corporation will notify Lender in writing at Lender's
address  shown  above (or such other addresses as Lender may designate from time
to  time)  prior  to any (A) change in the Corporation's name, (8) change in the
Corporation's  assumed  business  name(s),  (C)  change in the management of the
Corporation,  (D)  change  in  the  authorized  signer(s),  (E)  change  in  the
Corporation's  principal  office address, (F) conversion of the Corporation to a
now  or  different type of business entity, or (G) change in any other aspect of
the  Corporation  that  directly or indirectly relates to any agreements between
the Corporation and Lender. No change in the Corporation's name will take effect
until  after  Lender  has  been  notified.

CERTIFICATION  CONCERNING OFFICERS AND RESOLUTIONS. The officers named above are
duly  elected, appointed, or employed by or for the Corporation, as the case may
be,  and  occupy  the  positions  set  opposite  their  respective  names.  This
Resolution  now  stands  of  record  on the books of the Corporation, is in full
force and effect, and has not been modified or revoked in any manner whatsoever.

NO CORPORATE SEAL. The Corporation has no corporate seal, and therefore, no seal
is affixed to this Resolution.

CONTINUING VALIDITY. Any and all acts authorized pursuant to this Resolution and
performed  prior  to  the  passage  of  this  Resolution are hereby ratified and
approved.  This  Resolution  shall be continuing, shall remain in full force and
effect  and  Lender  may rely on it until written notice of its revocation shall
have  been  delivered  to and received by Lender at Lender's address shown above
(or  such  addresses as Lender may designate from time to time). Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the  time  notice  is  given.

IN TESTIMONY WHEREOF, I have hereunto set my hand.

I  have  read  all  the  provisions  of this Resolution, and I personally and on
behalf  of  the Corporation certify that all statements and representations made
In  this  Resolution are true and correct. This Corporate Resolution to Borrow /
Grant  Collateral  Is  dated  February  15,  2000.


<PAGE>
                CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL
                                   (Continued)

Page 2

CERTIFIED TO AND ATTESTED BY:


X  /s/Ernest T. Klinger


NOTE: If the officers signing this Resolution are designated by the foregoing
document as one of the officers authorized to act on the Corporation's behalf,
It is advisable to have this Resolution signed byat least one non-authorized
officer of the Corporation.