TOTAL ENTERTAINMENT & RESTAURANT CORP, S-1, 1997-03-14

TOTAL ENTERTAINMENT & RESTAURANT CORP
S-1, 1997-03-14

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 14, 1997

REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

TOTAL ENTERTAINMENT RESTAURANT CORP.*
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 5812 52-2016614
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

300 CRESCENT COURT
BUILDING 300, SUITE 850
DALLAS, TEXAS 75201
(214) 754-0414
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
------------------------

JAMIE B. COULTER

CHAIRMAN OF THE BOARD
TOTAL ENTERTAINMENT RESTAURANT CORP.
300 CRESCENT COURT
BUILDING 300, SUITE 850
DALLAS, TEXAS 75201
(214) 754-0414
(Name, address, including zip code, and telephone number,
including area code, of agent of service)
------------------------

COPIES TO:

<TABLE>
<S> <C>
STEVEN WOLOSKY, ESQ. JEFFREY D. SAPER, ESQ.
JEFFREY S. SPINDLER, ESQ. J. ROBERT SUFFOLETTA, ESQ.
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP WILSON SONSINI GOODRICH & ROSATI, P.C.
505 PARK AVENUE 650 PAGE MILL ROAD
NEW YORK, NEW YORK 10022 PALO ALTO, CALIFORNIA 94304
(212) 753-7200 (415) 493-9300
</TABLE>

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF SECURITIES PROPOSED MAXIMUM AGGREGATE
TO BE REGISTERED OFFERING PRICE(2) AMOUNT OF REGISTRATION FEE
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.01 par value(1)........................... $ 25,300,000 $ 7,666.67
==============================================================================================================================
</TABLE>

(1) Includes 300,000 shares of Common Stock which the Underwriters have the
option to purchase to cover over-allotments, if any.

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Securities Act of 1933, as amended.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================

* The current name of the Registrant is Eatertainment Inc., a Delaware
corporation. The Registrant intends to change its name to Total Entertainment
Restaurant Corp. after the filing of this Registration Statement and prior to
the effective date hereof.
<PAGE> 2

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.

SUBJECT TO COMPLETION, DATED MARCH 14, 1997

2,000,000 SHARES

[LOGO]

TOTAL ENTERTAINMENT RESTAURANT CORP.
COMMON STOCK

All of the shares of Common Stock offered hereby are being sold by Total
Entertainment Restaurant Corp. (the "Company"). Prior to this Offering, there
has been no public market for the Common Stock of the Company. It is currently
estimated that the initial public offering price of the Common Stock will be
between $9.00 and $11.00 per share. See "Underwriting" for a discussion of the
factors to be considered in determining the initial public offering price. The
Company has applied to have the Common Stock approved for quotation on the
Nasdaq National Market under the trading symbol "TENT."

SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.

------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

================================================================================

<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public Discount (1) Company (2)(3)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Per Share................................... $ $ $
Total(3).................................... $ $ $
=========================================================================================
</TABLE>

(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.

(2) Before deducting expenses payable by the Company estimated at $675,000.

(3) The Company has granted to the Underwriters a 30-day option to purchase up
to an additional 300,000 shares of Common Stock solely to cover
over-allotments, if any. If the Underwriters exercise this option in full,
the Price to Public will total $ , the Underwriting Discount will
total $ and the Proceeds to Company will total $ . See
"Underwriting."

The shares of Common Stock are offered by the several Underwriters named
herein when, as and if delivered to and accepted by the Underwriters and subject
to their right to reject any order in whole or in part. It is expected that
delivery of certificates representing the shares will be made against payment
therefor at the office of Montgomery Securities on or about , 1997.

------------------------

MONTGOMERY SECURITIES

, 1997
<PAGE> 3

[THIS PAGE CONTAINS PHOTOS OF
THE COMPANY'S ENTERTAINMENT RESTAURANT LOCATIONS.]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING STABILIZING BIDS, SYNDICATE COVERING TRANSACTIONS OR THE IMPOSITION OF
PENALTY BIDS. FOR A DISCUSSION OF THESE ACTIVITIES, SEE "UNDERWRITING."

Fox & Hound(R) and Bailey's Sports Grille(R) are registered service marks
of the Company. This Prospectus also includes service marks or trademarks of
corporations other than the Company.

2
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to, and
should be read in conjunction with, the more detailed information and the
historical and pro forma financial statements (including the notes thereto)
appearing elsewhere in this Prospectus. Unless otherwise indicated, all
information in this Prospectus assumes (i) the completion of a 79-for-1 stock
dividend prior to the date of this Prospectus and (ii) no exercise of the
Underwriters' over-allotment option.

THE COMPANY

Total Entertainment Restaurant Corp. (the "Company") currently owns and
operates 12 entertainment restaurant locations under the Fox & Hound ("Fox &
Hound") and Bailey's Sports Grille ("Bailey's") brand names. The Company's
entertainment restaurant locations combine a comfortable and inviting social
gathering place, full menu and full service bar, state-of-the-art audio and
video systems for sports entertainment, traditional games of skill such as
pocket billiards and a late-night dining and entertainment alternative all in a
single location. The Company's entertainment restaurant locations appeal to a
broad range of guests who can participate in one or more aspects of the
Company's total entertainment and restaurant experience. Fox & Hound and
Bailey's encompass the Company's multi-dimensional concept and serve both larger
urban and smaller regional markets. The first Bailey's was opened in Charlotte,
North Carolina in 1989 and the first Fox & Hound was opened in Arlington, Texas
in 1994. The Company currently owns and operates three Fox & Hounds and nine
Bailey's in Arkansas, Indiana, North Carolina, South Carolina, Tennessee and
Texas.

The Company believes that its versatile entertainment restaurant concept
will enable the Company to distinguish itself as the leader in this market
segment. Management's strategy for attaining this leadership position is based
on the following key elements: (i) provide guests with a wide variety of
entertainment and dining options; (ii) leverage management's experience to
secure favorable real estate sites, control costs and implement proven operating
procedures; (iii) expand rapidly through selected geographic markets in the
United States; (iv) utilize both the Fox & Hound and Bailey's brand names to
target different market segments; and (v) provide high quality food and
beverages, entertainment and customer service.

The Company's management team has extensive experience in the restaurant
business and has successfully developed and operated multi-unit concepts in a
variety of geographic markets throughout the United States. The Company intends
to open eight entertainment restaurant locations in 1997 (one of which was
opened in March 1997) and 15 locations in each of 1998 and 1999. Management
expects that these future locations will range from 6,500 to 10,000 square feet.
The Company is currently evaluating markets familiar to its management team and
is actively negotiating additional leases at a number of sites. The Company
expects to manage this growth by employing the services and infrastructure
provided by Coulter Enterprises to centralize its accounting and administrative
controls.

The Company, which was incorporated in Delaware in February 1997, was
formed to acquire the Bailey's and Fox & Hound concept and their existing
locations. The Company currently operates its Bailey's locations through its
subsidiary Bailey's Sports Grille, Inc. and its Fox & Hound locations through
separate subsidiary limited partnerships. The Company anticipates that future
entertainment restaurant locations will be operated by separate subsidiary
corporations in the states in which it will own and operate locations. The
Company's principal executive offices are located at 300 Crescent Court,
Building 300, Suite 850, Dallas, Texas 75201. The Company's telephone number is
(214) 754-0414.

3
<PAGE> 5

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered hereby...................... 2,000,000 shares
Common Stock to be outstanding after the
Offering....................................... 10,000,000 shares(1)
Use of Proceeds.................................. To finance the expansion and development
of additional entertainment restaurant
locations, to repay indebtedness and for
general corporate purposes. See "Use of
Proceeds."
Proposed Nasdaq National Market symbol........... "TENT"
</TABLE>

- ---------------
(1) Does not include (i) 1,500,000 shares reserved for issuance under the
Company's 1997 Incentive and Nonqualified Stock Option Plan (the "1997
Plan"), of which options to purchase 735,000 shares will be granted on the
date of this Prospectus and (ii) 150,000 shares reserved for issuance under
the Company's 1997 Directors Stock Option Plan (the "Directors Plan"), of
which options to purchase 50,000 shares will be granted on the date of this
Prospectus. See "Management -- Stock Option Plans."

SECTION 351 EXCHANGE

On February 20, 1997, the Company effected an exchange (the "Exchange") of
property under Section 351 of the Internal Revenue Code of 1986, as amended (the
"Code"), with the stockholders of four corporations (the "Subsidiary
Corporations") and certain limited partners of four Texas limited partnerships
(the "Subsidiary Limited Partnerships"). Pursuant to the Exchange, the Company
became the owner of the eight then-existing Bailey's locations and the three Fox
& Hound locations. The Company issued 8,000,000 shares of its common stock,
$0.01 par value (the "Common Stock"), in exchange for all of the outstanding
stock of the Subsidiary Corporations and the outstanding limited partnership
interests of the Subsidiary Limited Partnerships not owned by the Subsidiary
Corporations. The Subsidiary Corporations and Subsidiary Limited Partnerships
thereby became wholly-owned subsidiaries of the Company. All references to the
Company in this Prospectus are to Total Entertainment Restaurant Corp., a
Delaware corporation, and its subsidiaries, including the Subsidiary Limited
Partnerships. See "Certain Transactions."

4
<PAGE> 6

SUMMARY OF SELECTED HISTORICAL FINANCIAL DATA

The following table sets forth certain historical financial and operating
data for Bailey's Sports Grille, Inc. and the three Fox & Hound locations (the
"Fox & Hound Entertainment and Restaurant Group"). The table also sets forth
summary pro forma financial data for the Company as if the Exchange had occurred
on January 1, 1996. The financial data below should be read in conjunction with
all the historical and pro forma financial statements, including the notes
thereto, and the information under "Selected Historical Financial Data," "Pro
Forma Combined Condensed Financial Statements" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations." The pro forma
information is not necessarily indicative of what the Company's results of
operations or financial condition would have been for the period or at the dates
indicated.

<TABLE>
<CAPTION>
HISTORICAL
-----------------------------------------------------------------------
FOX & HOUND PRO FORMA(2)
ENTERTAINMENT AND -------------
BAILEY'S SPORTS GRILLE, INC.(1) RESTAURANT GROUP
------------------------------------------ -------------------------- THE COMPANY
-------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED
------------------------------------------ -------------------------- DECEMBER 31,
1992 1993 1994 1995 1996 1994 1995 1996 1996
------ ------ ------ ------ ------ ------ ------ ------ -------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA AND NUMBER OF LOCATIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales.................. $1,069 $1,340 $2,928 $5,333 $9,312 $ 730 $2,618 $5,506 $14,818
Income (loss) from
operations............... 234 290 316 726 1,709 (83) 109 420 1,905
Income (loss) before income
taxes.................... 204 274 250 602 1,502 (84) 96 364 1,271
Income tax provision(3).... -- -- -- -- -- -- -- -- 476
Net income (loss).......... $ 204 $ 274 $ 250 $ 602 $1,502 $ (84) $ 96 $ 364 $ 795
Average shares
outstanding.............. 8,000,000
Net income per share(4).... $ 0.10
OPERATING DATA:
Average sales per
location(5).............. $ 535 $ 670 $ 913 $1,105 $1,317 $1,186 $1,309 $1,812 $ 1,452
Number of locations at year
end...................... 2 2 4 6 8 2 3 3 11
</TABLE>

<TABLE>
<CAPTION>
THE COMPANY
DECEMBER 31, 1996
----------------------------
PRO FORMA AS ADJUSTED(6)
--------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)................................................... $(9,601) $ 8,344
Total assets................................................................ 13,197 20,472
Revolving note payable...................................................... 10,660 --
Stockholders' equity........................................................ 1,514 19,459
</TABLE>

- ---------------
(1) Bailey's operates on a 52 or 53 week fiscal year ending on the last Tuesday
in December. Bailey's 1992, 1993, 1994 and 1995 fiscal years were comprised
of 52 weeks and Bailey's 1996 fiscal year was comprised of 53 weeks. The
Company will operate on a 52 or 53 week fiscal year ending on the last
Tuesday in December.

(2) Reflects pro forma adjustments for amortization of goodwill and interest
expense. See "Pro Forma Combined Condensed Financial Statements."

(3) No income tax provision is presented for the historical results of Bailey's
Sports Grille, Inc. or Fox & Hound Entertainment and Restaurant Group as the
entities operated as either Subchapter S corporations or as partnerships and
were not subject to income taxes at the entity level.

(4) Gives effect to all shares of Common Stock outstanding immediately following
the consummation of the Exchange and prior to the closing of this Offering
as though they were outstanding since January 1, 1996.

(5) Average sales per location on an annualized basis are computed by dividing a
location's total sales for full weeks open during the period by the number
of full weeks open, and multiplying the result by fifty-two.

(6) Adjusted to reflect the sale of the 2,000,000 shares of Common Stock offered
hereby at an assumed initial public offering price of $10.00 per share and
the application of the estimated net proceeds therefrom. See "Use of
Proceeds."

5
<PAGE> 7

RISK FACTORS

Prospective purchasers should carefully consider the following information
in addition to the other information contained in this Prospectus in evaluating
an investment in the Common Stock offered hereby.

Limited Operating History; New Company Management. The Company was formed
in February 1997 and pursuant to the Exchange became the owner of the Bailey's
and Fox & Hound concept and their existing locations. Prior to the Exchange,
Bailey's and Fox & Hound were operated as two separate entities. The executive
officers of the Company have all joined the Company subsequent to the Exchange.
Accordingly, the historical operations and financial results of Bailey's and Fox
& Hound do not reflect the impact of the Company's current management.
Furthermore, only three of the Company's entertainment restaurant locations have
been in operation for more than three years. Accordingly, the Company and its
existing management have a limited operating history upon which investors may
evaluate the Company's performance and there can be no assurance that the
Company will be able to increase its revenues or sustain profitability in the
future. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

Small Unit Base. The Company currently owns and operates only 12
entertainment restaurant locations, of which nine are Bailey's and three are Fox
& Hounds. Of these locations, the Company believes only one Fox & Hound in
Dallas (Midway), Texas and the four most recently opened Bailey's reflect
management's expectations as to the layout and decor of future locations. There
can be no assurance that future locations will achieve the sales levels or
reflect the unit economics of the existing locations. Consequently, the revenues
and earnings achieved to date by the Company's relatively small and concentrated
unit base may not be indicative of the future operating results of a larger
number of locations. Furthermore, because of the Company's relatively small unit
base, the operating results of any one location or the lack of success of any
new location will have a more significant effect on the Company's results of
operations than would be the case in a larger company with a significantly
larger unit base.

Expansion Strategy. The Company intends to pursue an aggressive expansion
strategy by opening eight entertainment restaurant locations in 1997 (one of
which was opened in March 1997) and 15 locations in each of 1998 and 1999. The
Company's ability to expand will depend on a number of factors, including
identification of suitable locations, negotiation of favorable lease terms,
availability, staffing, training and retention of skilled management and hourly
personnel, securing required governmental approvals and permits, adequately
supervising construction, securing adequate financing, obtaining necessary
equipment and other factors, some of which are beyond the control of the
Company. Future operating results may be adversely affected by costs and
problems associated with developing new entertainment restaurant locations over
a short period of time. There can be no assurance that the Company will be able
to open all of its planned new entertainment restaurant locations or that such
newly opened locations can be operated profitably. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" and "Business -- Expansion Plans."

Future Capital Requirements. The Company plans to incur substantial costs
over the near term in connection with its expansion plans. The Company believes
that the net proceeds from this Offering, anticipated cash flow from operations
and funds anticipated to be available from a credit facility will be sufficient
to satisfy the Company's working capital and capital expenditure requirements
for at least the next twelve months. There can be no assurance, however, that
changes in the Company's operating plans, acceleration of the Company's
expansion plans, lower than anticipated revenues, increased expenses, potential
acquisitions or other events will not cause the Company to seek additional
financing sooner than anticipated. There can be no assurance that such
additional financing will be available on acceptable terms or at all.

Geographic Concentration; Dependence on Discretionary Spending. The
success of the Company's business and its operating results are dependent on
discretionary spending by consumers, particularly by consumers living in the
communities in which the Company's units are located. Currently, the Company's
units are concentrated in six states, Arkansas, Indiana, North Carolina, South
Carolina, Tennessee and Texas. A significant weakening in any of the local
economies in which the Company operates or is planning to operate may cause the
residents of such communities to curtail discretionary spending which, in turn,
could have a material adverse effect on the results of operations of the
Company. The Company's business could also be

6
<PAGE> 8

adversely affected by national economic conditions, demographic trends, consumer
confidence in the economy and local traffic patterns.

Competition. The entertainment and restaurant industries are highly
competitive. There are a great number of entertainment and restaurant businesses
that compete directly and indirectly with the Company. Many of these entities
are well-established and have significantly greater financial, marketing and
other resources than does the Company. Although there are few other companies
presently utilizing the concept of combining entertainment and restaurant
operations in a manner similar to the Company, the Company will encounter
increased competition in the future. Such increased competition may have an
adverse effect on the Company's operating results. In addition to other
entertainment and restaurant companies, the Company competes with numerous
businesses for suitable locations. The legalization of casino gambling in
geographic areas near any unit operated by the Company would increase consumers'
entertainment alternatives, which could have a material adverse effect on the
Company's business. See "Business -- Competition."

Dependence on Senior Management. Jamie B. Coulter, the Chairman of the
Board of the Company, and Michael A. Nahkunst, the Chief Executive Officer,
President and Chief Operating Officer of the Company, were not actively involved
in the day-to-day business of the Company prior to the Exchange. The Company has
entered into a non-competition, confidentiality and non-solicitation agreement
with Mr. Coulter. However, Mr. Coulter has made no future specific time
commitment to the Company. Mr. Nahkunst is employed pursuant to an employment
agreement which will expire in April 2002. The loss of the services of Messrs.
Coulter or Nahkunst could adversely affect the Company's business, its
operations or its expansion plans. The Company's growth will depend upon its
ability to attract and retain additional skilled management personnel. See
"Management."

Government Regulation. The Company is subject to numerous federal, state
and local laws affecting its business. Each location is subject to licensing and
regulation by a number of governmental authorities, which may include alcoholic
beverage control, amusement, health and safety and fire agencies in the state or
municipality in which each of the Company's entertainment restaurant units is
located. In 1996, a significant portion of the Company's sales were derived from
alcoholic beverages. Each unit is required to obtain, directly or indirectly, a
license to sell alcoholic beverages on the premises from a state authority and,
in certain locations, county and municipal authorities. Typically, licenses must
be renewed annually and may be revoked or suspended for cause at any time.
Alcoholic beverage control regulations govern numerous aspects of the daily
operations of each entertainment restaurant location, including the minimum age
of patrons and employees, hours of operation, advertising practices, wholesale
purchasing, inventory control and handling, and storage and dispensing of
alcoholic beverages. The Company has not encountered any material problems
relating to alcoholic beverage licenses to date. The failure to receive or
retain a liquor license in a particular location could adversely affect the
Company's ability to obtain such a license elsewhere.

The Company is subject to "dram-shop" statutes in the states in which its
entertainment restaurant units are located. These statutes generally provide a
person injured by an intoxicated person with the right to recover damages from
an establishment which wrongfully served alcoholic beverages to the intoxicated
individual. The Company carries liquor liability coverage as part of its
existing comprehensive general liability insurance, which coverage the Company
believes is consistent with that carried by other entities serving alcoholic
beverages. Although the Company is covered by insurance, a judgment against the
Company under a dram-shop statute in excess of the Company's liability coverage
could have a material adverse effect on the Company.

Various federal and state labor laws govern the Company's relationship with
its employees, including such matters as minimum wage requirements, overtime and
other working conditions. Significant additional government-imposed increases in
minimum wages, paid leaves of absence and mandated health benefits, or increased
tax reporting and tax payment requirements for employees who receive gratuities,
could be detrimental to the economic viability of the Company's operations. In
addition, the Company is subject to extensive rules and regulations with respect
to discriminatory practices and accommodation of persons with disabilities. See
"Business -- Government Regulation."

7
<PAGE> 9

A portion of the Company's revenues are derived from the use and operation
of video gaming machines. There can be no assurance that future regulations or
legislation will not limit, restrict or eliminate the use or operation of video
gaming machines.

Quarterly Fluctuations and Seasonality. As a result of revenues and
expenses associated with each new entertainment restaurant location, the timing
of the opening of future locations will result in fluctuations in the Company's
quarterly results. These fluctuations will likely be more significant in the
near term due to the Company's small unit base. In addition, the Company's
entertainment restaurant locations may have moderately higher revenues in the
first quarter due to weather conditions and major sporting events and in the
fourth quarter due to the year-end holidays.

Potential Increases in Food and Liquor Costs. Among other factors, the
success of the Company's business and its operating results are dependent upon
its ability to anticipate and react to changes in food and liquor costs and the
mix between its food and liquor revenues. Various factors beyond the Company's
control, such as adverse weather changes, may affect food costs and increases in
federal, state and local taxes may affect liquor costs. While in the past
management has been able to anticipate and react to increasing food and liquor
costs through purchasing practices, menu changes and price adjustments, there
can be no assurance that it will be able to do so in the future or that changes
in its sales mix will not adversely affect the Company's profitability.

Trademarks. The Company has obtained state and federal service mark
registrations and has a federal application pending for an additional service
mark. However, the Company has not yet obtained federal registration for certain
of the service marks used in its business and there can be no assurance that any
such registration for the Company's service marks will be obtained. In addition,
the Company is aware of the use by other persons in certain geographic areas of
names and marks which may be similar to "Fox & Hound" or "Bailey's" brands.
There can be no assurance that such marks will be available for use by the
Company in all locations or that the Company will be able to secure the
exclusive use of such marks. See "Business -- Trademarks."

Control by Management and Existing Stockholders. Following the completion
of this Offering, directors, officers and existing stockholders of the Company
will beneficially own approximately 80.0% of the outstanding Common Stock (77.7%
if the Underwriters' over-allotment option is exercised in full). Accordingly,
these persons, acting together, will be able to elect the entire Board of
Directors of the Company and to direct all of the affairs of the Company. See
"Management" and "Principal Stockholders."

Staggered Board, Blank-Check Preferred Stock. The Company's Certificate of
Incorporation provides for three classes of directors, to be elected on a
staggered basis for three-year terms after their initial terms expire. The
classification of directors will have the effect of making it more difficult for
stockholders to change the composition of the Board. As a result, at least two
annual meetings of stockholders may be required for the stockholders to change a
majority of the directors, whether or not a change in the Board would be
beneficial to the Company and its stockholders. In addition, the Board of
Directors has the authority without further action by the stockholders to issue
up to 2,000,000 shares of preferred stock (the "Preferred Stock"), in one or
more series and to fix the rights, privileges and restrictions thereof. Issuance
of such Preferred Stock, depending upon the rights, preferences and designations
thereof, may have the effect of delaying, detaining or preventing a change in
control of the Company. See "Description of Capital Stock -- Preferred Stock"
and "Description of Capital Stock -- Certain Anti-Takeover Provisions."

Use of Proceeds to Benefit Affiliates. The Company intends to use
approximately $10.7 million of the net proceeds of this Offering to repay
indebtedness, one-half of which is guaranteed by a principal stockholder of the
Company. See "Use of Proceeds" and "Certain Transactions."

Dilution. The purchasers of the Common Stock offered hereby will
experience immediate and significant dilution of approximately $8.50 per share.
The purchase price of the Common Stock offered hereby will exceed the pro forma
tangible book value of the Common Stock following this Offering. See "Dilution."

Absence of Public Market and Determination of Offering Price. Prior to
this Offering, there has been no public market for the Company's Common Stock.
The initial public offering price will be determined through

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<PAGE> 10

negotiations between the Company and the Representative of the Underwriters. See
"Underwriting" for a discussion of the factors to be considered in determining
the initial public offering price. There can be no assurance that an active
trading market will develop subsequent to this Offering or, if developed, that
it will be sustained. The market price of the Common Stock could fluctuate
substantially after this Offering due to a variety of factors, including
quarterly operating results of the Company or other entertainment or restaurant
companies, changes in general conditions in the economy, the financial markets
or the entertainment or restaurants industries, changes in financial analysts
recommendations or earnings estimates, natural disasters or other developments
affecting the Company or its competitors. In addition, in recent years the stock
market has experienced extreme price and volume fluctuations. This volatility
has had a significant effect on the market prices of securities issued by many
companies for reasons unrelated to the operating performance of these companies.

Shares Eligible for Future Sale. It is anticipated that the Company's
Common Stock will be traded on the Nasdaq National Market. The Company will have
10,000,000 shares of Common Stock outstanding immediately following this
Offering, 8,000,000 shares of which are restricted securities under Rule 144 of
the Securities Act of 1933, as amended (the "Securities Act"). None of such
restricted securities has satisfied the holding period required by Rule 144
under the Securities Act. Accordingly, such shares may not be sold in the public
market until at least February 1998. In addition, the Company has granted
"piggy-back" registration rights to its existing stockholders in connection with
future registration statements filed by the Company subsequent to this Offering.
Sales of the Company's Common Stock pursuant to Rule 144 or otherwise may have
an adverse effect on the market price of the Common Stock. See "Shares Eligible
for Future Sale."

Forward-Looking Statements. This Prospectus contains forward-looking
statements. Investors are cautioned that all forward-looking statements involve
risks and uncertainty. Although the Company believes that the assumptions
underlying the forward-looking statements contained herein are reasonable, any
of the assumptions are subject to change, and, therefore, there can be no
assurance that the forward-looking statements included in the Prospectus will
prove to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.

9
<PAGE> 11

USE OF PROCEEDS

The net proceeds from the sale of the 2,000,000 shares of Common Stock
offered by the Company hereby at an assumed initial public offering price of
$10.00 per share are estimated to be approximately $17,945,000 ($20,738,000 if
the Underwriters' over-allotment option is exercised in full). The Company
expects to use approximately $10.7 million of such net proceeds to repay
indebtedness and the balance will be used for general corporate purposes,
primarily to finance the development and expansion of additional entertainment
restaurant locations. Such indebtedness was principally incurred to fund the
purchase by the Company from certain stockholders of their general and limited
partnership interests in the Subsidiary Limited Partnerships, certain
distributions of undistributed S corporation earnings to the then-existing
Bailey's stockholders prior to the Exchange and to purchase leasehold
improvements, fixtures and equipment. A majority of such indebtedness was
incurred by the Company within the past year. All of such indebtedness accrues
interest at the prime rate (currently 8.25% per annum). One-half of such
indebtedness has been guaranteed by a principal stockholder of the Company. See
"Certain Transactions." Pending such uses, the net proceeds of this Offering
will be invested in short-term, interest-bearing securities.

A portion of such net proceeds may also be used to acquire one or more
companies in the entertainment restaurant business or certain of their
locations. However, the Company has not entered into any agreements and is not
involved in any negotiations involving potential acquisitions.

DIVIDEND POLICY

The Company does not intend to pay cash dividends on its Common Stock for
the foreseeable future. The payment of cash dividends in the future will be at
the discretion of the Company's Board of Directors and will depend upon such
factors as earnings levels, capital requirements, the Company's financial
condition and other factors deemed relevant by the Company's Board of Directors.

10
<PAGE> 12

CAPITALIZATION

The following table sets forth the pro forma capitalization of the Company
at December 31, 1996, (i) assuming the Exchange had been completed at that date,
but without giving effect to this Offering, and (ii) as adjusted to reflect the
issuance and sale of the 2,000,000 shares of Common Stock offered hereby at an
assumed initial public offering price of $10.00 per share and the application of
the estimated net proceeds therefrom.

<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------------
PRO FORMA AS ADJUSTED
--------- -----------
(IN THOUSANDS)
<S> <C> <C>
Revolving note payable.................................................. $10,660 $ --
======= =======
Stockholders' equity:
Preferred Stock, $0.10 par value, 2,000,000 shares authorized; none
outstanding........................................................ -- --
Common Stock, $0.01 par value, 20,000,000 shares authorized; 8,000,000
shares issued and outstanding pro forma; 10,000,000 shares issued
and outstanding, as adjusted (1)................................... 80 100
Additional paid-in capital............................................ 1,422 19,347
Retained earnings..................................................... 12 12
------- -------
Total stockholders' equity......................................... 1,514 19,459
------- -------
Total capitalization.......................................... $ 1,514 $19,459
======= =======
</TABLE>

- ---------------

(1) Does not include (i) 1,500,000 shares reserved for issuance under the
Company's 1997 Plan, of which options to purchase 735,000 shares will be
granted on the date of this Prospectus and (ii) 150,000 shares reserved for
issuance under the Directors Plan, of which options to purchase 50,000
shares will be granted on the date of this Prospectus. See
"Management -- Stock Option Plans."

11
<PAGE> 13

DILUTION

The pro forma net tangible book value deficiency of the Company as of
December 31, 1996 was approximately $(2,918,000), or $(0.36) per share of Common
Stock. Pro forma net tangible book value per share is equal to the Company's
total tangible assets less its total liabilities, divided by the number of
shares of Common Stock outstanding. After giving effect to the sale of 2,000,000
shares offered hereby at an assumed initial public offering price of $10.00 per
share and the application of the net proceeds therefrom, the pro forma net
tangible book value of the Company at December 31, 1996 would have been
$15,000,000, or $1.50 per share. This represents an immediate increase in such
pro forma net tangible book value of $1.86 per share to existing stockholders
and an immediate dilution of $8.50 per share to new investors purchasing shares
at the initial public offering price, as illustrated in the following table:

<TABLE>
<S> <C> <C>
Assumed initial public offering price................................ $10.00
Pro forma net tangible book value before Offering.................. $(0.36)
Increase attributable to new investors............................. 1.86
------
Pro forma net tangible book value after Offering..................... 1.50
------
Dilution to new investors............................................ $ 8.50
======
</TABLE>

The following table summarizes, on a pro forma basis as of December 31,
1996, the number of shares purchased from the Company, the total cash
consideration paid and the average cash price per share paid by the existing
stockholders and the new investors (based upon, in the case of new investors, an
assumed initial public offering price of $10.00 per share):

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------- ---------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders(1)(2)............. 8,000,000 80.0% $ 1,930,300 8.8% $ 0.24
New investors........................... 2,000,000 20.0 20,000,000 91.2 $ 10.00
---------- ----- ----------- -----
Total......................... 10,000,000 100.0% $21,930,300 100.0%
========== ===== =========== =====
</TABLE>

- ---------------

(2) The total consideration paid by existing stockholders is comprised of the
cash paid to the Company for shares issued and the cash paid by investors to
the Subsidiary Corporations and Subsidiary Limited Partnerships.

12
<PAGE> 14

SELECTED HISTORICAL FINANCIAL DATA

BAILEY'S SPORTS GRILLE, INC.
FOX & HOUND ENTERTAINMENT AND RESTAURANT GROUP

The following tables set forth historical financial data of Bailey's Sports
Grille, Inc. and Fox & Hound Entertainment and Restaurant Group. The selected
historical financial data of Bailey's Sports Grille, Inc. as of and for the
years ended December 31, 1994, 1995 and 1996, set forth below have been derived
from financial statements audited by Deloitte & Touche LLP, independent
auditors, whose report with respect thereto is included elsewhere in this
Prospectus. The selected historical financial data of Bailey's Sports Grille,
Inc. as of and for the years ended December 31, 1992 and 1993 were derived from
unaudited combined financial statements of Bailey's Sports Grille, Inc. In the
opinion of management, the unaudited financial statements reflect all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of the financial position and results of operations for the
unaudited periods. The selected historical financial data of Fox & Hound
Entertainment and Restaurant Group as of and for the years ended December 31,
1994, 1995 and 1996, set forth below have been derived from combined financial
statements audited by Ernst & Young LLP, independent auditors, whose report with
respect thereto is included elsewhere in this Prospectus. The tables should be
read in conjunction with the "Pro Forma Combined Condensed Financial
Statements," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the historical financial statements of Bailey's
Sports Grille, Inc. and Fox & Hound Entertainment and Restaurant Group and the
related notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
FOX & HOUND
ENTERTAINMENT AND
RESTAURANT GROUP
BAILEY'S SPORTS GRILLE, INC. ------------------------
------------------------------------------
FOR THE YEAR ENDED
FOR THE YEAR ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------ ------------------------
1992 1993 1994 1995 1996 1994 1995 1996
------ ------ ------ ------ ------ ------ ------ ------
(IN THOUSANDS, EXCEPT NUMBER OF LOCATIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales....................... $1,069 $1,340 $2,928 $5,333 $9,312 $ 730 $2,618 $5,506
Costs and expenses
Operating expenses............ 770 980 2,131 3,811 6,230 702 2,216 4,480
General and administrative.... 10 12 312 492 919 21 69 296
Depreciation and
amortization............... 55 58 169 304 454 90 224 310
------ ------ ------ ------ ------ ------ ------ ------
Total costs and expenses... 835 1,050 2,612 4,607 7,603 813 2,509 5,086
Income (loss) from operations... 234 290 316 726 1,709 (83) 109 420
Other expense................... (30) (16) (66) (124) (207) (1) (13) (56)
------ ------ ------ ------ ------ ------ ------ ------
Net income (loss)............... $ 204 $ 274 $ 250 $ 602 $1,502 $ (84) $ 96 $ 364
====== ====== ====== ====== ====== ====== ====== ======
OPERATING DATA:
Average sales per location(1)... $ 535 $ 670 $ 913 $1,105 $1,317 $1,186 $1,309 $1,812
Number of locations at year
end........................... 2 2 4 6 8 2 3 3
BALANCE SHEET DATA (AT END OF
PERIOD):
Total assets.................... $ 454 $1,109 $1,575 $2,946 $6,059 $1,346 $2,638 $2,520
Long-term debt, including
current portion............... 278 616 897 1,819 3,760 198 151 463
Stockholders' equity............ 121 387 573 910 1,756 1,012 1,559 1,564
</TABLE>

- ---------------

(1) Average sales per location on an annualized basis are computed by dividing a
location's total sales for full weeks open during the period by the number
of full weeks open, and multiplying the result by fifty-two.

13
<PAGE> 15

PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

The following unaudited pro forma combined condensed balance sheet of the
Company as of December 31, 1996 gives effect to (a) the Exchange and (b) the
Company's financing pursuant to its revolving line of credit agreement
consummated on February 24, 1997 as if such transactions had occurred on
December 31, 1996. The unaudited pro forma combined condensed statement of
operations for the year ended December 31, 1996 gives effect to the Exchange as
if such transactions occurred on January 1, 1996.

The Exchange among the Company and F&H Restaurant Corp. in the pro forma
combined condensed financial statements has been accounted for in a manner
similar to a pooling of interest as a combination of entities under common
control and pursuant to the Staff Accounting Bulletin No. 97. F&H Restaurant
Corp. was deemed to be the acquiring corporation since, upon the completion of
the Exchange, the stockholders of F&H Restaurant Corp., which had purchased 75%
of Fox & Hound Entertainment and Restaurant Group on December 6, 1996,
controlled 50% of the Company. Accordingly, the assets and liabilities of F&H
Restaurant Corp. are included in the pro forma combined condensed financial
statements using historical amounts. The Exchange among the Company and the
owners of the remaining 25% of Fox & Hound Entertainment and Restaurant Group
has been accounted for in the pro forma combined condensed financial statements
as the acquisition of a minority interest using the purchase method of
accounting in accordance with APB No. 16. The Exchange among the Company and
Bailey's Sports Grille, Inc. has been accounted for in the pro forma combined
condensed financial statements as a business combination using the purchase
method of accounting in accordance with APB No. 16.

The historical financial information of the Company, F&H Restaurant Corp.,
Fox & Hound Entertainment and Restaurant Group and Bailey's Sports Grille, Inc.
has been derived from their respective historical financial statements which are
contained elsewhere in this Prospectus. The pro forma adjustments are based upon
available information and assumptions that management believes are reasonable
under the circumstances. The pro forma combined condensed financial statements
do not purport to be indicative of the actual financial position or operating
results which would have occurred had such transactions been consummated on the
dates indicated or the Company's results of operations for any future period or
its financial position at any time in the future. The pro forma combined
condensed financial statements should be read in conjunction with the historical
financial statements and the notes thereto of the Company, F&H Restaurant Corp.,
Fox & Hound Entertainment and Restaurant Group and Bailey's Sports Grille, Inc.
contained elsewhere in this Prospectus. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

14
<PAGE> 16

TOTAL ENTERTAINMENT RESTAURANT CORP.

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET

DECEMBER 31, 1996

<TABLE>
<CAPTION>
HISTORICAL
---------------------------------------
TOTAL ADJUSTMENTS
ENTERTAINMENT F&H BAILEY'S TO
RESTAURANT RESTAURANT SPORTS HISTORICAL PRO
CORP. CORP. GRILLE, INC. DATA FORMA
------------- ---------- ------------ ----------- -------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash...................................... $ 1 $ 255 $1,039 $ -- $ 1,295
Inventories............................... -- 92 137 -- 229
Other current assets...................... -- 106 184 101(a) 391
--- ------ ------ ------- -------
Total current assets...................... 1 453 1,360 101 1,915
Property and equipment, net............... -- 2,104 4,612 -- 6,716
Other assets (principally goodwill)....... -- 3,452 87 1,027(b) 4,566
--- ------ ------ ------- -------
Total assets........................... $ 1 $6,009 $6,059 $ 1,128 $13,197
=== ====== ====== ======= =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving note payable to bank............ $-- $ -- $ -- $10,660(c) $10,660
Notes payable -- affiliates............... -- 4,763 -- (4,763)(c) --
Dividends payable......................... -- -- -- 1,674(d) --
(1,674)(c) --
Accounts payable.......................... -- 82 143 -- 225
Other..................................... -- 231 400 -- 631
Current portion of long-term debt......... -- 463 3,760 (4,223)(c) --
--- ------ ------ ------- -------
Total current liabilities.............. -- 5,539 4,303 1,674 11,516
Long-term debt.............................. -- -- -- -- --
Deferred income taxes....................... -- 67 -- 100(a) 167
Minority interest........................... -- 390 -- (390)(b) --
Stockholders' equity:
Preferred stock........................... -- -- -- -- --
Common stock, $.01 par value, 20,000,000
shares authorized; 8,000,000 shares
issued and outstanding................. -- 1 43 36(b) 80
Additional paid-in capital................ 1 -- 40 1,381(b) 1,422
Retained earnings......................... -- 12 1,673 (1,673)(d) 12
--- ------ ------ ------- -------
Total stockholders' equity............. 1 13 1,756 (256) 1,514
--- ------ ------ ------- -------
Total liabilities and stockholders'
equity............................... $ 1 $6,009 $6,059 $ 1,128 $13,197
=== ====== ====== ======= =======
</TABLE>

15
<PAGE> 17

TOTAL ENTERTAINMENT RESTAURANT CORP.

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
HISTORICAL
----------------------------------------------------
FOR THE 57
DAYS
ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31, 1996
1996(1) -----------------------------------
-------------- FOX & HOUND
F&H RESTAURANT ENTERTAINMENT AND BAILEY'S SPORTS ADJUSTMENTS TO
CORP. RESTAURANT GROUP GRILLE, INC. HISTORICAL DATA PRO FORMA
-------------- ----------------- --------------- --------------- ---------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net sales...................... $384 $ 5,506 $ 9,312 $ (384)(e) $ 14,818
Costs and expenses:
Operating expenses........... 301 4,480 6,230 (301)(e) 10,710
General and administrative... 20 296 919 (20)(e) 1,215
Depreciation and
amortization.............. 27 310 454 (15)(e) 988
212(f)
---- ------ ------ ------- ---------
Total costs and expenses....... 348 5,086 7,603 124 12,913
---- ------ ------ ------- ---------
Income from operations......... 36 420 1,709 (260) 1,905
Other income (expense):
Other income................. 5 23 30 (3)(e) 55
Interest expense:
Related parties........... (12) (19) (237) (361)(g) (629)
Other..................... (4) (60) -- 4(e) (60)
---- ------ ------ ------- ---------
Income before provision for
income taxes................. 25 364 1,502 (620) 1,271
Provision for income taxes..... 3 -- -- 473(h) 476
Minority equity interest in
income....................... 10 -- -- (10)(e) --
---- ------ ------ ------- ---------
Net income..................... $ 12 $ 364 $ 1,502 $(1,083) $ 795
==== ====== ====== ======= =========
Pro forma net income per
share........................ (i) $ 0.10
=========
Average shares outstanding..... (i) 8,000,000
=========
</TABLE>

- ---------------

(1) The operations of F&H Restaurant Corp. (FHRC) for the 57 days from its
inception on November 4, 1996 through December 31, 1996 includes 25 days of
operations of Fox & Hound Entertainment and Restaurant Group, which was
acquired by FHRC on December 6, 1996.

16
<PAGE> 18

NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS

The pro forma combined condensed financial statements have been prepared to
reflect certain adjustments to the historical amounts as described below:

(a) Adjusted to record the deferred income tax effect on the
difference between the recorded accounting basis and the federal income tax
basis of the net assets acquired in the Exchange.

(b) To give effect to the Exchange transaction which resulted in the
issuance of 8,000,000 shares of Common Stock with (1) 4,000,000 shares
issued in connection with the acquisition of F&H Restaurant Corp. which was
accounted for as a pooling of interest transaction, and (2) 2,000,000
shares each issued in connection with the acquisition of Bailey's Sports
Grille, Inc. and the remaining 25% minority interest in Fox & Hound
Entertainment and Restaurant Group, both of which were accounted for using
the purchase method of accounting with the aggregate value of the purchase
price being $1,500. The effect of the Exchange transactions resulting from
the purchase price allocations were to increase (decrease) the following
accounts:

<TABLE>
<S> <C>
Goodwill.................................................... $1,027
Minority interest........................................... (390)
Common stock................................................ 36
Additional paid-in capital.................................. 1,381
</TABLE>

(c) To give effect to the $12.0 million revolving line of credit
formally entered into by the Company with Intrust Bank, N.A., Wichita,
Kansas, on February 24, 1997, to reflect the application of $10,660 of such
proceeds to reduce certain Company indebtedness as follows:

<TABLE>
<S> <C>
Notes payable to affiliates................................ $ 4,763
Dividends payable.......................................... 1,674
Long-term debt, including current portion.................. 4,223
-------
$10,660
=======
</TABLE>

(d) To give effect to the estimated liability for distributions to be
made to certain stockholders of Bailey's Sports Grille, Inc. for
substantially all undistributed S corporation earnings to be distributed in
connection with the Exchange.

(e) To eliminate the duplication of 25 days of operating results which
is included in both the Fox & Hound Entertainment and Restaurant Group's
historical combined financial statements and the historical consolidated
statement of income of F&H Restaurant Corp. subsequent to its acquisition
of a 75% interest in Fox & Hound Entertainment and Restaurant Group on
December 6, 1996, and to eliminate the minority equity interest in net
income from the historical consolidated statement of income of F&H
Restaurant Corp.

(f) To give effect to a full year of amortization of goodwill
resulting from the acquisition of the 75% interest in Fox & Hound
Entertainment and Restaurant Group by F&H Restaurant Corp., the acquisition
by the Company of Bailey's Sports Grille, Inc. and the acquisition by the
Company of the remaining 25% minority interest of Fox & Hound Entertainment
and Restaurant Group.

(g) To give effect to the increase in interest expense resulting from
the assumption that the acquisition on December 6, 1996 of the 75% interest
in Fox & Hound Entertainment and Restaurant Group by F&H Restaurant Corp.
was consummated on January 1, 1996.

(h) Adjusted to reflect the provision for income taxes as if the
entities were combined into a single reporting entity and taxed as a C
corporation under the Code.

(i) Pro forma net income per share is based upon the average number of
shares of Common Stock outstanding during the period. For purposes of
computing average shares outstanding, all shares of the Company's Common
Stock outstanding immediately prior to this Offering are treated as being
outstanding since January 1, 1996.

17
<PAGE> 19

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company was formed on February 7, 1997 and, pursuant to the Exchange,
the Company became the owner of the eight then-existing Bailey's and the three
Fox & Hound locations. The first Bailey's was opened in Charlotte, North
Carolina in 1989 and the first Fox & Hound was opened in Arlington, Texas in
1994. As of March 31, 1997, the Company operated nine Bailey's and three Fox &
Hounds located in Arkansas, Indiana, North Carolina, South Carolina, Tennessee
and Texas.

The Company intends to open eight entertainment restaurant locations in
1997 (one of which was opened in March 1997) and 15 locations in each of 1998
and 1999. Because of the Company's anticipated expansion and its limited unit
base prior to such expansion, period to period comparisons may not be
meaningful. The Company intends to lease its locations and anticipates that most
of its future locations will range in size from approximately 6,500 to 10,000
square feet. The Company believes that the Fox & Hound opened in December 1995
in Dallas (Midway), Texas and the four most recently opened Bailey's reflect
management's expectations as to the layout and decor of future locations.

The components of the Company's net sales are food and non-alcoholic
beverages, alcoholic beverages, and amusement and other. For 1996, food and
non-alcoholic beverages were 22.4% of total sales, alcoholic beverages were
60.9% of total sales and amusement and other were 16.7% of total sales.

Components of operating expenses include food and beverage costs, operating
payroll and fringe benefit costs, occupancy costs and advertising and promotion
costs. These costs are generally variable and will fluctuate with changes in
sales volume and sales mix. Management expects that when a new location opens,
it will incur higher than normal levels of labor and food costs as personnel
complete training. Management believes, however, that as new staff gain
experience, hourly labor schedules will be gradually adjusted to provide
operating efficiencies similar to those at established locations. All of the
Company's leases provide for a minimum annual rent, and some leases call for
additional rent based on sales volume at the particular location over specified
minimum levels.

General and administrative expenses include all corporate and
administrative functions that support existing operations and provide an
infrastructure to support future growth. In addition, certain expenses of
recruiting and training unit management personnel prior to meeting the criteria
to be capitalized as pre-opening expenses are also included. Management,
supervisory and staff salaries, employee benefits, travel, information systems,
training, rent and office supplies are major items of costs in this category.
Since March 1997, the Company has been provided with certain accounting and
administrative services from Coulter Enterprises for a charge of 4.0% of net
sales. Concurrent with this Offering, the Company will enter into a services
agreement with Coulter Enterprises for a continuation of such services. The
fixed annual charge will be $94,000 and the per unit per 28-day period fee will
be $426.

The Company's policy is to capitalize costs associated with the opening of
locations, including the cost of hiring and training the initial workforce,
travel and other direct costs, if it is determined these costs are recoverable.
These costs are then amortized over the twelve month period following the
opening of a location. The Company capitalized approximately $139,000 of such
costs in 1996.

This Prospectus contains certain forward-looking statements. Although the
Company believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions are subject to change,
and therefore, there can be no assurance that the forward-looking statements
included in this Prospectus will prove to be accurate. Factors that could cause
actual results to differ from the results discussed in the forward-looking
statements include, but are not limited to, those discussed in "Risk Factors."
In light of the significant uncertainties inherent in the forward-looking
statements included herein, the inclusion of such information should not be
regarded as a representation by the Company or any other person that the
objectives and plans of the Company will be achieved.

18
<PAGE> 20

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the percentages
which certain items included in the Statement of Operations bear to net sales:

<TABLE>
<CAPTION>
FOX & HOUND ENTERTAINMENT
BAILEY'S SPORTS GRILLE, INC. AND RESTAURANT GROUP
---------------------------- ----------------------------
FOR THE YEAR ENDED DECEMBER FOR THE YEAR ENDED DECEMBER
31, 31,
---------------------------- ----------------------------
1994 1995 1996 1994 1995 1996
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Costs and expenses
Operating expenses................. 72.7 71.5 66.9 96.2 84.6 81.4
General and administrative......... 10.7 9.2 9.9 2.9 2.6 5.4
Depreciation and amortization...... 5.8 5.7 4.9 12.3 8.6 5.6
---- ------ ------ ------ ------ ------
Total costs and expenses........ 89.2 86.4 81.7 111.4 95.8 92.4
---- ------ ------ ------ ------ ------
Income (loss) from operations........ 10.8 13.6 18.3 (11.4) 4.2 7.6
Other (income) expense............... 0.4 -- (0.3) (0.6) (0.6) (0.4)
Interest expense..................... 1.9 2.3 2.5 0.7 1.1 1.4
---- ------ ------ ------ ------ ------
Net income........................... 8.5% 11.3% 16.1% 11.5% 3.7% 6.6%
==== ====== ====== ====== ====== ======
</TABLE>

BAILEY'S SPORTS GRILLE, INC.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Net sales increased $3,979,000 (74.6%) in 1996 compared to 1995 principally
attributable to the opening of two new locations during 1996 which resulted in a
45.5% increase in store operating weeks. Average sales per location increased
19.2% in 1996 compared to 1995 due to increased sales at existing units and due
to higher average sales at newer units compared to older units. Newer locations
were larger and had more seats than earlier locations.

Operating expenses increased $2,419,000 (63.5%) in 1996 compared to 1995.
Such expenses declined as a percentage of net sales to 66.9% in 1996 from 71.5%
in 1995 primarily due to the leverage of higher average sales volumes against
fixed costs related to occupancy and labor.

General and administrative expenses increased $427,000 (86.8%) in 1996
compared to 1995. As a percentage of net sales, such expenses increased to 9.9%
in 1996 from 9.2% in 1995 due to the addition of multi-unit supervisory
personnel and related costs.

Depreciation and amortization increased $150,000 (49.3%) in 1996 compared
to 1995, but declined as a percentage of net sales to 4.9% in 1996 from 5.7% in
1995 due to the leverage of the higher average sales volumes. The Company
anticipates that depreciation and amortization expense will increase in absolute
dollars and as a percentage of net sales during 1997 in view of the anticipated
opening of new locations.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Net sales increased $2,405,000 (82.1%) in 1995 compared to 1994 principally
attributable to the opening of two new locations during 1995 which resulted in a
50.9% increase in store operating weeks and a 21.0% increase in average sales
per location.

Operating expenses increased $1,680,000 (78.8%) in 1995 compared to 1994
and declined as a percentage of net sales to 71.5% in 1995 from 72.7% in 1994.
This decline was due to the leverage of higher average sales volumes against
fixed costs related to occupancy and labor.

General and administrative expenses increased $180,000 (57.7%) in 1995
compared to 1994. However, as a percentage of net sales, such expenses declined
to 9.2% in 1995 from 10.7% in 1994 due to the fixed nature of the charges for
such services.

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<PAGE> 21

Depreciation and amortization increased $135,000 (79.8%) in 1995 compared
to 1994 but were relatively constant as a percentage of net sales as the higher
average sales volumes of newer units offset their higher depreciable unit costs.

FOX & HOUND ENTERTAINMENT AND RESTAURANT GROUP

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Net sales increased $2,888,000 (110.3%) in 1996 compared to 1995. Store
operating weeks increased by 51.9% in 1996 compared to 1995 due to the opening
of the third unit. Average weekly sales per location increased by 38.4% in 1996
compared to 1995 due to the higher sales at the Dallas (Midway), Texas location
compared with the two previously opened locations.

Operating expenses increased $2,264,000 (102.2%) in 1996 compared to 1995.
Such expenses declined as a percentage of net sales to 81.4% in 1996 from 84.6%
in 1995, primarily due to an improvement in labor expense resulting from the
higher average sales per location and the fixed elements of management costs and
certain operating labor.

General and administrative expenses increased $227,000 (329.0%) in 1996
compared to 1995. As a percentage of net sales, such expenses increased to 5.4%
in 1996 from 2.6% in 1995, primarily due to the addition of personnel and
related costs.

Depreciation and amortization increased $86,000 (38.4%) in 1996 compared to
1995 but declined as a percentage of net sales to 5.6% in 1996 from 8.6% in 1995
. Depreciation and amortization of operating assets increased $107,000 in 1996
compared to 1995 primarily due to the increase in store operating weeks for new
locations while amortization of pre-opening costs declined by $59,000 in 1996
compared to 1995 due to the timing of the opening of new locations and lower
pre-opening costs for the third location compared to the two previously opened
locations.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Net sales increased $1,888,000 (258.7%) in 1995 compared to 1994. Store
operating weeks increased by 225.0% in 1995 compared to 1994 due to a full
year's operation of the two locations opened in 1994, and average weekly sales
per location increased by 10.4% in 1995 compared to 1994.

Operating expenses increased $1,514,000 (215.7%) in 1995 compared to 1994.
However, as a percentage of net sales, operating expenses declined to 84.6% in
1995 from 96.2% in 1994, primarily due to a 7.8% improvement in labor expense
resulting from reduced training costs and improved scheduling of hourly
personnel.

General and administrative expenses increased $48,000 (228.6%) in 1995
compared to 1994. However, as a percentage of net sales, such expenses remained
relatively constant.

Depreciation and amortization increased $134,000 (148.9%) in 1995 compared
to 1994 but declined as a percentage of net sales to 8.6% in 1995 from 12.3% in
1994. Depreciation and amortization of operating assets increased $86,000 in
1995 compared to 1994 and amortization of pre-opening costs increased $48,000 in
1995 compared to 1994 primarily due to a full year's depreciation for the two
locations opened in the second half of 1994.

IMPACT OF INFLATION

The principal operating expenses impacted by inflation include food, liquor
and labor costs. A large number of the Company's entertainment restaurant
personnel are paid at the federal minimum wage level and, accordingly, changes
in such wage level affect the Company's labor costs. In October 1997, the
federal minimum wage level will increase from $4.75 to $5.25 per hour. As costs
of food and labor have increased, the Company has been able to offset these
increases through economies of scale and improved operating procedures. To date,
inflation has not had a material impact on operating margins.

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<PAGE> 22

LIQUIDITY AND CAPITAL RESOURCES

The Company was formed on February 7, 1997 and, pursuant to the Exchange,
the Company became the owner of the eight then-existing Bailey's and the three
Fox & Hound locations. Prior to the Exchange, Bailey's financed its expansion
primarily with loans from stockholders. Prior to the Exchange, Fox & Hound
financed its expansion primarily with partners' equity contributions and loans
from related parties. See "Certain Transactions."

As is customary in the restaurant industry, the Company has operated with
negative working capital. The Company does not have significant receivables or
inventory and receives trade credit based upon negotiated terms in purchasing
food and supplies. Because funds available from cash sales are not needed
immediately to pay for food and supplies, or to finance inventory, they may be
considered as a source of financing for noncurrent capital expenditures.

At February 28, 1997, the Company had outstanding indebtedness to Intrust
Bank, N.A., Wichita, in the principal amount of $10.7 million. Such indebtedness
bears interest at the prime rate (8.25% per annum) and will be repaid with a
portion of the net proceeds of this Offering. One-half of the facility is
personally guaranteed by one of the Company's principal stockholders, which
guarantee will terminate upon the closing of this Offering. The Company has
recently received a commitment from Intrust Bank, N.A., Wichita, for a new
revolving credit facility of $12.0 million. No definitive agreement has been
entered into for this line of credit facility and there is no assurance that the
Company will be able to establish such facility. Such credit facility will not
be guaranteed by, nor is it anticipated that any future indebtedness will be
guaranteed by, any of the Company's stockholders.

The Company intends to open eight locations in 1997 (one of which was
opened in March 1997) and 15 locations in each of 1998 and 1999. The Company
expects to expend approximately $6.6 million in 1997 related to these openings.

The Company believes that the net proceeds from this Offering, its
anticipated cash flow from operations and funds anticipated to be available from
the credit facility noted above will be sufficient to satisfy its working
capital and capital expenditure requirements for at least the next 12 months.
There can be no assurance, however, that changes in the Company's operating
plans, acceleration of the Company's expansion plans, lower than anticipated
revenues, increased expenses, potential acquisitions or other events will not
cause the Company to seek additional financing sooner than anticipated. There
can be no assurance that additional financing will be available on acceptable
terms or at all.

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<PAGE> 23

BUSINESS

GENERAL

The Company currently owns and operates 12 entertainment restaurant
locations under the Fox & Hound and Bailey's brand names. The Company's
entertainment restaurant locations combine a comfortable and inviting social
gathering place, full menu and full service bar, state-of-the-art audio and
video systems for sports entertainment, traditional games of skill such as
pocket billiards and a late-night dining and entertainment alternative all in a
single location. The Company's entertainment restaurant locations appeal to a
broad range of guests who can participate in one or more aspects of the
Company's total entertainment restaurant experience. Fox & Hound and Bailey's
encompass the Company's multi-dimensional concept and serve both larger urban
and smaller regional markets. The first Bailey's was opened in Charlotte, North
Carolina in 1989 and the first Fox & Hound was opened in Arlington, Texas in
1994. The Company currently owns and operates three Fox & Hounds and nine
Bailey's in Arkansas, Indiana, North Carolina, South Carolina, Tennessee and
Texas.

CONCEPT

The Company's entertainment restaurant concept differentiates itself by
offering all of the following features in a single location:

- Social Gathering Place. The Company's locations provide a contemporary
social gathering place where friends and acquaintances can gather
regularly for food, drinks and entertainment in an upscale yet casual
environment.

- Food and Beverage. The Company's units offer a full menu with a wide
range of mid-priced appetizers, entrees and desserts served in generous
portions. Each location features a full service bar and a wide variety of
domestic, imported and premium craft beers. Food and beverages can be
enjoyed in all areas of each location.

- Sports Entertainment. The Company's locations feature state-of-the-art
audio and video systems for viewing sporting events. Each location has
numerous TVs (including several big screen TVs) with satellite and cable
coverage of national, regional and local sporting events.

- Games of Skill. The Company's units offer traditional games of skill,
including pocket billiards featuring tournament-quality tables,
shuffleboard and darts. Certain locations also offer "just for fun"
blackjack and a variety of popular interactive games.

- Late-night Destination. The Company provides guests with an upscale
entertainment and dining alternative by serving food and beverages during
the increasingly popular late-night segment.

STRATEGY

Management believes that its unique entertainment restaurant concept will
enable the Company to distinguish itself as the leader in this market segment.
Management's strategy for attaining this leadership position is based on the
following key elements:

Total Entertainment and Restaurant Experience. The Company's concept
offers a social gathering place, food and beverages, sports entertainment, games
of skill and a late-night destination all in a single location. Each location
provides guests with a multi-dimensional entertainment and restaurant experience
that enables them to participate in one or more elements of the experience.

Seasoned Management Team. The Company employs a seasoned management team
with experience in successfully developing and operating multi-unit concepts in
a variety of geographic markets throughout the United States. The Company
intends to leverage this experience to secure favorable real estate sites,
control costs and implement proven operating procedures. In addition, the
Company maintains centralized financial and accounting controls through Coulter
Enterprises, which has 16 years of experience in providing such services. By
employing the services and infrastructure provided by Coulter Enterprises, the
Company is able to focus its energy and resources on brand and unit development.

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<PAGE> 24

Rapid Growth and Expansion. The Company believes that its entertainment
restaurant concept will be attractive in a variety of geographic markets
throughout the United States. The Company currently plans to open eight
locations in 1997 (one of which was opened in March 1997) and 15 locations in
each of 1998 and 1999. The Company is currently evaluating locations in markets
that are familiar to its management team and is actively negotiating additional
leases at a number of sites.

Flexibility and Versatility of Concept. The Company is implementing its
concept through both the Fox & Hound and Bailey's brand names. This strategy
enables the Company to target both larger urban markets as well as smaller
regional markets. The Company's concept also allows for significant versatility
through the reconfiguration of the entertainment areas within each of its
locations to accommodate various special events.

Commitment to High Quality Products and Services. The Company is committed
to providing a superior experience that includes high quality menu items, a wide
variety of domestic, imported and premium craft beers, state-of-the-art audio
and video systems and tournament-quality pocket billiard tables. These features,
combined with the Company's focus on a high level of customer service, help
build a loyal clientele and attract new guests.

LOCATIONS

The following table sets forth the location, opening date and approximate
square footage of the Company's existing entertainment and restaurant locations:

<TABLE>
<CAPTION>
LOCATION OPENING DATE SQUARE FOOTAGE
------------------------------- --------------- --------------
<S> <C> <C>
Fox & Hound
Arlington, TX August 1994 6,500
College Station, TX September 1994 7,000
Dallas (Midway), TX December 1995 10,000

Bailey's
Charlotte, NC November 1989 6,800
Pineville, NC October 1990 7,000
North Little Rock, AR February 1994 8,200
Greenville, SC September 1994 7,200
Nashville, TN April 1995 9,450
Knoxville, TN December 1995 8,300
Johnson City, TN May 1996 8,250
Columbia, SC October 1996 8,500
Clarksville, IN March 1997 9,200
</TABLE>

EXPANSION PLANS

The Company's management team has extensive experience in the restaurant
business and has successfully developed and operated numerous restaurants in
many geographic markets throughout the United States. The Company intends to
open eight entertainment restaurant locations in 1997 (one of which was opened
in March 1997) and 15 locations in each of 1998 and 1999. The Company is
currently evaluating locations in markets familiar to its management team and is
actively negotiating additional leases at a number of sites. However, the number
of locations actually opened may vary depending upon the ability of the Company
to locate suitable sites and negotiate favorable leases.

The Company may in the future grant license or joint venture rights to the
Fox & Hound and Bailey's brands in certain limited geographic areas of the
United States. It is expected that these licensees or joint venture partners
will be required to develop a specific number of locations within a specified
time frame and that a license fee and/or a royalty fee will be paid to the
Company in connection with the development and operation of each such site. The
Company anticipates that one of such licenses may be granted to Dennis L.
Thompson, a director of the Company, and Thomas A. Hager, who has agreed to
become a director of the

23
<PAGE> 25

Company immediately following this Offering. Such license is anticipated to
grant the right to operate up to eight locations under the "Fox & Hound" name in
North Carolina. The Company has granted to Stephen P. Hartnett, a principal
stockholder of the Company and the founder of Fox & Hound, the right to operate
one "Fox & Hound" location in Dallas, Texas without the payment of any license
fee. See "Certain Transactions."

SITE SELECTION CRITERIA AND LEASING

The Company believes the site selection process is critical in determining
the potential success of each entertainment restaurant location. Senior
management devotes significant time and resources in analyzing each prospective
site and inspects and approves each location prior to final lease execution. A
variety of factors are considered in the site selection process, including local
market demographics, site visibility, traffic count, nature of the retail
environment and accessibility and proximity to major retail centers, office
complexes, hotels and entertainment centers (e.g., stadiums, arenas, theaters).

The Company currently leases all locations, with the exception of the
Bailey's in Columbia, South Carolina, which is owned by the Company. Most of the
units are located in shopping centers. Leases are negotiated with initial terms
of three to five years, with multiple renewal options. The Company has generally
required approximately 90 to 120 days after the signing of a lease and obtaining
required permits to complete construction and open a new location. Additional
time is sometimes required to obtain certain government approvals and licenses,
such as liquor licenses. In the future, the Company anticipates principally
leasing its locations, although it may consider purchasing free-standing sites
where it is cost-effective to do so.

UNIT ECONOMICS

In 1996, the three Fox & Hounds recorded average net sales of $1.8 million.
The average cost to open the three Fox & Hounds was approximately $830,000, with
an additional $80,000 of pre-opening expenses per unit. The average net sales of
the six Bailey's that were open for a full year in 1996 was $1.4 million. The
average cost to open such six Bailey's was approximately $650,000, with an
additional $60,000 of pre-opening expenses per unit (for the four most recently
opened Bailey's). Management anticipates that the cost of opening new locations
will average approximately $850,000 per unit, which includes leasehold
improvements, fixtures and equipment, with an additional $100,000 of pre-opening
expenses per unit. Future locations are anticipated to range from 6,500 to
10,000 square feet.

Fox & Hound offers a single menu for lunch, dinner and late-night dining.
The menu features a selection of appetizers, including quesadillas and nachos,
soups and salads, gourmet-style sandwiches and burgers, a selection of grilled
entrees and desserts. Each location features a full service bar and over 100
brands of ales, lagers, stouts and premium craft beers from around the world,
including over 35 on tap. Alcoholic beverage service accounted for approximately
63% of Fox & Hound's revenues in 1996. The average food and beverage check in
1996 was approximately $14.00 per person.

Bailey's offers a single menu for lunch (weekends only), dinner and
late-night dining. The menu currently offers more casual selections than Fox &
Hound by focusing more on appetizers, gourmet burgers and sandwiches, including
wraps, and less on grilled entrees. The full service bar features a complete
selection of mixed drinks, domestic and imported beers. Alcoholic beverage
service accounted for approximately 61% of Bailey's revenues in 1996. The
average food and beverage check in 1996 was approximately $12.00 per person.

AMBIANCE AND DESIGN

Fox & Hound. Fox & Hound entertainment restaurant locations incorporate
the tradition, spirit and sophistication of a contemporary social gathering
place, with an elegant yet comfortable atmosphere of finished wood, polished
brass, embroidered chairs and booths, hunter green and burgundy walls and etched
glass. Each Fox & Hound features a full service restaurant and bar as well as
state-of-the-art audio and video technology and traditional games of skill such
as pocket billiards generously spaced to avoid crowding, darts and shuffleboard.
The entertainment area can be readily configured into a comfortable "arena" for
viewing

24
<PAGE> 26

national, regional and local sporting and other television events. All locations
are also capable of accommodating business and social organizations for special
events.

Fox & Hound is the evolution of a concept originally conceived by Stephen
P. Hartnett. Management believes that the design of Fox & Hound plays an
essential role in its success. The bar and primary dining room are centrally
located while the wing rooms are partitioned from the bar and dining area by
etched glass and house games of skill along with state-of-the-art audio and
video technology. This layout provides guests with an open view of the main
dining room, bar and gaming areas. The open kitchen is organized for efficient
work flow and is centrally located so as to entice guests with its flavorful
aromas.

Bailey's. Each Bailey's location has a casual, relaxed atmosphere that
features a full-service restaurant and bar, numerous TVs (including several big
screen TVs) with satellite and cable coverage of sporting events, pocket
billiard tables, darts, foosball and shuffleboard. Certain locations also
feature "just for fun" blackjack and a variety of popular interactive games.
Like Fox & Hound, the bar and primary dining room in each Bailey's is centrally
located with games situated around the perimeter.

Bailey's is the evolution of a concept originally conceived by Thomas A.
Hager and Dennis L. Thompson. The first Bailey's was opened in Charlotte, North
Carolina in November 1989. There are presently nine locations operating in five
states. Since the opening of the first location in 1989, management has modified
and improved its original concept. With each successive opening, the decor was
modified to a more upscale yet casual decor.

MARKETING

The Company believes that its entertainment restaurant concept attracts a
loyal clientele, and the Company relies primarily on word-of-mouth to attract
new business. The Company does, however, advertise through traditional marketing
and advertising mediums in selected markets. These mediums include billboard
signage, radio and print advertising, local store marketing to households and
volunteer community involvement.

The Company's marketing efforts also seek to focus on national, regional
and local sporting events such as the Super Bowl and World Series, which attract
locally active groups of fans, supporters or alumni. The versatile layout and
design of the units can also accommodate group events.

OPERATIONS AND MANAGEMENT

The Company's operations and management systems are based upon systems and
controls that were developed by senior management and have been successfully
used to manage a large number of restaurants located in numerous states. The
Company strives to maintain quality and consistency in its entertainment
restaurant locations through the careful training and supervision of personnel
and the establishment of standards relating to food and beverage preparation,
maintenance of locations and conduct of personnel.

The management of a typical unit consists of one general manager and two or
three supporting managers. Each general manager is responsible for the unit's
day-to-day operations and is required to follow the Company's established
operating procedures and standards. Each entertainment restaurant location also
employs a staff of hourly employees, many of whom are part-time personnel. Unit
management personnel participate in an eight-week training program which focuses
on various aspects of the unit's operations and customer service. Working in
concert with general managers, the Company's senior management defines
operations and performance objectives. Each location's management team
participates in an incentive cash bonus program. Awards under the incentive plan
are tied to achievement of specified operating targets, including achievement of
specific unit objectives and control of operating expense budgets. Senior
management regularly visits the Fox & Hound and Bailey's locations and meets
with the respective management teams to ensure that the Company's strategies and
standards of quality are complied with.

The Company maintains financial and accounting controls for each of its
entertainment restaurant locations through the use of centralized accounting and
management information systems. Sales information

25
<PAGE> 27

is collected daily from each location, and general managers are provided with
operating statements for their locations. Cash is controlled through daily
deposits of sales proceeds in local operating accounts, the balances of which
are wire-transferred weekly to the Company's principal operating account. The
Company utilizes a comprehensive peer review reporting system for its general
managers. After the close of each 28-day accounting period, profit and loss
statements are produced and, subsequently, a conference call is arranged during
which the general manager of each location reviews the profit and loss statement
of the location with the other general managers and the senior management of the
Company. The participants offer each other feedback on their respective
performances and suggest ways of improving profitability. At the end of each
quarter, the general managers and the Company's senior management meet in
person. The Company believes that the peer review system enables each general
manager to benefit from the collective experience of all of the Company's
management.

The Company believes that customer service and satisfaction are keys to the
success of its operations. The Company's commitment to customer service and
satisfaction is evidenced by several Company practices and policies, including
periodic visits by unit management to guests' tables, active involvement of
management in responding to guest comments and assigning waitpersons so as to
ensure customer satisfaction. Teamwork is emphasized for efficient and timely
service.

Each new unit employee of the Company participates in a training program
during which the employee works under the close supervision of a general
manager. Management strives to instill enthusiasm and dedication in its
employees and to create a stimulating and rewarding working environment where
employees know what is expected of them in measurable terms. Management
continuously solicits employee feedback concerning unit operations and strives
to be responsive to the employees' concerns.

PURCHASING

The Company's management negotiates directly with suppliers for most food
and beverage products to ensure uniform quality, adequate supplies, and to
obtain competitive prices. Food and supplies are shipped directly to
entertainment restaurant locations, although invoices for purchases are
forwarded to a central location for payment. Due to the experience of the
Company's senior management in the restaurant business, the Company is able to
purchase most of its restaurant equipment directly from equipment manufacturers.
The Company has not experienced any significant delays in receiving supplies or
equipment.

MANAGEMENT INFORMATION SYSTEMS

The Company utilizes an in-store computer-based management support system
which is designed to improve labor scheduling and food and beverage cost
management, provide corporate management quick access to financial data and
reduce the general manager's administrative time. Each general manager uses the
system for production planning, labor scheduling and food and beverage cost
variance analysis. The system generates reports on sales, bank deposits and
variance data for the Company's management on a daily basis.

The Company generates weekly consolidated sales reports and food, beverage
and labor cost variance reports as well as detailed profit and loss statements
for each entertainment restaurant location every four weeks. Additionally, the
Company monitors the average check, customer count, product mix and other sales
trends on a daily basis.

ACCOUNTING AND ADMINISTRATIVE SERVICES

Since March 1997, the Company has been provided with certain accounting and
administrative services from Coulter Enterprises for a charge of 4.0% of net
sales. Concurrent with this Offering, the Company will enter into a services
agreement for such accounting and administrative services to be provided by
Coulter Enterprises. The fixed annual charge will be $94,000 and the per unit
per 28-day period fee will be $426. The services agreement will expire on
December 31, 1997 unless terminated by either party upon 30 days' notice and
will be renewable thereafter on a year-to-year basis, terminable by either party
upon 30 days' notice. See "Certain Transactions." In the future, the Company may
satisfy its accounting and administrative needs by

26
<PAGE> 28

hiring employees directly; however, the Company believes that such direct costs
would not be materially different than the costs under the contractual
arrangement.

COMPETITION

The entertainment and restaurant industries are highly competitive. There
are a great number of restaurants and entertainment businesses that compete
directly and indirectly with the Company. The Company competes with restaurants
primarily on the basis of quality of food and service, ambiance and location and
competes with sports bars and entertainment complexes on the basis of
entertainment quality. Competition for sales in the entertainment and restaurant
industries is intense. While the Company believes that its entertainment
restaurant units are distinctive in design and operating concept, it is aware of
competitors that operate with similar concepts. Many of the Company's existing
and potential competitors are well-established and have significantly greater
financial, marketing and other resources than does the Company. In addition to
other entertainment and restaurant companies, the Company competes with numerous
businesses for suitable locations for its units. The legalization of casino
gambling in geographic areas near any entertainment restaurant location operated
by the Company could also create the possibility for entertainment alternatives
that could have a material adverse effect on the Company's business.

GOVERNMENT REGULATION

The Company's entertainment restaurant locations are subject to numerous
federal, state and local laws affecting health, sanitation, safety and Americans
with Disabilities Act accessibility standards, as well as to state and local
licensing regulation of the sale of alcoholic beverages. Each location has
appropriate licenses from regulatory authorities allowing it to sell liquor,
beer and wine, and each location has food service licenses from local health
authorities. The Company's licenses to sell alcoholic beverages must be renewed
annually and may be suspended or revoked at any time for cause, including
violation by the Company or its employees of any law or regulation pertaining to
alcoholic beverage control, such as those regulating the minimum age of patrons
or employees, advertising, wholesale purchasing, and inventory control. The
failure of a location to obtain or retain liquor or food service licenses would
have a material adverse effect on the Company's operations. In order to reduce
this risk, each location is operated in accordance with standardized procedures
designed to assure compliance with all applicable codes and regulations.

The Company may be subject in certain states to "dram-shop" statutes, which
generally provide a person injured by an intoxicated person the right to recover
damages from an establishment that wrongfully served alcoholic beverages to the
intoxicated person. The Company carries liquor liability coverage as part of its
existing comprehensive general liability insurance and has never been named as a
defendant in a lawsuit involving "dram-shop" statutes.

The development and construction of additional locations will be subject to
compliance with applicable zoning, land use and environmental regulations. The
Company's operations are also subject to federal and state minimum wage laws
governing such matters as working conditions, overtime and tip credits and other
employee matters. Significant numbers of the Company's personnel are paid at
rates related to the federal minimum wage which is currently $4.75 per hour,
which will increase to $5.25 per hour in October 1997, and, accordingly, such
increase and further increases in the minimum wage will increase the Company's
labor costs.

A portion of the Company's revenues is derived from the use and operation
of video gaming machines. There can be no assurance that any future regulations
or legislation will not limit, restrict or eliminate the use or operation of
video gaming machines.

TRADEMARKS

The Company has registered its "Fox & Hound" service mark in Texas and has
applied for federal registration of such mark. The Company's "Bailey's Sports
Grille" service mark is registered federally and in North Carolina. The Company
regards its service marks as having significant value and as being an important
factor in the marketing of its entertainment restaurant concept. The Company is
aware of names and marks

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<PAGE> 29

similar to the service marks of the Company that are used by other persons in
certain geographic areas. The Company believes such uses will not have a
material adverse effect on the Company. The Company's policy is to pursue
registration of its marks whenever possible and to oppose vigorously any
infringement of its marks.

LEGAL MATTERS

The Company is not currently a party to any material litigation. From time
to time, however, the Company may be subject to claims and lawsuits arising in
the normal course of business.

EMPLOYEES

The Company employs approximately 600 persons, two of whom are executive
officers, 37 of whom are entertainment restaurant location management personnel
and the remainder of whom are hourly entertainment restaurant personnel. None of
the Company's employees is covered by a collective bargaining agreement. The
Company believes its employee relations are satisfactory.

PROPERTIES

All of the Company's units are located in leased space with the exception
of the Bailey's in Columbia, South Carolina, which is owned by the Company.
Initial lease terms range from three to five years, with multiple renewal
options. All of the Company's leases provide for a minimum annual rent, and some
leases call for additional rent based on sales volume at the particular location
over specified minimum levels. Generally, the leases are net leases which
require the Company to pay the costs of insurance, taxes and a portion of
lessors' operating cost. Two Fox & Hounds are leased from a related party. See
"Certain Transactions."

The Company's executive offices are located at 300 Crescent Court, Building
300, Suite 850, Dallas, Texas 75201, which space is provided pursuant to the
terms of the services agreement that will be entered into by the Company with
Coulter Enterprises concurrent with this Offering. The Company believes that
there is sufficient office space available at favorable leasing terms in the
Dallas, Texas area to satisfy the additional needs of the Company that may
result from future expansion.

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<PAGE> 30

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information concerning the executive
officers and directors of the Company:

<TABLE>
<CAPTION>
TERM AS DIRECTOR
NAME AGE POSITION EXPIRES
- --------------------------------------- --- -------------------------------------- ----------------
<S> <C> <C> <C>
Jamie B. Coulter....................... 56 Chairman of the Board 2000
Michael A. Nahkunst.................... 46 Chief Executive Officer, President,
Chief Operating Officer and Director 1999
[CFO] Chief Financial Officer and Secretary --
Dennis L. Thompson..................... 53 Director 1998
Thomas A. Hager*....................... 48 Director 1998
Steven Wolosky*........................ 41 Director 1999
William F. Orthwein*................... 36 Director 2000
Christopher Goldsbury*................. 54 Director 2000
</TABLE>

- ---------------
* Messrs. Hager, Wolosky, Orthwein and Goldsbury have each agreed to serve as a
director immediately following this Offering.

Jamie B. Coulter has served as Chairman of the Board since March 1997. Mr.
Coulter has served as Chairman and Chief Executive Officer of Lone Star
Steakhouse and Saloon, Inc. ("Lone Star") since January 1992 and was president
of Lone Star from 1992 through 1995 (and a director and executive officer of
various subsidiaries of Lone Star since 1991). Between 1965 and 1980, Mr.
Coulter and his partners developed and operated Pizza Hut and Kentucky Fried
Chicken restaurants as one of the largest franchisees of both systems. From 1980
to the present, Mr. Coulter has been and continues to be the sole stockholder,
chairman, chief executive officer and president of various Pizza Hut entities
operating more than 80 Pizza Hut restaurants in 11 states. Since 1980, Mr.
Coulter has been the sole stockholder and president of Coulter Enterprises,
Inc., a management and consulting company that provides management, accounting
and administrative services for Mr. Coulter's Pizza Hut franchises and other
affiliated and non-affiliated businesses.

Michael A. Nahkunst has served as Chief Executive Officer, President and
Chief Operating Officer and director since February 1997. Mr. Nahkunst served as
a concept consultant to Coulter Enterprises, Inc. from February 1995 to March
1997. From 1977 through May 1994, Mr. Nahkunst was employed by Brinker
International, Inc. and its predecessors ("Brinker") in various capacities, most
recently as senior vice president of Brinker for New Concept Development from
1992 to May 1994 and prior thereto as senior vice president-operations from 1987
to 1992. Mr. Nahkunst filed a voluntary petition under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for the Northern
District of Texas, Dallas Division, in May 1995.

Dennis L. Thompson has been a director of the Company since February 1997
and from 1989 to 1997 was an investor with Bailey Sports Grille, Inc., of which
he was a co-founder. Mr. Thompson has served as senior vice president of real
estate and a director of Lone Star since January 1992. Mr. Thompson has been an
executive officer and a director of various subsidiaries of Lone Star since
1989. From 1985 to August 1995, he was an executive officer, director and
stockholder of Creative Culinary Concepts Inc., a company that owned and
operated eleven Lone Star Steakhouse and Saloons and certain other restaurants.

Thomas A. Hager was a co-founder of Bailey's Sports Grille, Inc. and served
as its president from inception in November 1989 until February 1997. Prior to
founding Bailey's Sports Grille, Inc., Mr. Hager owned and operated a restaurant
in Charlotte, North Carolina. Mr. Hager is also the founder of Thomas
Advertising, Inc., a national billboard advertising agency where he has served
as president since its inception in 1983.

Steven Wolosky has been a partner of the law firm of Olshan Grundman Frome
& Rosenzweig LLP since January 1987. Mr. Wolosky is also a director of Uniflex,
Inc., a company that designs, manufactures and sells

29
<PAGE> 31

a variety of plastic products, and assistant secretary of WHX Corporation, a
holding company for an integrated steel manufacturer.

William F. Orthwein has been an independent floor trader in the Standard
and Poor's 500 pit at the Chicago Mercantile Exchange since 1984.

Christopher Goldsbury has been the president and chief executive officer of
Silver Ventures, a San Antonio, Texas based private investment company since
March 1995. Prior thereto, Mr. Goldsbury was employed by Pace Foods, Inc., a San
Antonio, Texas based company that produces Pace Picante Sauce. Mr. Goldsbury
joined Pace Foods in 1969, held positions in both production and sales from 1969
to 1979, was president from 1979 to 1982 and chairman of the board and chief
executive officer from 1982 to March 1995.

The Board of Directors of the Company currently consists of three members
divided into three classes, the terms of which expire at the annual meeting of
stockholders to be held in the year indicated in the table above. Each director
holds office until his term expires and his successor has been elected and
qualified. Beginning in 1998, at each annual meeting of stockholders, directors
nominated to a class with a term that expires in that year will be elected for a
three-year term. Executive officers serve at the discretion of the Board of
Directors.

Messrs. Hager, Wolosky, Orthwein and Goldsbury, whose biographical data
appear above, are not currently directors of the Company, but have agreed to
become directors contingent upon and effective immediately following this
Offering. The Board of Directors has created an Audit Committee, a Compensation
Committee and a Stock Option Committee. The Audit Committee will be composed of
a majority of independent directors and will be charged with reviewing the
Company's annual audit and meeting with the Company's independent accountants to
review the Company's internal controls and financial management practices. The
Compensation Committee, which will also be composed of a majority of the
independent directors, will recommend to the Board of Directors compensation for
the Company's key employees. The Stock Option Committee will administer the
Company's 1997 Plan and will be composed of independent directors. The members
of the Audit Committee will be Messrs. and . The members of
the Compensation Committee will be Messrs. , and .
The members of the Stock Option Committee will be Messrs. ,
and .

Directors of the Company, other than the Chairman of the Board, who are not
executive officers will receive director fees of $3,000 per year and $500 per
meeting attended, plus the reasonable expenses of attending meetings and will be
entitled to participate in the Directors Stock Option Plan.

EXECUTIVE COMPENSATION

No executive officer of the Company received cash or other compensation
paid by the Company or its subsidiaries for the fiscal year ended December 31,
1996. Set forth below under "Employment Agreements" is the compensation to be
paid by the Company to its executive officers.

EMPLOYMENT AGREEMENTS

The Company has entered into separate employment agreements commencing as
of the closing of this Offering with each of Messrs. Nahkunst and
providing for the employment of such individuals as Chief Executive Officer,
President and Chief Operating Officer, and Chief Financial Officer,
respectively. Each employment agreement provides that the officer shall devote
all of his professional time to the business of the Company. The agreements
provide for (i) annual base salaries of $200,000 and $ , respectively,
for Messrs. Nahkunst and , subject to increases as determined by the
Board of Directors and (ii) the granting of options on the date of this
Prospectus pursuant to the 1997 Plan to purchase 100,000 and 75,000 shares of
Common Stock, respectively, at an exercise price equal to the initial public
offering price of the shares offered hereby. Such options vest annually over
five years. Each agreement terminates in April 2002 with an option by the
Company to extend the term for an additional one-year period and contains
non-competition and non-solicitation provisions. Messrs. Coulter, Hager and
Thompson have entered into non-competition, confidentiality and non-solicitation
agreements with the Company.

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<PAGE> 32

Certain directors and executive officers of the Company are parties to
agreements that restrict their involvement with restaurants offering pizza,
pasta or steak. The Company's menus do not currently offer such items, and the
Company does not believe that such restrictions will have a material effect on
its operations.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

As permitted by the Delaware General Corporation Law, the Company's
Certificate of Incorporation limits the personal liability of a director to the
Company for monetary damages for breach of fiduciary duty of care as a director.
Liability is not eliminated for (i) any breach of the director's duty of loyalty
to the Company or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
unlawful payment of dividends or stock purchases or redemptions pursuant to
Section 174 of the Delaware General Corporation Law, or (iv) any transaction
from which the director derived an improper personal benefit.

The Company has obtained directors and officers liability insurance. The
Company has also entered into indemnification agreements with its directors and
executive officers. The indemnification agreements provide that the directors
and executive officers will be indemnified to the full extent permitted by
applicable law against all expenses (including attorneys' fees), judgments,
fines and amounts reasonably paid or incurred by them for settlement in any
threatened, pending or completed action, suit or proceeding, including any
derivative action, on account of their services as a director or officer of the
Company or of any subsidiary of the Company or of any other company or
enterprise in which they are serving at the request of the Company. No
indemnification will be provided under the indemnification agreements, however,
to any director or executive officer in certain limited circumstances, including
on account of knowingly fraudulent, deliberately dishonest or willful
misconduct. To the extent the provisions of the indemnification agreements
exceed the indemnification permitted by applicable law, such provisions may be
unenforceable or may be limited to the extent they are found by a court of
competent jurisdiction to be contrary to public policy.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.

STOCK OPTION PLANS

1997 Incentive and Nonqualified Stock Option Plan

In March 1997, the Board of Directors of the Company adopted the 1997
Incentive and Nonqualified Stock Option Plan (the "1997 Plan"). The 1997 Plan is
intended to assist the Company in securing and retaining a Chairman of the Board
and key employees by allowing them to participate in the ownership and growth of
the Company through the grant of incentive and nonqualified options
(collectively, the "Options") to the Chairman of the Board and full-time and
part-time employees of the Company and its subsidiaries. Incentive stock options
granted under the 1997 Plan are to be "Incentive Stock Options" as defined by
Section 422 of the Code.

An aggregate of 1,500,000 shares of Common Stock has been reserved for
issuance upon exercise of Options to be granted under the 1997 Plan. As of the
date of this Prospectus, the Company has granted options to purchase (i) 500,000
shares of Common Stock to the Chairman of the Board of the Company, (ii) 100,000
shares of Common Stock to the Chief Executive Officer of the Company, (iii)
75,000 shares of Common Stock to the Chief Financial Officer of the Company and
(iv) an aggregate of 60,000 shares of Common Stock to the 12 general managers of
the Company's entertainment restaurant locations, in each case at an exercise
price per share equal to the initial public offering price. The options expire
in , 2007. The 1997 Plan will be administered by a committee (the
"Committee"), composed of two or more non-management directors that are
"non-employee directors" within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and "outside
directors" within the meaning of Section 162(m) of the Code, authorized to
administer the 1997 Plan in a manner that complies with Rule 16b-3 under the
Exchange Act. The Committee will determine who shall receive Options,

31
<PAGE> 33

the number of shares of Common Stock that may be purchased under Options, the
time and manner of exercise of Options and Option exercise prices. The term of
Options granted under the 1997 Plan may not exceed 10 years (five years in the
case of an incentive stock option granted to an optionee owning more than 10.0%
of the voting stock of the Company (a "10.0% Holder")). The Option exercise
price for incentive stock options shall not be less than 100.0% of the "fair
market value" of the shares of Common Stock at the time the Option is granted;
provided, however, that if an Option granted to the Company's Chief Executive
Officer or to any of the Company's other four most highly compensated officers
is intended to qualify as "performance-based" compensation under Section 162(m)
of the Code, the exercise price must equal at least 100.0% of the fair market
value of the subject stock on the date of grant; provided, further, that with
respect to an incentive stock option, in the case of a 10.0% Holder, the
exercise price per share shall be at least 110.0% of such fair market value. The
Option exercise price for nonqualified options shall not be less than 75.0% of
the "fair market value" of the shares of Common Stock at the time the Option is
granted. The aggregate fair market value of the shares of Common Stock as to
which an optionee may exercise incentive stock options may not exceed $100,000
in any calendar year. Payment for shares purchased upon exercise of Options is
to be made in cash, check or other instrument, but, at the discretion of the
Committee, may be made by cashless exercise or the delivery of other shares of
Common Stock of the Company.

The maximum number of shares that may be subject to Options granted under
the 1997 Plan to any individual in any calendar year may not exceed 50% of the
number of shares covered by the 1997 Plan and the method of counting such shares
shall conform to any requirements applicable to "performance-based" compensation
under Section 162(m) of the Code. It is intended that compensation realized upon
the exercise of an Option granted under the 1997 Plan will thereupon be regarded
as "performance-based" under Section 162(m) of the Code and that such
compensation may be deductible without regard to the limits of Section 162(m) of
the Code.

Under certain circumstances involving a change in the number of outstanding
shares of Common Stock without the receipt by the Company of any consideration
therefor, such as a stock split, stock consolidation or payment of a stock
dividend, the class and aggregate number of shares of Common Stock in respect of
which Options may be granted under the 1997 Plan, the class and number of shares
subject to each outstanding Option and the Option exercise price per share will
be proportionately adjusted. In addition, in the event of any merger,
reorganization or consolidation of the Company with one or more corporations as
a result of which the Company is not the surviving corporation, the Options
granted under the 1997 Plan shall immediately vest assuming that the optionee
has held the Option for at least six months.

An Option may not be transferred other than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order,
and during the lifetime of the Option holder may be exercised only by such
holder; provided, however, that to the extent the Option does not disqualify
such Option for exemption under Rule 16b-3 of the Exchange Act, nonqualified
options may be transferable during an optionee's lifetime to immediate family
members of an optionee, partnerships in which the only partners are members of
the optionee's immediate family, and trusts established solely for the benefit
of such immediate family members.

The 1997 Plan will terminate in March 2007 and may be terminated at any
time by the Board of Directors prior to that date.

General Managers Program

The Company intends to grant incentive stock options under the 1997 Plan to
the general manager of each of its entertainment restaurant locations at the
time of their appointment as a general manager. Under this program, each general
manager will be granted incentive stock options to purchase shares of Common
Stock having an aggregate fair market value of $50,000 at the date of grant. The
incentive stock options shall vest over five years from the date of grant, with
vesting of 10.0%, 15.0%, 25.0%, 25.0% and 25.0% of the options, respectively, at
each of the first five anniversaries of the date of grant.

Directors Stock Option Plan

In March 1997, the Board of Directors of the Company adopted the Directors
Stock Option Plan (the "Directors Plan"). The Directors Plan provides for the
issuance of options to purchase up to 150,000 shares of

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<PAGE> 34

Common Stock. All members of the Board of Directors who are not employees of the
Company ("Eligible Directors") are eligible to receive grants of options. Each
Eligible Director receives automatic, nondiscretionary grants of options based
upon specific criteria set forth in the Directors Plan. Each Eligible Director
will receive a grant of an option to purchase 10,000 shares of Common Stock on
the later of (i) the date the Eligible Director is elected to the Board of
Directors or (ii) the date of this Prospectus, and will be granted another
option to purchase 3,000 shares of Common Stock annually thereafter so long as
he remains an Eligible Director. Each option vests annually over a three-year
period provided such individual continues to serve as a director of the Company
unless such individual no longer serves as a result of his death or disability,
in which case the option immediately vests as to all shares subject to such
option. Accordingly, Messrs. Hager, Thompson, Wolosky, Orthwein and Goldsbury
will each be granted options to purchase 10,000 shares of Common Stock under the
Directors Plan on the date of this Prospectus at an exercise price equal to the
initial public offering price.

The exercise price of each option granted under the Directors Plan is equal
to the fair market value of the Company's Common Stock on the date of grant. All
options granted are first exercisable one year after the grant date, except in
the case of an Eligible Director's death or permanent disability, upon which
event the options become immediately exercisable for a period of one year
thereafter and then would terminate. If an Eligible Director's membership on the
Board of Directors terminates for any reason, any option held on such date may
be exercised any time within one year after the date of termination, unless the
option terminates sooner by its terms. As of the date of this Prospectus,
options to purchase 50,000 shares of Common Stock will be outstanding under the
Directors Plan.

COMPENSATION COMMITTEE INTERLOCKS

The Compensation and Stock Option Committees will consist of Messrs.
, and . None of such Directors was a party to any
transaction with the Company which constitutes an interlock with another entity.

33
<PAGE> 35

CERTAIN TRANSACTIONS

Concurrent with this Offering, the Company will enter into a services
agreement with Coulter Enterprises pursuant to which the Company will utilize
certain accounting and administrative services provided by Coulter Enterprises,
a corporation controlled by Jamie B. Coulter, Chairman of the Board of the
Company. The services agreement initially expires on December 31, 1997, unless
terminated by either party upon 30 days' notice, and is renewable thereafter on
a year-to-year basis, terminable by either party upon 30 days' notice.
Concurrent with this Offering, the service fee will consist of a fixed annual
charge of $94,000 and a per unit per 28-day period fee of $426. The amount of
the services fee will be reviewed annually and will be subject to approval by a
majority of the disinterested directors of the Company. Since March 1997 and
through the date of this Offering, Coulter Enterprises has provided accounting
and administration services for a service fee of 4.0% of net sales during such
period.

Prior to March 1997, certain accounting and administrative services were
provided to the three Fox & Hound units by a corporation controlled by Stephen
P. Hartnett, a principal stockholder of the Company. The terms of the management
agreement provided for the reimbursement only of out-of-pocket expenses of such
corporation. The amount of such management fees were $1,750, $29,820 and
$225,600 for the fiscal years ended December 31, 1994, 1995 and 1996,
respectively.

The Company leases its Fox & Hounds in Dallas (Midway), Texas and College
Station, Texas from limited partnerships controlled by Stephen P. Hartnett. The
annual rent paid to the limited partnerships for the College Station, Texas
facility was $22,425, $66,121 and $56,000 for the fiscal years ended December
31, 1994, 1995 and 1996, respectively. Annual rent for fiscal year 1997 for this
facility will be $73,110. The annual rent paid to the limited partnerships for
the Dallas (Midway), Texas facility was $204,408 for the fiscal year ended
December 31, 1996. The annual rent for fiscal year 1997 for this facility will
be $205,320.

During the period November 1996 to January 1997, Jamie B. Coulter loaned to
F&H Restaurant Corp. an aggregate of approximately $4.53 million in connection
with the acquisition by F&H Restaurant Corp. of a 75% interest in the Subsidiary
Limited Partnerships and to provide working capital to the Subsidiary Limited
Partnerships. At December 31, 1996, the amount outstanding under such loans was
$1.5 million. The loans accrued interest at the prime rate (currently 8.25% per
annum). The loans were repaid in full in February 1997 pursuant to a $12.0
million line of credit obtained by the Company from Intrust Bank, N.A., Wichita,
Kansas. One-half of such line of credit has been guaranteed by Mr. Coulter.
Indebtedness outstanding under such line of credit bears interest at the prime
rate (currently 8.25% per annum) and is due June 1, 1997. The entire balance
outstanding under the line of credit will be repaid upon the closing of this
Offering with a portion of the net proceeds therefrom.

In September 1995, a corporate stockholder of the Company, in which the
wife of Stephen P. Hartnett owns approximately 20%, loaned $83,000 to a
Subsidiary Limited Partnership. In December 1995, a second corporate stockholder
of the Company, in which the wife of Stephen P. Hartnett owns approximately 34%,
loaned $75,000 to such Subsidiary Limited Partnership. The aggregate amount
outstanding under such loans at December 31, 1995 was $83,000 and $75,000,
respectively. In July 1996, the two corporate stockholders made additional loans
of $7,000 and $15,000, respectively, to such Subsidiary Limited Partnership. In
November 1996, the two corporate stockholders loaned the Subsidiary Limited
Partnership an additional $53,000. All of these loans accrued interest at a rate
of 10.0% per annum. At December 31, 1996, the amount outstanding to each
corporate stockholder was $116,500. The loans were repaid in full in February
1997.

Dennis L. Thompson, a director of the Company, and Thomas S. Hager, who has
agreed to become a director immediately following this Offering, have made
various loans to Bailey's Sports Grille, Inc. or its predecessors. In 1994,
Messrs. Thompson and Hager loaned to Bailey's Sports Grille, Inc. or its
predecessors an aggregate of $177,670 and $208,240, respectively. Such loans
accrued interest at an effective interest rate of 8.0% per annum. At December
31, 1994, the aggregate outstanding balances were $286,431 and $344,001,
respectively. In 1995, Messrs. Thompson and Hager loaned to Bailey's Sports
Grille, Inc. or its predecessors an aggregate of an additional $299,640 and
$431,014, respectively. Such loans accrued interest at an effective interest
rate of 8.0% per annum. At December 31, 1995, the aggregate outstanding balances
were $600,483 and $710,844, respectively. In 1996, Messrs. Thompson and Hager
loaned to Bailey's Sports Grille, Inc. or its

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<PAGE> 36

predecessors an aggregate of an additional $725,056 and $856,528, respectively.
Such loans accrued interest at an effective interest rate of 8.0% per annum. At
December 31, 1996, the aggregate outstanding balances were $1,269,864 and
$1,492,378, respectively. All such loans, to the extent not previously repaid,
were repaid in full in February 1997.

The Company anticipates that it may grant to Dennis L. Thompson, a director
of the Company, and Thomas A. Hager, who has agreed to become a director of the
Company immediately following this Offering, the right to operate up to eight
locations under the "Fox & Hound" name in North Carolina. The Company has
granted to Stephen P. Hartnett, a principal stockholder of the Company, the
right to operate one "Fox & Hound" location in Dallas, Texas without the payment
of any license fee.

On February 20, 1997, the Company entered into the Exchange with the
stockholders of the Subsidiary Corporations and certain limited partners of the
Subsidiary Limited Partnerships. Pursuant to the Exchange, the Company became
the owner of the eight then-existing Bailey's locations and the three Fox &
Hound locations. The Company issued all of its currently outstanding 8,000,000
shares of its Common Stock in exchange for all of the outstanding stock of the
Subsidiary Corporations and the outstanding limited partnership interests of the
Subsidiary Limited Partnerships not owned by the Subsidiary Corporations. The
Subsidiary Corporations and Subsidiary Limited Partnerships thereby became
wholly-owned subsidiaries of the Company. The Exchange constituted an exchange
of property under Section 351 of the Code. Each of the Subsidiary Corporations
which were S corporations under the Code terminated such status in connection
with the Exchange. Such Subsidiary Corporations and each of their respective
stockholders executed agreements with the Company indemnifying the Company for
any federal and state income tax liability incurred by the Company prior to the
Exchange relating to such Subsidiary Corporations.

The Company believes that the foregoing transactions were in its best
interests. It is the Company's current policy that all transactions by the
Company with officers, directors, 5.0% stockholders and their affiliates will be
entered into only if such transactions are approved by a majority of the
disinterested independent directors, are on terms no less favorable to the
Company than could be obtained from unaffiliated parties and are reasonably
expected to benefit the Company.

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<PAGE> 37

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the date of this Prospectus and as
adjusted to reflect the sale of the Common Stock offered by the Company hereby,
by (i) each director (including individuals who have agreed to serve as
directors immediately following this Offering), (ii) each executive officer,
(iii) all directors and executive officers as a group, and (iv) each person who
beneficially owns 5.0% or more of the Company's Common Stock. Unless otherwise
indicated, all the addresses for 5.0% stockholders, executive officers,
directors and director nominees of the Company is 300 Crescent Court, Building
300, Suite 850, Dallas, Texas 75201. Except as specified, the named beneficial
owner has sole voting and investment power with respect to the shares held by
such owner.

<TABLE>
<CAPTION>
PERCENT OF CLASS
SHARES ---------------------
BENEFICIALLY BEFORE AFTER
NAME OF BENEFICIAL OWNER OWNED OFFERING OFFERING
- --------------------------------------------------------------- ---------- -------- --------
<S> <C> <C> <C>
Jamie B. Coulter............................................... 2,000,000 25.0% 20.0%
Michael A. Nahkunst............................................ 280,000 3.5 2.8
[CFO].......................................................... -- -- --
Dennis L. Thompson(1).......................................... 489,800 6.1 4.9
Thomas A. Hager................................................ 725,600 9.1 7.3
Steven Wolosky................................................. 29,920 * *
William F. Orthwein............................................ -- -- --
Christopher Goldsbury.......................................... -- -- --
Stephen P. Hartnett(2)......................................... 416,240 5.2 4.2
4504 Winewood Court Colleyville, Texas 76034
United Strategic Trading II, Inc. 4504 Winewood Court
Colleyville, Texas 76034..................................... 544,240 6.8 5.4
Organized Capital II, Ltd. 4504 Winewood Court Colleyville,
Texas 76034.................................................. 526,800 6.6 5.3
All directors and executive officers as a group (4 persons)
(1)(2)....................................................... 2,769,800 34.6% 27.7%
</TABLE>

- ---------------
* Less than 1.0% percent.

(1) Includes 244,900 shares held by Mr. Thompson's wife, Sharon K. Thompson.
Excludes 40,000 shares held by Mr. Thompson's adult children.

(2) Excludes 544,240 shares held by United Strategic Trading II, Inc. and
526,800 shares held by Organized Capital II, Ltd. Mr. Hartnett is a trading
advisor to these entities, certain members of Mr. Hartnett's family are
stockholders or partners of such entities and Mr. Hartnett is the sole
stockholder of the corporate general partner of Organized Capital II, Ltd.
Mr. Hartnett's wife, Sandra Hartnett, holds approximately 34% and 20% of
the issued and outstanding stock or partnership interests of such
companies, respectively. Mr. Hartnett disclaims beneficial ownership of
these shares.

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<PAGE> 38

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 20,000,000 shares
of Common Stock, $0.01 par value, and 2,000,000 shares of Preferred Stock, $0.10
par value. The following summary of certain terms of the Common Stock and
Preferred Stock does not purport to be complete and is subject to, and qualified
in its entirety by, the provisions of the Company's Certificate of Incorporation
and By-laws, which are included as exhibits to the Registration Statement of
which this Prospectus is a part, and the provisions of applicable law.

COMMON STOCK

As of the date of this Prospectus, there were 8,000,000 shares of Common
Stock outstanding held by 73 stockholders of record. Immediately following this
Offering, there will be 10,000,000 shares of Common Stock outstanding. Holders
of Common Stock are entitled to one vote for each share held of record on all
matters submitted to a vote of the stockholders. Subject to preferences that may
be applicable to any then outstanding Preferred Stock, holders of Common Stock
are entitled to receive ratably such dividends as may be declared by the Board
of Directors out of funds legally available therefor. See "Dividend Policy." In
the event of a liquidation, dissolution or winding up of the Company, holders of
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities and the liquidation preference of any then outstanding Preferred
Stock. Holders of Common Stock have no right to convert their Common Stock into
any other securities. The Common Stock has no preemptive or other subscription
right. There are no redemption or sinking fund provisions applicable to the
Common Stock. All outstanding shares of Common Stock are, and the Common Stock
to be outstanding upon completion of this Offering will be, fully paid and
nonassessable.

PREFERRED STOCK

The Board of Directors has the authority, without further action by the
stockholders, to issue up to 2,000,000 shares of Preferred Stock in one or more
series and to fix the rights, preferences, privileges and restrictions thereof,
including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences and the number of shares constituting any
series or the designation of such series. The issuance of Preferred Stock could
adversely affect the voting power of holders of Common Stock and could have the
effect of delaying or preventing a change in control of the Company. The Company
has no present plan to issue any shares of Preferred Stock.

CERTAIN ANTI-TAKEOVER PROVISIONS

The Company's By-laws provide that the number of directors that constitutes
the Board of Directors shall be fixed by resolution of the Board of Directors
but in no event shall the number be greater than 10. The Board of Directors may
change the numbers of directors by a majority vote. The Certificate of
Incorporation provides that the Board of Directors shall be divided into three
classes, with the classes to be as nearly equal in number as possible, and that
one class shall be elected each year and serve for a three-year term. The
Company's Certificate of Incorporation does not provide for cumulative voting in
the election of directors. The Certificate of Incorporation provides that a
director may be removed only for "cause" by the affirmative vote of a majority
of the outstanding shares of Common Stock of the Company.

The classification of directors and the provisions of the Certificate of
Incorporation that limit the ability of stockholders to change the size of the
Board will have the effect of making it more difficult for stockholders to
change the composition of the Board. As a result, at least two annual meetings
of stockholders may be required for the stockholders to change a majority of the
directors, whether or not a change in the Board would be beneficial to the
Company and its stockholders and whether nor not a majority of the Company's
stockholders believes that such change would be desirable.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is First Union
National Bank, Charlotte, North Carolina.

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<PAGE> 39

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this Offering, the Company will have outstanding
10,000,000 shares of Common Stock. The 2,000,000 shares of Common Stock being
sold hereby will be freely tradeable (other than by an "affiliate" of the
Company as such term is defined in the Securities Act) without restriction or
registration under the Securities Act. All remaining outstanding shares (the
"Restricted Shares") were issued and sold by the Company in private transactions
and are eligible for public sale if registered under the Securities Act or sold
in accordance with Rule 144 or Rule 144A.

All of the Company's stockholders prior to this Offering, who collectively
own 8,000,000 Restricted Shares, have agreed that they will not sell or
otherwise transfer any Common Stock owned by them without the prior written
consent of Montgomery Securities for a period of 180 days from the date of this
Prospectus (the "Lockup Period"). Following the expiration of the Lockup Period,
no Restricted Shares will be available for sale in the public market pursuant to
Rule 144 prior to February 20, 1998 because no such Restricted Shares will have
been held for more than one year.

In general, under Rule 144 as currently in effect, a holder of "restricted
securities" who beneficially owns shares that were not acquired from the Company
or an affiliate of the Company within the previous two years would be entitled
to sell within any three-month period a number of shares that does not exceed
the greater of one percent of the then outstanding shares of Common Stock or the
average weekly trading volume of the Common Stock in the over-the-counter market
during the four calendar weeks preceding the date on which notice of the sale is
filed with the Securities and Exchange Commission (the "Commission"). Sales
under Rule 144 are subject to certain manner of sale provisions, notice
requirements and the availability of current public information about the
Company. A person who is not deemed an affiliate of the Company at any time
during the 90 days preceding a sale and who beneficially owns shares that were
not acquired from the Company or an affiliate of the Company within the past
three years is entitled to sell such shares under Rule 144(k) without regard to
volume limitations, manner of sale provisions, notice requirements or the
availability of current public information concerning the Company. On February
18, 1997, the Commission reduced the Rule 144 holding period for resales of
restricted securities from two years to one year and reduced the Rule 144(k)
holding period from three years to two years, effective April 29, 1997. The
reduced holding periods will apply to all restricted securities. Rule 144A under
the Securities Act permits the immediate sale by the current holders of
Restricted Shares of all or a portion of their shares to certain qualified
institutional buyers as defined in Rule 144A. The Company has granted
"piggy-back" registration rights to its existing stockholders in connection with
any future registration statement filed by the Company subsequent to this
Offering.

The Company intends to file a Registration Statement on Form S-8 under the
Securities Act, covering approximately 1,650,000 shares of Common Stock reserved
for issuance under its 1997 Plan and Directors Plan. See "Management -- Stock
Option Plans." Such registration statement is expected to be filed soon after
the date of this Prospectus and will automatically become effective upon filing.
Accordingly, shares registered under such registration statement will be
available for sale in the open market, unless such shares are subject to vesting
restrictions with the Company or the contractual Lockup Period restrictions
described above.

38
<PAGE> 40

UNDERWRITING

The Underwriters named below, represented by Montgomery Securities (the
"Representative"), have severally agreed, subject to the terms and conditions
contained in the underwriting agreement by and among the Company and the
Underwriters (the "Underwriting Agreement"), to purchase from the Company the
number of shares of Common Stock indicated below opposite their respective names
at the initial public offering price less the underwriting discount set forth on
the cover page of this Prospectus. The Underwriting Agreement provides that the
obligations of the Underwriters are subject to certain conditions precedent and
that the Underwriters are committed to purchase all of such shares if they
purchase any.

<TABLE>
<CAPTION>
NUMBER OF
SHARES
UNDERWRITER OF COMMON STOCK
------------------------------------------------------------------- ---------------
<S> <C>
Montgomery Securities..............................................

---------
Total.............................................................. 2,000,000
=========
</TABLE>

The Representative has advised the Company that the Underwriters propose
initially to offer the Common Stock to the public on the terms set forth on the
cover page of this Prospectus. The Underwriters may allow to selected dealers a
concession of not more than $ per share, and the Underwriters may
allow, and such dealers may reallow, a concession of not more than $
per share to certain other dealers. After the initial public offering, the
offering price and other selling terms may be changed by the Representative. The
Common Stock is offered subject to receipt and acceptance by the Underwriters
and to certain other conditions, including the right to reject orders in whole
or in part.

The Company has granted an option to the Underwriters, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to a maximum
of 300,000 additional shares of Common Stock to cover over-allotments, if any,
at the same price per share as the initial 2,000,000 shares to be purchased by
the Underwriters. To the extent that the Underwriters exercise this option, the
Underwriters will be committed, subject to certain conditions, to purchase such
additional shares in approximately the same proportion as set forth in the above
table. The Underwriters may purchase such shares only to cover over-allotments
made in connection with this Offering.

The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or will contribute to payments the Underwriters may be required
to make in respect thereof.

The Representative has informed the Company that the Underwriters do not
expect to make sales of Common Stock offered hereby to accounts over which they
exercise discretionary authority in excess of 5% of the shares of Common Stock
offered hereby.

Prior to this Offering, there has been no public market for the Common
Stock. Consequently, the initial public offering price will be determined by
negotiations between the Company and the Representative. Among the factors
considered in such negotiations will be the history of, and the prospects for,
the Company and the industry in which it competes, an assessment of the
Company's management, its past and present earnings and the trend of such
earnings, the prospects for future earnings of the Company, the present state of
the Company's development, the general condition of the securities markets at
the time of the Offering and the market prices of publicly traded stock of
comparable companies in recent periods and other factors deemed relevant.

All of the Company's current stockholders have agreed that, for a period of
180 days after the date of this Prospectus, they will not, without the prior
written consent of Montgomery Securities, directly or indirectly

39
<PAGE> 41

offer to sell, sell or otherwise dispose of any shares of Common Stock or any
securities convertible or exchangeable for shares of Common Stock. In addition,
the Company has agreed that for a period of 180 days after the date of this
Prospectus, it will not, without the prior written consent of Montgomery
Securities, directly or indirectly offer to sell, issue, distribute or otherwise
dispose of any equity securities or securities convertible into or exchangeable
for equity securities or any options, rights or warrants with respect to any
equity securities except (i) for shares of Common Stock offered hereby or (ii)
for shares of Common Stock issued pursuant to exercise of outstanding options
disclosed in the Prospectus or (iii) options granted after the date of the
Prospectus under the 1997 Plan or the Directors Plan. See "Shares Eligible for
Future Sale."

The Representative has advised the Company that, pursuant to Regulation M
under the Securities Act, certain persons participating in this Offering may
engage in transactions, including stabilizing bids, syndicate covering
transactions or the imposition of penalty bids, which may have the effect of
stabilizing or maintaining the market price of the Common Stock at a level above
that which might otherwise prevail in the open market. A "stabilizing bid" is a
bid for or the purchase of the Common Stock on behalf of the Underwriters for
the purpose of fixing or maintaining the price of the Common Stock. A "syndicate
covering transaction" is the bid for or the purchase of the Common Stock on
behalf of the Underwriters to reduce a short position incurred by the
Underwriters in connection with this Offering. A "penalty bid" is an arrangement
permitting the Representative to reclaim the selling concession otherwise
accruing to an Underwriter or syndicate member in connection with this Offering
if the Common Stock originally sold by such Underwriter or syndicate member is
purchased by the Representative in a syndicate covering transaction and has
therefore not been effectively placed by such Underwriter or syndicate member.
The Representative has advised the Company that such transactions may be
effected on the Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Olshan Grundman Frome & Rosenzweig LLP, New York, New
York. Steven Wolosky, a member of Olshan Grundman Frome & Rosenzweig LLP, owns
29,920 shares of Common Stock of the Company. Mr. Wolosky has agreed to serve as
a director of the Company immediately following this Offering. In addition, Mr.
Wolosky will be granted an option to purchase 10,000 shares of Common Stock
pursuant to the Directors Plan on the date of this Prospectus. Certain legal
matters arising in connection with this Offering will be passed upon for the
Underwriters by Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto, California.

EXPERTS

The balance sheet of Total Entertainment Restaurant Corp., the consolidated
financial statements of F&H Restaurant Corp. and the combined financial
statements of Fox & Hound Entertainment and Restaurant Group appearing in this
Prospectus and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, to the extent indicated in their reports thereon also
appearing elsewhere herein and in the Registration Statement. Such financial
statements have been included herein in reliance upon such reports given upon
the authority of such firm as experts in accounting and auditing.

The financial statements of Bailey's Sports Grille, Inc. as of December 26,
1995 and December 31, 1996 and for each of the three fiscal years in the period
ended December 31, 1996 included in this Prospectus have been audited by
Deloitte and Touche LLP, independent auditors, as stated in their report
appearing herein, and are included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.

40
<PAGE> 42

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-1 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act with respect to
the shares offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement, copies of
which may be obtained from the Public Reference Section of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, upon
payment of the fees prescribed by the Commission. Copies of such Registration
Statement may also be requested from the Company, attention Secretary, 300
Crescent Court, Building 300, Suite 850, Dallas, Texas 75201.

Following the effectiveness of the Registration Statement, the Company will
be subject to the informational requirements of the Exchange Act and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Any such report,
proxy statement and other information filed by the Company with the Commission
can be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, as well as at the following regional offices: Northeast Regional
Office, Seven World Trade Center, New York, New York 10048, and Midwest Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can also be obtained from the Public Reference
Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Company has applied to have its
Common Stock approved for listing on the Nasdaq National Market. The foregoing
material also should be available for inspection at the National Association of
Securities Dealers, Inc. 1735 K Street, N.W., Washington, D.C. 20006. The
Commission also maintains a home page on the World Wide Web that contains
reports, proxy and information statements and other information regarding
registrants that file electronically. The address of such site is
http://www.sec.gov.

The Company intends to furnish its stockholders with annual reports
containing financial statements audited and reported upon by its independent
accounting firm and quarterly reports containing unaudited interim financial
information for the first three quarters of each year.

41
<PAGE> 43

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
TOTAL ENTERTAINMENT RESTAURANT CORP.
Report of Independent Auditors........................................................ F-2
Balance Sheet as of February 7, 1997.................................................. F-3
Notes to Balance Sheet................................................................ F-4
F&H RESTAURANT CORP.
Report of Independent Auditors........................................................ F-6
Consolidated Balance Sheet of December 31, 1996....................................... F-7
Consolidated Statement of Operations for the 57 Days Ended December 31, 1996.......... F-8
Consolidated Statement of Stockholders' Equity for the 57 Days Ended December 31,
1996................................................................................ F-9
Consolidated Statement of Cash Flows for the 57 Days Ended December 31, 1996.......... F-10
Notes to Consolidated Financial Statements............................................ F-11
FOX & HOUND ENTERTAINMENT AND RESTAURANT GROUP
Report of Independent Auditors........................................................ F-16
Combined Balance Sheets of December 31, 1995 and 1996................................. F-17
Combined Statements of Operations for the Years Ended December 31,
1994, 1995 and 1996................................................................. F-18
Combined Statements of Partners' Equity for the Years Ended December 31, 1994, 1995
and 1996............................................................................ F-19
Combined Statements of Cash Flows for the Years Ended December 31, 1994, 1995 and
1996................................................................................ F-20
Notes to Combined Financial Statements................................................ F-21
BAILEY'S SPORTS GRILLE, INC.
Independent Auditors' Report.......................................................... F-24
Balance Sheets of December 26, 1995 and December 31, 1996............................. F-25
Statements of Income for the Years Ended December 27, 1994, December 26, 1995 and
December 31, 1996................................................................... F-26
Statements of Stockholders' Equity for the Years Ended December 27, 1994, December 26,
1995 and December 31, 1996.......................................................... F-27
Statements of Cash Flows for the Years Ended December 27, 1994, December 26, 1995 and
December 31, 1996................................................................... F-28
Notes to Financial Statements......................................................... F-29
</TABLE>

F-1
<PAGE> 44

REPORT OF INDEPENDENT AUDITORS

The Stockholders
Eatertainment Inc.

We have audited the accompanying balance sheet of Eatertainment Inc. (to be
named Total Entertainment Restaurant Corp.), as of February 7, 1997. This
balance sheet is the responsibility of the Company's management. Our
responsibility is to express an opinion on this balance sheet based on our
audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Eatertainment Inc. at February 7,
1997, in conformity with generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

March 10, 1997
Wichita, Kansas

F-2
<PAGE> 45

TOTAL ENTERTAINMENT RESTAURANT CORP.

BALANCE SHEET

<TABLE>
<CAPTION>
FEBRUARY 7, 1997
----------------
<S> <C>
ASSETS
Current assets:
Cash........................................................................ $1,000
------
Total assets............................................................. $1,000
======

LIABILITIES AND STOCKHOLDERS' EQUITY
Commitments................................................................... $ --
Stockholders' equity:
Preferred Stock, $.10 par value; 2,000,000 shares authorized; none issued... --
Common Stock, $.01 par value; 20,000,000 shares authorized, 8,000 shares
issued and outstanding................................................... 80
Additional paid-in capital.................................................. 920
------
Total liabilities and stockholders' equity.......................... $1,000
======
</TABLE>

F-3
<PAGE> 46

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO BALANCE SHEET

FEBRUARY 7, 1997

1. HISTORY AND ORGANIZATION

Total Entertainment Restaurant Corp. (the "Company") was organized as a
Delaware corporation on February 7, 1997, for the purpose of developing
entertainment restaurant locations. Effective February 20, 1997, the Company
entered into simultaneous stock exchange transactions and issued an aggregate of
8,000,000 shares of its common stock for all the common stock of Bailey's Sports
Grille, Inc., all the common stock of F&H Restaurant Corp. and the remaining 25%
minority interest in Fox & Hound Entertainment and Restaurant Group (the
"Exchange"). The Exchange among the Company and F&H Restaurant Corp. will be
accounted for in a manner similar to a pooling of interest as a combination of
entities under common control pursuant to Staff Accounting Bulletin No. 97. For
accounting purposes, F&H Restaurant Corp. is deemed to be the acquiring
corporation since, upon the completion of the Exchange, its former stockholders
control 50% of the Company. Accordingly, the assets and liabilities of F&H
Restaurant Corp. will be accounted for in the consolidated financial statements
of the Company using the historical amounts of F&H Restaurant Corp.

The Exchange among the Company and the owners of the remaining 25% of Fox &
Hound Entertainment Restaurant Group will be accounted for as the acquisition of
a minority interest using the purchase method of accounting in accordance with
APB No. 16.

The Exchange among the Company and Bailey's Sports Grille, Inc. will be
accounted for as a business combination using the purchase method of accounting
in accordance with APB No. 16.

Any excess purchase price over the fair value of the assets received will
be recorded as goodwill and will be amortized over 20 years.

Upon formation, the Company issued 8,000 shares of common stock at $0.0125
per share. In connection with the Exchange, the original issue shares were
canceled. In February 1997, the Company's Board of Directors approved a 79 for 1
stock dividend. All share, per share and stock option data included in the
accompanying balance sheet, notes thereto and elsewhere in the Prospectus have
been restated to reflect the stock dividend.

2. PREFERRED STOCK

The Company's Board of Directors has the authority to issue up to 2,000,000
shares of preferred stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preference
and the number of shares constituting any series or the designation of such
series.

3. STOCK OPTIONS

- 1997 Incentive and Nonqualified Stock Option Plan

In March 1997, the Board of Directors adopted a stock option plan
providing for incentive and nonqualified stock options pursuant to which
up to 1,500,000 shares of common stock will be available for issuance.
The Plan covers the Chairman of the Board, certain officers and key
employees. Concurrent with the effective date of the proposed initial
public offering, the Company will grant options to the Chairman of the
Board and certain key employees to purchase an aggregate of 735,000
shares of common stock at an exercise price per share equal to the
initial public offering price.

- Directors' Stock Option Plan

In March 1997, the Board of Directors adopted a stock option plan
providing for nondiscretionary grants to nonemployee directors pursuant
to which up to 150,000 shares of common stock will be

F-4
<PAGE> 47

TOTAL ENTERTAINMENT RESTAURANT CORP.

NOTES TO BALANCE SHEET -- (CONTINUED)

available for issuance. Concurrent with the effective date of the
proposed public offering, the Company will grant an option to directors
to purchase an aggregate of 50,000 shares of common stock at an exercise
price per share equal to the initial public offering price.

4. SUBSEQUENT EVENTS

On February 24, 1997, the Company borrowed $10,800,000 under a $12,000,000
revolving line of credit with Intrust Bank, N.A., Wichita, Kansas. The proceeds
from the borrowing were used to retire certain indebtedness assumed in
connection with the Exchange, including all notes payable to affiliates, notes
payable to banks and dividends payable to certain predecessor stockholders
representing substantially all of the undistributed S Corporation earnings
attributable to such stockholders prior to the Exchange. The line of credit
requires monthly payments of interest and is due June 1997. Interest accrues at
the bank's prime rate. The line of credit is secured by a guarantee from a
principal stockholder for up to $6,000,000.

F-5
<PAGE> 48

REPORT OF INDEPENDENT AUDITORS

The Stockholders
F&H Restaurant Corp.

We have audited the accompanying consolidated balance sheet of F&H
Restaurant Corp. as of December 31, 1996, and the related consolidated
statements of operations, stockholders' equity and cash flows for the 57 days
ended December 31, 1996 (since incorporation). These financial statements are
the responsibility of F&H Restaurant Corp.'s management. Our responsibility is
to express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of F&H Restaurant
Corp. at December 31, 1996, and the consolidated results of its operations and
its cash flows for the 57 days ended December 31, 1996, in conformity with
generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

March 10, 1997
Wichita, Kansas

F-6
<PAGE> 49

F&H RESTAURANT CORP.

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31,
1996
------------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents..................................................... $ 254,463
Accounts receivable -- affiliates............................................. 28,343
Accounts receivable........................................................... 5,003
Inventories................................................................... 92,455
Deferred taxes................................................................ 47,289
Other current assets.......................................................... 25,758
----------
Total current assets....................................................... 453,311
Property and equipment:
Leasehold improvements........................................................ 1,150,312
Equipment..................................................................... 821,295
Furniture and fixtures........................................................ 151,416
----------
2,123,023
Less accumulated depreciation and amortization................................ 19,302
----------
2,103,721
Other assets:
Goodwill (net of accumulated amortization of $11,776)...................... 3,436,290
Other assets............................................................... 15,760
----------
Total other assets.................................................... 3,452,050
----------
Total assets.......................................................... $6,009,082
==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to stockholder (Notes 1 and 3)................................... $1,500,000
Note payable to affiliates (Note 4)........................................... 233,000
Amounts due to sellers (Note 1)............................................... 3,030,071
Accounts payable.............................................................. 66,363
Accounts payable -- affiliates................................................ 15,128
Accrued liabilities:
Sales tax payable.......................................................... 70,057
Accrued payroll............................................................ 69,298
Insurance.................................................................. 29,765
Other...................................................................... 61,672
Current maturities -- long-term debt (Note 5)................................. 463,465
----------
Total current liabilities.................................................. 5,538,819
Long-term debt (Note 5)......................................................... --
Deferred taxes.................................................................. 67,057
Minority interest............................................................... 390,214
Commitments (Note 7)............................................................ --
Stockholders' equity:
Common stock, no par value; 1,000 shares authorized, issued and outstanding... 1,000
Retained earnings............................................................. 11,992
----------
Total stockholders' equity................................................. 12,992
----------
Total liabilities and stockholders' equity............................ $6,009,082
==========
</TABLE>

See notes to consolidated financial statements.

F-7
<PAGE> 50

F&H RESTAURANT CORP.

CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE
57 DAYS ENDED
DECEMBER 31,
1996
-------------
<S> <C>
Net sales...................................................................... $ 384,522
Costs and expenses:
Costs of sales............................................................... 115,725
Entertainment and restaurant operating expenses.............................. 185,430
Depreciation and amortization................................................ 27,179
--------
Entertainment and restaurant costs and expenses................................ 328,334
--------
Entertainment and restaurant operating income.................................. 56,188
General and administrative expenses:
Related parties.............................................................. 15,797
Other........................................................................ 4,337
--------
Income from operations......................................................... 36,054
Other income (expense):
Other income................................................................. 4,775
Interest expense:
Related parties........................................................... (12,256)
Other..................................................................... (3,427)
--------
Income before income taxes and minority interest........................ 25,146
Provision for income taxes (Note 8)............................................ 3,181
Minority interest......................................................... 9,973
--------
Net income................................................................ $ 11,992
========
</TABLE>

See notes to consolidated financial statements.

F-8
<PAGE> 51

F&H RESTAURANT CORP.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK
----------------- RETAINED
NUMBER AMOUNT EARNINGS TOTAL
------- ------ -------- -------
<S> <C> <C> <C> <C>
Balance at November 7, 1996........................... -- $ -- $ -- $ --
Issuance of common stock............................ 1,000 1,000 -- 1,000
Net income.......................................... -- -- 11,992 11,992
----- ------ ------- -------
Balance at December 31, 1996.......................... 1,000 $1,000 $ 11,992 $12,992
===== ====== ======= =======
</TABLE>

See notes to consolidated financial statements.

F-9
<PAGE> 52

F&H RESTAURANT CORP.

CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
FOR THE
57 DAYS ENDED
DECEMBER 31,
1996
-------------
<S> <C>
Operating activities
Net income................................................................... $ 11,992
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization............................................. 31,156
Deferred taxes............................................................ 1,809
Minority interest in income of subsidiaries............................... 9,973
Net change in operating assets and liabilities:
Accounts receivable..................................................... 7,041
Inventories............................................................. (414)
Other current assets.................................................... 11,562
Accounts payable........................................................ (20,926)
Accrued liabilities..................................................... 5,026
----------
Net cash provided by operating activities............................ 57,219
Investing activities
Payment for purchase of interest in Fox & Hound Entertainment and Restaurant
Group, net of cash acquired............................................... (1,327,925)
Purchases of property and equipment.......................................... (7,517)
Other........................................................................ (1,000)
----------
Net cash used in investing activities..................................... (1,336,442)
Financing activities
Net proceeds from issuance of common stock................................... 1,000
Proceeds from notes payable -- stockholder................................... 1,500,000
Proceeds from note receivable -- partner..................................... 42,322
Payment of long-term debt.................................................... (9,636)
----------
Net cash provided by financing activities.................................... 1,533,686
----------
Net increase in cash and cash equivalents.................................... 254,463
Cash and cash equivalents at beginning of period............................. --
----------
Cash and cash equivalents at end of period................................... $ 254,463
==========
Supplemental disclosure of cash flow information:
Cash paid for interest.................................................... $ 11,628
</TABLE>

See notes to consolidated financial statements.

F-10
<PAGE> 53

F&H RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1996

1. DESCRIPTION OF BUSINESS AND ACQUISITION

F&H Restaurant Corp. (FHRC) was organized as a Delaware corporation on
November 4, 1996, for the purpose of acquiring a 75% partnership interest in the
Fox & Hound Entertainment and Restaurant Group (FHERG). FHERG owns and operates
three entertainment restaurant locations in the state of Texas under the name of
"Fox & Hound English Pub and Grille." The acquisition was completed on December
6, 1996; thus, the accompanying consolidated financial statements include 25
days of operations of FHERG.

The acquisition was financed by a loan from a principal stockholder of FHRC
in the initial amount of $1,500,000 and an additional loan from such stockholder
of $3,030,071 in January 1997. The aggregate consideration paid by FHRC was
$4,568,995, including expenses associated with the purchase, consisting of
$1,538,924 in cash and a promissory note for $3,030,071 which was due January 2,
1997.

The acquisition has been accounted for as a purchase and, accordingly, the
acquired underlying assets and liabilities have been recorded at their estimated
fair values at the date of acquisition. The acquisition resulted in goodwill of
approximately $3,436,000 which is being amortized over 20 years. The preliminary
purchase price allocation to the assets and liabilities acquired are as follows:

<TABLE>
<S> <C>
Assets acquired
Current assets......................................... $ 388,913
Property and equipment................................. 2,115,506
Goodwill and other assets.............................. 3,504,158
----------
Total assets acquired............................... 6,008,577
----------
Liabilities assumed
Current liabilities.................................... 520,191
Long-term debt (including current portion)............. 473,101
Other.................................................. 66,049
----------
Total liabilities assumed........................... 1,059,341
----------
Net assets acquired...................................... 4,949,236
Minority interest........................................ 380,241
----------
Total purchase price allocated......................... $4,568,995
==========
</TABLE>

2. SIGNIFICANT ACCOUNTING POLICIES

- - Consolidation

The accompanying financial statements include the accounts of FHRC and its
majority-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.

- - Cash and Cash Equivalents

FHRC considers cash and cash equivalents to include currency on hand,
demand deposits with banks or other financial institutions, and short-term
investments with maturities of three months or less when purchased. Cash and
cash equivalents are carried at cost which approximates fair value.

F-11
<PAGE> 54

F&H RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 1996

- - Inventories

Inventories consist of food and beverages, and are stated at the lower of
cost (first-in, first-out) or market.

- - Property and Equipment

Property and equipment are stated at cost. Maintenance, repairs and
renewals which do not enhance the value of or increase the life of the assets
are expensed as incurred.

Leasehold improvements are amortized on the straight-line method over the
lesser of the maximum life of the lease or 20 years, or the estimated useful
lives of the assets. Equipment and furniture and fixtures are depreciated using
the straight-line method over seven years, which is the estimated useful life of
the assets. Depreciation expense for the period ended December 31, 1996 was
approximately $11,300.

In March 1995, the FASB issued Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. Statement 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. FHRC has adopted Statement 121 and,
based on current circumstances, believes there have been no impairments.

2. SIGNIFICANT ACCOUNTING POLICIES

- - Goodwill

Goodwill represents the excess of the acquisition cost of the 75% interest
in FHERG over the fair value of its net assets at the date of acquisition and is
being amortized on a straight-line method over 20 years. The carrying value of
goodwill will be reviewed if the facts and circumstances suggest that it may be
impaired. If this review indicates that goodwill will not be recoverable, as
determined based on the undiscounted cash flows of the entity acquired over the
remaining amortization period, FHRC's carrying value of the goodwill will be
reduced by the estimated shortfall of cash flows.

- - Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from estimates.

- - Income Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Valuation allowances are established when necessary to reduce deferred
tax assets to the amounts expected to be realized. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled.

3. NOTE PAYABLE -- STOCKHOLDER

At December 31, 1996, FHRC had an outstanding note payable to a principal
stockholder for $1,500,000. This note is payable on demand and accrues interest
at the prime interest rate as published in the Wall Street Journal (8.25% at
December 31, 1996).

F-12
<PAGE> 55

F&H RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 1996

4. NOTE PAYABLE TO AFFILIATES

Note payable to affiliates represents notes to certain partners of FHERG
totaling $233,000 at December 31, 1996. These notes are payable on demand and
accrue interest at 10%.

5. LONG-TERM DEBT

Long-term debt at December 31, 1996 consisted of the following:

<TABLE>
<S> <C>
Installment loan to bank, payable in varying monthly payments, including interest
at the bank's base rate plus 2% (10.25% at December 31, 1996), due September
1999, secured by leasehold improvements and restaurant equipment and a guarantee
from a general partner.......................................................... $110,058
Installment loan to bank, payable in varying monthly payments, including interest
at the bank's base rate plus 1.5% (11.25% at December 31, 1996), due September
2000, secured by leasehold improvements and restaurant equipment and a guarantee
from several partners........................................................... 353,407
--------
463,465
Less current portion.............................................................. 463,465
--------
$ --
========
</TABLE>

In connection with the acquisition of FHRC as described in Note 9, the
installment notes payable were refinanced with a revolving note payable to a
bank. Accordingly, the installment notes payable have been classified as current
portion of long-term debt.

6. RELATED PARTY TRANSACTIONS

FHRC utilizes an affiliate to provide certain accounting, computer
administrative services and certain management services. FHRC incurred fees of
$15,797 related to such services for the period ended December 31, 1996.

7. LEASES

FHRC leases two entertainment restaurant locations from affiliates and
another from a third party. These leases are noncancelable operating leases
having terms expiring between 1999 and 2000. The leases have renewal clauses of
5 to 20 years, exercisable at the option of the lessee. FHRC also leases various
office, entertainment and restaurant equipment under noncancelable operating
leases having terms from one to three years. Total rental expense for the period
ended December 31, 1996, was $19,066, including $17,786 involving related
parties.

Minimum lease payments for the next five years and thereafter under
operating leases in effect at December 31, 1996, are as follows:

<TABLE>
<CAPTION>
RELATED UNRELATED
FISCAL YEAR PARTIES PARTIES TOTAL
------------------------------------ -------- --------- --------
<S> <C> <C> <C>
1997................................ $193,416 $36,132 $229,548
1998................................ 178,416 36,132 214,548
1999................................ 178,416 10,588 189,004
2000................................ 163,548 -- 163,548
2001................................ -- -- --
Thereafter -- -- --
</TABLE>

F-13
<PAGE> 56

F&H RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 1996

8. INCOME TAXES

Significant components of the provision for income taxes are as follows:

<TABLE>
<S> <C>
Current:
Federal................................................... $ 318
State..................................................... 1,054
------
Total.................................................. 1,372
Deferred:
Federal................................................... 1,206
State..................................................... 603
------
Total.................................................. 1,809
------
Total income tax expense.......................... $3,181
======
</TABLE>

Significant components of FHRC's deferred tax assets and liabilities at
December 31, 1996, are as follows:

<TABLE>
<S> <C>
Deferred tax assets:
Tax over book basis of other assets...................... $47,289
Deferred tax liabilities:
Book over tax basis of property and equipment............ 889
Book over tax basis of goodwill and other assets......... 66,168
-------
67,057
-------
Net deferred tax liabilities.......................... $19,768
=======
</TABLE>

The reconciliation of income tax expense computed at the U.S. federal
statutory rate to the actual income tax expense for the period ended December
31, 1996, is:

<TABLE>
<CAPTION>
AMOUNT RATE
------- ----
<S> <C> <C>
Income tax expense at federal statutory rate........ $ 8,550 34%
State income taxes, net of federal benefit.......... 1,077 4
Tax credits......................................... (2,581) (10)
Effect of graduated tax rates....................... (4,778) (19)
Other............................................... 913 4
------- ---
Actual income tax expense........................... $ 3,181 13%
======= ===
</TABLE>

9. EXCHANGE TRANSACTION

On February 20, 1997, the stockholders of FHRC completed an Exchange
Transaction whereby they exchanged all of their interests in FHRC's common stock
for common stock of Total Entertainment Restaurant Corp. In connection with the
acquisition of FHRC, Total Entertainment Restaurant Corp. refinanced the
long-term installment note payable of $463,465 with a revolving note payable to
a bank.

F-14
<PAGE> 57

F&H RESTAURANT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 1996

10. FAIR VALUES OF FINANCIAL INSTRUMENTS

The methods used by FHRC in estimating its fair value disclosures for
financial instruments are as follows:

Cash and Cash Equivalents -- The carrying amount reported in the balance
sheet for cash and cash equivalents approximates its fair value.

Long-term Debt, Notes Payable, Notes Payable to Stockholder and Notes
Payable to Partners -- The carrying amount of FHRC's borrowings under its
short-term and long-term debt agreements approximates their fair value.

F-15
<PAGE> 58

REPORT OF INDEPENDENT AUDITORS

The Partners
Fox & Hound Entertainment and Restaurant Group

We have audited the accompanying combined balance sheets of Fox & Hound
Entertainment and Restaurant Group as of December 31, 1995 and 1996, and the
related combined statements of operations, partners' equity and cash flows for
each of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Fox & Hound Entertainment and
Restaurant Group's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Fox & Hound
Entertainment and Restaurant Group at December 31, 1995 and 1996, and the
combined results of its operations and its cash flows for each of the three
years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles.

/s/ ERNST & YOUNG LLP
--------------------------------------
March 10, 1997
Wichita, Kansas

F-16
<PAGE> 59

FOX & HOUND ENTERTAINMENT AND RESTAURANT GROUP

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1995 1996
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................................... $ 280,519 $ 252,229
Accounts receivable............................................... 12,692 5,003
Accounts receivable -- affiliates................................. 27,343 27,343
Inventories....................................................... 75,718 92,455
Preopening costs, net............................................. 81,053 --
Other current assets.............................................. 44,108 25,758
---------- ----------
Total current assets........................................... 521,433 402,788
Property and equipment (Note 4):
Leasehold improvements............................................ 1,137,334 1,252,445
Equipment......................................................... 954,899 1,048,438
Furniture and fixtures............................................ 157,330 186,232
---------- ----------
2,249,563 2,487,115
Less accumulated depreciation and amortization.................... 154,590 383,394
---------- ----------
2,094,973 2,103,721
Other assets........................................................ 21,570 13,720
---------- ----------
Total assets.............................................. $2,637,976 $2,520,229
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Note payable (Notes 2 and 4)...................................... $ 445,439 $ --
Note payable -- partners (Note 3)................................. 163,000 233,000
Accounts payable.................................................. 138,007 66,363
Accrued liabilities:
Sales and gross receipts tax payable........................... 69,216 70,057
Payroll and related expenses................................... 86,428 69,298
Insurance...................................................... -- 29,765
Other.......................................................... 25,559 24,363
Current maturities -- long-term debt (Note 4)..................... 40,901 463,465
---------- ----------
Total current liabilities...................................... 968,550 956,311
Long-term debt (Note 4)............................................. 110,000 --
Commitments (Note 6)................................................ -- --
Partners' equity:
Partners' equity.................................................. 1,609,426 1,563,918
Less note receivable -- partner................................... (50,000) --
---------- ----------
Total partners' equity.............................................. 1,559,426 1,563,918
---------- ----------
Total liabilities and partners' equity.............................. $2,637,976 $2,520,229
========== ==========
</TABLE>

See notes to combined financial statements.

F-17
<PAGE> 60

FOX & HOUND ENTERTAINMENT AND RESTAURANT GROUP

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
1994 1995 1996
-------- ---------- ----------
<S> <C> <C> <C>
Net sales............................................... $729,800 $2,617,834 $5,506,697
Costs and expenses:
Costs of sales........................................ 245,737 824,089 1,721,088
Entertainment and restaurant operating expenses....... 455,933 1,390,982 2,759,146
Depreciation and amortization......................... 90,427 224,219 310,512
-------- ---------- ----------
Entertainment and restaurant costs and expenses......... 792,097 2,439,290 4,790,746
-------- ---------- ----------
Entertainment and restaurant operating income (loss).... (62,297) 178,544 715,951
General and administrative expenses:
Related parties....................................... 1,750 29,820 225,600
Other................................................. 19,343 39,524 70,416
-------- ---------- ----------
Income (loss) from operations........................... (83,390) 109,200 419,935
Other income (expense):
Other income.......................................... 4,308 15,384 23,370
Interest expense:
Related parties.................................... -- (6,398) (18,945)
Other.............................................. (5,559) (22,388) (59,868)
-------- ---------- ----------
(1,251) (13,402) (55,443)
-------- ---------- ----------
Net income (loss).................................. $(84,641) $ 95,798 $ 364,492
======== ========== ==========
</TABLE>

See notes to combined financial statements.

F-18
<PAGE> 61

FOX & HOUND ENTERTAINMENT AND RESTAURANT GROUP

COMBINED STATEMENTS OF PARTNERS' EQUITY

<TABLE>
<CAPTION>
NOTE RECEIVABLE PARTNERS' TOTAL PARTNERS'
PARTNER EQUITY EQUITY
--------------- ---------- ---------------
<S> <C> <C> <C>
Balance at December 31, 1993....................... $ -- $ -- $ --
Contributed capital.............................. -- 1,096,669 1,096,669
Net loss......................................... -- (84,641) (84,641)
-------- ---------- ----------
Balance at December 31, 1994....................... -- 1,012,028 1,012,028
Contributed capital.............................. (50,000) 750,000 700,000
Partners' distributions.......................... -- (248,400) (248,400)
Net income....................................... -- 95,798 95,798
-------- ---------- ----------
Balance at December 31, 1995....................... (50,000) 1,609,426 1,559,426
Partners' distributions.......................... -- (410,000) (410,000)
Proceeds from note receivable.................... 50,000 -- 50,000
Net income....................................... -- 364,492 364,492
-------- ---------- ----------
Balance at December 31, 1996....................... $ -- $1,563,918 $ 1,563,918
======== ========== ==========
</TABLE>

See notes to combined financial statements.

F-19
<PAGE> 62

FOX & HOUND ENTERTAINMENT AND RESTAURANT GROUP

COMBINED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
Operating activities
Net income (loss)..................................... $ (84,641) $ 95,798 $ 364,492
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization...................... 90,427 224,219 310,512
Net change in operating assets and liabilities:
Accounts receivable.............................. (8,740) (31,295) 7,689
Inventories...................................... (31,524) (44,194) (16,737)
Preopening costs................................. (153,121) (87,818) --
Other current assets............................. (51,316) 7,208 18,350
Accounts payable................................. 7,767 (3,420) 62,016
Accrued liabilities.............................. 128,827 52,376 12,280
------------ ------------ ------------
Net cash provided by (used in) operating
activities.................................. (102,321) 212,874 758,602

Investing activities
Purchases of property and equipment................... (1,120,717) (995,186) (371,212)
Other................................................. (15,769) (5,971) 7,195
------------ ------------ ------------
Net cash used in investing activities.............. (1,136,486) (1,001,157) (364,017)

Financing activities
Capital contributions................................. 1,096,669 700,000 50,000
Proceeds from long-term debt.......................... 202,707 450,000 --
Proceeds from note payable -- partners................ 5,000 158,000 70,000
Payment of long-term debt............................. (10,000) (46,367) (132,875)
Partner distributions................................. -- (248,400) (410,000)
------------ ------------ ------------
Net cash provided by (used in) financing activities... 1,294,376 1,013,233 (422,875)
Net increase (decrease) in cash and cash
equivalents........................................ 55,569 224,950 (28,290)
Cash and cash equivalents at beginning of period...... -- 55,569 280,519
------------ ------------ ------------
Cash and cash equivalents at end of period............ $ 55,569 $ 280,519 $ 252,229
============ ============ ============
Supplemental disclosure of cash flow information:
Cash paid for interest............................. $ 5,559 $ 24,426 $ 79,118
Supplemental schedule of non cash investing and
financing activities:
During 1996, the note payable of $445,439 was
refinanced by a long-term installment note
payable due September 2000.
</TABLE>

See notes to combined financial statements.

F-20
<PAGE> 63

FOX & HOUND ENTERTAINMENT AND RESTAURANT GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996

1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Business Description

The accompanying combined financial statements include the historic assets,
liabilities and operations associated with the limited partnerships listed
below. The combined partnerships are collectively referred to as Fox & Hound
Entertainment and Restaurant Group (FHERG). Pursuant to an acquisition agreement
entered into on December 6, 1996, a 75% partnership interest was purchased from
each partner by F&H Restaurant Corp. All such limited partnerships have been
presented on a combined basis because they have common partners and management
and significant interrelated activities. All significant intercompany
transactions have been eliminated.

<TABLE>
<CAPTION>
ENTITY STORE OPENING DATE
--------------------------------- ------------------
<S> <C>
Midway Entertainment, Ltd........ November 30, 1995
505 Entertainment, Ltd........... September 10, 1994
North Collins Entertainment,
Ltd............................ August 29, 1994
</TABLE>

Each of the above entities operates a stand-alone entertainment restaurant
location in the state of Texas under the name of "Fox & Hound English Pub and
Grille."

Significant Accounting Policies

- - Cash and Cash Equivalents

FHERG considers cash and cash equivalents to include currency on hand,
demand deposits with banks or other financial institutions, and short-term
investments with maturities of three months or less when purchased. Cash and
cash equivalents are carried at cost which approximates fair value.

- - Inventories

Inventories consist of food and beverages, and are stated at the lower of
cost (first-in, first-out) or market.

- - Property and Equipment

Property and equipment are stated at cost. Maintenance, repairs and
renewals which do not enhance the value of or increase the life of the assets
are expensed as incurred.

Leasehold improvements are amortized on the straight-line method over the
lesser of the maximum life of the lease or 20 years, or the estimated useful
lives of the assets. Equipment and furniture and fixtures are depreciated using
the straight-line method over seven years, which is the estimated useful life of
the assets. Depreciation expense incurred for the years ended December 31, 1994,
1995 and 1996 was approximately $35,700, $122,000 and $128,900, respectively.

In March 1995, the FASB issued Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. Statement 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. FHERG adopted Statement 121 and,
based on current circumstances, believes there have been no impairments.

F-21
<PAGE> 64

FOX & HOUND ENTERTAINMENT AND RESTAURANT GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

- - Use of Estimates

- - Pre-opening Costs

Labor costs and costs of hiring and training personnel and certain other
costs relating to opening new entertainment restaurant locations are capitalized
until the entertainment restaurant location is open and then amortized over the
subsequent 12 months. Accumulated amortization related to such entertainment
restaurant locations was approximately $156,700 and $237,800 at December 31,
1995 and 1996, respectively.

- - Income Taxes

The entities comprising FHERG are limited partnerships and are taxed as
such pursuant to the Internal Revenue Code and, as such, are not individually
subject to federal or state income taxes because their taxable income or loss
accrues to the individual partners or members. Accordingly, the accompanying
combined financial statements do not include a provision for income taxes.

2. NOTE PAYABLE

At December 31, 1995, FHERG had an available line of credit with a bank of
up to $450,000. Interest was payable on the outstanding balance at the bank's
base rate plus 2%. Borrowings under the line of credit were guaranteed by
several partners of FHERG. The note matured in May of 1996 and was refinanced
with an installment loan with the bank (see Note 4).

3. NOTE PAYABLE TO PARTNERS

Note payable to partners represents notes to certain partners totaling
$163,000 and $233,000 at December 31, 1995 and 1996, respectively. These notes
are payable on demand and accrue interest at 10%.

4. LONG-TERM DEBT

Long-term debt at December 31, 1995 and 1996 consisted of the following:

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Installment loan to bank, payable in varying monthly payments,
including interest at the bank's base rate plus 2% (10.25% at
December 31, 1996), due September 1999, secured by leasehold
improvements and restaurant equipment and a guarantee from a general
partner.............................................................. $150,901 $110,058
Installment loan to bank, payable in varying monthly payments,
including interest at the bank's base rate plus 1.5% (11.25% at
December 31, 1996), due September 2000, secured by leasehold
improvements and restaurant equipment and a guarantee from several
partners............................................................. -- 353,407
-------- --------
150,901 463,465
Less current portion................................................... 40,901 463,465
-------- --------
$110,000 $ --
======== ========
</TABLE>

In connection with the acquisition of FHERG as described in Note 8, the
installment notes payable were refinanced with a revolving note payable to a
bank. Accordingly, the installment notes payable have been classified as current
portion of long-term debt.

F-22
<PAGE> 65

FOX & HOUND ENTERTAINMENT AND RESTAURANT GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. RELATED PARTY TRANSACTIONS

FHERG utilizes certain affiliates to provide accounting, computer,
administrative services and certain management services. The Company incurred
fees of $1,750, $29,820 and $225,600 related to such services for fiscal years
1994, 1995 and 1996, respectively.

6. LEASES

FHERG leases two entertainment restaurant locations from affiliates and
another from a third party. These leases are noncancelable operating leases
having terms expiring between 1999 and 2000. The leases have renewal clauses of
5 to 20 years, exercisable at the option of the lessee. FHERG also leases
various office, entertainment and restaurant equipment under noncancelable
operating leases having terms from one to three years. Total rental expense for
the years ended December 31, 1994, 1995 and 1996, was $35,886, $123,546 and
$306,280, respectively, including $22,425, $77,600 and $260,400, respectively,
involving related parties.

Minimum lease payments for the next five years and thereafter under
operating leases in effect at December 31, 1996, are as follows:

<TABLE>
<CAPTION>
RELATED UNRELATED
FISCAL YEAR PARTIES PARTIES TOTAL
-------------------------------------------- -------- --------- --------
<S> <C> <C> <C>
1997........................................ $193,416 $36,132 $229,548
1998........................................ 178,416 36,132 214,548
1999........................................ 178,416 10,588 189,004
2000........................................ 163,548 -- 163,548
2001........................................ -- -- --
Thereafter.................................. -- -- --
</TABLE>

7. FAIR VALUES OF FINANCIAL INSTRUMENTS

The methods used by FHERG in estimating its fair value disclosures for
financial instruments are as follows:

Cash and Cash Equivalents -- The carrying amount reported in the balance
sheet for cash and cash equivalents approximates its fair value.

Long-term Debt, Notes Payable and Notes Payable -- Partners -- The carrying
amount of FHERG's borrowings under its short-term and long-term debt agreements
approximates their fair value.

8. EXCHANGE TRANSACTION

On February 20, 1997, the partners of FHERG completed an Exchange
Transaction whereby they exchanged all of their interests for common stock of
Total Entertainment Restaurant Corp. In connection with the Exchange
Transaction, Total Entertainment Restaurant Corp. refinanced the long-term
installment notes payable of $463,465 with a revolving note payable to a bank.

F-23
<PAGE> 66

INDEPENDENT AUDITORS' REPORT

Board of Directors
Bailey's Sports Grille, Inc.
Charlotte, North Carolina

We have audited the accompanying balance sheets of Bailey's Sports Grille,
Inc. ("Bailey's") as of December 26, 1995 and December 31, 1996, and the related
statements of income, stockholders' equity, and cash flows for each of the three
years in the period ended December 31, 1996. These financial statements are the
responsibility of Bailey's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Bailey's as of December 26, 1995 and
December 31, 1996, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.

/s/ Deloitte & Touche LLP

March 11, 1997

F-24
<PAGE> 67

BAILEY'S SPORTS GRILLE, INC.

BALANCE SHEETS
DECEMBER 26, 1995 AND DECEMBER 31, 1996

<TABLE>
<CAPTION>
1995 1996
---------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash............................................................. $ 326,068 $ 1,039,532
Accounts receivable.............................................. 3,832 9,263
Inventories...................................................... 91,548 136,724
Pre-opening costs, net (Note 2).................................. 67,057 84,101
Prepaid expenses................................................. 49,830 90,904
---------- -----------
Total current assets..................................... 538,335 1,360,524
---------- -----------
PROPERTY AND EQUIPMENT:
Land............................................................. -- 600,000
Buildings........................................................ -- 650,012
Leasehold improvements........................................... 884,858 1,434,856
Restaurant equipment............................................. 1,094,508 1,621,071
Furniture and equipment.......................................... 939,833 1,180,642
Computer equipment and software.................................. 198,329 284,499
Vehicles......................................................... 8,900 28,101
---------- -----------
Total.................................................... 3,126,428 5,799,181
Less accumulated depreciation and amortization................... (732,813) (1,187,513)
---------- -----------
Property and equipment, net.............................. 2,393,615 4,611,668
---------- -----------
OTHER ASSETS, NET (Note 2)......................................... 14,138 87,189
---------- -----------
TOTAL.............................................................. $2,946,088 $ 6,059,381
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable................................................. $ 18,749 $ 143,142
Accrued liabilities:
Payroll and related expenses.................................. 88,717 164,671
Sales tax payable............................................. 37,285 67,219
Interest...................................................... 4,128 25,350
Other......................................................... 68,204 142,374
Long-term debt, current portion.................................. 287,106 3,760,381
---------- -----------
Total current liabilities................................ 504,189 4,303,137
---------- -----------
LONG-TERM DEBT (Note 4)............................................ 1,532,252 --
---------- -----------
COMMITMENTS (Note 5)
STOCKHOLDERS' EQUITY (Note 1):
Common stock of combined companies as of December 26, 1995....... 42,440 --
Common stock, no par value, 100,000 shares authorized, 10,000
issued and outstanding at December 31, 1996................... -- 42,880
Additional paid-in capital....................................... 20,160 39,720
Retained earnings................................................ 867,047 1,673,644
---------- -----------
Total.................................................... 929,647 1,756,244
Less note receivable -- stockholder (Note 3)..................... (20,000) --
---------- -----------
Total stockholders' equity............................... 909,647 1,756,244
---------- -----------
TOTAL.............................................................. $2,946,088 $ 6,059,381
========== ===========
</TABLE>

See notes to financial statements.

F-25
<PAGE> 68

BAILEY'S SPORTS GRILLE, INC.

STATEMENTS OF INCOME
YEARS ENDED DECEMBER 27, 1994, DECEMBER 26, 1995 AND DECEMBER 31, 1996

<TABLE>
<CAPTION>
1994 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
NET SALES:
Food and beverage.................................... $2,244,626 $4,262,630 $7,420,320
Gaming and vending................................... 683,857 1,070,891 1,892,075
----------- ----------- -----------
Total........................................ 2,928,483 5,333,521 9,312,395
----------- ----------- -----------
COSTS AND EXPENSES:
Cost of sales........................................ 754,072 1,410,085 2,456,763
Operating expenses................................... 1,377,053 2,400,773 3,773,007
General and administrative expenses.................. 312,474 491,693 919,112
Depreciation and amortization........................ 168,605 304,460 454,700
----------- ----------- -----------
Total........................................ 2,612,204 4,607,011 7,603,582
----------- ----------- -----------
INCOME FROM OPERATIONS................................. 316,279 726,510 1,708,813
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense..................................... (56,299) (125,120) (237,002)
Other income (expense)............................... (10,086) 1,041 29,824
----------- ----------- -----------
Total........................................ (66,385) (124,079) (207,178)
----------- ----------- -----------
NET INCOME............................................. $ 249,894 $ 602,431 $1,501,635
=========== =========== ===========
</TABLE>

See notes to financial statements

F-26
<PAGE> 69

BAILEY'S SPORTS GRILLE, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 27, 1994, DECEMBER 26, 1995 AND DECEMBER 31, 1996

<TABLE>
<CAPTION>
COMMON
STOCK ADDITIONAL NOTES
(NOTE PAID-IN RETAINED RECEIVABLE-
1) CAPITAL EARNINGS STOCKHOLDER TOTAL
------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 28, 1993........ $21,000 $ 600 $ 395,722 $ -- $ 417,322
Net income...................... -- -- 249,894 -- 249,894
Issuance of common stock........ 1,000 -- -- -- 1,000
Stockholder distributions....... -- -- (95,000) -- (95,000)
------- ------- ---------- -------- ----------
BALANCE, DECEMBER 27, 1994........ 22,000 600 550,616 -- 573,216
Net income...................... -- -- 602,431 -- 602,431
Issuance of common stock........ 20,440 19,560 -- (20,000) 20,000
Stockholder distributions....... -- -- (286,000) -- (286,000)
------- ------- ---------- -------- ----------
BALANCE, DECEMBER 26, 1995........ 42,440 20,160 867,047 (20,000) 909,647
Net income...................... -- -- 1,501,635 -- 1,501,635
Issuance of common stock........ 440 19,560 -- (20,000) --
Repayment of notes receivable --
stockholder.................. -- -- -- 40,000 40,000
Stockholder distributions....... -- -- (695,038) -- (695,038)
------- ------- ---------- -------- ----------
BALANCE, DECEMBER 31, 1996........ $42,880 $ 39,720 $1,673,644 $ -- $1,756,244
======= ======= ========== ======== ==========
</TABLE>

See notes to financial statements.

F-27
<PAGE> 70

BAILEY'S SPORTS GRILLE, INC.

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 27, 1994, DECEMBER 26, 1995 AND DECEMBER 31, 1996

<TABLE>
<CAPTION>
1994 1995 1996
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................... $ 249,894 $ 602,431 $ 1,501,635
------------ ------------ ------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization............... 168,605 304,460 578,171
(Increase) decrease in accounts
receivable................................ 74,607 2,710 (5,431)
Increase in inventories..................... (15,782) (45,399) (45,176)
Increase in preopening costs................ (6,860) (60,197) (138,157)
Increase in prepaid expenses and other
current assets............................ (5,665) (31,499) (41,074)
(Increase) decrease in other assets......... 61,267 (9,881) (75,409)
Increase (decrease) in accounts payable..... (51,102) (427) 124,393
Increase in accrued liabilities............. 50,787 112,441 191,280
------------ ------------ ------------
Net adjustments........................ 275,857 272,208 588,597
------------ ------------ ------------
Net cash provided by operating
activities........................... 525,751 874,639 2,090,232
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES --
Capital expenditures........................... (1,063,392) (1,405,076) (2,672,753)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term borrowings........................... 509,000 1,177,676 2,745,799
Payments on long-term debt..................... (229,190) (235,358) (794,776)
Distributions to stockholders.................. (95,000) (286,000) (695,038)
Repayment of notes receivable -- stockholder... 1,000 -- 40,000
------------ ------------ ------------
Net cash provided by financing
activities........................... 185,810 656,318 1,295,985
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH.................. (351,831) 125,881 713,464
CASH, BEGINNING OF YEAR.......................... 552,018 200,187 326,068
------------ ------------ ------------
CASH, END OF YEAR................................ $ 200,187 $ 326,068 $ 1,039,532
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION -- Cash paid during the year for
interest....................................... $ 52,369 $ 143,588 $ 214,754
NONCASH FINANCING ACTIVITIES -- In 1995, Bailey's
converted $20,000 of notes payable to
stockholders to common stock representing the
initial capitalization of one new store.
</TABLE>

See notes to financial statements.

F-28
<PAGE> 71

BAILEY'S SPORTS GRILLE, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 27, 1994, DECEMBER 26, 1995 AND DECEMBER 31, 1996

1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

Bailey's Sports Grille, Inc. ("Bailey's") operates eight entertainment
restaurant locations in North Carolina, South Carolina, Tennessee and Arkansas
under the name Bailey's Sports Grille. Bailey's was formed pursuant to a merger
of eight separate corporate entities in August 1996, each operating as a
Bailey's Sports Grille entertainment restaurant location. No change in relative
ownership interests occurred as a result of this merger, and therefore, no
change in basis was recorded relative to any combining company's assets and
liabilities. The stated value of Bailey's stock upon formation was $42,440, an
amount equal to the combined par value of the predecessor combined entities.
From January 1995 through the August 1996 merger, the separate entities had
common ownership and management and significant interrelated activities. As
such, they were combined in the accompanying financial statements for that
period. All significant intercompany accounts have been eliminated for fiscal
years 1994, 1995 and 1996.

The following summarizes the entities whose accounts are included in the
accompanying combined financial statements as of December 27, 1994 and December
26, 1995:

<TABLE>
<CAPTION>
1994 1995
----------------- ----------------
PAR VALUE/ SHARES SHARES PAR SHARES PAR
NAME OF ENTITY SHARE AUTHORIZED ISSUED VALUE ISSUED VALUE
- --------------------------------------- ---------- ---------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Charlotte Billiards Club, Inc. ........ $ 1.00 100,000 10,000 $10,000 10,200 $10,200
Creative Billiards, Inc. .............. $ 1.00 100,000 10,000 10,000 10,200 10,200
Bailey's of Greenville, Inc. .......... $ 0.10 10,200 10,000 1,000 10,200 1,020
Bailey's of Nashville, Inc. ........... $ 1.00 100,000 -- -- 10,000 10,000
Bailey's of Knoxville, Inc. ........... $ 1.00 100,000 -- -- 10,000 10,000
Bailey's of North Little Rock, Inc. ... $ 1.00 1,020 1,000 1,000 1,020 1,020
------- -------
$22,000 $42,440
======= =======
</TABLE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES -- Inventories, which consist of food, beverage, and
merchandise, are reported at the lower of cost or market determined on the
first-in, first-out method.

PROPERTY AND EQUIPMENT -- Property and equipment are stated at cost. Repair
and maintenance costs which do not enhance the value of, or increase the useful
life of, the assets are expensed as incurred. Depreciation is calculated using
the straight-line method over the following estimated useful service lives:

<TABLE>
<S> <C>
Building......................................................... 30 years
Restaurant Equipment............................................. 7 years
Furniture and equipment.......................................... 7 years
Computer equipment............................................... 5 years
Vehicles......................................................... 3 years
</TABLE>

Leasehold improvements are amortized on the straight-line method over the
lesser of 20 years or the estimated useful lives of the assets.

PRE-OPENING COSTS -- Labor costs and certain other incremental costs
relating to opening new entertainment restaurant locations are capitalized until
the store is open and then amortized over the subsequent twelve months. The net
carrying value of pre-opening costs at December 27, 1994, December 26, 1995 and
December 31, 1996 was $6,860, $67,057 and $84,101, respectively. Accumulated
amortization was $14,839, $55,510 and $174,005 at December 27, 1994, December
26, 1995 and December 31, 1996, respectively.

F-29
<PAGE> 72

BAILEY'S SPORTS GRILLE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

ORGANIZATION COSTS -- Legal and professional costs and other costs related
to corporate organization are capitalized and then amortized on a straight-line
basis over five years. The net carrying value of organization costs and
accumulated amortization at December 31, 1996 was $53,749 and $4,812,
respectively. No such organization costs were capitalized in 1994 and 1995.

FISCAL YEAR -- Bailey's fiscal year ends on the last Tuesday before
December 31, with both 1994 and 1995 representing 52 weeks of operations and
1996 representing 53 weeks.

INCOME TAX STATUS -- Bailey's has elected S corporation status for income
tax purposes. As such, income taxes on earnings of Bailey's are the
responsibility of the shareholders individually and, accordingly, are not
reflected in the accompanying financial statements. The separate entities which
were merged into Bailey's in August 1996 also had elected S corporation status.

USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

RECLASSIFICATIONS -- Certain amounts in the 1994 and 1995 financial
statements have been reclassified to conform to the 1996 financial statement
presentation.

3. NOTES RECEIVABLE -- STOCKHOLDER

In March 1995 and January 1996, Bailey's issued 620 shares of common stock
to an individual in return for notes receivables totaling $40,000, with interest
at 8-1/2% per year. In June 1996, the individual sold all of his shares to two
existing stockholders and repaid the outstanding notes receivable to Bailey's in
full. At December 26, 1995, one of these notes in the amount of $20,000 is shown
as a reduction of stockholders' equity.

4. FINANCING ARRANGEMENTS

Bailey's stockholders had an unsecured financing arrangement with a bank
that provided for total availability of $5,100,000 to be used to establish six
entertainment restaurant locations at $700,000 each and $900,000 to finance the
purchase of property related to one additional entertainment restaurant
location. Bailey's received the proceeds under this financing arrangement when
executed, and established a corresponding note payable to stockholders. The
original repayment terms and interest rate charged for this stockholder debt
represented the same terms as the stockholder bank loan. Amounts payable to
stockholders under this arrangement totaled $388,040, $1,204,544 and $3,667,187
at December 27, 1994, December 26, 1995 and December 31, 1996, respectively.

The following is a summary of amounts payable under all financing
arrangements at December 26, 1995 and December 31, 1996:

<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Stockholder notes, refinanced in 1997......................... $1,204,544 $3,667,187
Other amounts advanced by stockholders........................ 614,814 93,194
---------- ----------
1,819,358 3,760,381
Less current portion.......................................... 287,106 3,760,381
---------- ----------
Long-term portion............................................. $1,532,252 $ --
========== ==========
</TABLE>

F-30
<PAGE> 73

BAILEY'S SPORTS GRILLE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

In connection with the February 20, 1997 acquisition of Bailey's as
described in Note 7, the stockholder notes have been refinanced with a
short-term loan from Total Entertainment Restaurant Corp. Accordingly, the
stockholder notes have been classified within current liabilities as of December
31, 1996.

In February 1997, the other amounts advanced by stockholders were repaid in
full, and as such, have been classified within current liabilities as of
December 31, 1996.

5. OPERATING LEASES

Bailey's leases of entertainment restaurant locations have been classified
as operating leases. Original lease terms range from 3 to 5 years, but all have
renewal options which cover periods ranging from 6 to 27 years. The lease
agreements provide for minimum rental payments or a rental payment based upon a
percentage of sales, whichever is greater. For the years ended December 27,
1994, December 26, 1995 and December 31, 1996, no contingent rental expense was
incurred.

Future payments under all noncancelable operating leases are as follows:

<TABLE>
<CAPTION>
OPERATING
YEAR LEASES
----------------------------------------------------------------- ----------
<S> <C>
1997............................................................. $ 609,056
1998............................................................. 548,333
1999............................................................. 361,477
2000............................................................. 211,259
2001............................................................. 144,143
Thereafter....................................................... 532,044
----------
Total....................................................... $2,406,312
==========
</TABLE>

Total lease expense for the years ended December 27, 1994, December 26,
1995 and December 31, 1996 was $230,203, $322,863 and $455,192, respectively.

6. RELATED PARTY TRANSACTIONS

During 1996, Bailey's purchased $72,110 of inventory from a company which
is owned by a stockholder. Amounts payable to this company totaled $11,192 at
December 31, 1996.

7. SUBSEQUENT EVENT

On February 20, 1997, all of the outstanding shares of stock of Bailey's
were acquired in an exchange of stock with Total Entertainment Restaurant Corp.,
a holding company formed to own and operate entertainment restaurant location.
In connection with this transaction, Bailey's distributed $1,984,195 to its
previous shareholders, of which $1,675,332 was funded through a loan from Total
Entertainment Restaurant Corp. Additionally, Total Entertainment Restaurant
Corp. refinanced $3,913,118 of stockholder notes with a short-term loan (see
Note 4).

*******

F-31
<PAGE> 74

===================================================

No dealer, salesperson or any other person has been authorized to give any
information or to make any representations in connection with this Offering
other than those contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or by the Underwriters. This Prospectus does not constitute an
offer to sell or solicitation of an offer to buy any security other than the
shares of Common Stock to which it relates or an offer to sell or a solicitation
of any person in any jurisdiction in which such an offer or solicitation would
be unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information herein is correct as of any time subsequent to the date of this
Prospectus.

----------------------------

TABLE OF CONTENTS

----------------------------

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................. 3
Risk Factors........................ 6
Use of Proceeds..................... 10
Dividend Policy..................... 10
Capitalization...................... 11
Dilution............................ 12
Selected Historical Financial
Data.............................. 13
Pro Forma Combined Condensed
Financial Statements.............. 14
Management's Discussion and Analysis
of Financial Condition and Results
of Operations..................... 18
Business............................ 22
Management.......................... 29
Certain Transactions................ 34
Principal Stockholders.............. 36
Description of Capital Stock........ 37
Shares Eligible For Future Sale..... 38
Underwriting........................ 39
Legal Matters....................... 40
Experts............................. 40
Available Information............... 41
Index to Financial Statements....... F-1
</TABLE>

----------------------------

Until , 1997 (25 days after the date of this Prospectus), all
dealers effecting transactions in the Common Stock whether or not participating
in the distribution, may be required to deliver a Prospectus. This is in
addition to the obligation of dealers to deliver a Prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.

===================================================
===================================================

2,000,000 SHARES
[LOGO]

TOTAL ENTERTAINMENT
RESTAURANT CORP.
COMMON STOCK
----------------------------

PROSPECTUS

----------------------------
MONTGOMERY SECURITIES
, 1997

===================================================
<PAGE> 75

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the various expenses (other than selling
commissions and other fees paid to the Underwriters) which will be paid by the
Registrant in connection with the issuance and distribution of the securities
being registered. With the exception of the registration fee and the NASD filing
fee, all amounts shown are estimates.

<TABLE>
<S> <C>
Registration fee........................................................ $ 7,666.67
NASD filing fee......................................................... $ 3,030.00
Nasdaq listing expenses................................................. $ 42,500.00
Blue sky fees and expenses (including legal and filing fees)............ $ 10,000.00
Printing expenses (other than stock certificates)....................... $110,000.00
Printing and engraving of stock certificates............................ $ 2,000.00
Legal fees and expenses (other than Blue sky)........................... $125,000.00
Accounting fees and expenses............................................ $280,000.00
Transfer Agent and Registrar fees and expenses.......................... $ 10,000.00
Miscellaneous expenses.................................................. $ 84,803.33
-----------
Total......................................................... $675,000.00
===========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Certificate of Incorporation of the Registrant provides that the
Registrant shall indemnify to the extent permitted by Delaware law any person
whom it may indemnify thereunder, including directors, officers, employees and
agents of the Registrant. Such indemnification (other than an order by a court)
shall be made by the Registrant only upon a determination that indemnification
is proper in the circumstances because the individual met the applicable
standard of conduct. Advances for such indemnification may be made pending such
determination. Such determination shall be made by a majority vote of a quorum
consisting of disinterested directors, by independent legal counsel or by the
stockholders. In addition, the Registrant's Certificate of Incorporation
eliminates, to the extent permitted by Delaware law, personal liability of
directors to the Registrant and its stockholders for monetary damages for breach
of fiduciary duty as directors.

The Registrant's authority to indemnify its directors and officers is
governed by the provisions of Section 145 of the Delaware General Corporation
Law, as follows:

(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to

II-1
<PAGE> 76

procure a judgment in its favor by reason of the fact that he is or was
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation
and except that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.

(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.

(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (2)
if such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a
written opinion, or (3) by the stockholders.

(e) Expenses incurred by an officer or director in defending a civil
or criminal action, suit or proceeding may be paid by the corporation in
advance of the final disposition or such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses incurred by other employees and agents may be paid
upon such terms and conditions, if any, as the board of directors deems
appropriate.

(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any by, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding
such office.

(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under this section.

(h) For purposes of this section, references to the "corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had the power and authority to indemnify its directors,
officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is
or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position
under this section with respect to the resulting or surviving corporation
as he would have with respect to such constituent corporation if its
separate existence had continued.

II-2
<PAGE> 77

(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans, references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan, and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee, or agent with respect
to any employee benefit plan, its participants or beneficiaries, and a
person who acted in good faith and in a manner reasonably believed to be in
the interest of the participants and beneficiaries of any employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this section.

(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.

Pursuant to the Underwriting Agreement filed as Exhibit 1.1 to this
Registration Statement, the Registrant has agreed to indemnify the Underwriters
and the Underwriters have agreed to indemnify the Registrant and its directors,
officers and controlling persons against certain civil liabilities that may be
incurred in connection with the Offering, including certain liabilities under
the Securities Act of 1933, as amended (the "Securities Act").

The Registrant has entered into Indemnification Agreements with each of its
directors and officers whereby it has agreed to indemnify each director and
officer from and against any and all expenses, losses, claims, damages and
liability incurred by such director or officer for or as a result of action
taken or not taken while such director was acting in his capacity as a director,
officer, employee or agent of the Registrant.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On February 20, 1997, the Company entered into an Exchange Agreement with
the stockholders of four corporations (the "Subsidiary Corporations,") and
certain limited partners of four Texas limited partnerships (the "Subsidiary
Limited Partnerships"). Pursuant to the Exchange, the Company became the owner
of the eight then-existing Bailey's entertainment restaurants and the three Fox
& Hound entertainment restaurants. The Company issued 8,000,000 shares of its
Common Stock in exchange for all of the outstanding stock of the Subsidiary
Corporations and certain outstanding limited partnership interests of the
Subsidiary Limited Partnerships not owned by the Subsidiary Corporations. The
Subsidiary Corporations and Subsidiary Limited Partnerships thereby became
wholly-owned subsidiaries of the Company. The transaction constituted an
exchange of property under Section 351 of the Internal Revenue Code of 1986, as
amended. There were no underwriting discounts or commissions paid in connection
with the issuance of any of these securities. The issuance of these securities
are claimed to be exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, as amended, as transactions by an Issuer not involving a
public offering. All certificates representing the shares have been properly
legended.

II-3
<PAGE> 78

ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS.

(a) Exhibits:

<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBIT
-----------
-------------------------------------------------------------------------------
<C> <C> <S>
1.1 -- Form of Underwriting Agreement.*
2.1 -- Form of Stock for Stock Exchange Agreement between the Registrant, the
Shareholders of F&H Restaurant Corp., Fox & Hound, Inc., Fox & Hound II, Inc.
and Bailey's Sports Grille, Inc. and Certain Limited Partners of N. Collins
Entertainment, Ltd., 505 Entertainment, Ltd., Midway Entertainment, Ltd. and
F&H Dallas, L.P., dated February 20, 1997.
3.1 -- Certificate of Incorporation of the Registrant.
3.2 -- By-laws of the Registrant.
4.1 -- Specimen Certificate of the Registrant's Common Stock.*
5.1 -- Opinion of Olshan Grundman Frome & Rosenzweig LLP.*
10.1 -- Form of Services Agreement between the Registrant and Coulter Enterprises,
Inc., dated March , 1997.*
10.2 -- Employment Agreement between the Registrant and Michael A. Nahkunst.*
10.3 -- Employment Agreement between the Registrant and [CFO].*
10.4 -- Form of 1997 Incentive and Nonqualified Stock Option Plan of the Registrant.
10.5 -- Form of 1997 Directors' Stock Option Plan of the Registrant.
10.6 -- Form of Indemnification Agreement for officers and directors of the Registrant.
10.7 -- Confidentiality and Non-Competition Agreement among F&H Dallas, L.P., Midway
Entertainment, Ltd., N. Collins Entertainment, Ltd., 505 Entertainment, Ltd.
and Jamie B. Coulter, dated December 6, 1996.
10.8 -- Non-Competition, Confidentiality and Non-Solicitation Agreement between the
Registrant and Dennis L. Thompson, dated February 20, 1997.
10.9 -- Non-Competition, Confidentiality and Non-Solicitation Agreement between the
Registrant and Thomas A. Hager, dated February 20, 1997.
10.10 -- Lease by and between Real Alchemy, I, L.P. and Midway Entertainment, Ltd.,
dated June 1, 1995.
10.11 -- First Amendment to Lease by and between Real Alchemy I, L.P. and Midway
Entertainment, Ltd., dated February 20, 1996.
10.12 -- Amendment to Lease by and between Real Alchemy I, L.P. and Midway
Entertainment, Ltd., dated December 6, 1996.
10.13 -- Lease by and between 505 Center, L.P. and 505 Entertainment, Ltd., dated
January 31, 1994.
10.14 -- Amendment to Lease by and between 505 Center, L.P. and 505 Entertainment, Ltd.,
dated December 6, 1996.
10.15 -- Promissory Note to Jamie B. Coulter, issued by F&H Restaurant Corp., dated
November 14, 1996.
10.16 -- Promissory Note to Jamie B. Coulter, issued by F&H Restaurant Corp., dated
December 6, 1996.
10.17 -- Promissory Note to Jamie B. Coulter, issued by F&H Restaurant Corp., dated
January 3, 1997.
10.18 -- Promissory Note to Jamie B. Coulter, issued by F&H Restaurant Corp., dated
January 21, 1997.
</TABLE>

II-4
<PAGE> 79

<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBIT
-----------
-------------------------------------------------------------------------------
<C> <C> <S>
10.19 -- Promissory Note to Intrust Bank, N.A., issued by the Registrant, dated February
25, 1997.
10.20 -- Commercial Guaranty to Intrust Bank, N.A., issued by Jamie B. Coulter, dated
February 25, 1997.
10.21 -- Promissory Note to Dennis L. Thompson, issued by Bailey's of Nashville, Inc.,
dated July 11, 1995.
10.22 -- Promissory Note to Thomas A. Hager, issued by Bailey's of Nashville, Inc.,
dated July 11, 1995.
10.23 -- Promissory Note to Dennis L. Thompson, issued by Bailey's of Greenville, Inc.,
dated October 4, 1994.
10.24 -- Promissory Note to Thomas A. Hager, issued by Bailey's of Greenville, Inc.,
dated October 4, 1994.
10.25 -- NationsBank, N.A. Loan Agreement by and among NationsBank, N.A., Dennis L.
Thompson, Thomas A. Hager, Octavio J. Ponce, Patrick C.Boyd and C. Wells Hall,
III, dated August 8, 1996.
10.26 -- Credit Agreement (Individuals) by and among NationsBank, N.A., Dennis L.
Thompson, Thomas A. Hager, Octavio J. Ponce, Patrick C. Boyd, C. Wells Hall,
III and James E. Harris, as Guarantor, dated as of August 8, 1996.
21.1 -- Subsidiaries of Registrant.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Olshan Grundman Frome & Rosenzweig LLP (contained in Exhibit 5.1).*
24.1 -- Powers of Attorney (included on the signature page of this Registration
Statement).
27.1 -- Financial Data Schedule.
99.1 -- Consent of Thomas A. Hager to serve as a director.
99.2 -- Consent of Steven Wolosky to serve as a director.
99.3 -- Consent of William F. Orthwein to serve as a director.
99.4 -- Consent of Christopher Goldsbury to serve as a director.
</TABLE>

- ---------------
* To be filed by amendment

(b) Financial Statement Schedules: Omitted as not being required.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registration of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

II-5
<PAGE> 80

The undersigned registrant hereby undertakes that:

(i) For purposes of determining any liability under the Securities
Act, the information omitted form the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective, and

(ii) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the Offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

The undersigned registrant undertakes to provide to the Underwriters at the
closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

II-6
<PAGE> 81

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized in the City of Dallas, State of Texas, on
the 12th day of March, 1997.

TOTAL ENTERTAINMENT
RESTAURANT CORP.

By: /s/ MICHAEL A. NAHKUNST
------------------------------------
Michael A. Nahkunst,
Chief Executive Officer, President
and Chief
Operating Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints JAMIE B. COULTER and MICHAEL A. NAHKUNST,
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and any related registration statement filed
pursuant to Rule 462(b) of the Act, and to file the same, with exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or either of them, or their or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------- ---------------

/s/ JAMIE B. COULTER Chairman of the Board of Directors March 12, 1997
- ------------------------------------------
Jamie B. Coulter

/s/ MICHAEL A. NAHKUNST Chief Executive Officer, President March 12, 1997
- ------------------------------------------ (principal executive officer and
Michael A. Nahkunst principal financial and accounting
officer), Chief Operating Officer and
Director

/s/ DENNIS L. THOMPSON Director March 12, 1997
- ------------------------------------------
Dennis L. Thompson
</TABLE>

II-7
<PAGE> 82

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
-----------
-------------------------------------------------------------------- ------------
<C> <C> <S> <C>
1.1 -- Form of Underwriting Agreement.*
2.1 -- Form of Stock for Stock Exchange Agreement between the Registrant,
the Shareholders of F&H Restaurant Corp., Fox & Hound, Inc., Fox &
Hound II, Inc. and Bailey's Sports Grille, Inc. and Certain Limited
Partners of N. Collins Entertainment, Ltd., 505 Entertainment, Ltd.,
Midway Entertainment, Ltd. and F&H Dallas, L.P., dated February 20,
1997.
3.1 -- Certificate of Incorporation of the Registrant.
3.2 -- By-laws of the Registrant.
4.1 -- Specimen Certificate of the Registrant's Common Stock.*
5.1 -- Opinion of Olshan Grundman Frome & Rosenzweig LLP.*
10.1 -- Form of Services Agreement between the Registrant and Coulter
Enterprises, Inc., dated March , 1997.*
10.2 -- Employment Agreement between the Registrant and Michael A.
Nahkunst.*
10.3 -- Employment Agreement between the Registrant and [CFO].*
10.4 -- Form of 1997 Incentive and Nonqualified Stock Option Plan of the
Registrant.
10.5 -- Form of 1997 Directors' Stock Option Plan of the Registrant.
10.6 -- Form of Indemnification Agreement for officers and directors of the
Registrant.
10.7 -- Confidentiality and Non-Competition Agreement among F&H Dallas,
L.P., Midway Entertainment, Ltd., N. Collins Entertainment, Ltd.,
505 Entertainment, Ltd. and Jamie B. Coulter, dated December 6,
1996.
10.8 -- Non-Competition, Confidentiality and Non-Solicitation Agreement
between the Registrant and Dennis L. Thompson, dated February 20,
1997.
10.9 -- Non-Competition, Confidentiality and Non-Solicitation Agreement
between the Registrant and Thomas A. Hager, dated February 20, 1997.
10.10 -- Lease by and between Real Alchemy, I, L.P. and Midway Entertainment,
Ltd., dated June 1, 1995.
10.11 -- First Amendment to Lease by and between Real Alchemy I, L.P. and
Midway Entertainment, Ltd., dated February 20, 1996.
10.12 -- Amendment to Lease by and between Real Alchemy I, L.P. and Midway
Entertainment, Ltd., dated December 6, 1996.
10.13 -- Lease by and between 505 Center, L.P. and 505 Entertainment, Ltd.,
dated January 31, 1994.
10.14 -- Amendment to Lease by and between 505 Center, L.P. and 505
Entertainment, Ltd., dated December 6, 1996.
10.15 -- Promissory Note to Jamie B. Coulter, issued by F&H Restaurant Corp.,
dated November 14, 1996.
10.16 -- Promissory Note to Jamie B. Coulter, issued by F&H Restaurant Corp.,
dated December 6, 1996.
10.17 -- Promissory Note to Jamie B. Coulter, issued by F&H Restaurant Corp.,
dated January 3, 1997.
10.18 -- Promissory Note to Jamie B. Coulter, issued by F&H Restaurant Corp.,
dated January 21, 1997.
</TABLE>
<PAGE> 83

<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
-----------
-------------------------------------------------------------------- ------------
<C> <C> <S> <C>
10.19 -- Promissory Note to Intrust Bank, N.A., issued by the Registrant,
dated February 25, 1997.
10.20 -- Commercial Guaranty to Intrust Bank, N.A., issued by Jamie B.
Coulter, dated February 25, 1997.
10.21 -- Promissory Note to Dennis L. Thompson, issued by Bailey's of
Nashville, Inc., dated July 11, 1995.
10.22 -- Promissory Note to Thomas A. Hager, issued by Bailey's of Nashville,
Inc., dated July 11, 1995.
10.23 -- Promissory Note to Dennis L. Thompson, issued by Bailey's of
Greenville, Inc., dated October 4, 1994.
10.24 -- Promissory Note to Thomas A. Hager, issued by Bailey's of
Greenville, Inc., dated October 4, 1994.
10.25 -- NationsBank, N.A. Loan Agreement by and among NationsBank, N.A.,
Dennis L. Thompson, Thomas A. Hager, Octavio J. Ponce, Patrick
C.Boyd and C. Wells Hall, III, dated August 8, 1996.
10.26 -- Credit Agreement (Individuals) by and among NationsBank, N.A.,
Dennis L. Thompson, Thomas A. Hager, Octavio J. Ponce, Patrick C.
Boyd, C. Wells Hall, III and James E. Harris, as Guarantor, dated as
of August 8, 1996.
21.1 -- Subsidiaries of Registrant.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Olshan Grundman Frome & Rosenzweig LLP (contained in
Exhibit 5.1).*
24.1 -- Powers of Attorney (included on the signature page of this
Registration Statement).
27.1 -- Financial Data Schedule.
99.1 -- Consent of Thomas A. Hager to serve as a director.
99.2 -- Consent of Steven Wolosky to serve as a director.
99.3 -- Consent of William F. Orthwein to serve as a director.
99.4 -- Consent of Christopher Goldsbury to serve as a director.
</TABLE>

- ---------------
* To be filed by amendment

<PAGE> 1
EXHIBIT 2.1

EXCHANGE AGREEMENT

AGREEMENT made February 20, 1997 among Eatertainment Inc., a Delaware
corporation having its principal office at 224 East Douglas, Suite 700, Wichita,
Kansas 67202 (hereinafter called "Holding Company"), and each of the persons
listed on the signature pages hereto (hereinafter collectively called the
"Shareholders").

WHEREAS the Shareholders own (i) all of the outstanding shares of the
common stock of Bailey's Sports Grille, Inc., a Delaware corporation
("Bailey's"), F&H Restaurant Corp., a Delaware corporation ("F&H"), Fox & Hound,
Inc., a Texas corporation ("Fox I"), Fox & Hound II, Inc., a Texas corporation
("Fox II") and (ii) 18.75% of the limited partnership interests of N. Collins
Entertainment, Ltd., a Texas limited partnership ("Collins"), 505 Entertainment,
Ltd., a Texas limited partnership ("505"), Midway Entertainment, Ltd., a Texas
limited partnership ("Midway") and F & H Dallas, L.P., a Texas limited
partnership ("Dallas"), from the limited partners as set forth on Schedule I
attached hereto (the "18.75% Limited Partners"). As used herein, the Subsidiary
Corporations shall mean Bailey's, F&H, Fox I and Fox II and the Subsidiary
Limited Partnerships shall mean Collins, 505, Midway and Dallas;

WHEREAS Holding Company desires to acquire (i) all of the issued and
outstanding shares of common stock of the Subsidiary Corporations and (ii)
18.75% of the limited partnership interests of the Subsidiary Limited
Partnerships, as the same may be constituted on the closing date hereunder from
the 18.75% Limited Partners, and the Shareholders are willing to transfer to
Holding Company the shares of such common stock and limited partnership
interests owned by them, as the case may be, as set forth on Schedule I, all on
the terms and conditions hereinafter set forth; and

WHEREAS the parties desire that the transactions contemplated by this
Agreement constitute an exchange of property as provided in Section 351 of the
Internal Revenue Code of 1986, as amended.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. Representations of shareholders. The Shareholders severally, but not
jointly, represent and warrant solely with respect to themselves and the
respective Subsidiary Corporation(s) in which they own shares of common stock
and/or the respective Subsidiary Limited Partnership(s) in which they hold a
limited partnership interest, all as set forth on the applicable portion of
Schedule I, as provided in this Section 1.
<PAGE> 2
As used herein, "Knowledge" shall mean the knowledge of any Shareholder in
his/her capacity as shareholder and, if such Shareholder is also an officer,
director or employee of a Subsidiary Corporation or the managing partner of a
Subsidiary Limited Partnership, the knowledge of such Shareholder in his/her
capacity as an officer, director or employee of a Subsidiary Corporation or the
managing partner of a Subsidiary Limited Partnership. For the purposes of
Section 1, a Shareholder shall not include the 18.75% Limited Partners.

(a) The Shareholders are the record owners and holders of (i)
the number of fully paid and nonassessable shares of common stock of each of the
Subsidiary Corporations and (ii) the limited partnership interests of each of
the Subsidiary Limited Partnerships, as of the date hereof as set forth opposite
their respective names in the applicable portion of Schedule I attached hereto,
and all such shares of common stock and limited partnership interests are owned
free and clear of all liens, claims, encumbrances, charges, and assessments and
are subject to no restrictions with respect to transferability, other than with
respect to the Subsidiary Limited Partnerships, the limitations set forth in the
respective amended and restated limited partnership agreements governing such
Subsidiary Limited Partnership. Notwithstanding anything to the contrary
contained in the first paragraph of this Section 1, (i) to each Shareholder of
Bailey's knowledge, none of the shares of common stock of Bailey's held by the
other Shareholders of Bailey's, (ii) to each Shareholder of F&H's knowledge,
none of the shares of common stock of F&H's held by the other Shareholders of
F&H, (iii) to each Shareholder of Fox I's and Fox II's knowledge, none of the
shares of common stock of Fox I or Fox II held by the other Shareholders of Fox
I and Fox II, and (iv) to each 18.75% Limited Partners's knowledge, none of the
limited partnership interests of any Subsidiary Limited Partnership, is, in each
case, subject to any liens, claims, encumbrances, charges, or assessments or any
restrictions with respect to transferability, other than with respect to the
Subsidiary Limited Partnerships the limitations set forth in the respective
amended and restated limited partnership agreement governing such Subsidiary
Limited Partnership.

(b) To the knowledge of each Shareholder of Bailey's, the
authorized capital stock of Bailey's consists of 100,000 shares of common stock,
no par value, of which 10,000 shares are issued and outstanding; to the
knowledge of each Shareholder of F&H, the authorized capital stock of F&H
consists of 1,000 shares of common stock, no par value, of which 100 shares are
issued and outstanding; and to the knowledge of each Shareholder of Fox I and
Fox II, the authorized capital stock of each of Fox I and Fox II consists of
10,000 shares of common stock, $1.00 par value per share, of which 1,000 shares
are issued and outstanding for each of Fox I and Fox II. There

-2-
<PAGE> 3
are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require such corporation to issue, sell or otherwise
cause to become outstanding any of its capital stock. There are no outstanding
or authorized stock appreciation, phantom stock, profit participation, or
similar rights with respect to such corporation. There are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of the
capital stock of such corporation.

(c) To the knowledge of such Shareholder, each Subsidiary
Corporation is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its businesses as now being conducted, and is duly qualified to
do business as a foreign corporation, if required, and is in good standing in
each jurisdiction in which the ownership or leasing of its properties or the
conduct of its business require such qualification, except where the failure to
be so qualified would not have a material adverse effect on the assets,
business, results of operations or conditions (financial or otherwise) of each
of such corporation. Each Subsidiary Corporation has previously delivered to
Holding Company true, complete and correct copies of its charter and by-laws, as
currently in effect.

(d) To the knowledge of such Shareholder, each Subsidiary
Limited Partnership is a limited partnership duly formed, validly existing and
in good standing under the laws of the jurisdiction of its formation and has all
requisite power and authority to own, lease and operate its properties and to
carry on its businesses as now being conducted, and is duly qualified to do
business as a foreign limited partnership, if required, and is in good standing
in each jurisdiction in which the ownership or leasing of its properties or the
conduct of its business require such qualification, except where the failure to
be so qualified would not have a material adverse effect on the assets,
business, results of operations or conditions (financial or otherwise) of each
of such limited partnership. Each Subsidiary Limited Partnership has previously
delivered to Holding Company a true, complete and correct copy of its agreement
of limited partnership, as currently in effect.

(e) To the knowledge of such Shareholder, neither any
Subsidiary Corporation nor any Subsidiary Limited Partnership has any
subsidiaries, or any direct or indirect interest, whether by way of stock
ownership or otherwise, in any corporation, firm, association or business
enterprise.

-3-
<PAGE> 4
(f) To the knowledge of such Shareholder, each Subsidiary
Corporation and each Subsidiary Limited Partnership owns and possesses, or is
duly licensed in respect of, all licenses, trademarks, trademark rights,
applications for trademarks, trade names, trade name rights, processes, and
formulas, necessary for the operation of its business, with no known material
conflict with the rights of others, and the same are subject to no liens,
encumbrances, claims, or charges.

(g) As of the date of this Agreement, to the knowledge of such
Shareholder, there are no actions, suits, or proceedings pending or, to the
knowledge of the Shareholders, threatened, against either any Subsidiary
Corporation or any Subsidiary Limited Partnership, at law or in equity, or
before or by any federal, state, municipal, or other governmental agency or
instrumentality, domestic or foreign, except for those actions, suits, or
proceedings which would not have a material and adverse effect on the financial
condition of the Subsidiary Corporations or the Subsidiary Limited Partnerships,
as the case may be. Neither any Subsidiary Corporation nor any Subsidiary
Limited Partnership is in default with respect of any order or decree of any
court or of any such governmental agency or instrumentality.

(h) Neither the execution and delivery of this Agreement, the
Stockholders Agreement dated as of the date hereof by and among the Shareholders
and the Holding Company or the S Corporation Termination, Tax Allocation and
Indemnification Agreements ("Tax Agreements") dated as of the date hereof by and
among certain of the Shareholders and the Holding Company, nor the consummation
of the transactions herein or therein contemplated, will conflict with or result
in the breach of, or accelerate the performance required by, any terms of any
agreement to which any of the Subsidiary Corporations or any of the Subsidiary
Limited Partnerships, or the Shareholders, are now a party, or constitute a
default thereunder, or result in the creation of any lien, charge, or
encumbrance upon any of the properties or assets of any of the Subsidiary
Corporations or any of the Subsidiary Limited Partnerships.

(i) To the knowledge of each Shareholder, none of the
Subsidiary Corporations or the Subsidiary Limited Partnerships is a party to any
agreement or instrument subject to any charter or other corporate restriction
materially and adversely effecting the business, property, or assets, operations
or condition (financial or otherwise) of such corporation or limited
partnership, as the case may be.

(j) To the knowledge of each Shareholder, each of the
Subsidiary Corporations and the Subsidiary Limited Partnerships and the
Shareholders have timely filed all tax returns and reports required to be filed
by each, including without limitation all federal, state, local and foreign tax
returns, and

-4-
<PAGE> 5
all such tax returns and reports are true, complete and correct in all material
respects. Each of the Subsidiary Corporations and the Subsidiary Limited
Partnerships have paid in full or made adequate provision by the establishment
of reserves for all such taxes and other charges which have become due or have
been asserted in writing by any taxing authority to be due, relating to each
such corporation or limited partnership, as the case may be, including, if such
corporation was an S Corporation prior to the consummation of the transactions
contemplated by this Agreement, taxes and other charges attributable to the S
Corporation election by each such corporation, and has withheld with respect to
their employees all federal and state income taxes, FICA, FUTA and any other
taxes or charges required to be withheld except for those taxes or other charges
the failure of which to pay or withhold would not have a material and adverse
effect on the financial condition of the Subsidiary Corporations or the
Subsidiary Limited Partnerships, as the case may be. To the knowledge of each
Shareholder, there is no tax deficiency proposed or threatened against any
Subsidiary Corporation or any Subsidiary Limited Partnerships, and the
Shareholders relating to such corporation or limited partnership, as the case
may be, have no knowledge or any basis for the assertion of any such claim,
including if such corporation was an S Corporation prior to the consummation of
the transactions contemplated by this Agreement, taxes and other charges
attributable to the S Corporation election by each such corporation and its
Shareholders except where such deficiency would not have a material and adverse
effect on the financial condition of the Subsidiary Corporations or the
Subsidiary Limited Partnerships, as the case may be. To the knowledge of each
Shareholder, each of the Subsidiary Corporations and the Subsidiary Limited
Partnerships have made all payments of estimated taxes, if any, when due in
amounts sufficient to avoid the imposition of any penalty except where such
penalty would not have a material and adverse effect on the financial condition
of the Subsidiary Corporations or the Subsidiary Limited Partnerships, as the
case may be. There are no outstanding agreements, waivers, or arrangements
extending the statutory period of limitation applicable to any claim for, or the
period for the collection or assessment of, taxes due from or with respect to
the Subsidiary Corporations or the Subsidiary Limited Partnerships for any
taxable period, and no power of attorney granted by or with respect to the
Subsidiary Corporations or the Subsidiary Limited Partnerships relating to taxes
is currently in force. No closing agreement pursuant to Section 7121 of the
Internal Revenue Code of 1986, as amended, (or any predecessor provision) or any
similar provision of any state, local, or foreign law has been entered into by
or with respect to the Subsidiary Corporations or the Subsidiary Limited
Partnerships that could materially and negatively effect the future liability
for taxes of the Subsidiary Corporations or the Subsidiary Limited Partnerships,
as the case may be. No audit or other proceeding by any governmental authority
has formally

-5-
<PAGE> 6
commenced and no written notification has been given that such an audit or other
proceeding is pending or threatened with respect to any taxes due from or with
respect to the Subsidiary Corporations or the Subsidiary Limited Partnerships,
as the case may be, that could materially and negatively affect the future
liability for taxes of the Subsidiary Corporations or the Subsidiary Limited
Partnerships, as the case may be. No unpaid assessment of tax has been proposed
in writing against the Subsidiary Corporations or the Subsidiary Limited
Partnerships, as the case may be, other than assessment of a type that arise on
a recurring basis in the ordinary course of business.

(k) To the knowledge of each Shareholder, neither any
Subsidiary Corporation nor any Subsidiary Limited Partnership has any direct or
indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, accrued, absolute, contingent or otherwise ("Liabilities"),
which would be required by generally accepted accounting principles to be
disclosed in their respective financial statements (including, without
limitation, in the notes thereto), other than liabilities fully and adequately
reflected or reserved against their respective balance sheet, prepared in
accordance with generally accepted accounting principles. To the knowledge of
each Shareholder, since December 31, 1996, none of the Subsidiary Corporations
or the Subsidiary Limited Partnerships has incurred any liabilities which would
be required by generally accepted accounting principles to be disclosed in their
respective financial statements (including, without limitation, in the notes
thereto), other than (i) Liabilities incurred since December 31, 1996 in the
ordinary course of business, (ii) the payment of a dividend declared by
Bailey's, Collins, 505 or Midway to their respective Shareholders prior to the
closing date relating to all undistributed earnings of such entity for periods
prior to the closing date or (iii) the payment of a dividend declared by Fox I
or Fox II to their respective Shareholders prior to the closing date relating to
all cash held by such entity as of the closing date.

(l) To the knowledge of such Shareholder, each of the
Subsidiary Corporations and the Subsidiary Limited Partnerships is in compliance
in all material respects with all applicable laws (including, but not limited
to, rules, regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings, and charges thereunder) of all federal, state or local governments, or
any agency or instrumentality of the foregoing, domestic or foreign, in respect
of the conduct of its business and ownership or leasing of its properties,
except where the failure to so comply would not have a material adverse effect
on the assets, business, results of operations or condition (financial or
otherwise) of such corporation or limited partnership, as the case may be. To
the knowledge of such Shareholder, each of the Subsidiary Corporations and the
Subsidiary Limited Partnerships

-6-
<PAGE> 7
have all licenses, permits, orders or approvals of all federal, state or local
governmental bodies, quasi-governmental bodies or authorities, domestic or
foreign, which are material to, or necessary for, the conduct of the operations
of each of such corporation or limited partnership, as the case may be. To the
knowledge of the Shareholders, no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been filed or
commenced against the Subsidiary Corporations or the Subsidiary Limited
Partnerships, as the case may be, alleging any failure so to comply, except
where the failure to so comply would not have a material and adverse effect on
the assets, business, results of operations or condition (financial or
otherwise) of such corporation or limited partnership, as the case may be.

(m) The following financial statements of the Subsidiary
Corporations and Subsidiary Partnerships, which are attached hereto as Schedule
II, are true, correct and complete in all material respects, have been prepared
from and are in accordance with the books and records of each such Subsidiary
Corporation or Subsidiary Partnership, as the case may be, in accordance with
generally accepted accounting principles ("GAAP") consistently applied except
where otherwise indicated, and fairly present the financial condition of such
Subsidiary Corporation or Subsidiary Partnership, as the case may be, in all
material respects as at the dates stated and the results of operations of such
Subsidiary Corporation or Subsidiary Partnership, as the case may be, for the
periods then ended: (i) the balance sheet and income statement of each
Subsidiary Corporation (other than F&H) and Subsidiary Limited Partnership, as
at and for the years ended December 31, 1995 and December 31, 1996 (the
"December Financial Statements"); and (ii) the balance sheet of F&H as at
December 31, 1995 and December 31, 1996 (the "F&H Financial Statements" and,
together with the December Financial Statements, the "Financial Statements").
All Financial Statements attached hereto are unaudited except for the Financial
Statements of Bailey's, which are audited as at December 31, 1995. The Financial
Statements relating Collins, 505 and Midway have been prepared on a "tax basis,"
not in accordance with GAAP.

(n) Since December 31, 1996, there has not been any material
adverse change in the business, financial condition, operations, results of
operations, or future prospects of any of the Subsidiary Corporations or
Subsidiary Limited Partnerships.

(o) Each Subsidiary Corporation and each Subsidiary Limited
Partnership have good and marketable title to, or a valid leasehold interest in,
the properties and assets used by them, located on its premises, or shown in its
balance sheet, or acquired after the date thereof, free and clear of all liens,
claims, encumbrances, charges, and assessments, except for

-7-
<PAGE> 8
properties and assets disposed of in the ordinary course of business since
December 31, 1996.

2. Exchange of stock. On the closing date, as hereinafter fixed, the
Shareholders shall deliver, or cause to be delivered, to Holding Company
certificates representing all of the issued and outstanding shares of common
stock of the Subsidiary Corporations, as the same shall be constituted on the
closing date, duly endorsed in blank by the owner of record, or accompanied by
duly executed stock powers in blank, and accompanied by requisite revenue stamps
evidencing the payment of the transfer tax, if any. By the signature of each of
the 18.75% Limited Partners on the signature pages hereto, each such 18.75%
Limited Partner shall be deemed to consent to the transfer of the limited
partnership interest of each other 18.75% Limited Partner and to have
transferred the limited partnership interest of each of the Subsidiary Limited
Partnerships held by such 18.75% Limited Partner. In consideration therefor
Holding Company shall, at the closing, deliver to the Shareholders, or their
agents, for their accounts, certificates representing shares of the common
stock, $.01 par value per share, of Holding Company (the "Common Stock"), as set
forth below:

<TABLE>
<CAPTION>
Subsidiary Corporation Percentage of Outstanding shares of Common
- ---------------------- ------------------------------------------
or Subsidiary Limited Stock of Holding Company following the
- --------------------- --------------------------------------
Partnership Exchange described in this Section 2
- ----------- ------------------------------------
<S> <C>
Bailey's 25%

F&H 50%

Fox I 6.25%
Fox II

Collins 18.75%
505
Midway
Dallas
</TABLE>

3. Closing. The closing date under this Agreement shall be simultaneous
with the execution of this Agreement or such other time as Holding Company and
the Shareholders may agree. The closing shall be held at the offices of the
Holding Company, 224 East Douglas, Suite 700, Wichita, Kansas 67202, unless
another place is mutually agreed upon by the Holding Company and the
Shareholders.

4. Indemnity for damages. Each Shareholder, severally and not jointly,
shall indemnify, fully defend and save and hold harmless the Holding Company at
all times from and against all demands, claims, actions, causes of action,
assessments, losses, damages, liabilities, costs and expenses, including,
without limitation, interest, penalties and reasonable attorneys' fees and
expenses, but net of any tax savings and insurance proceeds actually received by
the indemnitee as a result of the matter

-8-
<PAGE> 9
giving rise to the indemnification, asserted against, resulting to, imposed upon
or incurred by the Holding Company, by reason of or resulting from any
inaccurate representation made by each such Shareholder in this Agreement,
breach of any of the warranties made by each such Shareholder in this Agreement
and breach or default in performance by each such Shareholder of any of the
covenants which he or it is to perform hereunder.

5. Conditions to obligations of Holding Company. The obligations
of Holding Company hereunder are, except as may be waived in writing by Holding
Company, subject to the conditions that:

(a) Certificates representing 100% of the issued and
outstanding shares of common stock of each Subsidiary Corporation, as such stock
shall then be constituted, and documents representing 18.75% of the limited
partnership interests of the Subsidiary Limited Partnerships held by the 18.75%
Limited Partners, if any, as such interests shall then be constituted, shall be
tendered for exchange at the closing by the Shareholders.

(b) The representations contained in Sections 1 and 7 hereof
shall be true on and as of the closing date with the same effect as though such
representations had been made on and as of the closing date, and there shall be
delivered to Holding Company at the closing, if requested, a certificate, in
form and substance satisfactory to Holding Company and its counsel, duly signed
by the Shareholders to that effect.

(c) The Shareholders must each execute and deliver to Holding
Company a Stockholders Agreement in form satisfactory to Holding Company.

(d) Shareholders of Subchapter S Subsidiary Corporations must
each execute and deliver to Holding Company a Tax Agreement.

6. Conditions to obligations of Shareholders. The obligation of
the Shareholders hereunder to deliver to Holding Company shares of common stock
of each of the Subsidiary corporations and to transfer to Holding Company the
limited partnership interests of each of the subsidiary Limited Partnerships,
each as set forth on Schedule I attached hereto, is, except as may be waived in
writing by the Shareholders, subject to the conditions that (i) Holding Company
was formed for the purpose of participating in the exchanges as contemplated in
this Agreement and no shares of Common Stock are issued or outstanding (other
than as contemplated pursuant to the terms of this Agreement); (ii) Holding
Company is a duly organized and existing corporation in good standing under the
laws of the State of Delaware; (iii) the shares of Common Stock of Holding
Company

-9-
<PAGE> 10
being delivered hereunder are validly issued, fully paid, and nonassessable;
(iv) this Agreement has been duly executed and delivered by Holding Company, and
constitutes the legal, valid, and binding obligation of Holding Company,
enforceable in accordance with its terms; and (v) as to such other matters
incident to the transactions contemplated by this Agreement as the Shareholders
may reasonably require.

7. Stock received as investment. Each Shareholder represents that the
shares of Common Stock of Holding Company being acquired by him or it pursuant
to the terms and provisions of this Agreement are being acquired for his or its
own account for purposes of investment and not with a view to or for resale in
connection with any distribution thereof.

8. Survival of representations. The representations and warranties of
the parties hereto shall survive the making of this agreement, any examination
on behalf of such parties, and the closing hereunder. Any waiver of any term or
condition of this agreement shall not operate as a waiver of any other breach of
such term or condition, or of any other term or condition, nor shall any failure
to enforce any provision hereof operate as a waiver of such provision or of any
other provision hereof.

9. Notices. All communications hereunder shall be in writing and
delivered or mailed to Holding Company, 224 East Douglas, Suite 700, Wichita,
Kansas 67202, Attn: President, and to the Shareholders, each c/o Jamie B.
Coulter, 224 East Douglas, Suite 700, Wichita, Kansas 67202, or at such other
address as each party may specify in writing.

10. Broker. Holding Company and the Shareholders represent to each
other that no broker has been employed in connection with any transaction or
transactions involved in this Agreement.

11. Entire agreement. This Agreement constitutes the entire contract
between the parties hereto and no party shall be liable or bound to another in
any manner by any warranties, representations or guarantees except as
specifically set forth herein.

12. Modification. This Agreement may not be changed or modified except
by an agreement in writing by the Holding Company and by the Shareholders or by
any person authorized to act on their behalf.

13. Benefit. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective legal representatives,
successors, and assigns of the parties hereto.

-10-
<PAGE> 11
14. Governing law. This Agreement is made pursuant to and shall be
construed under the laws of the State of Delaware, without regard to any
applicable conflicts of law provisions.

15. Counterparts. This Agreement may be executed and endorsed in one or
more counterparts, and each of such counter parts shall, for all purposes, be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

IN WITNESS WHEREOF the parties hereto have duly caused this Agreement
to be executed as of the day and year first above written.

EATERTAINMENT INC.

By:________________________________
Name: Jamie B. Coulter
Title: Chairman of the Board

-11-
<PAGE> 12
BAILEY'S SHAREHOLDERS
---------------------

--------------------------------------
Thomas A. Hager

--------------------------------------
Dennis L. Thompson

--------------------------------------
Sharon K. Thompson

--------------------------------------
Blake A. Thompson

--------------------------------------
Ashley D. Thompson

--------------------------------------
Patrick C. Boyd

--------------------------------------
C. Wells Hall, III

--------------------------------------
Octavio P. Ponce

--------------------------------------
James E. Harris, Jr.

--------------------------------------
Thomas W. Shannon

--------------------------------------
Christopher Weinberg

--------------------------------------
Ramey G. Millett

-12-
<PAGE> 13
F&H SHAREHOLDERS
----------------

--------------------------
Jamie B. Coulter

--------------------------
Mike Nahkunst

--------------------------
Chris Wettig

--------------------------
Gary Judd

--------------------------
Max Sheets

--------------------------
Steve Johnson

--------------------------
John White

--------------------------
Bill Hall

--------------------------
Mike Archer

--------------------------
Bob Leino

--------------------------
Bev Parker

--------------------------
Tracy Daniels

--------------------------
Dennis Simmons

-13-
<PAGE> 14
--------------------------
T.D. O'Connell

--------------------------
Tom Dippre

--------------------------
Mike Sipes

--------------------------
Jeff Bracken

--------------------------
Ken Syvarth

--------------------------
Jerry Aaron

--------------------------
Rob Kendall

--------------------------
Bob Crawford

--------------------------
Dee Lincoln

--------------------------
Dru Coulson

--------------------------
John McKenzie

--------------------------
Mark Eason

--------------------------
Frank Furstenburg

--------------------------
Alen Smith

-14-
<PAGE> 15
--------------------------
Karon Perrill

--------------------------
Jeff Fletcher

--------------------------
Bob Emerson

--------------------------
Reed Smith

--------------------------
Steven Wolosky

--------------------------
Bill Tilley

--------------------------
George Leff

--------------------------
Adam North

--------------------------
Reg Redding

--------------------------
David Ketter

--------------------------
Rusty Karst

--------------------------
Brian Judd

--------------------------
John Manuel

--------------------------
Carole Bailey

-15-
<PAGE> 16
--------------------------
Clark Mandigo

--------------------------
Denise Cerelli

--------------------------
Christie Reniger

--------------------------
Phil Holtschult

--------------------------
Roger Morrow

--------------------------
Cassandra Wilson

-16-
<PAGE> 17
FOX I AND FOX II SHAREHOLDERS
-----------------------------

---------------------------------------
Paul Guernsey

---------------------------------------
Steve Hartnett

18.75% LIMITED PARTNERS
-----------------------

Organized Capital, Inc.

By:
------------------------------------
Name:
Title:

United II Strategic Trading, Inc.

By:
------------------------------------
Name:
Title:

---------------------------------------
Mark Lee

Fox II General Partnership

By:
------------------------------------
Name:
Title:

---------------------------------------
Richard Benning

---------------------------------------
Julie Hilliker

KemJen Enterprises

By:
------------------------------------
Name:
Title:

---------------------------------------
Larry Schmidt

-17-
<PAGE> 18
---------------------------------------
Steve Bean Vickie Bean

---------------------------------------
Craig Steede

---------------------------------------
Allen McGehee

Old South I General Partnership

By:
------------------------------------
Name:
Title:

-18-
<PAGE> 19
Schedule I

<TABLE>
<CAPTION>
Shares Held in
Subsidiary Corporation Shares of Common
or Percentage Interest Stock of Holding
in Subsidiary Limited Company to received
Shareholders Partnership in Exchange
------------ ----------- -----------
<S> <C> <C>
BAILEY'S SPORTS GRILLE,
INC.
Thomas A. Hager 3,628 9,070
Dennis L. Thompson 1,224.50 3,061.25
Sharon K. Thompson 1,224.50 3,061.25
Blake A. Thompson 100 250
Ashley D. Thompson 100 250
Patrick C. Boyd 1,099 2,747.5
C. Wells Hall, III 463 1,157.5
Octavio P. Ponce 829 2,072.5
James E. Harris, Jr. 332 830
Thomas W. Shannon 400 1,000
Christopher Weinberg 400 1,000
Ramey G. Millett 200 500

Total shares
Total Shares received in Exchange
Outstanding 10,000 25,000
------ ------
</TABLE>

<PAGE> 20

Jamie B. Coulter 500 25,000
Mike Nahkunst 70 3,500
Chris Wettig 35 1,750
Gary Judd 35 1,750
Max Sheets 35 1,750
Steve Johnson 32.75 1,637.5
John White 32.75 1,637.5
Bill Hall 32.75 1,637.5
Mike Archer 32.75 1,637.5
Bob Leino 25 1,250
Bev Parker 4 200
Tracy Daniels 4 200
Dennis Simmons 4 200
T.D. O'Connell 5 250
Tom Dippre 5 250
Mike Sipes 5 250
Jeff Bracken 5 250
Ken Syvarth 5 250
Jerry Aaron 12.5 625
Rob Kendall 25 1,250
Bob Crawford 12.5 625
Dee Lincoln 5 250
Dru Coulson 3.5 175
John McKenzie 1.5 75
Mark Eason 2 100
Frank Furstenburg 2 100
Alen Smith 6.88 344
Karon Perrill 3.5 175
Jeff Fletcher 2.5 125
Bob Emerson 6.88 344
Reed Smith 2 100
George Leff 1 50
Adam North 1.5 75
Reg Redding 1.5 75
David Ketter 1 50
Rusty Karst 1 50
Brian Judd 1 50
John Manuel 1 50
Carole Bailey 2.5 125
Steve Wolosky 7.48 374
Bill Tilley 6.88 344
Clark Mandigo 6.88 344
Denise Cerelli 5 250
Christie Reniger 3.5 175
Phil Holtschult 3.5 175
Roger Morrow 1.5 75
Cassandra Wilson 1 50
Total shares
Total Shares received in Exchange
Outstanding 1,000 50,000
----- ------
</TABLE>

<PAGE> 21

<TABLE>
<CAPTION>
Shares Held in
Subsidiary Corporation Shares of Common
or Percentage Interest Stock of Holding
in Subsidiary Limited Company to received
Shareholders Partnership in Exchange
------------ ----------- -----------
<S> <C> <C>
FOX & HOUND, INC.
Paul Guernsey 250
Steve Hartnett 750
Total Shares
Outstanding 1,000
-----
Combined total of
shares received in
Exchange relating to
FOX & HOUND II, INC. Fox I and Fox II
Paul Guernsey 100 1,047
Steve Hartnett 900 5,203
Total shares
Total Shares received in Exchange
Outstanding 1,000 6,250
----- -----

N. COLLINS ENTERTAINMENT,
LTD.
505 ENTERTAINMENT, LTD.
MIDWAY ENTERTAINMENT, LTD.
F&H DALLAS, L.P.

Organized Capital, Inc. 6.5856% 6,585
United II Strategic
Trading, Inc. 6.8031% 6,803
Mark Lee 0.9925% 993
Fox II General Partnership 0.5363% 536
Richard Benning 0.0786% 79
Julie Hilliker 0.0688% 69
Kemjen Enterprises, Inc. 1.3750% 1,375
Larry Schmidt 0.3438% 344
Steve and Vickie Bean 0.5913% 591
Craig Steede 0.2063% 206
Allen McGehee 0.1375% 138
Old South I General
Partnership 1.0312% 1,031
Total shares
received in Exchange
18,750
------
</TABLE>

<PAGE> 1
EXHIBIT 3.1

CERTIFICATE OF INCORPORATION

EATERTAINMENT INC.

The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the purposes
hereinafter stated, under the provisions of and subject to the requirements of
the laws of the State of Delaware (particularly Chapter 1, Title 8 of the
Delaware Code and the acts amendatory thereof and supplemental thereto, and
known, identified and referred to as the "General Corporation Law of the State
of Delaware"), hereby certifies that:

FIRST: The name of the corporation (hereinafter sometimes
called the "Corporation") is Eatertainment Inc.

SECOND: The address, including street, number, city and county
of the registered office of the Corporation in the State of Delaware is 9 East
Loockerman Street, Dover, Delaware 19901; and the name of the registered agent
of the Corporation in the State of Delaware at such address is National
Corporate Research, Ltd.

THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.

FOURTH: The total number of shares of stock which the
Corporation shall have the authority to issue is 22,000,000 shares, consisting
of (i) 2,000,000 shares of Preferred Stock, $.10 par value (the "Preferred
Stock") and (ii) 20,000,000 shares of Common Stock, $.01 par value (the "Common
Stock").

A. Preferred Stock. The Board of Directors is expressly
authorized to provide for the issuance of all or any shares of the Preferred
Stock, in one or more series, and to fix for each such series such voting
powers, full or limited, or no voting powers, and such designations, preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof as shall be stated and
expressed in the resolution or resolutions adopted by the Board of Directors
providing for the issue of such series (a "Preferred Stock Designation") and as
may be permitted by the General Corporation Law of the State of Delaware. The
number of authorized shares of Preferred Stock may be increased (but not above
the number of authorized shares of the class) or decreased (but not below the
number of shares thereof then outstanding). Without limiting the generality of
the foregoing, the resolutions providing for issuance of any series of Preferred
Stock may
<PAGE> 2
provide that such series shall be superior or rank equally or junior to the
Preferred Stock of any other series to the extent permitted by law. No vote of
the holders of the Preferred Stock or Common Stock shall be required in
connection with the designation or the issuance of any shares of any series of
any Preferred Stock authorized by and complying with the conditions herein, the
right to have such vote being expressly waived by all present and future holders
of the capital stock of the Corporation.

B. Common Stock.

(1) Voting. Except as otherwise required by law or as
otherwise provided in any Preferred Stock Designation, the holders of the Common
Stock shall exclusively possess all voting power and each share of Common Stock
shall have one vote.

(2) Dividends. The holders of Common Stock shall be entitled
to receive dividends, when, as and if declared by the Board of Directors out of
funds legally available for such purpose and subject to any preferential
dividend rights of any then outstanding Preferred Stock.

(3) Liquidation, Dissolution, Winding Up. After distribution
in full of the preferential amount, if any (fixed in accordance with the
provisions of paragraph A of this Article FOURTH), to be distributed to the
holders of Preferred Stock in the event of voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding-up of the Corporation,
the holders of the Common Stock shall be entitled to receive all the remaining
assets of the Corporation, tangible and intangible, of whatever kind available
for distribution to stockholders ratably in proportion to the number of shares
of Common Stock held by them respectively.

FIFTH: A. Number of directors. Subject to the rights, if any,
of the holders of any series of Preferred Stock to elect additional directors
under specified circumstances, the number of directors shall be fixed from time
to time exclusively by the Board of Directors pursuant to a resolution adopted
by a majority of the total number of directors which the Corporation would have
if there were no vacancies (the "Whole Board").

B. Election and Terms of Directors. Directors shall be elected
by a plurality of votes cast and the directors of this Corporation shall be
divided into three classes, with respect to the time that they severally hold
office, as nearly equal in number as possible, with the initial term of office
of the first class of directors to expire at the 1998 annual meeting of
stockholders of the Corporation and until their respective successors are
elected and qualified ("Class I Directors"), the initial term of office of the
second class of directors to expire

-2-
<PAGE> 3
at the 1999 annual meeting of stockholders of the Corporation and until their
respective successors are elected and qualified ("Class II Directors") and the
initial term of office of the third class of directors to expire at the 2000
annual meeting of stockholders of the Corporation and until their respective
successors are elected and qualified ("Class III Directors"). Commencing with
the 1998 annual meeting of stockholders of the Corporation, directors elected to
succeed those directors whose terms have thereupon expired shall be elected for
a term of office to expire at the third succeeding annual meeting of
stockholders of the Corporation after their election and until their respective
successors are elected and qualified.

C. Newly created directorships and vacancies. (1) If the
number of directors is changed, any increase or decrease shall be apportioned
among the classes so as to maintain or attain, if possible, the equality of the
number of directors in each class, but in no case will a decrease in the number
of directors shorten the term of any incumbent director. If such equality is not
possible, the increase or decrease shall be apportioned among the classes in
such a way that the difference in the number of directors in any two classes
shall not exceed one.

(2) Subject to the rights of the holders of any series of
Preferred Stock, newly created directorships resulting from any increase in the
authorized number of directors or any vacancies on the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause (other than a vacancy resulting from removal by the
stockholders, in which case such vacancy shall be filled by the stockholders)
shall be filled only by a majority vote of the directors then in office, though
less than a quorum, and a director so chosen shall hold office for the unexpired
portion of the term of the class in which such Director was chosen to serve and
until his successor is elected and qualified. No decrease in the numbers of
authorized directors constituting the Whole Board shall shorten the term of any
incumbent director.

D. Amendments to Article Fifth Section 5(B) and 5(C)(1). The
affirmative vote of the holders of eighty percent (80%) of the voting power of
all of the then outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of directors (the "Voting Stock"),
voting together as a single class, shall be required to amend or repeal, or to
adopt any provision inconsistent with Article Fifth Sections 5(B) and 5(C)(1)
unless approved by at least two-thirds (2/3rds) of the Whole Board. In the event
that at least two-thirds (2/3rds) of the Whole Board approves any such
provision, then the affirmative vote of the holders of outstanding stock
representing at least a majority of the voting power of all of the then
outstanding shares of Voting Stock, voting together as a

-3-
<PAGE> 4
single class, shall be required to amend or repeal, or to adopt any provision
inconsistent with Article Fifth Sections 5(B) or 5(C)(1).

E. Removal. Subject to the rights of the holders of Preferred
Stock, and unless this Certificate of Incorporation otherwise provides, where
the Board of Directors is classified as provided in Section 141(d) of the
General Corporation Law of the State of Delaware, any director or the entire
Board of Directors may be removed by stockholders only for cause, and the
affirmative vote of at least a majority of the voting power of all the then
outstanding shares of Voting Stock, voting together as a single class shall be
required to effect such removal.

SIXTH: The name and the mailing address of the incorporator is
as follows:

Kenneth M. Silverman, Esq.
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022

SEVENTH: The Corporation is to have perpetual existence.

EIGHTH: Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them and/or between
the Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of the Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for the Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution under Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation, as the case may be, the said compromise or arrangement and the
said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of the
Corporation, as the case may be, and also on the Corporation.

NINTH: For the management of the business and for the conduct
of the affairs of the Corporation, and in further definition, limitation and
regulation of the powers of the

-4-
<PAGE> 5
Corporation and of its directors and its stockholders or any class thereof, as
the case may be, it is further provided:

(1) The management of the business and the
conduct of the affairs of the Corporation,
including the election of the Chairman of
the Board of Directors, if any, the
President, the Treasurer, the Secretary, and
other principal officers of the Corporation,
shall be vested in its Board of Directors.
The number of directors which shall
constitute the whole Board of Directors
shall be fixed by, or in the manner provided
in, the ByLaws. The phrase "whole Board" and
the phrase "total number of directors" shall
be deemed to have the same meaning, to wit,
the total number of directors which the
Corporation would have if there were no
vacancies. No election of directors need be
by written ballot.

(2) The original By-Laws of the Corporation
shall be adopted by the incorporator unless
the Certificate of Incorporation shall name
the initial Board of Directors therein.
Thereafter, the power to make, alter, or
repeal the By-Laws, and to adopt any new
ByLaw, except a By-Law classifying directors
for election for staggered terms, shall be
vested in the Board of Directors.

(3) Whenever the Corporation shall be authorized
to issue only one class of stock, each
outstanding share shall entitle the holder
thereof to notice of, and the right to vote
at, any meeting of stockholders. Whenever
the Corporation shall be authorized to issue
more than one class of stock, no outstanding
share of any class of stock which is denied
voting power under the provisions of the
Certificate of Incorporation shall entitle
the holder thereof to notice of, and the
right to vote at, any meeting of
stockholders, except as the provisions of
paragraph (b) (2) of Section 242 of the
General Corporation Law of the State of
Delaware, as the same may be amended and
supplemented, shall otherwise require.

TENTH: The personal liability of the directors of the
corporation is hereby eliminated to the fullest extent permitted by paragraph
(7) of subsection (b) of Section 102 of the General

-5-
<PAGE> 6
Corporation Law of the State of Delaware, as same may be amended and
supplemented.

ELEVENTH: The Corporation shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said section, and the indemnification provided for herein shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any By-Law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in their official capacities and as to
action in another capacity while holding such offices, and shall continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.

TWELFTH: From time to time any of the provisions of this
Certificate of Incorporation may be amended, altered, changed or repealed, and
other provisions authorized by the laws of the State of Delaware at the time in
force may be added or inserted in the manner and at the time prescribed by said
laws, and all rights at any time conferred upon the stockholders of the
Corporation by this Certificate of Incorporation are granted subject to the
provisions of this Article TWELFTH.

Dated: February 7, 1997

/s/ Kenneth M. Silverman
-----------------------------------------
Kenneth M. Silverman, Incorporator
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022

-6-

<PAGE> 1
EXHIBIT 3.2

----------------------------------

BY-LAWS

EATERTAINMENT INC.

AS ADOPTED ON

FEBRUARY 7, 1997

---------------------------------

ARTICLE I

STOCKHOLDERS

SECTION 1.1. Annual Meetings. An annual meeting of
stockholders to elect directors and transact such other business as may properly
be presented to the meeting shall be held at such place as the Board of
Directors may from time to time fix, if that day shall be a legal holiday in the
jurisdiction in which the meeting is to be held, then on the next day not a
legal holiday or as soon thereafter as may be practical, determined by the Board
of Directors.

SECTION 1.2. Special Meetings. A special meeting of
stockholders may be called at any time by two or more directors or the Chairman
of the Board and shall be called by any of them or by the Secretary upon receipt
of a written request to do so specifying the matter or matters, appropriate for
action at such a meeting, proposed to be presented at the meeting and signed by
holders of record of a majority of the shares of stock that would be entitled to
be voted on such matter or matters if the meeting were held on the day such
request is received and the record date for such meeting were the close of
business on the preceding day. Any such meeting shall be held at such time and
at such place, within or without the State of Delaware, as shall be determined
by the body or person calling such meeting and as shall be stated in the notice
of such meeting.

SECTION 1.3. Notice of Meeting. For each meeting of
stockholders written notice shall be given stating the place, date and hour and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. Except as otherwise provided by Delaware law, the written notice of
any meeting shall be given not less than 10 or more than 60 days before the date
of the meeting to each stockholder entitled to vote at such meeting. If mailed,
notice shall be deemed to be given when deposited in the
<PAGE> 2
United States mail, postage prepaid, directed to the stockholder at his address
as it appears on the records of the Corporation.

SECTION 1.4. Quorum. Except as otherwise required by Delaware
law or the Certificate of Incorporation, the holders of record of a majority of
the shares of stock entitled to be voted present in person or represented by
proxy at a meeting shall constitute a quorum for the transaction of business at
the meeting, but in the absence of a quorum the holders of record present or
represented by proxy at such meeting may vote to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
is obtained. At any such adjourned session of the meeting at which there shall
be present or represented the holders of record of the requisite number of
shares, any business may be transacted that might have been transacted at the
meeting as originally called.

SECTION 1.5. Chairman and Secretary at Meeting. At each
meeting of stockholders the Chairman of the Board, or in his absence the person
designated in writing by the Chairman of the Board, or if no person is so
designated, then a person designated by the Board of Directors, shall preside as
chairman of the meeting; if no person is so designated, then the meeting shall
choose a chairman by plurality vote. The Secretary, or in his absence a person
designated by the chairman of the meeting, shall act as secretary of the
meeting.

SECTION 1.6. Voting; Proxies. Except as otherwise provided by
Delaware law or the Certificate of Incorporation, and subject to the provisions
of Section 1.10:

(a) Each stockholder shall at every meeting of the
stockholders be entitled to one vote for each share of capital stock held by
him.

(b) Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.

(d) Each matter, other than election of directors,
properly presented to any meeting shall be decided by a majority of the votes
cast on the matter.

(e) Election of directors and the vote on any other
matter presented to a meeting shall be by written ballot only if so ordered by
the chairman of the meeting or if so requested by any stockholder present or
represented by proxy at the meeting entitled to vote in such election or on such
matter, as the case may be.

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SECTION 1.7. Adjourned Meetings. A meeting of stockholders may
be adjourned to another time or place as provided in Section 1.4. Unless the
Board of Directors fixes a new record date, stockholders of record for an
adjourned meeting shall be as originally determined for the meeting from which
the adjournment was taken. If the adjournment is for more than 30 days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote. At the adjourned meeting any business may be transacted that
might have been transacted at the meeting as originally called.

SECTION 1.8. Consent of Stockholders in Lieu of Meeting. Any
action that may be taken at any annual or special meeting of stockholders may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Notice of the taking of such
action shall be given promptly to each stockholder that would have been entitled
to vote thereon at a meeting of stockholders and that did not consent thereto in
writing.

SECTION 1.9. List of Stockholders Entitled to Vote. At least
10 days before every meeting of stockholders a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder, shall be prepared and shall be open to the examination of any
stockholder for any purpose germane to the meeting, during ordinary business
hours, for a period of at least 10 days prior to the meeting, at a place within
the city where the meeting is to be held. Such list shall be produced and kept
at the time and place of the meeting during the whole time thereof and may be
inspected by any stockholder who is present.

SECTION 1.10. Fixing of Record Date. In order that the
Corporation may determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than 60 or less than 10 days
before the date of such meeting, nor more than 60 days prior to any other
action. If no record date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held; the record date for determining stockholders
entitled to express

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<PAGE> 4
consent to corporate action in writing without a meeting, when no prior action
by the Board of Directors is necessary, shall be the day on which the first
written consent is expressed; and the record date for any other purpose shall be
at the close of business on the day on which the Board of Directors adopts the
resolution relating thereto.

ARTICLE II

DIRECTORS

SECTION 2.1. Number; Term of Office; Qualifications;
Vacancies. Subject to the rights of the holders of any class or series of
Preferred Stock to elect directors under specified circumstances, the number of
directors shall be fixed from time to time exclusively pursuant to a resolution
adopted by a majority of the Whole Board; provided, however, that in no event
shall the Whole Board be greater than ten (10) directors. Subsequent to the
election by the incorporator of the initial Board of Directors, at the annual
meeting the stockholders shall elect by a plurality vote the number of Directors
equal to the number of Directors of the class whose term expires at such meeting
(or, if fewer, the number of Directors properly nominated and qualified for
election) to hold office until the third succeeding annual meeting of
stockholders after their election, subject to the provisions of Article FIFTH of
the Certificate of Incorporation.

SECTION 2.2. Vacancies. Subject to the rights of the holders
of any class or series of Preferred Stock, vacancies resulting from death,
resignation, retirement, disqualification, removal from office or other cause
(other than a vacancy resulting from removal by the stockholders which shall be
filled by the stockholders), and newly created directorships resulting from any
increase in the authorized number of directors may be filled only by the
affirmative vote of a majority of the remaining directors, though less than a
quorum of the Board of Directors, and directors so chosen shall hold office
until the next annual election at which the term of the class to which he has
been elected expires and until his successor shall be duly elected and shall
qualify, or until his earlier death, resignation or removal. No decrease in the
number of authorized directors constituting the Whole Board shall shorten the
term of any incumbent director.

SECTION 2.3. Resignation. Any director of the Corporation may
resign at any time by giving written notice of such resignation to the Board of
Directors or the Secretary of the Corporation. Any such resignation shall take
effect at the time specified therein or, if no time be specified, upon receipt
thereof by the Board of Directors or one of the above-named officers; and,
unless specified therein, the acceptance of such resignation shall not be
necessary to make it effective. When one or more directors shall resign from the
Board of Directors effective at a future date, a majority of the directors then
in office, including those who have so resigned, shall have power to fill such
vacancy or

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<PAGE> 5
vacancies, the vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office as
provided in these By-Laws in the filling of other vacancies.

SECTION 2.4. Removal. Subject to the rights of the holders of
any class or series of Preferred Stock, any director, or the entire Board of
Directors, may be removed from office at any time, only for cause and only by
the affirmative vote of the holders of at least a majority of the voting power
of all of the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (the "Voting Stock"),
voting together as a single class.

SECTION 2.5. Regular and Annual Meetings; Notice. Regular
meetings of the Board of Directors shall be held at such time and at such place,
within or without the State of Delaware, as the Board of Directors may from time
to time prescribe. No notice need be given of any regular meeting, and a notice,
if given, need not specify the purposes thereof. A meeting of the Board of
Directors may be held without notice immediately after an annual meeting of
stockholders at the same place as that at which such meeting was held.

SECTION 2.6. Special Meetings; Notice. A special meeting of
the Board of Directors may be called at any time by the Board of Directors or
the Chairman of the Board and shall be called by any one of them or by the
Secretary upon receipt of a written request to do so specifying the matter or
matters, appropriate for action at such a meeting, proposed to be presented at
the meeting and signed by the Chairman of the Board or at least two directors.
Any such meeting shall be held at such time and at such place, within or without
the State of Delaware, as shall be determined by the body or person calling such
meeting. Notice of such meeting stating the time and place thereof shall be
given (a) by deposit of the notice in the United States mail, first class,
postage prepaid, at least seven days before the day fixed for the meeting
addressed to each director at his address as it appears on the Corporation's
records or at such other address as the director may have furnished the
Corporation for that purpose, or (b) by delivery of the notice similarly
addressed for dispatch by telegraph, cable or radio or by delivery of the notice
by telephone or in person, in each case at least 24 hours before the time fixed
for the meeting.

SECTION 2.7. Presiding Officer and Secretary at Meetings. Each
meeting of the Board of Directors shall be presided over by the Chairman of the
Board or in his absence by such member of the Board of Directors as shall be
chosen at the meeting. The Secretary, or in his absence an Assistant Secretary,
shall act as secretary of the meeting, or if no such officer is present, a
secretary of the meeting shall be designated by the person presiding over the
meeting.

SECTION 2.8. Quorum. A majority of directors shall constitute
a quorum for the transaction of business, but in the

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<PAGE> 6
absence of a quorum a majority of those present (or if only one be present, then
that one) may adjourn the meeting, without notice other than announcement at the
meeting, until such time as a quorum is present. The vote of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors.

SECTION 2.9. Meeting by Telephone. Members of the Board of
Directors or of any committee thereof may participate in meetings of the Board
of Directors or of such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting.

SECTION 2.10. Action Without Meeting. Unless otherwise
restricted by the Certificate of Incorporation, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of the Board of Directors or of
such committee, as the case may be, consent thereto in writing and the writing
or writings are filed with the minutes of proceedings of the Board of Directors
or of such committee.

SECTION 2.11. Committees of the Board. The Board of Directors
may, by resolution passed by the whole Board of Directors, designate one or more
other committees, each such committee to consist of one or more directors as the
Board of Directors may from time to time determine. Any such committee, to the
extent provided in such resolution or resolutions, shall have and may exercise
the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation, but no such committee shall have such
power of authority in reference to amending the Certificate of Incorporation or
a revocation of a dissolution, or amending the By-Laws; and unless the
resolution shall expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock. In the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member. Each such committee shall have such name as may be
determined from time to time by the Board of Directors.

SECTION 2.12. Compensation. Directors shall have such
compensation as may be determined by the Board of Directors of the Corporation.

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<PAGE> 7
ARTICLE III

OFFICERS

SECTION 3.1. Election; Qualification. The officers of the
Corporation shall be a Chairman of the Board, a President, one or more Vice
Presidents, a Secretary and a Treasurer, each of whom shall be selected by the
Board of Directors. The Board of Directors may elect a Controller, one or more
Assistant Secretaries, one or more Assistant Treasurers, one or more Assistant
Controllers and such other officers as it may from time to time determine. Two
or more offices may be held by the same person.

SECTION 3.2. Term of Office. Each officer shall hold office
from the time of his election and qualification to the time at which his
successor is elected and qualified, unless he shall die or resign or shall be
removed pursuant to Section 3.4 at any time sooner.

SECTION 3.3. Resignation. Any officer of the Corporation may
resign at any time by giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, the President or the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein or, if no time be specified, upon receipt thereof by the Board of
Directors or one of the above-named officers; and, unless specified therein, the
acceptance of such resignation shall not be necessary to make it effective.

SECTION 3.4. Removal. Any officer may be removed at any time,
with or without cause, by the vote of two directors if there are three directors
or less, or the vote of a majority of the whole Board of Directors if there are
more than three directors.

SECTION 3.5. Vacancies. Any vacancy however caused in any
office of the Corporation may be filled by the Board of Directors.

SECTION 3.6. Compensation. The compensation of each officer
shall be such as the Board of Directors may from time to time determine.

SECTION 3.7. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the Board of Directors and of the shareholders,
and shall have such powers and duties as generally pertain to the office of
Chairman of the Board, subject to the direction of the Board of Directors.

SECTION 3.8. President. The President shall be the chief
executive officer of the Corporation and shall have general charge of the
business and affairs of the Corporation, subject however to the right of the
Board of Directors to confer specified powers on officers and subject generally
to the direction of the Board of Directors.

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<PAGE> 8
SECTION 3.9. Vice President. Each Vice President shall have
such powers and duties as generally pertain to the office of Vice President and
as the Board of Directors or the President may from time to time prescribe.
During the absence of the President or his inability to act, the Vice President,
or if there shall be more than one Vice President, then that one designated by
the Board of Directors, shall exercise the powers and shall perform the duties
of the President, subject to the direction of the Board of Directors and the
Executive Committee, if any.

SECTION 3.10. Secretary. The Secretary shall keep the minutes
of all meetings of stockholders and of the Board of Directors. He shall be
custodian of the corporate seal and shall affix it or cause it to be affixed to
such instruments as require such seal and attest the same and shall exercise the
powers and shall perform the duties incident to the office of Secretary, subject
to the direction of the Board of Directors and the Executive Committee, if any.

SECTION 3.11. Other Officers. Each other officer of the
Corporation shall exercise the powers and shall perform the duties incident to
his office, subject to the direction of the Board of Directors and the Executive
Committee, if any.

ARTICLE IV

CAPITAL STOCK

SECTION 4.1. Stock Certificates. The interest of each holder
of stock of the Corporation shall be evidenced by a certificate or certificates
in such form as the Board of Directors may from time to time prescribe. Each
certificate shall be signed by or in the name of the Corporation by the Chairman
of the Board, the President or a Vice President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary. Any of or all
the signatures appearing on such certificate or certificates may be a facsimile.
If any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.

SECTION 4.2. Transfer of Stock. Shares of stock shall be
transferable on the books of the Corporation pursuant to applicable law and such
rules and regulations as the Board of Directors shall from time to time
prescribe.

SECTION 4.3. Holders of Record. Prior to due presentment for
registration of transfer the Corporation may treat the holder of record of a
share of its stock as the complete owner thereof exclusively entitled to vote,
to receive notifications and otherwise entitled to all the rights and powers of
a complete owner thereof, notwithstanding notice to the contrary.

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<PAGE> 9
SECTION 4.4. Lost, Stolen, Destroyed or Mutilated
Certificates. The Corporation shall issue a new certificate of stock to replace
a certificate theretofore issued by it alleged to have been lost, destroyed or
wrongfully taken, if the owner or his legal representative (i) requests
replacement, before the Corporation has notice that the stock certificate has
been acquired by a bona fide purchaser; (ii) files with the Corporation a bond
sufficient to indemnify the Corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such stock
certificate or the issuance of any such new stock certificate; and (iii)
satisfies such other terms and conditions as the Board of Directors may from
time to time prescribe.

ARTICLE V

MISCELLANEOUS

SECTION 5.1. Indemnity. (a) The Corporation shall indemnify,
subject to the requirements of subsection (d) of this Section, any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation),
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

(b) The Corporation shall indemnify, subject to the
requirements of subsection (d) of this Section, any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or

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<PAGE> 10
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery of the State of Delaware or such other court shall deem proper.

(c) To the extent that a director, officer, employee or agent
of the Corporation, or a person serving in any other enterprise at the request
of the Corporation, has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsection (a) and (b) of this
Section, or in defense of any claim, issue or matter therein, the Corporation
shall indemnify him against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.

(d) Any indemnification under subsections (a) and (b) of this
Section (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsections (a) and (b)
of this Section. Such determination shall be made (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, or (3) by the
Stockholders.

(e) Expenses incurred by a director, officer, employee or
agent in defending a civil or criminal action, suit or proceeding may be paid by
the Corporation in advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Section.

(f) The indemnification and advancement of expenses provided
by or granted pursuant to, the other subsections of this Section shall not limit
the Corporation from providing any other indemnification or advancement of
expenses permitted by law nor shall it be deemed exclusive of any other rights
to which those seeking indemnification may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office.

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<PAGE> 11
(g) The Corporation may purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or who is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Section.

(h) The indemnification and advancement of expenses
provided by, or granted pursuant to this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.

(i) For the purposes of this Section, references to "the
Corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Section with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.

(j) This Section 5.1 shall be construed to give the
Corporation the broadest power permissible by the Delaware General Corporation
Law, as it now stands and as heretofore amended.

SECTION 5.2. Waiver of Notice. Whenever notice is required by
the Certificate of Incorporation, the By-Laws or any provision of the General
Corporation Law of the State of Delaware, a written waiver thereof, signed by
the person entitled to notice, whether before or after the time required for
such notice, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the stockholders, directors or
members of a committee of directors need be specified in any written waiver of
notice.

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<PAGE> 12
SECTION 5.3. Fiscal Year. The fiscal year of the Corporation
shall start on such date as the Board of Directors shall from time to time
prescribe.

SECTION 5.4. Corporate Seal. The corporate seal shall be in
such form as the Board of Directors may from time to time prescribe, and the
same may be used by causing it or a facsimile thereof to be impressed or affixed
or in any other manner reproduced.

ARTICLE VI

AMENDMENT OF BY-LAWS

SECTION 6.1. Amendment. The Board of Directors is expressly
empowered to adopt, amend or repeal the Bylaws of the Corporation; provided,
however, that any adoption, amendment or repeal of Sections 2.1, 2.2, 2.4 or
this Section 6.1 of the Bylaws of the Corporation by the Board of Directors
shall require the approval of at least sixty-six and two-thirds percent
(66-2/3%) of the total number of authorized directors (whether or not there
exist any vacancies in previously authorized directorships at the time any
resolution providing for adoption, amendment or repeal is presented to the
Board) and the affirmative vote of the holders of sixty-six and two-thirds
percent (66-2/3%) of the voting power of all of the then outstanding shares of
stock of the Corporation entitled to vote generally in the election of
Directors, voting together as a single class. The stockholders shall also have
power to adopt, amend or repeal the Bylaws of the Corporation by majority vote;
provided, however, that in addition to any vote of the holders of any class or
series of stock of this Corporation required by law or by the Certificate of
Incorporation of the Corporation, unless otherwise specified in the Certificate
of Incorporation the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the voting power of all of the then outstanding
shares of the stock of the Corporation entitled to vote generally in the
election of directors, voting together as a single class, shall be required for
such adoption, amendment or repeal by the stockholders of Sections 2.1, 2.2.,
2.4 or this Section 6.1 of the Bylaws of the Corporation.

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<PAGE> 1
Exhibit 10.4

1997 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
OF
TOTAL ENTERTAINMENT RESTAURANT CORP.

1. Purpose of the Plan.

This 1997 Incentive and Nonqualified Stock Option Plan (the "Plan") is
intended as an incentive, to retain in the employ of Total Entertainment
Restaurant Corp. (the "Company") and any Subsidiary of the Company (within the
meaning of Section 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code")), persons of training, experience and ability, to attract new employees
whose services are considered valuable, to encourage the sense of proprietorship
and to stimulate the active interest of such persons in the development and
financial success of the Company and its Subsidiaries.

It is further intended that certain options granted pursuant to the Plan
shall constitute incentive stock options within the meaning of Section 422 of
the Code ("Incentive Options") while certain other options granted pursuant to
the Plan shall be nonqualified stock options ("Nonqualified Options"). Incentive
Options and the Nonqualified Options are hereinafter referred to collectively as
"Options".

2. Administration of the Plan.

The Board of Directors of the Company (the "Board") shall appoint and
maintain as administrator of the Plan a Stock Option Committee (the "Committee")
consisting of two or more directors of the Company. No person shall be eligible
to serve on the Committee unless he or she is then a "non-employee director"
within the meaning of Rule 16b-3 of the Securities and Exchange Commission
("Rule 16b-3") promulgated under the Securities Exchange Act of 1934, as amended
(the "Act"), if and as Rule 16b-3 is then in effect. The members of the
Committee shall serve at the pleasure of the Board.

The Committee, subject to Section 3 hereof, shall have full power and
authority to designate recipients of Options, to determine the terms and
conditions of respective Option agreements (which need not be identical) and to
interpret the provisions and supervise the administration of the Plan. Subject
to Section 7 hereof, the Committee shall have the authority, without limitation,
to designate which Options granted under the Plan shall be Incentive Options and
which shall be Nonqualified Options. To the extent any Option does not qualify
as an Incentive Option, it shall constitute a separate Nonqualified Option.
Notwithstanding any provision in the Plan to the contrary, no Options may be
granted under the Plan to any member of the Committee during the term of his
membership on the Committee.

Subject to the provisions of the Plan, the Committee shall interpret the
Plan and all Options granted under the Plan shall make such rules as it deems
necessary for the proper administration of the Plan, make all other
determinations necessary or advisable for the
<PAGE> 2
administration of the Plan and correct any defects or supply any omission or
reconcile any inconsistency in the Plan or in any Options granted under the Plan
in the manner and to the extent that the Committee deems desirable to carry the
Plan or any Options into effect. The act or determination of a majority of the
Committee shall be deemed to be the act or determination of the Committee and
any decision reduced to writing and signed by all of the members of the
Committee shall be fully effective as if it had been made by a majority at a
meeting duly held. Subject to the provisions of the Plan, any action taken or
determination made by the Committee pursuant to this and the other paragraphs of
the Plan shall be conclusive on all parties.

3. Designation of Optionees.

The persons eligible for participation in the Plan as recipients of
Options ("Optionees") shall include the Chairman of the Board and only full-time
and part-time key employees (including full-time and part-time key employees who
also serve as directors) of the Company or any Subsidiary. In selecting
Optionees, and in determining the number of shares to be covered by each Option
granted to Optionees, the Committee may consider the office or position held by
the Optionee, the Optionee's degree of responsibility for and contribution to
the growth and success of the Company or any Subsidiary, the Optionee's length
of service, age, promotions, potential and any other facts to which the
Committee may consider relevant. Subject to the next sentence, an employee who
has been granted an Option hereunder may be granted an additional Option or
Options, if the Committee shall so determine. Notwithstanding anything contained
in the Plan to the contrary, no recipient of Options may be granted Options to
purchase in excess of fifty percent of the maximum number of shares of Stock (as
defined herein) authorized to be issued under the Plan.

4. Stock Reserved for the Plan.

Subject to adjustment as provided in Section 7 hereof, a total of 1.5
million (1,500,000) shares of common stock, $.01 par value ("Stock"), of the
Company shall be subject to the Plan. The shares of Stock subject to the Plan
shall consist of unissued shares or previously issued shares reacquired and held
by the Company or any Subsidiary of the Company, and such amount of shares of
Stock shall be and is hereby reserved for such purpose. Any of such shares of
Stock which may remain unsold and which are not subject to outstanding Options
at the termination of the Plan shall cease to be reserved for the purpose of the
Plan, but until termination of the Plan the Company shall at all times reserve a
sufficient number of shares of Stock to meet the requirements of the Plan.
Should any Option expire or be canceled prior to its exercise in full or should
the number of shares of Stock to be delivered upon the exercise in full of any
Option be reduced for any reason, the shares of Stock theretofore subject to
such Option may again be subject to an Option under the Plan.

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<PAGE> 3
5. Terms and Conditions of Options.

Options granted under the Plan shall be subject to the following
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

(a) Option Price. The purchase price of each share of Stock
purchasable under an Option shall be determined by the Committee at the
time of grant but shall not be less than 100% of the fair market value of
such share of Stock on the date the Option is granted in the case of an
Incentive Option and not less than 75% of the fair market value of such
share of Stock on the date the Option is granted in the case of a
non-Incentive Option; provided, however, that with respect to an Incentive
Option, in the case of an Optionee who, at the time such Option is
granted, owns (within the meaning of Section 424(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the
Company or of any Subsidiary, then the purchase price per share of stock
shall be at least 110% of the Fair Market Value as defined below) per
share of Stock at the time of grant. The exercise price for each incentive
stock option shall be subject to adjustment as provided in Section 7
below. The fair market value ("Fair Market Value") means the closing price
of publicly traded shares of Stock on the national securities exchange on
which shares of Stock are listed (if the shares of Stock are so listed) or
on the Nasdaq National Market (if the shares of stock are regularly quoted
on the Nasdaq National Market), or, if not so listed or regularly quoted,
the mean between the closing bid and asked prices of publicly traded
shares of Stock in the over-the-counter market, or, if such bid and asked
prices shall not be available, as reported by any nationally recognized
quotation service selected by the Company, or as determined by the
Committee in a manner consistent with the provisions of the Code.

(b) Option Term. The term of each Option shall be fixed by the
Committee, but no Option shall be exercisable more than ten years after
the date such Option is granted; provided, however, that in the case of an
Optionee who, at the time such Option is granted, owns more than 10% of
the total combined voting power of all classes of stock of the Company or
any Subsidiary, then such Incentive Stock Option shall not be exercisable
with respect to any of the shares subject to such Incentive Stock Option
later than the date which is five years after the date of grant.

(c) Exercisability. Subject to paragraph (j) of this Section 5,
Options shall be exercisable at such time or times and subject to such
terms and conditions as shall be determined by the Committee at grant,
provided, however, that except as provided in paragraphs (f) and (g) of
this Section 5, unless a shorter or longer vesting period is otherwise
determined by the Committee at grant, Options shall be exercisable as
follows: up to ten (10%) percent of the aggregate initial shares of Stock
purchasable under an Option shall be exercisable commencing one year after
the date of grant, an additional fifteen (15%) percent of the aggregate
initial shares of Stock purchasable under an Option shall be exercisable
commencing two years after the date of grant up to an additional

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<PAGE> 4
twenty-five (25%) percent of the aggregate initial shares of Stock
purchasable under an Option shall be exercisable commencing three years
from the date of grant, up to an additional twenty-five (25%) percent of
the aggregate initial shares of Stock purchasable under an Option shall be
exercisable commencing four years from the date of grant and the balance
commencing on the fifth anniversary from the date of grant. The Committee
may waive such installment exercise provision at any time in whole or in
part based on performance and/or such other factors as the Committee may
determine in its sole discretion, provided, however, no Option shall be
exercisable until more than six months have elapsed from the date of grant
of such Option.

(d) Method of Exercise. Options may be exercised in whole or in part
at any time during the option period, by giving written notice to the
Company specifying the number of shares to be purchased, accompanied by
payment in full of the purchase price, in cash, by check or such other
instrument as may be acceptable to the Committee, including a cashless
exercise. As determined by the Committee, in its sole discretion, at or
after grant, payment in full or in part may also be made in the form of
Stock owned by the Optionee (based on the Fair Market Value of the Stock
owned by the Optionee (based on the Fair Market Value of the Stock on the
trading day before the Option is exercised); provided, however, that if
such Stock was issued pursuant to the exercise of an Incentive Option
under the Plan, the holding requirements for such Stock under the Code
shall first have been satisfied. An Optionee shall have the rights to
dividends or other rights of a stockholder with respect to shares subject
to the Option after (i) the Optionee has given written notice of exercise
and has paid in full for such shares and (ii) becomes a stockholder of
record.

(e) Transferability of Options. No Option granted hereunder shall be
transferable otherwise than by (i) will, (ii) the laws of descent and
distribution or (iii) pursuant to a qualified domestic relations order as
defined by the Internal Revenue Code or Title 1 of the Employee Retirement
Income Security Act of 1986, as amended, or the rules and regulations
promulgated thereunder; provided however, that to the extent the option
agreement provisions do not disqualify such option for exemption under
Rule 16b- 3 under the Act of 1934, as amended, Nonqualified Options may be
transferable during an Optionee's lifetime to immediate family members of
an optionee, partnerships in which the only partners are members of the
Optionee's immediate family, and trusts established solely for the benefit
of such immediate family members.

(f) Termination by Death. Unless otherwise determined by the
Committee at grant, if any Optionee's employment with the Company or any
Subsidiary terminates by reason of death, the Option may thereafter be
immediately exercised, to the extent then exercisable (or on such
accelerated basis as the Committee shall determine at or after grant), by
the legal representative of the estate or by the legatee or the Optionee
under the will of the Optionee, for a period of one year from the date of
such death or until the expiration of the stated term of such Option as
provided under the Plan, whichever period is shorter.

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<PAGE> 5
(g) Termination by Reason of Disability. Unless otherwise determined
by the Committee at grant, if any Optionee's employment with the Company
or any Subsidiary terminates by reason of total and permanent disability
as determined under [the Company's long term disability policy
("Disability")], any Option held by such Optionee may thereafter be
exercised, to the extent it was exercisable at the time of termination due
to Disability (or on such accelerated basis as the Committee shall
determine at or after grant), but may not be exercised after one year from
the date of such termination of employment or the expiration of the stated
term of such Option, whichever period is shorter; provided, however, that,
if the Optionee dies within such one-year period, any unexercised Option
held by such Optionee shall thereafter be exercisable to the extent to
which it was exercisable at the time of death for a period of one year
from the date of such death or for the stated term of such Option,
whichever period is shorter.

(h) Termination by Reason of Retirement. Unless otherwise determined
by the Committee at grant, if any Optionee's employment with the Company
or any Subsidiary terminates by reason of Normal or Early Retirement (as
such terms are defined below), any Option held by such Optionee may
thereafter be exercised to the extent it was exercisable at the time of
such Retirement (as defined below) (or on such accelerated basis as the
Committee shall determine at or after grant), but may not be exercised
after three months from the date of such termination of employment or the
expiration of the stated term of such Option, whichever period is shorter;
provided, however, that, if the Optionee dies within such three-month
period, any unexercised Option held by such Optionee shall thereafter be
exercisable, to the extent to which it was exercisable at the time of
death, for a period of one year from the date of such death or for the
stated term of such Option, whichever period is shorter.

For purposes of this paragraph (h), "Normal Retirement" shall mean
retirement from active employment with the Company or any Subsidiary on or after
the normal retirement date specified in the applicable Company or Subsidiary
pension plan. "Early Retirement" shall mean retirement from active employment
with the Company or any Subsidiary pursuant to the early retirement provisions
of the applicable Company or Subsidiary pension plan. "Retirement" shall mean
Normal or Early Retirement.

(i) Other Termination. Unless otherwise determined by the Committee
at grant, if any Optionee's employment with the Company or any Subsidiary
terminates for any reason other than death, Disability or Retirement, the
Option shall thereupon terminate, except that the portion of any Option
which was exercisable on the date of such termination of employment may be
exercised for the lesser of (A) three months from the date of termination
or (B) the balance of such Option's term if the Optionee's employment with
the Company or any Subsidiary is involuntarily terminated by the
Optionee's employer without Cause. "Cause" shall mean a felony conviction
or the failure of an Optionee to contest prosecution for a felony or an
Optionee's willful misconduct or dishonesty, any of which is harmful to
the business or reputation of the Company or any Subsidiary. The transfer
of an Optionee from the employ of the

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<PAGE> 6
Company to a Subsidiary, or vice versa, or from one Subsidiary to another,
shall not be deemed to constitute a termination of employment for purposes
of the Plan.

(j) Limit on Value of Incentive Option. The aggregate Fair Market
Value, determined as of the date the Option is granted, of the Stock for
which Incentive Options are exercisable for the first time by any Optionee
during any calendar year under the Plan (and/or any other stock option
plans of the Company or any Subsidiary) shall not exceed $100,000.

(k) Disposition of Incentive Option Shares. The stock option
agreement evidencing any Incentive Options granted under this Plan shall
provide that if the Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of any
share or shares of Stock issued to him pursuant to his exercise of an
Incentive Option granted under the Plan within the two-year period
commencing on the day after the date of the grant of such Incentive Option
or within a one-year period commencing on the day after the date of
transfer of the share or shares to him pursuant to the exercise of such
Incentive option, he shall, within ten days of such disposition, notify
the Company thereof and immediately deliver to the Company any amount of
federal income tax withholding required by law.

6. Term of Plan.

No Option shall be granted pursuant to the Plan on or after the tenth
anniversary of the date the Plan is approved by the Board, but Options granted
may extend beyond that date.

7. Capital Change of the Company.

In the event of any merger, reorganization or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation, or upon a sale of substantially all of the property or
more than 80% of the then-outstanding shares of Stock of the Company to another
corporation, all Options granted under the Plan shall immediately vest, assuming
that the Optionee has held the Option for at least six months. In the event of a
stock dividend or recapitalization, or other change in corporate structure
affecting the Stock not covered in the first sentence of this Section 7 (or in
the event of a merger, reorganization or consolidation where the Optionee has
not held the Option for at last six months), the Committee shall make an
appropriate and equitable adjustment in the number and kind of shares reserved
for issuance under the Plan and in the number and option price of shares subject
to outstanding Options granted under the Plan, to the end that after such event
each Optionees's proportionate interest shall be maintained as immediately
before the occurrence of such event.

8. Proportionate Adjustments. If the outstanding shares of Stock are
increased, decreased, changed into or exchanged into a different number or kind
of shares of Stock or securities of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, an appropriate and proportionate

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<PAGE> 7
adjustment shall be made to the maximum number and kind of shares of Stock as to
which Options may be granted under this Plan. A corresponding adjustment
changing the number or kind of shares of Stock allocated to unexercised Options
or portions thereof, which shall have been granted prior to any such change,
shall likewise be made. Any such adjustment in the outstanding Options shall be
made without change in the purchase price applicable to the unexercised portion
of the Option with a corresponding adjustment in the exercise price of the
shares of Stock covered by the Option. Notwithstanding the foregoing, there
shall be no adjustment for the issuance of shares of Stock on conversion of
notes, preferred stock or exercise of warrants or shares of Stock issued by the
Board for such consideration as the Board deems appropriate.

9. Purchase for Investment.

Unless the Options and shares covered by the Plan have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or the
Company has determined that such registration is unnecessary, each person
exercising an Option under the Plan may be required by the Company to give a
representation in writing that he is acquiring the shares for his own account
for investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.

10. Taxes.

The Company may make such provisions as it may deem appropriate,
consistent with applicable law, in connection with any Options granted under the
Plan with respect to the withholding of any taxes or any other tax matters.

11. Effective Date of Plan.

The Plan shall be effective on the date it is approved by the Board,
provided, however, that the Plan shall subsequently be approved by majority vote
of the Company's stockholders within one (1) year from the date approved by the
Board.

12. Amendment and Termination.

The Board may amend, suspend, or terminate the Plan, except that no
amendment shall be made which would impair the right of any Optionee under any
Option theretofore granted without his consent, and except that no amendment
shall be made which, without the approval of the stockholders, would:

(a) materially increase the number of shares which may be issued
under the Plan, except as is provided in Sections 7 and 8;

(b) materially increase the benefits accruing to the Optionees under
the Plan;

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<PAGE> 8
(c) materially modify the requirements as to eligibility for
participation in the Plan;

(d) decrease the Option exercise price to less than 100% of the Fair
Market Value on the date of grant thereof; or

(e) extend the Option term provided for in Section 5(b).

The Committee may amend the terms of any Option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Optionee without his consent. The Committee may also substitute new Options
for previously granted Options, including options granted under other plans
applicable to the participant and previously granted Options having higher
option prices, upon such terms as the Committee may deem appropriate.

13. Government Regulations.

The Plan, and the granting and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such Options, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.

14. Rule 16b-3 Compliance.

The Company intends that the Plan meet the requirements of Rule 16b-3 by
officers of the Company (whether or not they are directors) pursuant to the Plan
will be exempt from the operation of Section 16(b) of the Act. In all cases, the
terms, provisions, conditions and limitations of the Plan shall be construed and
interpreted consistent with the Company's intent as stated in this Section 14.

15. General Provisions.

(a) Certificates. All certificates for shares of Stock delivered
under the Plan shall be subject to such stock transfer orders and other
restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed, and
any applicable Federal or state securities law, and the Committee may
cause a legend or legends to be placed on any such certificates to make
appropriate reference to such restrictions.

(b) Employment Matters. The adoption of the Plan shall not confer
upon any Optionee of the Company or any Subsidiary, any right to continued
employment (or, in case the Optionee is also a director, continued
retention as a director) with the Company or a Subsidiary, as the case may
be, nor shall it interfere in any way with the

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<PAGE> 9
right of the Company or any Subsidiary to terminate the employment of any
of its employees at any time.

(c) Limitation of Liability. No member of the Board or the
Committee, or any officer or employee of the Company acting on behalf of
the Board or the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect
to the Plan, and all members of the Board of the Committee and each and
any officer or employee of the Company acting on their behalf shall, to
the extent permitted by law, be fully indemnified and protected by the
Company in respect of any such action, determination or interpretation.

(d) Registration of Options. Notwithstanding any other provision in
the Plan, no Option may be exercised unless and until the Stock to be
issued upon the exercise thereof has been registered under the Securities
Act and applicable state securities laws, or are, in the opinion of
counsel to the Company, exempt from such registration. The Company shall
not be under any obligation to register under applicable federal or state
securities laws any Stock to be issued upon the exercise of any Option
granted hereunder, or to comply with an appropriate exemption from
registration under such laws in order to permit the exercise of an Option
and the issuance and sale of the Stock subject to such Option, however,
the Company may in its sole discretion register such Stock at such time as
the Company shall determine. If the Company chooses to comply with such an
exemption from registration, the Stock issued under the Plan may, at the
direction of the Committee, bear an a appropriate restrictive legend
restricting the transfer or pledge of the Stock represented thereby, and
the Committee may also give appropriate stop-transfer instructions to the
transfer agent to the Company.

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<PAGE> 1
EXHIBIT 10.5

TOTAL ENTERTAINMENT RESTAURANT CORP.
1997 DIRECTORS STOCK OPTION PLAN

ARTICLE I

PURPOSE

The purpose of the Total Entertainment Restaurant Corp.
1997 Directors Stock Option Plan (the "Plan") is to secure for Total
Entertainment Restaurant Corp. and its stockholders the benefits arising from
stock ownership by its Directors. The Plan will provide a means whereby such
Directors may purchase shares of the common stock, $.01 par value, of Total
Entertainment Restaurant Corp. pursuant to options granted in accordance with
the Plan.

ARTICLE II

DEFINITIONS

The following capitalized terms used in the Plan shall have the
respective meanings set forth in this Article:

2.1 "Board" shall mean the Board of Directors of Total
Entertainment Restaurant Corp.

2.2 "Chairman" shall mean the duly appointed Chairman of any
standing Committee of the Board.

2.3 "Committee" shall mean a duly appointed standing committee
of the Board.

2.4 "Company" shall mean Total Entertainment Restaurant Corp.
and any of its subsidiaries.

2.5 "Director" shall mean any person who is a member of the
Board of Directors of the Company.

2.6 "Eligible Director" shall be any Director who is not a full
or part-time Employee of the Company.

2.7 "Exercise Price" shall mean the price per Share at which an
Option may be exercised.

2.8 "Fair Market Value" shall mean the closing sales price of a
Share as quoted on the National Association of Securities Dealers Automated
Quotation ("Nasdaq") National Market System on the Grant Date or on the
preceding date on which such Shares are traded if no Shares were traded on such
Grant Date. If the Shares are not quoted on the Nasdaq National Market
<PAGE> 2
System, Fair Market value shall be deemed to be the average of the high bid and
asked prices of the Shares on the over-the-counter market on the Grant Date, or
the next preceding date on which the last prices were recorded. With respect to
Options granted on or before the effective date of the Company's initial public
offering pursuant to a Registration Statement on Form S-1, the Fair Market Value
shall be deemed to be the initial public offering price of the Shares.

2.9 "Grant Date" shall mean the Initial Grant Date or any other
date that an Option shall be granted pursuant to the Plan as appropriate.

2.10 "Initial Grant Date" shall mean with respect to each
Eligible Director the date such Eligible Director is first elected as a member
of the Board.

2.11 "Option" shall mean an Option to purchase Shares granted
pursuant to the Plan.

2.12 "Option Agreement" shall mean the written agreement
described in Article VI herein.

2.13 "Permanent Disability" shall mean the condition of an
Eligible Director who is unable to participate as a member of the Board by
reason of any medically determined physical or mental impairment which can be
expected to result in death or which can be expected to last for a continuous
period of not less than twelve (12) months.

2.14 "Purchase Price" shall be the Exercise Price multiplied by
the number of whole Shares with respect to which an Option may be exercised.

2.15 "Shares" shall mean shares of common stock $.01 par value
of the Company.

2.16 "Subsequent Grant Date" shall mean the anniversary date of
the appointment of an Eligible Director to the Board.

ARTICLE III

ADMINISTRATION

3.1 General. This Plan shall be administered by the Board in
accordance with the express provisions of this Plan.

3.2 Powers of the Board. The Board shall have full and complete
authority to adopt such rules and regulations and to make all such other
determinations not inconsistent with the Plan as may be necessary for the
administration of the Plan.

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<PAGE> 3
ARTICLE IV

SHARES SUBJECT TO PLAN

Subject to adjustment in accordance with Article IX an aggregate of
150,000 Shares is reserved for issuance under this Plan. Shares sold under this
Plan may be either authorized, but unissued Shares or reacquired Shares. If an
Option, or any portion thereof, shall expire or terminate for any reason without
having been exercised in full, the unpurchased Shares covered by such Option
shall be available for future grants of Options.

ARTICLE V

GRANTS

5.1 Initial Grants. On the Initial Grant Date, each Eligible
Director shall receive the grant of an option to purchase 10,000 Shares.

5.2 Subsequent Grants. On each Subsequent Grant Date, each
Eligible Director shall receive the grant of an Option to purchase 3,000 Shares.

5.3 Compliance With Rule 16b-3. The terms for the grant of
Options to an Eligible Director may only be changed if permitted under Rule
16b-3 of the Securities Exchange Act of 1934, as amended, and accordingly the
formula for the grant of Options may not be changed or otherwise modified more
than once in any six month period.

ARTICLE VI

TERMS OF OPTION

Each Option shall be evidenced by a written Option Agreement
executed by the Company and the Eligible Director which shall specify the Grant
Date, the number of Shares subject to the Option, the Exercise Price and shall
also include or incorporate by reference the substance of all of the following
provisions and such other provisions consistent with this Plan as the Board may
determine.

6.1 Term. The term of the Option shall be three (3) years from
the Grant Date of each Option, subject to earlier termination in accordance with
Articles VI and X.

6.2 Restriction on Exercise. Options shall be exercisable at
such time or times and subject to such terms and conditions as shall be
determined by the Committee at grant, provided, however, that except in the case
of the Eligible Director's death or Permanent Disability, upon which events the

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<PAGE> 4
Option will become immediately exercisable, unless a longer vesting period is
otherwise determined by the Committee at grant, Options shall be exercisable as
follows: up to one-third of the aggregate Shares purchasable under an Option
shall be exercisable commencing one year after the Grant Date, an additional
one-third of the Shares purchasable under an Option shall be exercisable
commencing two years after the Grant Date and the balance commencing on the
third anniversary from the Grant Date. The Committee may waive such installment
exercise provision at any time in whole or in part based on performance and/or
such other factors as the Committee may determine in its sole discretion,
provided, however, that no Option shall be exercisable until more than six
months have elapsed from the Grant Date.

6.3 Exercise Price. The Exercise Price for each Share subject
to an Option shall be the Fair Market Value of the Share as determined in
Section 2.8 herein.

6.4 Manner of Exercise. An Option shall be exercised in
accordance with its terms, by delivery of a written notice of exercise to the
Company and payment of the full purchase price of the Shares being purchased. An
Eligible Director may exercise an Option with respect to all or less than all of
the Shares for which the Option may then be exercised, but a Director must
exercise the Option in full Shares.

6.5 Payment. The Purchase Price of Shares purchased pursuant to
an Option or portion thereof, may be paid:

(a) in United States Dollars, in cash or by check, bank
draft or money order payable to the Company;

(b) by delivery of Shares already owned by an
Eligible Director with an aggregate Fair Market Value on the date of exercise
equal to the Purchase Price, subject to the provisions of Section 16(b) of the
Securities Exchange Act of 1934;

(c) through the written election of the Eligible Director
to have Shares withheld by the Company from the Shares otherwise to be received
with such withheld Shares having an aggregate Fair Market Value on the date of
exercise equal to the Purchase Price.

6.6 Transferability of Options. No Option granted hereunder
shall be transferable otherwise than by (i) will, (ii) the laws of descent and
distribution or (iii) pursuant to a qualified domestic relations order as
defined by the Internal Revenue Code or Title 1 of the Employee Retirement
Income Security Act of 1986, as amended, or the rules and regulations
promulgated thereunder; provided however, that to the extent the option
agreement provisions do not disqualify such option for

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<PAGE> 5
exemption under Rule 16b-3 under the Act of 1934, as amended, Options may be
transferable during an Optionee's lifetime to immediate family members of an
optionee, partnerships in which the only partners are members of the Optionee's
immediate family, and trusts established solely for the benefit of such
immediate family members.

6.7 Termination of Membership on the Board. If an Eligible
Director's membership on the Board terminates for any reason, any vested Option
held on the date of termination may be exercised in whole or in part at any time
within one (1) year after the date of such termination (but in no event after
the term of the Option expires) and shall thereafter terminate.

ARTICLE VII

GOVERNMENT AND OTHER REGULATIONS

7.1 Delivery of Shares. The obligation of the Company to issue
or transfer and deliver Shares for exercised Options under the Plan shall be
subject to all applicable laws, regulations, rules, orders and approvals which
shall then be in effect.

7.2 Holding of Stock After Exercise of Option. The Option
Agreement shall provide that the Eligible Director, by accepting such Option,
represents and agrees, for the Eligible Director and his permitted transferees
hereunder that none of the Shares purchased upon exercise of the Option shall be
acquired with a view to any sale, transfer or distribution of the Shares in
violation of the Securities Act of 1933, as amended (the "Act") and the person
exercising an Option shall furnish evidence satisfactory to that Company to that
effect, including an indemnification of the Company in the event of any
violation of the Act by such person. Notwithstanding the foregoing, the Company
in its sole discretion may register under the Act the Shares issuable upon
exercise of the Options under the Plan.

ARTICLE VIII

WITHHOLDING TAX

The Company may in its discretion, require an Eligible Director to
pay to the Company, at the time of exercise of an Option an amount that the
Company deems necessary to satisfy its obligations to withhold federal, state or
local income or other taxes (which for purposes of this Article includes an
Eligible Director's FICA obligation) incurred by reason of such exercise. When
the exercise of an Option does not give rise to the obligation to withhold
federal income taxes on the date of exercise, the Company may, in its
discretion, require an Eligible Director to place Shares purchased under the
Option in escrow for

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<PAGE> 6
the benefit of the Company until such time as federal income tax withholding is
required on amounts included in the Eligible Director's gross income as a result
of the exercise of an Option. At such time, the Company, in its discretion, may
require an Eligible Director to pay to the Company an amount that the Company
deems necessary to satisfy its obligation to withhold federal, state or local
taxes incurred by reason of the exercise of the Option, in which case the Shares
will be released from escrow upon such payment by an Eligible Director.

ARTICLE IX

ADJUSTMENTS

9.1 Proportionate Adjustments. If the outstanding Shares are
increased, decreased, changed into or exchanged into a different number or kind
of Shares or securities of the Company through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction, an appropriate and proportionate adjustment shall be made
to the maximum number and kind of Shares as to which Options may be granted
under this Plan. A corresponding adjustment changing the number or kind of
Shares allocated to unexercised Options or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Any such
adjustment in the outstanding Options shall be made without change in the
Purchase Price applicable to the unexercised portion of the Option with a
corresponding adjustment in the Exercise Price of the Shares covered by the
Option. Notwithstanding the foregoing, there shall be no adjustment for the
issuance of Shares on conversion of notes, preferred stock or exercise of
warrants or Shares issued by the Board for such consideration as the Board deems
appropriate.

9.2 Dissolution or Liquidation. Upon the dissolution or
liquidation of the Company, or upon a reorganization, merger or consolidation of
the Company with one or more corporations as a result of which the Company is
not the surviving corporation, or upon a sale of substantially all of the
property or more than 80% of the then outstanding Shares of the Company to
another corporation, the Company shall give to each Eligible Director at the
time of adoption of the plan for liquidation, dissolution, merger or sale either
(1) a reasonable time thereafter within which to exercise the Option prior to
the effective date of such liquidation or dissolution, merger or sale, or (2)
the right to exercise the Option as to an equivalent number of Shares of stock
of the corporation succeeding the Company or acquiring its business by reason of
such liquidation, dissolution, merger, consolidation or reorganization.

-6-
<PAGE> 7
ARTICLE X

AMENDMENT OR TERMINATION OF PLAN

10.1 Amendments. The Board may at any time amend or revise the
terms of the Plan, provided no such amendment or revision shall, unless
appropriate stockholder approval of such amendment or revision is obtained:

(a) increase the maximum number of Shares which may be
sold pursuant to Options granted under the Plan, except as permitted under the
provisions of Article IX;

(b) change the minimum Exercise Price set forth in
Article VI;

(d) permit the granting of Options to any one other than
as provided in Article V.

10.2 Termination. The Board at any time may suspend or terminate
this Plan. This Plan, unless sooner terminated, shall terminate on the tenth
(10th) anniversary of its adoption by the Board. No Option may be granted under
this Plan while this Plan is suspended or after it is terminated.

10.3 Holder of Consent. No amendment, suspension or termination
of the Plan shall, without the consent of the holder of Options, alter or impair
any rights or obligations under any Option theretofore granted under the Plan.

ARTICLE XI

MISCELLANEOUS PROVISIONS

11.1 Privilege of Stock Ownership. No Eligible Director entitled
to exercise any Option granted under the Plan shall have any of the rights or
privileges of a stockholder of the Company with respect to any Shares issuable
upon exercise of an Option until certificates representing the Shares shall have
been issued and delivered.

11.2 Plan Expenses. Any expenses incurred in the administration
of the Plan shall be borne by the Company.

11.3 Use of Proceeds. Payments received from an Eligible
Director upon the exercise of Options shall be used for general corporate
purposes of the Company.

-7-
<PAGE> 8
11.4 Governing Law. The Plan has been adopted under the laws of
the State of Delaware. The Plan and all Options which may be granted hereunder
and all matters related thereto, shall be governed by and construed and
enforceable in accordance with the laws of the State of Delaware as it then
exists.

ARTICLE XII

STOCKHOLDER APPROVAL

This Plan is subject to approval at a duly held stockholders'
meeting within twelve (12) months after the date the Board approves this Plan,
by the affirmative vote of holders of a majority of the voting Shares of the
Company represented in person or by proxy and entitled to vote at the meeting.
Options may be granted, but not exercised, before such stockholder approval. If
the stockholders fail to approve the Plan within the required time period, any
Options granted under this Plan shall be void, and no additional Options may
thereafter be granted.

-8-

<PAGE> 1
EXHIBIT 10.6

INDEMNIFICATION AGREEMENT

This Agreement made and entered into this _____ day of __________,
1997, by and between TOTAL ENTERTAINMENT RESTAURANT CORP., a Delaware
corporation, hereinafter called the "Company," and ________________, hereinafter
called "Indemnitee."

W I T N E S S E T H :

WHEREAS, the Company is desirous of providing Indemnitee with
limitation of liability and indemnification to the fullest extent permitted by
law;

WHEREAS, the Company desires to have Indemnitee serve or continue to
serve as a director or officer of the Company or any other corporation,
subsidiary, partnership, joint venture, trust, or other enterprise (herein
called "Affiliate") of which he has been or is serving at the request, for the
convenience, or to represent the interest of the Company, with the assurance
that the Company will indemnify him, and use its best efforts to obtain adequate
insurance to indemnify him or that the combination of the two will be sufficient
to indemnify him against costs and risks of claims for damages by reason of his
being a director or officer of the Company or of an Affiliate, or by reason of
his decisions or actions on their behalf;

WHEREAS, although the Company believes that the coverage of any
directors' and officers' liability insurance obtained will be adequate to
protect and indemnify Indemnitee from liability, to ensure Indemnitee sufficient
protection, the Company has agreed to provide Indemnitee with the benefits
contemplated by this Agreement, which benefits are intended to supplement, if
necessary, the Company's proposed directors' and officers' liability insurance
policy; and
<PAGE> 2
WHEREAS, Indemnitee desires to serve or to continue to serve as such
director or officer provided that he is furnished with the indemnity provided
for hereinafter, in one or more of such capacities.

NOW, THEREFORE, for and in consideration of the premises and the
covenants contained herein, the Company and Indemnitee do hereby covenant and
agree as follows:

1. AGREEMENT TO SERVE. Indemnitee will serve and/or continue to
serve the Company or an Affiliate of the Company, at the will of the Company as
a director and/or officer faithfully and to the best of his ability so long as
he is duly elected and qualified in accordance with the provisions of the
Certificate of Incorporation and the By-laws thereof, or until such time as he
tenders his resignation in writing.

2. MAINTENANCE OF D&O INSURANCE.

(a) The Company hereby represents and warrants that Exhibit A
contains a summary description of the proposed policies of directors' and
officers' liability insurance that the Company will use its best efforts to
obtain and that upon the effectiveness of a Registration Statement on Form S-1
relating to up to 2,300,000 shares of the Company's Common Stock, par value
$.01, filed by the Company with the Securities and Exchange Commission, such
policies are anticipated to be in full force and effect.

(b) The Company hereby covenants and agrees that, so long as
Indemnitee shall continue to serve as a director or officer of the Company or an
Affiliate and thereafter so long as Indemnitee shall be subject to any possible
claim or threatened, pending or completed action, suit or proceeding, whether
civil, criminal or investigative, by reason of the fact that Indemnitee was a
director or officer of the Company or an Affiliate, the Company shall use

-2-
<PAGE> 3
its best efforts to maintain in full force and effect directors' and officers'
liability insurance; provided, however, that the Company shall no longer be
required to maintain such insurance to the extent that the cost thereof in the
sole discretion of the Company becomes excessive.

(c) In all policies of directors' and officers' liability
insurance, Indemnitee shall be named as an insured in such a manner as to
provide Indemnitee the same rights and benefits, subject to the same
limitations, as are accorded to the Company's or its Affiliates' directors or
officers most favorably insured by such policy.

3. INDEMNIFICATION.

(a) The Company hereby agrees to indemnify and hold harmless
Indemnitee to the fullest extent permitted by the Certificate of Incorporation,
By-laws, the Delaware General Corporation Law (the "DGCL") or any other
applicable law as may be amended from time to time, against any and all amounts
which he is or becomes obligated to pay because of any charge, claim or claims,
whether civil or criminal, made against him because of any act or omission or
neglect or breach of duty, including any actual or alleged error or misstatement
or misleading statement or other act done or wrongfully attempted, which he
commits or suffers while acting in his capacity as an officer or director of the
Company or an Affiliate thereof and because of his being such an officer or
director; provided, however, that if the DGCL is repealed or modified the result
of which limits Indemnitee's indemnification rights and/or protection under the
DGCL, then with respect to any event occurring prior to such repeal or
modification, Indemnitee shall be entitled to the rights and protection provided
under the DGCL as if such repeal or modification would not result in the Company
violating any provision of the DGCL or other applicable law. The payments which
the Company will be obligated to

-3-
<PAGE> 4
make hereunder shall include but shall not be limited to all expenses (including
attorney's fees), damages, judgments, fines, settlements and costs, cost of
investigation and costs of defense of actual or threatened legal actions, claims
or judicial administrative or other proceedings and appeals therefrom and costs
of attachment or similar bonds and shall be payable within 30 days after the
Indemnitee has given the Company a written claim for such funds, as set forth in
Section 2(b) hereof; provided, however, that the Company shall not be obligated
to pay fines or other obligations or fees imposed by law or otherwise which is
prohibited by applicable law from paying as indemnity. To the full extent so
permitted, the foregoing shall apply to actions by or in the right of the
Company and require the Company to pay expenses, including bail bonds, if any,
in advance of final disposition as set forth above.

(b) If a claim under this Agreement is not paid by the
Company, or on its behalf, within 30 days after a written claim has been given
to the Company, the Indemnitee may at any time thereafter bring suit against the
Company to recover the unpaid amount of the claim and if successful, the
Indemnitee shall also be entitled to be paid all costs and expenses of
prosecuting such claim, including attorney's fees and interest. As a condition
precedent to his right to be indemnified hereunder, Indemnitee shall give the
Company notice of writing as soon as reasonably practicable of any claim made
against him for which indemnity will or could be sought under this Agreement.
Notice to the Company shall be directed to Total Entertainment Restaurant Corp.,
300 Crescent Court, Building 300, Suite 850, Dallas, Texas 75201 Attention:
Secretary and shall be deemed received if sent by registered or certified mail,
return receipt requested.

-4-
<PAGE> 5
(c) In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee.

4. LIMITATIONS. The Company shall not be liable under this
Agreement to make any payment in connection with any claim:

(a) for which payment is actually made to the Indemnitee under
a valid and collectable Company insurance policy, which premiums are paid by the
Company or any of its Affiliates, except in respect of any deductible and excess
beyond the amount of payment under such insurance;

(b) for which the Indemnitee is indemnified by the Company
otherwise than pursuant to this Agreement, provided such amount has previously
been paid to the Indemnitee;

(c) based upon or attributable to the Indemnitee gaining in
fact any personal profit or advantage to which he was not legally entitled;

(d) for an accounting of profits in fact made from the
purchase or sale by the Indemnitee of securities of the Company within the
meaning of applicable law;

(e) brought about or contributed to by the dishonesty of the
Indemnitee seeking payment hereunder; provided, however, notwithstanding the
foregoing, the Indemnitee shall be protected under this Agreement as to any
claims upon which suit may be brought against him by reason of any alleged
dishonesty on his part, unless a judgment or other final and nonappealable
adjudication thereof adverse to the Indemnitee shall establish that he committed
acts of active and deliberate dishonesty with actual dishonest purpose and
intent, which acts were material and an essential element to the cause of
actions so adjudicated; and

-5-
<PAGE> 6
(f) by an Indemnitee who acts as a plaintiff suing other
directors or officers of the Company or its Affiliates.

5. CUMULATIVE RIGHTS AND SEVERABILITY. Nothing herein shall be
deemed to diminish or otherwise restrict the Indemnitee's right to
indemnification under the Company's directors' and officers' liability
insurance, any provision of the Certificate of Incorporation, By-laws, vote of
stockholders or disinterested directors, or under the DGCL or any other
applicable law. On the contrary, the rights granted to Indemnitee hereunder are
intended to protect Indemnitee to the fullest extent permitted by law and shall
be cumulative and in addition to any rights that Indemnitee may have from any
other source. If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable for any reason whatsoever, (i) the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby and (ii) to the
fullest extent possible the provisions of this Agreement shall be construed so
as to give effect to the intent manifested by the provisions held invalid,
illegal or unenforceable.

6. SURVIVAL. The provisions of this Agreement shall inure to the
benefit of Indemnitee, his heirs, executors and administrators, and shall be
binding on the successors and assigns of the Company whether by operation of law
or otherwise. The obligations of the Company hereunder will survive (i) any
actual or purported termination of this Agreement by the Company or its
successors or assigns, whether by operation or law or otherwise, (ii) any change
in the Company's Certificate of Incorporation or By-laws and (iii) termination
of the indemnity services to the Company (whether such services were terminated
by the Company or the Indemnitee), whether or not a claim is made or an action
or proceeding is threatened or

-6-
<PAGE> 7
commenced before or after the actual or purported termination of the Agreement,
change in the Certificate of Incorporation or By-laws, or termination of the
Indemnitee's services.

7. GOVERNING LAW. The parties hereto agree that this Agreement
shall be construed and enforced in accordance with and governed by the internal
laws of the State of Delaware.

8. SUCCESSOR AND ASSIGNS. This Agreement shall be (i) binding
upon all successors and assigns of the Company (including any transferee of all
or substantially all of its assets and any successor by merger or otherwise by
operation of law) and (ii) shall be binding on and inure to the benefit of the
heirs, personal representatives and estate of the Indemnitee.

9. BOARD APPROVAL. This Agreement has been approved by the Board
of Directors of the Company.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and signed as of the day and year first above written.

TOTAL ENTERTAINMENT RESTAURANT CORP.

__________________________________________
Title: Michael A. Nahkunst, President

INDEMNITEE

__________________________________________
Name:

-7-

<PAGE> 8

EXHIBIT "A" TO
INDEMNIFICATION AGREEMENT
DATED ____________ , 1997

TERMS AND CONDITIONS:

- - Co-insurance -0-

- - Retroactive Date: 1997, date of Delaware incorporation

- - Arbitration Endorsement

- - Service of Suit

- - Broad Form Prior Acts exclusion

- - Provide defense cost coverage only of:
- $250,000 per claim/
$500,000 aggregate for following named perils:

- Insured vs. Insured, except for employment contractual
disputes & wrongful termination.

- Failure to maintain insurance.

- - Provides Broad Form outside directorship liability for non-profit
organizations.

- - Six (6) months discovery period at 50% additional premium.

-8-

<PAGE> 1
EXHIBIT 10.7

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

This Confidentiality and Non-competition Agreement ("Agreement") is made
and entered into this 6th day of December, 1996, by and between F & H Dallas,
L.P., Midway Entertainment, Ltd., N. Collins Entertainment, Ltd. and 505
Entertainment, Ltd., each a Texas limited partnership ("the Partnerships"), and
Jamie B. Coulter ("Coulter").

WHEREAS, the Partnerships are in the business of developing, owning and
operating sports bar/grille facilities which include specific types and layouts
of pool tables, televisions, music and sound systems and a distinctive ambiance
(hereafter the "Business");

WHEREAS, the Partnerships are possessed of certain Confidential
Information, as hereafter defined, and preserving the confidentiality of such
Confidential Information is of extreme importance to the Partnerships;

WHEREAS, the Partnerships have expended, and will continue to expend,
considerable time, effort and resources to develop the Business;

WHEREAS, Coulter will have continuing access to Confidential Information
of the Partnerships;

WHEREAS, Coulter is a key person in the intended development of the
Business and the partners of the Partnerships have required that Coulter enter
into this Agreement as a condition to the sale of 75% of their interests in the
Partnerships to F & H Restaurant Corp.; and

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

1. Consideration. Coulter acknowledges that the consideration to be
received by him as a consultant to or employee of the Partnerships constitutes
good and valuable consideration for this Agreement.

2. Confidential Information and Restrictive Covenants.

2.1 Acknowledgment and Definition.

a. Coulter acknowledges that the Business includes
specialized, proprietary, confidential and trade secret information
and that the Partnerships have a legitimate need to protect such
information.

b. Definition of Confidential Information. For purposes of
this Agreement, the term "Confidential Information" means that
secret
<PAGE> 2
proprietary information of the Partnerships not otherwise publicly
disclosed. Without limiting the generality of the foregoing, such
proprietary information shall include information not generally
known in the industry which concerns (i) operating and other cost
data, including information regarding salaries and benefits of
employees; (ii) sales, cost and pricing data; (iii) acquisition,
expansion, marketing, financial and other business plans and
methods; (iv) recipes, manuals, files, records, memoranda, plans,
drawings and designs, specifications and computer programs and
records; (v) identification of suppliers and contractors; and (vi)
all information which is a "trade secret" as defined in the Uniform
Trade Secrets Act as adopted in Kansas at K.S.A. 60-3320.
Confidential Information shall include all such information whether
or not legended or otherwise identified as Confidential Information.

2.2 Confidential Information. Coulter will have access to and
become familiar with Confidential Information of the Partnerships. Coulter
acknowledges that such Confidential Information is owned and shall
continue to be owned solely by the Partnerships. Coulter shall not use or
divulge Confidential Information to any person or entity other than the
Partnerships, or persons to whom the Partnerships have given their written
consent, unless such information has become common knowledge and is no
longer Confidential Information.

2.3 Return of Documents. Upon termination of Coulter's
participation as a Partner in each of the Partnerships, or his ownership
of an equity interest in an entity which is a partner in each of the
Partnerships, all procedural manuals, guides, specifications, plans,
drawings, designs, records, lists, notebooks, diskettes, customer lists,
pricing documentation and similar documentation which is or contains
Confidential Information, including all copies thereof, in the possession
or control of Coulter, whether prepared by Coulter or others, shall be
forthwith delivered by Coulter to Partnerships.

2.4 Covenant Restricting Competition. For a period of either (i)
two years from the date of this Agreement or (ii) one year from the date
on which Coulter terminates his relationship as an employee, consultant or
director providing services to one or more of the Partnerships or any
successor entity, whichever is later (the "Restricted Period"), Coulter
shall not compete with the Partnerships, or any successor to the Business,
as an owner, officer, director, employee, agent, consultant, lender or
otherwise with any person or entity engaged in a business involving Sports
Bars (a "Competing Business"). As used herein, the term "Sports Bar" shall
mean a facility having pool tables and in which the presence of multiple
television sets offering diverse programming is a primary attraction when
compared to other bar or restaurant facilities wherein the availability of
television is limited and would normally be considered a secondary
attraction by customers. Coulter acknowledges the intention of the
Partnerships to

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<PAGE> 3
develop the Business on a nationwide basis and agrees that, accordingly,
the geographic scope of the covenants set forth in this Section 2.4 shall
include the entire United States.

Notwithstanding any other provision herein, the parties agree that
Coulter may, during the period covered by this Agreement, invest Coulter's
personal, private assets as a passive investor in not more than three
percent (3%) of the total outstanding shares of any publicly traded
company engaged in a Competing Business, so long as Coulter does not
participate in the management or operations of the affairs of such
company.*

2.5 Solicitation of Employees. During the Restricted Period,
Coulter shall not, without the prior written approval of the President of
Fox & Hound, II, Inc. directly or indirectly solicit, raid, entice, or
induce any person who presently is, or at any time during the term hereof
shall be, an employee (manager level or above) of the Partnerships to
become employed by any other person, firm, or corporation in any business
in which Coulter has an interest. Furthermore, Coulter shall inform the
Partnerships in writing if any other person employed by the Partnerships
contacts Coulter for the purpose of seeking employment during such
Restricted Period.

2.6 Reasonableness of Restrictions, Reformation, and Severability.

a. Coulter has carefully read and considered the provisions of
this Section 2 and, having done so, agrees that the restrictions set
forth herein, including, but not limited to, the duration of the
Restricted Period and the scope of the restriction, are fair and
reasonable and are reasonably required for the protection of the
interests of the Partnerships.

b. In the event that, notwithstanding the foregoing, any part
of the covenants set forth in Section 2 shall be held to be invalid
or unenforceable, the remaining parts thereof shall nevertheless
continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. In the event that
any provision of this Section 2 relating to the time period and/or
scope of restrictions shall be declared by a court of competent
jurisdiction to exceed the maximum time period or area as such court
deems reasonable and enforceable, said time period and/or areas of
restrictions shall be deemed to become and thereafter be the maximum
time period and/or scope which such court deems reasonable and
enforceable.

- --------
* Notwithstanding, Coulter may develop one (1) facility, in Salem, Illinois,
which operation may include television sets and pool tables.

-3-
<PAGE> 4
c. Any provision hereof otherwise prohibited by or
unenforceable under any applicable law or public policy in any
jurisdiction which cannot be reformed in accordance with the
provisions herein, shall, as to such jurisdiction, be ineffective
without affecting any other provision of this Agreement, or shall be
deemed to be severed or otherwise modified to conform with such law
or public policy; and the remaining provisions of this Agreement
shall remain in force, provided that the purpose of this Agreement
can be effected. To the full extent, however, that the provisions of
such applicable law or public policy may be waived, this Agreement
shall be deemed to be a waiver thereof. The parties hereto
understand and agree that all the covenants set forth herein are and
shall be separately enforceable, each to the full extent permitted
by applicable law.

2.7 Tolling Period. If it should become desirable or necessary for
the Partnerships to seek compliance with this Section 2 by judicial
proceedings, the period during which Coulter shall comply with its
provisions shall extend to the first anniversary of the date of the final,
nonappealable order requiring such compliance.

2.8 Remedies. It is agreed that the Partnerships would be
irreparably damaged by reason of any violation of the provisions of this
Agreement, and that any remedy at law for a breach of the provisions of
this Agreement, and that any remedy at law for a breach of the provisions
of this Agreement would be inadequate. Therefore, the Partnerships shall
be entitled to seek injunctive or other equitable relief in a court of
competent jurisdiction against Coulter, Coulter's agents, Coulter's
affiliates, partners, or other associates, for any breach or threatened
breach of this Agreement, without the necessity of proving actual monetary
loss. It is expressly understood that the remedy described in this
Paragraph 2.8 shall not be the exclusive remedy of the Partnerships for
any breach of this Agreement, and the Partnerships shall be entitled to
seek such other relief or remedy at law or in equity to which it may be
entitled as a consequence of any breach of this Agreement.

3. Miscellaneous.

3.1 Definition. For purposes of this Agreement, "Partnerships"
shall include any successor to the Business.

3.2 Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of its subject matter and
supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

-4-
<PAGE> 5
3.3 Amendment; Waiver. This Agreement may not be amended,
supplemented, canceled or discharged except by written instrument executed
by the party affected thereby. No failure to exercise, and no delay in
exercising, any right, power or privilege hereunder shall operate as a
waiver thereof. No waiver of any breach of any provision of this Agreement
shall be deemed to be a waiver of any preceding or succeeding breach of
the same or any other provision.

3.4 Binding Effect; Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit of any successor of the
Partnerships by reorganization, merger or consolidation, or any assignee
of all or substantially all of the Partnerships' businesses and
properties. Coulter's rights or obligations under this Agreement may not
be assigned by Coulter.

3.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation
of this Agreement.

3.6 Governing Law; Interpretation. This Agreement shall be
construed in accordance with, and governed for all purposes by, the laws
and public policy of the State of Kansas applicable to contracts executed
and to be wholly performed within such State.

3.7 Further Assurances. Each of the parties agree to execute,
acknowledge, deliver and perform, and/or cause to be executed,
acknowledged, delivered and performed, at any time and/or from time to
time, as the case may be, all such further acts, assignments, transfers,
conveyances, powers of attorney and/or assurances as may be necessary
and/or proper to carry out the provisions and/or intent of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.

F & H DALLAS, L.P.;
/s/ Jamie B. Coulter MIDWAY ENTERTAINMENT, LTD.
Jamie B. Coulter N. COLLINS ENTERTAINMENT, LTD.
505 ENTERTAINMENT, LTD., by

F & H Restaurant Corp., General Partner

By:/s/ Michael A. Nahkunst
Michael A. Nahkunst, President

-5-

<PAGE> 1
EXHIBIT 10.8

CONFIDENTIALITY AND
NON-COMPETITION AGREEMENT

This Confidentiality and Non-competition Agreement ("Agreement") is made
and entered into this 20th day of February, 1997, by and between Eatertainment
Inc. (the "Company") and Dennis L. Thompson ("Thompson").

WHEREAS, the Company is in the business of developing, owning and
operating sports bar/grille facilities which include specific types and layouts
of pool tables, televisions, music and sound systems and a distinctive ambiance
(hereafter the "Business");

WHEREAS, the Company is possessed of certain Confidential Information, as
hereafter defined, and preserving the confidentiality of such Confidential
Information is of extreme importance to the Company;

WHEREAS, the Company has expended, and will continue to expend,
considerable time, effort and resources to develop the Business;

WHEREAS, Thompson will have continuing access to Confidential Information
of the Company;

WHEREAS, the Company has required that Thompson enter into this Agreement
as a condition to the consummation of the exchange of property as provided in
Section 351 of the Internal Revenue Code of 1986, as amended (the "Exchange")
contemplated in that certain Exchange Agreement dated as of the date hereof
among the Company and each of the persons listed on the signature pages thereto;
and

WHEREAS, Thompson will recognize substantial and immediate valuable
consideration from the Exchange and the Company's intended development and
expansion of the Business.

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

1. Consideration. Thompson acknowledges that the Exchange constitutes
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged by Thompson.

2. Confidential Information and Restrictive Covenants.

2.1 Acknowledgment and Definition.

a. Thompson acknowledges that the Business includes
specialized, proprietary, confidential and trade secret information
and that the Company have a legitimate need to protect such
information.
<PAGE> 2
b. Definition of Confidential Information. For purposes of
this Agreement, the term "Confidential Information" means that
secret proprietary information of the Company not otherwise publicly
disclosed. Without limiting the generality of the foregoing, such
proprietary information shall include information not generally
known in the industry which concerns (i) operating and other cost
data, including information regarding salaries and benefits of
employees; (ii) sales, cost and pricing data; (iii) acquisition,
expansion, marketing, financial and other business plans and
methods; (iv) recipes, manuals, files, records, memoranda, plans,
drawings and designs, specifications and computer programs and
records; (v) identification of suppliers and contractors; and (vi)
all information which is a "trade secret" as defined in the Uniform
Trade Secrets Act as adopted in Kansas at K.S.A. 60-3320.
Confidential Information shall include all such information whether
or not legended or otherwise identified as Confidential Information.

2.2 Confidential Information. Thompson will have access to and
become familiar with Confidential Information of the Company. Thompson
acknowledges that such Confidential Information is owned and shall continue to
be owned solely by the Company. Thompson shall not use or divulge Confidential
Information to any person or entity other than the Company, or persons to whom
the Company have given their written consent, unless such information has become
common knowledge and is no longer Confidential Information.

2.3 Return of Documents. Upon termination of Thompson's
participation as an officer or director of the Company, or his ownership of an
equity interest in the Company, all procedural manuals, guides, specifications,
plans, drawings, designs, records, lists, notebooks, diskettes, customer lists,
pricing documentation and similar documentation which is or contains
Confidential Information, including all copies thereof, in the possession or
control of Thompson, whether prepared by Thompson or others, shall be forthwith
delivered by Thompson to Company.

2.4 Covenant Restricting Competition. For a period of either (i)
two years from the date of this Agreement or (ii) one year from the date on
which Thompson terminates his relationship as an employee, consultant or
director providing services to one or more of the Company or any successor
entity, whichever is later (the "Restricted Period"), Thompson shall not compete
with the Company, or any successor to the Business, as an owner, officer,
director, employee, agent, consultant, lender or otherwise with any person or
entity engaged in a business involving Sports Bars (a "Competing Business");
provided, however, Thompson may continue his involvement with the small brew pub
concept presently operating under the name "Stool Pigeons" so long as it does
not have at any time pool tables and multiple television sets. As used herein,
the term "Sports Bar" shall mean a facility having pool tables and multiple
television sets. Thompson acknowledges the intention of the Company to develop
the Business on a nationwide basis and agrees that, accordingly, the geographic
scope of the covenants set forth in this Section 2.4 shall include the entire
United States.

Notwithstanding any other provision herein, the parties agree that
Thompson may, during the period covered by this Agreement, invest Thompson's
personal, private assets as a

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<PAGE> 3
passive investor in not more than three percent (3%) of the total outstanding
shares of any publicly traded company engaged in a Competing Business, so long
as Thompson does not participate in the management or operations of the affairs
of such company.

2.5 Solicitation of Employees. During the Restricted Period,
Thompson shall not, without the prior written approval of the President of the
Company, directly or indirectly solicit, raid, entice, or induce any person who
presently is, or at any time during the term hereof shall be an employee
(manager level or above) of the Company or any other entity indirectly providing
management services to any of the Company, excluding Ramey Millett, to become
employed by any other person, firm, or corporation in any business in which
Thompson has an interest. Furthermore, Thompson shall inform the Company in
writing if any other person employed by the Company contacts Thompson for the
purpose of seeking employment during such Restricted Period.

2.6 Reasonableness of Restrictions, Reformation, and Severability.

a. Thompson has carefully read and considered the provisions
of this Section 2 and, having done so, agrees that the restrictions
set forth herein, including, but not limited to, the duration of the
Restricted Period and the scope of the restriction, are fair and
reasonable and are reasonably required for the protection of the
interests of the Company.

c. Any provision hereof otherwise prohibited by or
unenforceable under any applicable law or public policy in any
jurisdiction which cannot be reformed in accordance with the
provisions herein, shall, as to such jurisdiction, be ineffective
without affecting any other provision of this Agreement, or shall be
deemed to be severed or otherwise modified to conform with such law
or public policy; and the remaining provisions of this Agreement
shall remain in force, provided that the purpose of this Agreement
can be effected. To the full extent, however, that the provisions of
such applicable law or public policy may be waived, this Agreement
shall be deemed to be a waiver thereof. The parties hereto
understand and agree that all the covenants set forth herein are and
shall be separately enforceable, each to the full extent permitted
by applicable law.

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<PAGE> 4
2.7 Tolling Period. If it should become desirable or necessary for
the Company to seek compliance with this Section 2 by judicial proceedings, the
period during which Thompson shall comply with its provisions shall extend to
the first anniversary of the date of the final, nonappealable order requiring
such compliance.

2.8 Remedies. It is agreed that the Company would be irreparably
damaged by reason of any violation of the provisions of this Agreement, and that
any remedy at law for a breach of the provisions of this Agreement would be
inadequate. Therefore, the Company shall be entitled to seek injunctive or other
equitable relief in a court of competent jurisdiction against Thompson,
Thompson's agents, Thompson's affiliates, partners, or other associates, for any
breach or threatened breach of this Agreement, without the necessity of proving
actual monetary loss. It is expressly understood that the remedy described in
this Paragraph 2.8 shall not be the exclusive remedy of the Company for any
breach of this Agreement, and the Company shall be entitled to seek such other
relief or remedy at law or in equity to which it may be entitled as a
consequence of any breach of this Agreement.

3. Miscellaneous.

3.1 Definition. For purposes of this Agreement, "Company" shall
include any successor to the Business.

3.2 Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of its subject matter and supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.

3.3 Amendment; Waiver. This Agreement may not be amended,
supplemented, canceled or discharged except by written instrument executed by
the party affected thereby. No failure to exercise, and no delay in exercising,
any right, power or privilege hereunder shall operate as a waiver thereof. No
waiver of any breach of any provision of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any other provision.

3.4 Binding Effect; Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit of any successor of the Company by
reorganization, merger or consolidation, or any assignee of all or substantially
all of the Company's businesses and properties. Thompson's rights or obligations
under this Agreement may not be assigned by Thompson.

3.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

3.6 Governing Law; Interpretation. This Agreement shall be
construed in accordance with, and governed for all purposes by, the laws and
public policy of the State of Kansas applicable to contracts executed and to be
wholly performed within such State.

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<PAGE> 5
3.7 Further Assurances. Each of the parties agree to execute,
acknowledge, deliver and perform, and/or cause to be executed, acknowledged,
delivered and performed, at any time and/or from time to time, as the case may
be, all such further acts, assignments, transfers, conveyances, powers of
attorney and/or assurances as may be necessary and/or proper to carry out the
provisions and/or intent of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.

EATERTAINMENT INC.

/s/ Dennis L. Thompson By:/s/ Jamie B. Coulter
Dennis L. Thompson Name: Jamie B. Coulter
Title: Chairman

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<PAGE> 1
EXHIBIT 10.9

CONFIDENTIALITY AND
NON-COMPETITION AGREEMENT

This Confidentiality and Non-competition Agreement ("Agreement") is
made and entered into this 20th day of February, 1997, by and between
Eatertainment Inc. (the "Company") and Thomas A. Hager ("Hager").

WHEREAS, the Company is possessed of certain Confidential Information,
as hereafter defined, and preserving the confidentiality of such Confidential
Information is of extreme importance to the Company;

WHEREAS, the Company has expended, and will continue to expend,
considerable time, effort and resources to develop the Business;

WHEREAS, Hager will have continuing access to Confidential Information
of the Company;

WHEREAS, the Company has required that Hager enter into this Agreement
as a condition to the consummation of the exchange of property as provided in
Section 351 of the Internal Revenue Code of 1986, as amended (the "Exchange")
contemplated in that certain Exchange Agreement dated as of the date hereof
among the Company and each of the persons listed on the signature pages thereto;
and

WHEREAS, Hager will recognize substantial and immediate valuable
consideration from the Exchange and the Company's intended development and
expansion of the Business.

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

1. Consideration. Hager acknowledges that the Exchange
constitutes good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged by Hager.

2. Confidential Information and Restrictive Covenants.

2.1 Acknowledgment and Definition.

a. Hager acknowledges that the Business includes
specialized, proprietary, confidential and trade secret
information and that the Company have a legitimate need to
protect such information.
<PAGE> 2
b. Definition of Confidential Information. For
purposes of this Agreement, the term "Confidential
Information" means that secret proprietary information of the
Company not otherwise publicly disclosed. Without limiting the
generality of the foregoing, such proprietary information
shall include information not generally known in the industry
which concerns (i) operating and other cost data, including
information regarding salaries and benefits of employees; (ii)
sales, cost and pricing data; (iii) acquisition, expansion,
marketing, financial and other business plans and methods;
(iv) recipes, manuals, files, records, memoranda, plans,
drawings and designs, specifications and computer programs and
records; (v) identification of suppliers and contractors; and
(vi) all information which is a "trade secret" as defined in
the Uniform Trade Secrets Act as adopted in Kansas at K.S.A.
60-3320. Confidential Information shall include all such
information whether or not legended or otherwise identified as
Confidential Information.

2.2 Confidential Information. Hager will have access to and
become familiar with Confidential Information of the Company. Hager acknowledges
that such Confidential Information is owned and shall continue to be owned
solely by the Company. Hager shall not use or divulge Confidential Information
to any person or entity other than the Company, or persons to whom the Company
have given their written consent, unless such information has become common
knowledge and is no longer Confidential Information.

2.3 Return of Documents. Upon termination of Hager's
participation as an officer or director of the Company, or his ownership of an
equity interest in the Company, all procedural manuals, guides, specifications,
plans, drawings, designs, records, lists, notebooks, diskettes, customer lists,
pricing documentation and similar documentation which is or contains
Confidential Information, including all copies thereof, in the possession or
control of Hager, whether prepared by Hager or others, shall be forthwith
delivered by Hager to Company.

2.4 Covenant Restricting Competition. For a period of either
(i) two years from the date of this Agreement or (ii) one year from the date on
which Hager terminates his relationship as an employee, consultant or director
providing services to one or more of the Company or any successor entity,
whichever is later (the "Restricted Period"), Hager shall not compete with the
Company, or any successor to the Business, as an owner, officer, director,
employee, agent, consultant, lender or otherwise with any person or entity
engaged in a business involving Sports Bars (a "Competing Business"). As used
herein, the term "Sports Bar" shall mean a facility having pool tables and
multiple television sets. Hager acknowledges the intention of the Company to
develop the Business on a nationwide basis and agrees that, accordingly, the
geographic scope of the covenants set forth in this Section 2.4 shall include
the entire United States.

Notwithstanding any other provision herein, the parties agree
that Hager may, during the period covered by this Agreement, invest Hager's
personal, private assets as a passive investor in not more than three percent
(3%) of the total outstanding shares of any publicly traded

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<PAGE> 3
company engaged in a Competing Business, so long as Hager does not participate
in the management or operations of the affairs of such company.

2.5 Solicitation of Employees. During the Restricted
Period, Hager shall not, without the prior written approval of the President of
the Company, directly or indirectly solicit, raid, entice, or induce any person
who presently is, or at any time during the term hereof shall be an employee
(manager level or above) of the Company or any other entity indirectly providing
management services to any of the Company, excluding Ramey Millett, to become
employed by any other person, firm, or corporation in any business in which
Hager has an interest. Furthermore, Hager shall inform the Company in writing if
any other person employed by the Company contacts Hager for the purpose of
seeking employment during such Restricted Period.

2.6 Reasonableness of Restrictions, Reformation, and
Severability.

a. Hager has carefully read and considered the
provisions of this Section 2 and, having done so, agrees that
the restrictions set forth herein, including, but not limited
to, the duration of the Restricted Period and the scope of the
restriction, are fair and reasonable and are reasonably
required for the protection of the interests of the Company.

b. In the event that, notwithstanding the foregoing,
any part of the covenants set forth in Section 2 shall be held
to be invalid or unenforceable, the remaining parts thereof
shall nevertheless continue to be valid and enforceable as
though the invalid or unenforceable parts had not been
included therein. In the event that any provision of this
Section 2 relating to the time period and/or scope of
restrictions shall be declared by a court of competent
jurisdiction to exceed the maximum time period or area as such
court deems reasonable and enforceable, said time period
and/or areas of restrictions shall be deemed to become and
thereafter be the maximum time period and/or scope which such
court deems reasonable and enforceable.

c. Any provision hereof otherwise prohibited by or
unenforceable under any applicable law or public policy in any
jurisdiction which cannot be reformed in accordance with the
provisions herein, shall, as to such jurisdiction, be
ineffective without affecting any other provision of this
Agreement, or shall be deemed to be severed or otherwise
modified to conform with such law or public policy; and the
remaining provisions of this Agreement shall remain in force,
provided that the purpose of this Agreement can be effected.
To the full extent, however, that the provisions of such
applicable law or public policy may be waived, this Agreement
shall be deemed to be a waiver thereof. The parties hereto
understand and agree that all the covenants set forth herein
are and shall be separately enforceable, each to the full
extent permitted by applicable law.

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<PAGE> 4
2.7 Tolling Period. If it should become desirable or necessary
for the Company to seek compliance with this Section 2 by judicial proceedings,
the period during which Hager shall comply with its provisions shall extend to
the first anniversary of the date of the final, nonappealable order requiring
such compliance.

2.8 Remedies. It is agreed that the Company would be
irreparably damaged by reason of any violation of the provisions of this
Agreement, and that any remedy at law for a breach of the provisions of this
Agreement would be inadequate. Therefore, the Company shall be entitled to seek
injunctive or other equitable relief in a court of competent jurisdiction
against Hager, Hager's agents, Hager's affiliates, partners, or other
associates, for any breach or threatened breach of this Agreement, without the
necessity of proving actual monetary loss. It is expressly understood that the
remedy described in this Paragraph 2.8 shall not be the exclusive remedy of the
Company for any breach of this Agreement, and the Company shall be entitled to
seek such other relief or remedy at law or in equity to which it may be entitled
as a consequence of any breach of this Agreement.

3. Miscellaneous.

3.1 Definition. For purposes of this Agreement, "Company"
shall include any successor to the Business.

3.2 Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of its subject matter and supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.

3.4 Binding Effect; Assignment. The rights and obligations of
this Agreement shall bind and inure to the benefit of any successor of the
Company by reorganization, merger or consolidation, or any assignee of all or
substantially all of the Company's businesses and properties. Hager's rights or
obligations under this Agreement may not be assigned by Hager.

3.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

3.6 Governing Law; Interpretation. This Agreement shall be
construed in accordance with, and governed for all purposes by, the laws and
public policy of the State of Kansas applicable to contracts executed and to be
wholly performed within such State.

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.

EATERTAINMENT INC.

/s/ Thomas A. Hager By: /s/ Jamie B. Coulter
- ------------------------------- ------------------------------
Thomas A. Hager Name: Jamie B. Coulter
Title: Chairman

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<PAGE> 1
EXHIBIT 10.10

SHOPPING CENTER LEASE

THIS LEASE is made effective as of June 1, 1995, between the Landlord and Tenant
named below to evidence the following:

BASIC LEASE INFORMATION

A. Shopping Center Name: Midway Square

B. Landlord: Real Alchemy I, L.P.

C. Mailing Address of Landlord:

4504 Winewood Ct.
Colleyville, TX 76034

Attention:Sue Bednarczuk
(Phone:817-868-0081)

D. Tenant: Midway Entertainment, Ltd.

E. Mailing Address of Tenant:

4504 Winewood Ct.
Colleyville, TX 76034

Attention:Paul Guernsey
(Phone:817 540-0120)

F. Tenant's Trade Name: Fox & Hound

G. Address of Premises:

18918 Midway Rd., Suite 200
Dallas, TX

Attention:
(Phone: )

H. Guarantor: N/A
<PAGE> 2
I. Mailing Address of Guarantor:

Attention:
(Phone:

J. Scheduled Commencement Date: Oct. 1 1995 or date tenant
receives Certificate of Occupancy, whichever is later

K. Expiration Date: 5 years after commencement date

L. Permitted Use:

Sports Tavern

M. Minimum Rent (Payable Monthly; See Paragraph 1.01):

$10,761.75 ($13.50 per sq. ft.)

N. Initial CAM Charges (Payable Monthly; See Paragraph 6.05):

$Pro rata

O. Initial Taxes (Payable Monthly; See Paragraph 9.02):

$Pro rata

P. Initial Insurance Costs (Payable Monthly; See Paragraph
10.03):

$Pro rata

Q. Security Deposit: $10,761.75 payable on commencement date,
applicable to first month's rent

R. Approximate Floor Area of the Shopping Center: 17,074
square feet

S. Approximate Floor Area of the Premises: 9,566 square feet

T. Floor Level(s) of the Premises:

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<PAGE> 3
U. Miscellaneous:

(1) Landlord agrees that only the "Fox & Hound" will be allowed signage
on the center tower. The tower signs will be designed by Midway
Entertainment, Ltd. and approved by Landlord. (2) Landlord grants to
tenant a $1.50 per sq ft expense stop against CAM, taxes & insurance.
i.e., Tenant pays its rata share of CAM, taxes and insurance less $1.50
per sq ft per year.

References below to the "Basic Lease Information" are references to the
information set out above. If a conflict exists between the Basic Lease
Information and the provisions below, the provisions below will control.

ADDENDA

The following addenda are attached to and made a part of this Lease for
all purposes:

Exhibit A - Site Plan of Shopping Center
Exhibit A-1 - Legal Description of the Shopping Center
Exhibit B - Construction and Related Matters
Exhibit C - Certificate of Acceptance
Exhibit E - Renewal Option
Exhibit F - Rules and Regulations

LEASE OF THE PREMISES

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
certain premises (the "Premises") in the Shopping Center for the term, at the
rental, and upon all the conditions and agreements set forth herein. The
location of the Premises within the Shopping Center is shown cross-hatched on
the site plan attached hereto as Exhibit A, but if there shall exist any
discrepancy between the location shown on Exhibit A and the location of the
actual demising walls of the Premises (as such walls presently exist or as they
are hereafter constructed under Landlord's supervision and with Landlord's
approval) the location of the demising walls shall control. Notwithstanding
anything to the contrary contained herein, the term "Shopping Center" as used in
this Lease does not include anything outside the boundaries of the land
described in Exhibit A-1 attached hereto, it being understood that the site plan
attached hereto as Exhibit A may depict more than the Shopping Center. The
Premises contain approximately the number of square feet of floor area that is
specified in the Basic Lease Information and are located on the floor level(s)
specified in the Basic Lease Information. The Premises shall not include and
Tenant shall not be entitled to use the land lying thereunder or any part of the
exterior walls of the buildings in which the Premises are located or the roof

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<PAGE> 4
thereof or any space other than on the floor level(s) indicated in the preceding
sentence.

TERM

The term of this Lease shall commence on the date (the "Commencement
Date") that is the earlier of (i) the Scheduled Commencement Date specified in
the Basic Lease Information, (ii) the date specified in Exhibit B attached
hereto, if any, as the latest possible Commencement Date, and (iii) the date on
which Tenant opens for business in the Premises; and the term of this Lease
shall expire on the expiration date specified in the Basic Lease Information
(the "Expiration Date"). Such term is hereinafter referred to as the "Lease
Term" or the "term of this Lease". After the Commencement Date has been
determined and Tenant has accepted possession of the Premises, Tenant shall sign
and deliver a certificate upon request of Landlord in the form attached hereto
as Exhibit C.

SUPPLEMENTAL TERMS, COVENANTS AND CONDITIONS

Landlord leases the Premises to Tenant and Tenant accepts and agrees to
use and possess the Premises on the following Supplemental Terms, Covenants and
Conditions:

1. RENTAL

1.1 MINIMUM RENT

Tenant shall pay Landlord for each month in the Lease Term a guaranteed
minimum monthly rental for the Premises ("Minimum Rent") as specified in the
Basic Lease Information. Such Minimum Rent will be due in advance beginning on
the Commencement Date and continuing on the first day of each calendar month
thereafter. It will be prorated on a daily basis for the first month if the
Commencement Date is not on the first day of a calendar month and for the last
month if the Expiration Date is not on the last day of a calendar month. Minimum
Rent shall be payable without demand, deduction or offset, at the address for
Landlord set forth in the Basic Lease Information, or at such other place as
Landlord may from time to time designate in writing.

1.2 ADDITIONAL RENTAL

Any amount to be paid by Tenant to Landlord hereunder in addition to
Minimum Rent is additional rental (whether or not so designated in the following
provisions) payable upon demand or as otherwise provided herein.

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<PAGE> 5
2. CONDUCT OF BUSINESS BY TENANT

2.1 USE OF PREMISES AND TRADE NAME

Tenant shall use and occupy the Premises solely for the permitted use
and under the trade name specified in the Basic Lease Information and for no
other purposes. Tenant shall conduct its business activity in the Premises
during all business hours usual for Tenant's type of business, unless Tenant is
prevented from doing so by Applicable Laws (as defined below) or by strike, fire
or other casualty beyond Tenant's control and except during reasonable periods
approved by Landlord in advance for repairing, cleaning and decorating the
Premises.

2.2 PROHIBITED USES

Without limiting the foregoing, Tenant shall not use or permit the
Premises to be used for any purpose that conflicts with existing lease in or
restrictions affecting the Shopping Center or for any other use Landlord finds
offensive or disruptive to other tenants in the Shopping Center. Tenant shall
not permit the Premises to be used for any operation that is extra hazardous on
account of fire or otherwise or for an operation that will increase the
insurance premiums on the fire insurance carried by Landlord or that may render
void or voidable the insurance carried by Landlord; nor shall Tenant sell or
permit to be kept, used or sold in or about the Premises any article which may
be prohibited to standard fire insurance policies.

2.3 COMPLIANCE WITH LAWS AND REGULATIONS

Tenant shall use and maintain the Premises in compliance with all laws,
ordinances, building codes, rules and regulations, present or future of all
governmental authorities ("Applicable Laws"), including Applicable Laws
pertaining to health, safety, disabled persons and the environment. Without
limiting the foregoing, Tenant shall be responsible for determining that its
proposed use of the Premises is permitted by Applicable Laws and shall obtain
any permits (including any certificate of occupancy) required for such use.
Tenant shall comply with such rules and regulations as Landlord may from time to
time reasonably adopt for the safety, care, good order and cleanliness of the
Shopping Center. Landlord shall not be liable to Tenant for the failure of any
other tenant or other person to comply with such rules and regulations. If the
Permitted Use specified in the Basic Lease Information contemplates the
operation of a restaurant by Tenant in the Premises, or if otherwise required by
Landlord or any governmental agency having jurisdiction, Tenant shall at its
sole cost and expense install and maintain grease traps and/or grease
interceptors that Landlord deems necessary or desirable or that any governmental
entity having jurisdiction shall deem necessary

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<PAGE> 6
to handle liquid waste, including grease, oil or any material whatsoever which
could damage, obstruct or overload any drainage, sewer or other systems.

2.4 CLEANLINESS, WASTE AND DELIVERIES

Tenant shall maintain the Premises, and adjoining sidewalks and alleys,
in a neat and clean condition; shall store all garbage within the Premises or in
the trash dumpster as provided in Paragraph 6.3; and shall arrange for the
regular pickup of garbage unless Landlord elects to arrange and charge Tenant
for such pickup as provided in Paragraph 6.3 below.

3. CONSTRUCTION

3.1 INITIAL CONSTRUCTION

If this Lease covers Premises that will be used as a store which has
yet to be constructed or finished out, the store shall be built in accordance
with plans and specifications to be prepared by Tenant or Tenant's architects
and approved by Landlord as provided in Exhibit B. Tenant shall provide, at its
own expense, all trade fixtures that may be required on the Premises, except as
may otherwise be specified in Exhibit B. Tenant's acceptance of possession of
the Premises will constitute Tenant's agreement that Landlord has completed any
construction to be made by it and that Tenant accepts the Premises "as is" in
their then present condition.

3.2 MECHANIC'S LIENS

Tenant shall not permit any mechanic's lien or liens to be placed upon
the Premises or the Shopping Center caused by or resulting from any work
performed or materials furnished or resulting from obligations incurred by or at
the request of Tenant and nothing contained in the Lease shall be deemed or
construed in any way as constituting the request of Landlord, express or
implied, by inference or otherwise, to a contractor, subcontractor, laborer or
materialman for the performance of any labor or the furnishing of any materials
for any specified improvement, alteration or repair of or to the Premises, the
Shopping Center or any part thereof, nor as giving Tenant any right, power or
authority to contract for or permit the rendering of any services or the
furnishing of any materials that would give rise to the filing of a mechanic's
or other liens against the interest of Landlord in the Premises or the Shopping
Center.

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<PAGE> 7
4. MAINTENANCE AND REPAIRS

4.1 OBLIGATION FOR REPAIRS

From and after Tenant's acceptance of possession of the Premises,
Landlord shall have no obligation to make any repairs, improvements or
alterations whatsoever, except those required under any express covenant or
warranty that may be contained in Exhibit B, and except that Landlord shall
maintain the roof and the structural members of exterior walls and the
foundation of the Premises (but not windows; plate glass; doors; door closure
devices; window and door frames, molding, locks and hardware; or interior
painting or other interior treatments of exterior walls) in good repair during
the Lease Term. Notwithstanding the foregoing, Landlord shall not have to make
any repairs required of it by this Lease until Tenant gives Landlord notice of
the need therefor, and Landlord shall not be required to repair any damage
caused by the acts or negligent omissions of Tenant, its agent, employees or
invitees, or any damage to the Premises caused by burglary, robbery, or
vandalism or resulting from any alterations (including roof penetrations) made
to the Premises by Tenant whether with or without Landlord's consent. Except as
is specifically made the responsibility of Landlord hereunder, Tenant agrees
that during the entire term of this Lease it shall promptly and at its own
expense service, keep, maintain in good repair and replace as necessary all
parts of the Premises, including, but not limited to, the following (regardless
of whether situated within walls or under floor covering or above the ceiling):
all plumbing (including the fire protection sprinkler system, if any), piping,
heating, air conditioning, ventilating, electrical and lighting facilities;
equipment; fixtures; walls and wall covering; ceilings; floors and floor
coverings; windows; doors; and glass, plate glass, showcases and skylights.
Tenant shall be responsible for all periodic interior painting of the Premises,
and shall keep the Premises in good, clean and tenantable condition; and Tenant
shall at its sole cost and expense keep the Premises free of insects, rodents,
vermin and other pests. Additionally, Tenant shall pay to Landlord upon demand,
and without contribution from any other tenant or Landlord, all costs and
expenses for (i) the repair and replacement of any utility lines and related
facilities (including sewer lines, drains, drainage systems, storm sewer
systems, sanitary sewer systems and plumbing equipment, fixtures and appliances)
which are necessary because of the obstruction of the flow, clogging, backing-up
or other malfunction or disrepair of said lines and related appurtenances
resulting from any act or negligent omission of Tenant or any other party using
or occupying the Premises, and (ii) any repairs to the roof required because of
penetrations made by or on behalf of Tenant, whether or not such penetrations
were made with Landlord's consent. Under no circumstances will Tenant make any
roof penetrations, except with Landlord's prior consent and using a roofing

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<PAGE> 8
contractor approved by Landlord in its sole discretion. Such agreements of
Tenant are subject to the waivers set out in Paragraph 10.6 below.

4.2 LANDLORD'S RIGHT TO REPAIR

If Tenant fails to perform its obligations under this Article 4,
Landlord may at its option, after three days' written notice to Tenant (except
in circumstances which Landlord deems to be an emergency, in which case no
notice shall be required), enter upon the Premises and put the same in good
order, condition and repair and the cost thereof shall become due and payable by
Tenant to Landlord upon demand as additional rent.

5. ALTERATIONS BY TENANT

Tenant shall not make any alterations or additions to the Premises
without first obtaining the written consent of Landlord. If Landlord gives its
consent to alterations or additions to the Premises by Tenant, Tenant shall
procure, at Tenant's expense, all necessary permits before undertaking such
work. All such alterations and additions shall be done in accordance with
Applicable Laws, including applicable building codes and regulations.

6. COMMON AREAS

6.1 DEFINITION OF COMMON AREAS

All areas provided by Landlord from time to time in the Shopping Center
for the common use of Landlord and tenants and their respective employees and
invitees shall be deemed "Common Areas." However, this Lease does not guarantee,
nor does Landlord make any representation or warranty to Tenant as to, the
configuration of the Shopping Center and the Common Areas, and the reference
herein made to any site plan setting forth the general layout of buildings,
parking areas and other improvements shall not be deemed to be a warranty or
representation.

6.2 USE OF COMMON AREAS

Tenant and its employees and invitees shall be entitled to use the
Common Areas as they exist from time to time during the Lease Term, in common
with Landlord and with other persons authorized by Landlord from time to time to
use such areas, subject to such rules and regulations relating to such use as
Landlord may from time to time establish and subject to all Applicable Laws.
Landlord shall at all times during the term of the Lease be entitled to control
the Common Areas, and may restrain any use or occupancy thereof as authorized by
this Lease and by the rules and regulations for the use of such areas. Tenant
shall keep said areas free and clear of any obstructions

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created by Tenant or resulting from Tenant's operation in the Premises. If, in
the opinion of Landlord, unauthorized persons are using any of said areas
because of the presence of Tenant in the Shopping Center, Tenant shall restrain
such unauthorized use by appropriate legal proceedings. Nothing herein shall
affect the right of Landlord to prohibit the use of any of said areas by
unauthorized persons.

6.3 TRASH DISPOSAL

In the event that Landlord finds its necessary or desirable to furnish
a form of trash disposal for the common use of more than one tenant, including
Tenant, the cost of said trash disposal shall be allocated on the basis
determined by Landlord to those using it, and Tenant will pay its share. If
Landlord does not provide trash disposal for use by Tenant and other tenants, it
shall be Tenant's responsibility to provide, at Tenant's expense, a trash
dumpster or some other method of trash disposal meeting the approval of the
applicable municipality in which the Premises are located. Such dumpster or
other receptacle shall be located and shall be screened or enclosed as directed
by Landlord.

6.4 COMMON AREA CHARGES AS ADDITIONAL RENT

Tenant shall pay Landlord, as additional rental, Tenant's share of all
costs and expenses incurred by Landlord in the operation and maintenance of the
Common Areas during the term of this Lease. Such costs and expenses ("CAM
Charges") shall include, without limiting the generality of the foregoing, the
cost of landscaping, resurfacing, stripping, bumpers, directional signs and
other markers, lighting (including Tenant's own consumption of electricity on
any Common Area pole sign) and other utilities, cleaning, sewage and garbage
disposal, exterminating, depreciation of equipment used in and about the
Shopping Center, fire protection, security, and similar items. CAM Charges will
also include all management fees and expenses and all costs of maintenance and
repairs concerning the Shopping Center (to the extent not covered by insurance),
whether or not allocable to the Common Areas, but will not include leasing
commissions and any costs incurred by Landlord to make space in the Shopping
Center ready for another particular tenant. Tenant's share of CAM Charges
incurred in any calendar year or partial calendar year during the term of this
Lease will be determined by Landlord by multiplying the total CAM Charges
incurred in the applicable calendar year or partial calendar year times a
fraction, the numerator of which is the floor area of the Premises and the
denominator of which is the greater of (i) the average of the

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total rented floor area of the buildings in the Shopping Center during the
applicable calendar year or partial calendar year, or (ii) ninety five percent
of the average of the total rentable floor area of the buildings in the Shopping
Center during the applicable year or partial calendar year.

6.5 PAYMENT OF COMMON AREA CHARGES

Tenant's share of CAM Charges for each month of the calendar year in
which the Commencement Date occurs is estimated to be the amount specified as
Initial CAM Charges in the Basic Lease Information, which amount is payable
monthly by Tenant to Landlord on the same dates as and in addition to the
Minimum Rent that is due during such calendar year. Following the calendar year
in which the Commencement Date occurs, Tenant shall pay to Landlord, at the same
time as and in addition to each installment of the Minimum Rent, Landlord's
estimate of Tenant's share of CAM Charges for the then current calendar month,
or, if Tenant has not been notified of such estimate, then Tenant shall pay the
most recent available estimate by Landlord of Tenant's share of CAM Charges for
a full calendar month. Landlord shall determine Tenant's share of the actual CAM
Charges incurred for every calendar year or partial calendar year during the
Lease Term within one hundred twenty days (or such additional time as may be
required) after the close of such year, and Landlord will deliver a statement to
Tenant setting out the calculation. Within ten days from Tenant's receipt from
Landlord of such statement, Tenant shall pay Landlord the excess, if any, of
Tenant's share of the actual CAM Charges shown therein over the estimated amount
theretofore paid by Tenant for such period. If, however, Tenant's share of the
actual CAM Charges for the applicable calendar year or partial calendar year is
less than the estimated amount theretofore paid by Tenant, the excess share of
CAM Charges paid by Tenant shall (i) be credited against the next maturing
installments of additional rental due from Tenant (but not against Minimum
Rent), and (ii) to the extent not offset against amounts then due or to be due
in the future from Tenant under this Lease, be refunded by Landlord to Tenant.

7. SIGNS, DISPLAYS AND OBSTRUCTIONS

Before 30 days after the Commencement Date, Tenant shall, at its own
expense, erect and maintain as many as "... three exterior building exterior
sign advertising ..." its business on the Premises. Such sign shall be designed
in accordance with the sign criteria adopted by Landlord for the Shopping Center
and all Applicable Laws and shall be located on Tenant's storefront in a
location approved by Landlord in advance. Tenant shall not paint signs on
windows or place any merchandise, showcases, pay telephones, ice machines, rides
or other obstructions on the outside of its store on the Premises. Tenant shall
keep all display windows, exterior electric signs and exterior lighting under
any canopy in front of the Premises lighted from dusk until 11:00 p.m. daily,
including Sundays and holidays.

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See item U(2), page 2 for special provision for tower sign.

8. UTILITIES

Tenant shall pay all utility charges incurred by it in the use of the
Premises whether supplied by Landlord or directly to Tenant by a utility
company. If any such charges are not paid when due, Landlord may pay the same
and any amount so paid by Landlord shall thereupon become due to Landlord from
Tenant. Regardless of whether Landlord supplies Tenant with any utility
services, Landlord shall not be responsible for problems with respect to the
quality, quantity or interruption of such services beyond its control, and
failure or interruption of services shall not entitle Tenant to terminate this
Lease.

9. REAL ESTATE TAXES

9.1 TAXES AS ADDITIONAL RENTAL

Tenant shall pay Landlord additional rental equal to all ad valorem
taxes, charges, impositions and liens for public improvements, and assessments
allocable to the Premises (as determined by Landlord pursuant to this Paragraph)
and all costs of evaluating and contesting the same (including attorneys' and
consultants' fees), together with interest penalties or other charges which may
accrue thereon, that Landlord pays for any portion of the term of this Leases
(collectively, "Taxes"). As used herein, "Taxes" shall include, to the extent
allocable to any calendar year or partial calendar year during the Lease Term,
all ad valorem taxes, charges, impositions and other assessments described in
the preceding sentence that are separately assessed against the Premises.
"Taxes" shall also include, to the extent allocable to any calendar year or
partial calendar year during the Lease Term, Tenant's share of any such items
that are assessed against the Shopping Center or against other property of which
the Premises are only a portion. Tenant's share of such items for each calendar
year or partial calendar year will be determined by Landlord by multiplying the
total amount thereof by a fraction, the numerator of which is the floor area of
the Premises and the denominator of which is the greater of (i) the average of
the total rented floor area of buildings on the property covered by such items
during the applicable calendar year, or (ii) ninety five percent of the average
of the total rentable floor area of buildings on the property covered by such
items during the applicable calendar year.

9.2 PAYMENT OF TAXES

The Taxes for each month during the calendar year in which the
Commencement Date occurs are estimated to be the amount specified as Initial
Taxes in the Basic Lease Information, which amount is payable monthly by Tenant
to Landlord on the same dates

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as and in addition to the Minimum Rent that is due during such calendar year.
Following the calendar year in which the Commencement Date occurs, Tenant shall
pay to Landlord, at the same time as and in addition to each installment of the
Minimum Rent, Landlord's estimate of the Taxes for the then current calendar
month, or, if Tenant has not been notified of such estimate, then Tenant shall
pay the most recent available estimate by Landlord of the Taxes for a full
calendar month. Landlord shall calculate the actual Taxes incurred for every
calendar year or partial calendar year during the Lease Term within one hundred
twenty days (or such additional time as may be required) after the close of such
year, and Landlord will deliver a statement to Tenant setting out the
calculation. Within ten days from Tenant's receipt from Landlord of such
statement, Tenant shall pay Landlord the excess, if any, of the actual Taxes
shown therein over the estimated amount theretofore paid by Tenant for such
period. If, however, the actual Taxes for the applicable calendar year or
partial calendar year are less than the estimated amount theretofore paid by
Tenant, the excess Taxes paid by Tenant shall (i) be credited against the next
maturing installments of additional rental due from Tenant (but not against
Minimum Rent), and (ii) to the extent not offset against amounts then due or to
be due in the future from Tenant under this Lease, be refunded by Landlord to
Tenant.

9.3 SUBSTITUTE TAXES

If during the term of this Lease any taxes or other charges shall be
levied or assessed against the Premises or charged to Landlord either as a rent
tax or in lieu of or as a substitute for all or part of any present or
contemplated ad valorem taxes on the Premises or the Shopping Center, then for
the purposes of this Lease such levies and assessments shall be treated the same
as ad valorem taxes on the Premises or the Shopping Center, as the case may be.

9.4 TAXES ON TENANT'S PROPERTY

Tenant shall be liable for and promptly pay all taxes levied against
personal property and trade fixtures on the Premises during the term of this
Lease. If the assessed value of Landlord's property is increased by inclusion of
personal property and trade fixtures on the Premises and Landlord elects to pay
the taxes based on such increase, then Tenant shall pay to Landlord upon demand
the part of such taxes that Landlord determines to be attributable to such
personal property and trade fixtures.

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10. INSURANCE AND INDEMNITY

10.1 INSURANCE REQUIRED OF TENANT

From and after the Commencement Date Tenant shall keep in force
commercial general liability insurance (including blanket contractual liability
coverage) with limits of liability of not less than $1,000,000.00 (unless a
greater or lesser minimum dollar amount of coverage is specified in the Basic
Lease Information) for bodily injury, death or property damage occurring in any
one accident. Such insurance may be carried under a blanket policy covering the
Premises and any other stores operated by Tenant. In the event Tenant is to
construct the improvements or any part of the improvements on the Premises prior
to the Commencement Date, Tenant shall provide such insurance from and after the
date it commences such construction. All insurance required to be carried by
Tenant shall be issued by companies, on forms and with endorsements satisfactory
to Landlord. Such policy or a certificate of insurer evidencing the insurance
with proof of payment of premiums shall be deposited with Landlord on or prior
to the earlier of the Commencement Date or the date Tenant commences
construction of improvements on the Premises. Certificates of renewal thereof
shall be deposited with Landlord ten days prior to the expiration of any such
policy or renewal thereof. Tenant shall, at its cost, maintain insurance
covering: (i) its personal property, equipment and trade fixtures, including
insurance providing protection against fire and extended coverage perils,
sprinkler damage, vandalism and malicious mischief, and . Such insurance will be
in the amount of the full replacement value of the insured property, and Tenant
shall furnish Landlord with a certificate evidencing such insurance from the
applicable insurer upon request.

10.2 INSURANCE COSTS AS ADDITIONAL RENT

Tenant shall pay Landlord additional rental equal to all insurance
costs allocable to the Premises (as determined by Landlord pursuant to this
Paragraph) that Landlord pays for the term of this Lease (collectively,
"Insurance Costs"). As used herein, "Insurance Costs" shall include, to the
extent allocable to any calendar year or partial calendar year during the Lease
Term, the entire cost of any insurance policy that covers only the Premises.
"Insurance Costs" shall also include, to the extent allocable to any calendar
year or partial calendar year during the Lease Term, the Tenant's share of the
cost of any insurance policy or policies covering the Shopping Center or any
other property of which the Premises are only a part. Tenant's share of such
cost for each calendar year or partial calendar year during the Lease Term will
be determined by Landlord by multiplying the total amount thereof times a
fraction, the numerator of which is the floor area of the Premises and the

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denominator of which is the greater of (i) the average of the total rented floor
area of the buildings on the insured property during the applicable calendar
year, or (ii) ninety five percent of the average of the total rentable floor
area of the buildings on the insured property during the applicable calendar
year.

10.3 PAYMENT OF INSURANCE COSTS

Insurance Costs for each month during the calendar year in which the
Commencement Date occurs are estimated to be the amount specified as Initial
Insurance Costs in the basic Lease Information, which amount is payable by
Tenant to Landlord on the same dates as and in addition to the Minimum Rent that
is due during such calendar year. Following the calendar year in which the
Commencement Date occurs, Tenant shall pay to Landlord, at the same time as and
in addition to each installment of the Minimum Rent, Landlord's estimate of the
Insurance Costs for the then current calendar month, or, if Tenant has not been
notified of such estimate, then Tenant shall pay the most recent available
estimate by Landlord of Insurance Costs for a full calendar month. Landlord
shall calculate the actual Insurance Costs incurred for every calendar year or
partial calendar year during the Lease Term within one hundred twenty days (or
such additional time as may be required) after the close of such year, and
Landlord will deliver a statement to Tenant setting out the calculation. Within
ten days from Tenant's receipt of such statement from Landlord, Tenant shall pay
Landlord the excess, if any, of the actual Insurance Costs set out therein over
the estimated Insurance Costs theretofore paid by Tenant for such period. If,
however, the actual Insurance Costs for the applicable calendar year or partial
calendar year are less than the estimated amount theretofore paid by Tenant, the
excess Insurance Costs paid by Tenant shall be (i) be credited against the next
maturing installments of additional rental due from Tenant (but not against
Minimum Rent), and (ii) to the extent not offset against amounts then due or to
be due in the future from Tenant under this Lease, be refunded by Landlord to
Tenant.

10.4 WAIVER OF CLAIMS

The parties desire to avoid liability to each other's insurers. Thus,
Landlord and Tenant each for itself, and for any person or entity claiming
through it (including any insurance company claiming by way of subrogation),
waives any and every claim which arises or may arise in its favor against the
other party hereto and the other party's officers, directors, and employees (and
Tenant waives any such claim against the other tenants and occupants of the
Shopping Center and their officers, directors and employees) for any and all
loss of or damage to property, to the extent (but only to the extent) that the
waiving party who suffers such loss or damage is actually compensated by
insurance or would be compensated by the insurance policies

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contemplated in this Article 10 if such policies were maintained as required
hereby. Each party agrees to have such insurance policies properly endorsed so
as to make them valid notwithstanding this waiver, if such endorsement is
required to prevent a loss of insurance.

10.5 INDEMNITY

Tenant and Landlord agree to indemnify and save each other from and
against any and all claims, actions, damages, liens, liabilities and expenses,
including but not limited to attorneys' fees, in connection with loss of life,
personal injury and/or damage to property occurring on the Premises or arising
from or out of Tenant's occupancy or use of the Premises or any portion thereof
or any portion of the Shopping Center.

10.6 LIMITATION OF LANDLORD'S LIABILITY

Except as may be caused primarily by the gross negligence or
intentional act of Landlord, Landlord shall not be liable for (i) injury or
damage which may be sustained by Tenant, its agents, officers, directors,
employees or invitees, or to their goods, wares, merchandise or property, caused
by or resulting from the state of repair of the Premises or the Shopping Center,
(ii) injury or damage from fire, steam, electricity, gas, water or rain which
may leak or flow from or into any party of the Premises; or (iii) the breakage,
leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures of the Premises or
the Shopping Center. Landlord shall not be liable for damage arising from any
act or neglect of any other tenant of the Shopping Center. Landlord shall not be
liable for any damages sustained by Tenant by reason of construction, repair or
reconstruction, or widening of any private, public or quasi-public utility
lines, streets, walkways or thoroughfares; nor shall the rent or other charges
under this Lease be abated during any period that ingress, egress or traffic may
be curtailed, blocked or hampered by reason of such activities. Landlord shall
not be required to remove snow or ice from any areas in or around the Shopping
Center and shall not be liable for any accident resulting therefrom.

11. CASUALTY AND RESTORATION

If the building or other improvements on the Premises should be damaged
or destroyed by fire or other casualty, Tenant shall give immediate written
notice thereof to Landlord. If the Premises are damaged by fire or other insured
casualty to the extent of less than one-third of the then value of the Premises
and if the holder of any deed of trust, mortgage, or security interest covering
the Premises does not require that the insurance proceeds payable on account of
such fire or casualty be

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applied to reduce the indebtedness secured thereby, then Landlord shall repair
such damage at its expense. However, if the Premises are damaged by fire or
other casualty to the extent of more than one-third of the then value of the
Premises, or if the holder of any deed of trust, mortgage or security interest
covering the Premises applies or indicates that it may apply the insurance
proceeds payable on account of such fire or other casualty to the indebtedness
secured thereby, then Landlord may, at its option, terminate this Lease by
giving written notice to Tenant within ninety days after Landlord is notified of
the fire or other casualty. If this option is available but not exercised by
Landlord, then Landlord shall proceed with reasonable diligence to collect any
insurance proceeds not claimed by the holder of a deed of trust, mortgage or
security interest on the Premises and to apply any or all of such proceeds as
may be required to repair such damage. During the period of any repairs to or
restoration of the Premises, Tenant shall continue the operation of its business
to the extent reasonably practicable. There shall be no abatement of Minimum
Rent or other charges during the period of such repairs or restoration.
Landlord's obligation to repair or rebuild pursuant to this Article 11 shall be
limited to the restoration of a "shell" building to the extent permitted by
Applicable Laws, and to the replacement of any interior work in the Premises
which may have originally been installed at Landlord's cost; and Tenant shall be
obligated to complete the balance of the repairs or rebuilding required for the
Premises. Upon completion of such restoration and replacement, Tenant shall
promptly refixture and restock the Premises.

12. EMINENT DOMAIN

If during the term of this Lease, all or a substantial part of the
Premises should be taken for any public or quasi-public use by eminent domain,
or should be sold to the condemning authority under threat of condemnation, this
Lease shall terminate and all rentals shall be abated during the unexpired
portion of this Lease, effective as of the date when said taking or sale shall
occur. "Substantial part," as used herein, means that the remainder of the
Premises cannot be reconstructed or restored to make it reasonably tenantable
and suitable for the uses for which the Premises are leased as defined in the
Basic Lease Information. If less than a substantial part of the Premises shall
be taken for any public or quasi-public use by eminent domain, or should be sold
to the condemning authority under the threat of condemnation, this Lease shall
not terminate and Landlord shall, at its sole expense, restore and reconstruct
the building and other improvements situated on the remaining part of the
Premises so as to make the remaining part reasonably tenantable and suitable for
the uses set out in the Basic Lease Information. Notwithstanding the preceding
sentence, Landlord may, at its option, terminate this Lease rather than restore
and

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reconstruct the Premises after less than a substantial portion of the Premises
are taken or sold as aforesaid if the cost of such restoration and
reconstruction can be expected to exceed the damages or other consideration that
Landlord will receive because of the partial taking or sale of the Premises. If
Landlord does restore or reconstruct the Premises pursuant to this paragraph,
but thereafter the square footage of the Premises available for Tenant's use is
less than that available before the taking or sale, then the Minimum Rent
payable hereunder during the unexpired term of this Lease shall be reduced in
proportion to the reduction of square feet of floor area of the Premises. All
damages awarded for any taking of all or any part of the Premises by eminent
domain, and all proceeds of a sale in lie of such a taking, shall belong to and
be the property of Landlord, whether compensation for the diminution in value of
the Tenant's leasehold or for the fee of the Premises. However, Landlord shall
not be entitled to any separate award made to Tenant for loss or damage to
Tenant's removable personal property. Nor will Landlord be entitled to any award
for damages for cessation or interruption of Tenant's business to the extent
that such cessation or interruption damages are awarded exclusive of and
separate and apart from damages for the diminution in value in the Tenant's
leasehold.

13. ASSIGNMENT AND SUBLETTING

Tenant may not, either voluntarily or by operation of law, without the
prior written consent of Landlord, assign this Lease, sublet the whole or any
part of the Premises, sell, encumber, pledge or otherwise transfer all or any
part of Tenant's leasehold estate hereunder, or permit the Premises to be
possessed by anyone other than Tenant or Tenant's employees. Notwithstanding any
permitted assignment or subletting, Tenant and any guarantor of Tenant's
obligations under this Lease shall at all times remain fully responsible and
liable for the payment of the rent herein specified and for compliance with all
of Tenant's other obligations under the terms, provisions and covenants of this
Lease. Tenant shall pay all costs incurred by Landlord (including reasonable
attorneys' fees) to evaluate any request by Tenant for consent to a proposed
sublease or assignment.

Landlord agrees to sublease to a private club corporation to satisfy
TABC requirements of the Tenant.

14. DEFAULTS AND REMEDIES

14.1 DEFAULT BY TENANT

The occurrence of any one of the following events shall be an event of
default by Tenant under this Lease:

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(a) Tenant shall fail to pay any rental or other sum of money when due
hereunder.

(b) Tenant shall fail to perform or observe any term, condition,
covenant or agreement of this Lease (other than a failure to timely pay rent or
other charges) and Tenant shall not cure such failure within ten days after
notice thereof is given by Landlord, but if such failure is of a nature that it
cannot be cured within such ten day period. Tenant shall not have committed an
event of default if Tenant commences the curing of the failure within such ten
day period and thereafter diligently pursues the curing of same and completes
such cure within sixty days; provided, however, that if Tenant shall fail to
perform or observe any term, condition, covenant or agreement of this Lease two
or more times in any calendar year, then notwithstanding that such defaults have
been cured by Tenant, any further similar failure shall be deemed an event of
default without notice or opportunity to cure.

(c) Tenant or any guarantor of Tenant's obligations under this Lease
shall become insolvent, shall admit in writing its inability to pay its debts
when due, shall make a transfer in fraud of its creditors, shall make a general
assignment or arrangement for the benefit of creditors, or all or substantially
all of Tenant's assets or the assets of any guarantor of Tenant's obligations
under this Lease or Tenant's interest in this Lease are levied on by execution
or other legal process.

14.2 REMEDIES OF LANDLORD

(a) Upon the occurrence of any event or default by Tenant, Landlord
shall have the option, without any notice to Tenant (except as expressly
provided below) and with or without judicial process, to pursue any one or more
of the following remedies:

(i) Landlord may terminate this Lease, in which event
Tenant shall immediately surrender the Premises to
Landlord.

(ii) Landlord may enter upon and take custodial
possession of the Premises by picking the locks if
necessary, lock out or remove Tenant and any other
person occupying the Premises and alter the locks
and other security devices at the Premises, all
without Landlord being deemed guilty of trespass
or becoming liable for any resulting loss or
damage and without causing a termination or
forfeiture of this Lease or of the Tenant's
obligation to pay rent. Landlord shall not, in
the event of a lockout by changing the locks, be
required to furnish new keys to Tenant.

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(iii) Landlord may enter the Premises and take
possession of and remove any and all trade
fixtures and personal property situated in the
Premises, without liability for trespass or
conversion. Landlord may retain control over all
such property for the purpose of foreclosing the
liens and security interests described in Article
15 below by public or private sale. If Landlord
takes possession of and removes personal property
from the Premises, then prior to any disposition
of the property by sale or until Tenant reclaims
the property if no foreclosure by public or
private sale is contemplated, Landlord may store
it in a public warehouse or elsewhere at the cost
of and for the account of Tenant without the
resort to legal process and without becoming
liable for any resulting loss or damage.

(iv) Landlord may perform on behalf of Tenant any
obligation of Tenant under this Lease which Tenant
has failed to perform and the cost of the performance
will be deemed additional rental and will be payable
by Tenant to Landlord upon demand.

Landlord's pursuit of any remedy specified in this Lease will not constitute an
election to pursue that only, nor preclude Landlord from pursuing any other
remedy available at law or in equity, nor constitute a forfeiture or waiver of
any rent or other amount due to Landlord as described below.

(b) In the event Landlord enters and takes possession of the Premises
without electing to cause a termination of this Lease, Landlord will have the
right to relet the Premises for Tenant, in the name of Tenant or Landlord or
otherwise, on such terms as Landlord deems advisable and Tenant hereby appoints
Landlord its attorney-in-fact for such purposes. Landlord will not be required
to incur any expense to relet the Premises and the failure of Landlord to relet
the Premises shall not reduce Tenant's liability for monthly rentals and other
charges due under this Lease or for damages. Landlord will not be obligated to
relet for less than the then market value of the Premises or to relet the
Premises when other comparable rental space in the Shopping Center is available.
Landlord may retain the excess, if any, of the rent earned from reletting the
Premises over the rentals specified in this Lease.

(c) No re-entry or reletting of the Premises or any filing or service
of an lawful detainer action or similar action will be construed as an election
by Landlord to terminate or accept a forfeiture of this Lease or to accept a
surrender of the Premises after an event of default by Tenant, unless a written
notice of such intention is given by Landlord to Tenant; but

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notwithstanding any such action without such notice, Landlord may at any time
thereafter elect to terminate this Lease by notifying Tenant.

(d) Upon the termination of this Lease, Landlord will be entitled to
recover all unpaid rentals that have accrued through the date of termination
plus the costs of performing any of Tenant's obligations (other than the payment
of rent) that should have been but were not satisfied as of the date of such
termination. In addition, Landlord will be entitled to recover, not as rent or a
penalty but as compensation for Landlord's loss of the benefit of its bargain
with Tenant, the difference between (i) an amount equal to the present value of
the rental and other sums that this Lease provides Tenant will pay for the
remainder of the Primary Term and for the balance of any then effective
extension of the Primary Term, and (ii) the present value of the net future
rentals for such period that will be or with reasonable efforts could be
collected by Landlord by reletting the Premises. For purposes of determining
what cold be collected by Landlord by reletting under the preceding sentence, it
will be assumed that Landlord is not required to relet when other comparable
space in the Shopping center is available for lease and that Landlord will not
be required to incur any cost to relet, other than customary leasing
commissions.

(e) After an event of default by Tenant, Landlord may recover from
Tenant from time to time and Tenant shall pay to Landlord upon demand, whether
or not Landlord has relet the Premises or terminated this Lease, (i) such
expenses as Landlord may incur in recovering possession of the Premises,
terminating this Lease, placing the Premises in good order and condition and
altering or repairing the same for reletting; (ii) all other costs and expenses
(including brokerage commissions and legal fees) paid or incurred by Landlord in
exercising any remedy or as a result of the event of default by Tenant; and
(iii) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform Tenant's obligations under
this Lease or which in the ordinary course of things would be likely to result
form such failure.

(f) In the event that any future amount owing to Landlord or offsetting
an amount owing to Landlord is to be discounted to present value under this
Lease, the present value shall be determined by discounting at the rate of seven
percent per annum.

14.3 LATE CHARGES

Tenant hereby acknowledges that late payment by Tenant to Landlord of
rent and other sums due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting

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charges and late charges which may be imposed on Landlord by the terms of any
mortgage or deed of trust covering the Premises. Accordingly, if an event of
default by Tenant shall arise because any installment of rent or any other sum
due from Tenant shall not be received by Landlord or Landlord's designee on the
date such amount shall be due, Tenant shall pay to Landlord a late charge equal
to ten percent of such overdue amount. The parties hereby agree that such late
charge does not represent interest, but rather represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall not waiver of Tenant's default
with respect to such overdue amount, nor prevent Landlord from exercising any of
the other rights and remedies granted hereunder.

Tenant will be granted a 5-day grace period to cure any delinquency
without penalty.

14.4 DEFAULT BY LANDLORD

If Landlord should be in default in the performance of any of its
obligations under this Lease, Landlord shall have thirty days to cure such
default after receipt of written notice from Tenant specifying such default; or
if such default is of a nature to require more than thirty days to remedy,
Landlord shall have the time reasonably necessary to cure it. Tenant agrees to
serve any notice of claimed default or breach by Landlord under this Lease upon
the lender holding a first mortgage or deed of trust against the Premises,
provided Tenant has been advised of the name and address of such lender. Tenant
waives any statutory lien it may have against rent due under this Lease or
against Landlord's property in Tenant's possession.

14.5 ATTORNEYS' FEES

If Landlord incurs attorneys' fees because of Tenant's failure to cure
a breach of this Lease within any permitted cure period or because of any
request by Tenant for the consent or approval of Landlord to any matter
requiring Landlord's consent or approval under this Lease, then Tenant will
reimburse Landlord for such fees upon demand.

14.6 WAIVERS

No waiver by Landlord of any provision of this Lease will be deemed a
waiver of any other provision or of any subsequent breach by Tenant. Landlord's
consent to or approval of any act will not be deemed to render unnecessary the
obtaining of Landlord's consent to or approval of any subsequent act by Tenant.
Landlord's acceptance of rent will not constitute a waiver of any preceding
breach by Tenant of this Lease, regardless of Landlord's knowledge of the
preceding breach at the

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time Landlord accepts the rent. Any payment by Tenant or receipt by Landlord of
a lesser amount than the Minimum Rent and additional rental stipulated in this
Lease will be deemed to be on account of the earliest stipulated rental.
Landlord's failure to take any action in regard to Tenant's default, regardless
of how long, will not constitute a waiver of such default. Any waiver of
Tenant's default must be in writing and signed by Landlord to be effective. Any
written waiver by Landlord will constitute a waiver only in the specific
circumstances described in the waiver.

15. LANDLORD'S LIEN AND SECURITY INTEREST

To secure the payment of all rental and other sums of money due and to
become due hereunder and the faithful performance of this lease by Tenant,
Tenant hereby grants to Landlord an express first and prior contractual lien
upon and security interest all property (including fixtures, equipment, chattels
and merchandise) which may be placed on the Premises by Tenant and all proceeds
thereof, including proceeds of any insurance which may accrue to Tenant by
reason of destruction of or damage to any such property. Such property shall not
be removed from the Premises without the written consent of landlord until all
arrearages in rent and other sums of money then due to Landlord hereunder shall
first have been paid. All exemption laws are hereby waived in favor of said lien
and security interest. This lien and security interest are given in addition to
any Landlord's statutory lien and shall be cumulative thereto. Upon the
occurrence of an event of default, this security interest may be foreclosed with
or without court proceedings by public or private sale provided Landlord gives
Tenant at least fifteen days' notice of the time and place of said sale, and
Landlord shall have the right to become the purchaser, upon being the highest
bidder at such sale. Contemporaneously with the execution of this lease (or
thereafter if requested by Landlord), Tenant shall execute and deliver to
Landlord uniform commercial code financing statements in sufficient form so that
when properly filed, the security interest hereby granted shall be perfected.
Upon request by Landlord, Tenant shall also execute and deliver to Landlord
uniform commercial code financing statement change instruments in sufficient
form to reflect any proper amendment or modification in or extension of the
contractual lien and security interest hereby granted. A carbon, photographic or
other reproduction of this Lease will suffice and may be filed as a financing
statement. Landlord shall, in addition to all of its rights hereunder, also have
all of the rights and remedies of a secured party under the uniform commercial
code as adopted in the state in which the Premises are located.

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16. SECURITY DEPOSIT

An additional security for the faithful performance by Tenant of all of
the terms and conditions upon Tenant's part to be performed, Tenant has
deposited with Landlord a security deposit (the "Security Deposit") in the
amount specified in the Basic Lease Information. Such amount shall be returned
to Tenant, without interest, on the day herein set forth for the expiration of
the Lease Term if Tenant has fully and faithfully carried out all of the terms,
covenants and conditions on its part to be performed. Landlord shall not be
required to keep the Security Deposit separate from its general funds. Landlord
may, from time to time, without prejudice to any other remedy, use the Security
Deposit to the extent necessary to make good any arrearages of rent or
additional rent, or to satisfy any other covenant or obligation of Tenant
hereunder, and Tenant shall pay to Landlord on demand a sum sufficient to
restore the Security Deposit to its original amount, and upon the failure of
Tenant to do so, Landlord may exercise any of the remedies available to it as
provided in Article 14 hereof. If Landlord transfers its interest in the
Premises, Landlord may assign the Security Deposit to the transferee and
thereafter shall have no further liability for the return of such Security
Deposit, and it is agreed that the provisions hereof shall apply to every
transfer or assignment made of the security to each successive landlord. Tenant
further covenants that it will not assign or encumber or attempt to assign or
encumber the monies deposited herein as security and that neither Landlord nor
its successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance. In the absence of evidence
satisfactory to Landlord of an assignment of the right to receive the Security
Deposit or the remaining balance thereof, Landlord may return the Security
Deposit to the original Tenant, regardless of one or more assignments of this
Lease by Tenant.

17. QUIET ENJOYMENT AND SUBORDINATION

17.1 COVENANT OF QUIET ENJOYMENT

Tenant, upon payment of the rents herein reserved and performance of
the terms, conditions, covenants and agreements herein contained, may peaceably
and quietly have, hold and enjoy the Premises during the full term of this
Lease, including any extension thereof, without hindrance or interruption by
Landlord or any other person or entity lawfully claiming an interest in the
Premises by, through, or under Landlord, subject, however, to the terms of and
conditions hereof and subject and subordinate to any deed of trust or other
liens and encumbrances affecting the Premises.

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17.2 SUBORDINATION

This Lease is subject and subordinate to any deed of trust which now or
may in the future affect the Premises or any interest of Landlord in the
Shopping Center, and to all increases, renewals, modifications, consolidations,
replacements, and extensions thereof. This Paragraph is self operative. No
further instrument is required to effect the subordination of this Lease to any
deed of trust. In confirmation of the subordination, however, Tenant agrees to
execute, acknowledge, and delivery promptly any certificate or instrument
requested by Landlord that evidences the subordination. Tenant agrees that if
the Premises are sold at foreclosure under any deed of trust or are transferred
in lieu of foreclosure, Tenant will attorn to the purchaser or transferee upon
request.

18. RIGHTS RESERVED BY LANDLORD

Landlord reserves the following rights, exercisable without notice and
without liability to Tenant and without causing an eviction (constructive or
actual) or giving rise to any claim for setoff or abatement of rent:

(a) to designate and approve, prior to installation, all types of
window shades, blinds, drapes, awnings, window ventilators and other similar
equipment, and to control all internal lighting that may be visible from the
exterior of the Premises;

(b) to enter upon the Premises at reasonable hours to inspect, clean or
make repairs or alterations (without implying any obligation to do so) and to
show the Premises to prospective lenders, purchasers and tenants and, if the
Premises are vacated, to prepare them for reoccupancy;

(c) to retain and use in appropriate instances keys to all doors into
and within the Premises (Tenant shall not change or add locks without the prior
written consent of Landlord);

(d) to decorate and to make repairs, alterations, additions or
improvements (whether structural or otherwise) to and about the Shopping Center
and, for such purposes, to enter upon the Premises, and to change the
arrangement and location of parking areas, entrances, driveways and other Common
Areas, all without abatement of rent or impairing Tenant's obligations so long
as the Premises are reasonably accessible and fit for the use expressly
permitted in this Lease; and

(e) to grant to anyone the exclusive right to conduct any business or
render any service in or to the Shopping Center, provided such exclusive right
does not exclude Tenant from the use expressly permitted in this Lease.

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19. SURRENDER OF PREMISES AND HOLDING OVER

Upon the expiration of the term hereof Tenant shall deliver all keys to
the Premises to Landlord and shall surrender the Premises to Landlord in as good
order and condition as at the commencement of the Lease Term except for ordinary
wear and tear and damage by fire and other standard extended coverage perils. In
the event Tenant continues to occupy the Premises after the expiration of the
Lease Term, such occupancy shall be considered a tenancy from month-to-month at
a monthly rental equal to twice the highest amount of Minimum Rent and
additional rental due for any calendar month of the Lease Term and such tenancy
shall be upon and subject to all of the other terms, provisions, covenants and
agreements set forth herein, except that Tenant shall have no right to renew
this Lease or to extend or continue possession hereunder nor have any other
option that may be hereby granted to Tenant. Upon the expiration or termination
of this Lease, if Tenant is not then in default, Tenant may remove, at its
expense, any trade fixtures and unattached personal property previously placed
in the Premises by Tenant; but any damage to the Premises caused by such removal
shall be repaired by Tenant at the time of the removal. All other installations
(including air conditioning equipment, duct work, electric and water connections
and electric lighting fixtures) and all repairs, improvements, replacements and
alterations to the Premises made by Tenant shall, upon being installed, become
the property of Landlord. However, Tenant shall promptly remove any alterations
or improvements to the Premises made by it if requested to do so by Landlord,
and shall repair any damage to the Premises resulting from such removal. Tenant
shall continue to pay all rent until Tenant has made all alterations and
corrections as are required herein by Tenant, and until the additions and
improvements Tenant is entitled or required to remove have been removed, and
until all repairs required to be made by Tenant have been made. If, after the
occurrence of an event of default, or upon the expiration or termination of this
Lease, Tenant moves out or is dispossessed and fails to remove any trade
fixtures, signs or other personal property placed on the Premises by Tenant
prior to such moving out or dispossession, then and in any such events the said
fixtures, signs and property shall at Landlord's option be deemed abandoned by
Tenant and become the property of Landlord. Landlord shall not be liable for
trespass, conversion or negligence by reason of its acts or the acts of anyone
claiming under it or by reason of the negligence of any other person with
respect to the acquisition and/or disposition of such property, whether or not
deemed to be abandoned by Tenant.

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20. ESTOPPEL CERTIFICATE AND FINANCIAL STATEMENTS

20.1 ESTOPPEL CERTIFICATE

Tenant shall from time to time, within ten days after receipt of
written request by Landlord, deliver a statement in writing certifying:

(a) that this Lease is unmodified and in full force and effect (or if
modified that this Lease as so modified is in full force and effect);

(b) the Commencement Date of the Lease Term, the term of this Lease and
the monthly Minimum Rent and additional rental, and the amount of any advance
rental payments made or security deposits in the possession of Landlord;

(c) that Landlord is not in default under any provision of the Lease
(or if in default, the nature thereof in detail) and a statement as to any
outstanding obligations on the part of Landlord or Tenant;

(d) that, if requested by Landlord or Landlord's mortgagee or assignee,
Tenant will not pay rent for more than one month in advance; and

(e) that no modification (except as described in such statement) or
termination of this Lease executed or effected by Tenant shall be binding upon
any mortgagee holding a mortgage or deed of trust covering the Shopping Center
granted by Landlord without notice to and approval of such mortgagee.

Tenant's failure to deliver such statement within such time shall be conclusive
upon Tenant (i) that this Lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) that there are no
uncured defaults in Landlord's performance hereunder, and (iii) that not more
than one month's rent has been paid in advance hereunder; and, at Landlord's
option, Tenant's failure to deliver such statement within such time shall
constitute a noncurable event of default by Tenant.

20.2 FINANCIAL STATEMENTS

Tenant will also furnish Landlord from time to time, within ten days
after receipt of a written request, current financial statements of Tenant and
of any guarantor of Tenant's obligations hereunder, which are certified by
Tenant or by an independent certified public accountant to have been prepared in
accordance with generally accepted accounting principles or on some other basis
acceptable to Landlord. And if requested by Landlord, Tenant will furnish
Landlord before the tenth day of each calendar month a report certified by
Tenant showing the gross

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sales generated in or from the Premises during the then preceding calendar
month. Any such financial statements and sales reports provided by Tenant may be
relied upon by any prospective purchaser or mortgagee of the Land or any
interest therein.

21. LANDLORD'S LIABILITY

Landlord shall not be personally liable to Tenant for the breach by
Landlord of any covenant, representation or warranty made by Landlord in
connection with this Lease; and Tenant agrees that any judgment for damages
rendered in favor of Tenant for any such breach by Landlord shall be satisfied
only by levy of execution upon Landlord's interest in the Shopping Center and
that Tenant will not seek to hold Landlord personally liable for such breach or
to levy execution upon any other property or assets of Landlord to satisfy such
judgment.

22. OVERHEAD AND ADMINISTRATIVE EXPENSES

In determining any costs that Landlord pays or incurs to make any
repairs required of Tenant or to perform any other obligation of Tenant, which
Tenant fails to make or perform, Landlord shall be entitled to add 15% to its
direct costs to cover its overhead and administrative expenses. Further, a 15%
overhead and administrative charge will be added to any costs paid or incurred
by Landlord or provide Tenant with special services or facilities that are not
required, by the terms of this Lease to be provided at Landlord's expense. Thus,
for example, if Landlord incurs any cost to make repairs required of Tenant
pursuant to Paragraph 4.2, Landlord shall be entitled to charge Tenant such
costs plus 15% to cover Landlord's overhead and administrative expenses.

23. MISCELLANEOUS

23.1 NOTICES

Any notice or document required or permitted to be delivered hereunder
shall be in writing and shall be deemed to be delivered, whether actually
received or not, upon first attempted delivery when postmarked by the U.S.
Postal Service, postage prepaid, registered or certified mail, return receipt
requested, or sent by courier or Express Mail where evidence of delivery is
retained, addressed to the parties at the respective mailing addresses set out
in the Basic Lease Information, or at such other address as they have at least
ten days theretofore specified by written notice delivered in accordance
herewith.

23.2 SUCCESSORS AND ASSIGNS

The conditions, covenants and agreements contained in this Lease shall
be binding upon and, subject to the restrictions herein concerning assignment
and subletting, inure to the benefit

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of the parties hereto, their respect heirs, executors, administrators,
successors and assigns.

23.3 JOINT AND SEVERAL LIABILITY

If Tenant is more than one person or entity, all such persons or
entities shall be jointly and severally liable hereunder for the obligations of
Tenant.

23.4 SUBMISSION OF LEASE

THE SUBMISSION OF THIS LEASE FOR EXAMINATION DOES NOT CONSTITUTE AN
OFFER TO LEASE, AND THIS LEASE BECOMES EFFECTIVE ONLY UPON EXECUTION HEREOF BY
TENANT AND BY A REPRESENTATIVE OF LANDLORD AUTHORIZED TO EXECUTE THE LEASE.

23.5 ENTIRE AGREEMENT; AMENDMENTS

This Lease and the Addenda which are part of this Lease supersede any
prior agreements between the parties concerning the Premises, and no oral
statements, representations or prior written matter relating to the subject
matter hereof, but not contained in this Lease, shall have any force or effect.
Nothing contained in this Lease, including the site plan on Exhibit A, shall
give rise to duties or covenants on the part of the Landlord, express or
implied, other than the express duties and covenants set forth herein. ANY
REPRESENTATION OF LANDLORD'S AGENTS OR ANY THIRD PARTY LEASING BROKER OR LEASING
AGENT WHICH IS NOT INCORPORATED IN THIS LEASE SHALL NOT BE BINDING UPON LANDLORD
AND SHOULD BE CONSIDERED AS UNAUTHORIZED. Nothing herein contained shall be
construed to create any partnership or joint venture between the parties, it
being intended that the only relationship between the parties created by this
Lease is a landlord/tenant relationship. This Lease shall not be amended or
added to in any way except by written instruments executed by both parties or
their respective successors in interest.

23.6 REPRESENTATIONS, WARRANTIES AND COVENANTS OF TENANT

Tenant represents, warrants and covenants that it is now in a solvent
condition; that no bankruptcy or insolvency proceedings are pending or
contemplated by or against Tenant or any guarantor of Tenant's obligations under
this Lease; that all reports, statements and other data furnished by Tenant to
Landlord in connection with this Lease are true and correct in all material
respects; that the execution and delivery of this Lease by Tenant does not
contravene, result in a breach of, or constitute a default under any contract or
agreement to which Tenant is a party or by which Tenant may be bound and does
not violate or contravene any law, order, decree, rule or regulation to which
Tenant is subject; and that there are no judicial or administrative actions,
suits, or proceedings pending or

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threatened against or affecting Tenant or any guarantor of Tenant's obligations
under this Lease. If Tenant is a corporation or partnership, each of the persons
executing this Lease on behalf of Tenant represents and warrants that Tenant is
duly organized and existing, is qualified to do business in the state in which
the Premises are located, has full right and authority to enter into this Lease,
that the persons signing on behalf of Tenant are authorized to do so by
appropriate corporate or partnership action and that the terms, conditions and
covenants in this Lease are enforceable against Tenant. If Tenant is a
corporation, Tenant will deliver certified resolutions to Landlord, upon
request, evidencing that the execution and delivery of this Lease has been duly
authorized and properly executed, and will deliver such other evidence of
existence, authority and good standing as Landlord shall require.

IN WITNESS WHEREOF, this Lease has been duly executed by the parties
hereto as of the day and year first written above.

LANDLORD: Real Alchemy I, L.P. TENANT: Midway Entertainment, Ltd.
---------------------------

By: /s/ S.P. Hartnett By: /s/ Paul R. Guernsey
------------------------------------ ---------------------------------

Name: S.P. Hartnett Name: Paul Guernsey
----------------------------- ------------------------

Title: Pres., Energy Alchemy Title: Pres., Fox & Hound,
-------------------------- -------------------------
Inc., General Partner Inc., General Partner

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EXHIBIT "A"
SITE PLAN

<PAGE> 31

EXHIBIT "A-1"
LEGAL DESCRIPTION

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<PAGE> 32
EXHIBIT "B"

AGREEMENT FOR CONSTRUCTION

(Tenant Finish Out)

Landlord: Real Alchemy I, L.P.

Tenant: Midway Entertainment, Ltd.

Lease: that certain lease agreement dated June 1, 1995 between
Landlord and Tenant, covering approximately 9,566 rentable
square feet in the Building designated as Suite(s) 200.

Building: 18918 Midway, Dallas, TX

Landlord's Representative (for coordination of construction):

NAME Joe Coggans, JDC Construction Management, Inc.

ADDRESS 1350 N. Buckner, Suite 212, Dallas, TX

PHONE (214) 320-0202

Tenant's Representative (for coordination of construction):

NAME Same as above

ADDRESS

PHONE

Allowance: $15.00 per rentable square foot of the Premises

Deadline for Commencement Date:

This Agreement is attached to and part of the Lease described above. Any
capitalized term not defined above or in the following provisions is intended to
have the meaning assigned to it in the body of the Lease. Landlord and Tenant
agree as follows:

1. PLANS AND SPECIFICATIONS

(a) On or before July 1, 1995 Tenant's space planner, at no cost
to Landlord, shall prepare and deliver to Landlord a space for
the Premises, showing the proposed location of all partitions
and doors and the layout of the Premises. The selection of
Tenant's space planner shall be subject to the approval of
Landlord.

(b) Within seven (7) business days after receipt of the space
plan, Landlord will approve or disapprove it in writing, and
if disapproved Landlord will provide Tenant with reasons for

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disapproval. Tenant will within three (3) business days after
the receipt of Landlord's written disapproval cause the space
plan to be revised (to satisfy Landlord's objections) and
resubmitted for Landlord's review. The foregoing process shall
be repeated until Landlord has approved the space plan (such
space plan, when approved by Landlord and Tenant, is referred
to as the "Space Plan" below).

(c) On or before August 1, 1995, Tenant's space planner will meet
with Landlord's Representative and Tenant's Representative to
discuss the preparation of a summary of the interior design
and color scheme for the Premises (the sum of the design and
color scheme approved by Landlord is referred to as the
"Design and Color Scheme" below) and to discuss request for
any product specifications for materials, products, finishes
and work desired by Tenant that Landlord does not consider to
be standard for the Building (the list of such product
specifications prepared by Tenant's designated space planner
and approved by Landlord, if any, is referred to as the
"Above-Standard Product Specification List" below).

(d) Without limiting Landlord's right to disapprove of any plans
and specifications submitted by Tenant's space planner, it is
understood that: (i) the Space Plan must be compatible in
Landlord's judgment with the use for which space in the
Building is generally leased, (ii) the Design and Color Scheme
must (a) conform to the design criteria from time to time
established by Landlord for the Building, and (b) be
compatible in Landlord's judgment with the design and colors
of existing finished space in the Building, and (iii) in no
event will Landlord be responsible for the function and
maintenance of the Tenant's Improvements (as defined below
which are different than Landlord's Building standard
improvements.

(e) After receipt of Landlord's written approval of the Space
Plan, the Design and Color Scheme and any above Standard
Product Specification List (as the same may be revised from
time to time with Landlord's written approval), Tenant's space
planner or an engineer selected by Tenant with Landlord's
approval will prepare - if required by Landlord or necessary
for construction - more detailed construction plans (any such
detailed construction plans approved by Landlord, together
with the Space Plans, the Design and Color Scheme and any
Above-Standard Product Specifications List, are collectively
referred to as the "Construction Plans" (see below) for the
improvements contemplated in the Space Plan, the Design and
Color Scheme and any Above Standard Product Specification List
(such improvements are referred to as the "Tenant's
Improvements" in this Agreement). Such detailed construction
plans may include drawings for partitions, doors, reflected
ceiling, telephone outlets, electrical switches and outlets,
and Building standard heating, ventilation and air
conditioning equipment and controls. Within seven (7) business
days after any more detailed construction plans are delivered
to Landlord, Landlord shall approve or disapprove the same in
writing, and if disapproved Landlord shall provide Tenant
reasons for disapproval. Tenant will cause the more detailed
construction plans to be revised (to satisfy Landlord's
objections) and resubmitted for Landlord's review within three
(3) business days after the receipt of Landlord's written
disapproval. The foregoing process shall continue until the
more detailed construction plans are approved by Landlord.

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<PAGE> 34
(f) All Construction Plans must be approved by Landlord in writing
prior to the commencement of construction of Tenant's
Improvements.

2. CONSTRUCTION

(a) Tenant will construct the Tenant's Improvements in a good and
workmanlike manner in accordance with the Construction Plans
using JDG Construction Management, Inc. (such contractor or
contractors are collectively referred to below as "Tenant's
Contractors", whether one or more). Such construction and the
cost of preparing the Construction Plans will be at Tenant's
expense; but Landlord shall provide Tenant with an Allowance
in the amount specified on page one of this Agreement. The
Allowance shall be used only for payment of the sums to be
paid to Tenant's Contractors for construction of Tenant's
Improvements ("Actual Costs") and fees of Tenant's space
planner and engineer (the Actual Costs and the fees of
Tenant's space planner and engineer are collectively referred
to as the "Construction Costs" below). In no event will any
unused portion of the Allowance be applied against Rent under
the Lease Agreement or be paid as a cash advance to Tenant.

(b) If the Construction Costs estimated by Landlord exceed the
Allowance, Tenant will deposit a sum (the "Construction
Deposit" equal to the excess with Landlord prior to the
commencement of any construction. Such deposit will either be
(i) cash or (ii) in the form of a letter of credit from a
financial institution and containing such provisions as are
approved in writing by Landlord (The Construction Deposit, if
any, and the Allowance are collectively referred to as the
"Available Construction Funds" below).

(c) Should Tenant's Contractor require to be paid in stages as
Tenant's Improvements progress in substantial accordance with
the Construction Plans, Landlord shall make disbursements from
the Available Construction Funds to Tenant's Contractors,
provided the following conditions shall be satisfied: (1)
Landlord shall have received executed lien waivers for all
work completed as of the date of payment; (2) all work shall
have been completed as of the date of payment, in the sole
judgment of Landlord is in a good and workmanlike manner; (3)
Landlord shall be entitled to retain a ten percent (10%)
statutory retainage to protect the Premises from future
mechanic's liens; and (4) Tenant shall have complied with such
other requirements as Landlord may reasonably impose shall
have been satisfied.

(d) If any portion of the Available Constructions Funds remains
unexpended after the payment of the Construction Costs, then
the unexpended portion of the Available Construction Funds
will be repaid to Tenant (the "Repayment"); provided, in no
event will the Repayment exceed the cash (if any) deposited
with Landlord as the Construction Deposit.

(e) If the Construction Costs exceeds the Available Construction
Funds, Tenant must pay all such excess costs.

(f) Tenant will not make any cuts in the roof. All roof cuts will
be made by Landlord.

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3. COMMENCEMENT OF THE LEASE TERM

Notwithstanding any provision to the contrary in the Lease or this
Agreement, the commencement date of the Term (as defined in the body of the
Lease) will occur no later than the Deadline for the Commencement Date (as
defined on Page 1 of this Agreement). In addition, Tenant must cause Tenant's
Improvements to be substantially completed no later than 90 days after such
deadline for the Commencement Date.

4. INSURANCE

(a) Prior to the commencement of construction, Tenant must obtain,
and must thereafter maintain, all insurance required of Tenant
in the body of the Lease and any other exhibits. Tenant's
Contractors and other agents of Tenant must obtain
certificates for workmen's compensation, public liability and
builder's risk insurance, all in amounts and with companies
and on forms as Landlord may consider necessary or appropriate
for its protection. Evidence of such certificates, in such
form as required by Landlord, must be delivered to Landlord
before the commencement of construction of Tenant's
Improvements.

(b) Landlord shall not be liable for any injury, loss or damage to
any of Tenant's installations or decorations made prior to the
Commencement Date. Tenant shall indemnify and hold harmless
Landlord, Landlord's Representative and any other agent of
Landlord from and against any and all costs, expenses, claims,
liabilities and causes of action arising out of or in
connection with work performed in the Premises by Tenant,
Tenant's Contractors or any other agent of Tenant.

5. WARRANTIES

THE WARRANTIES HEREIN EXPRESSED ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES (INCLUDING IMPLIED WARRANTIES AND LIABILITIES BY REASON OF THE
CONSTRUCTION OF SAID IMPROVEMENTS OR OTHERWISE. Landlord warrants the
improvements, if any, constructed on the Premises by Landlord for the Tenant
named herein (but not improvements constructed for and used by any prior tenant,
with respect to which Landlord makes no warranty whatsoever) for a period of one
year from the commencement date of the Lease against all material defects
(including latent defects) and agrees during such period to correct such defects
upon receiving written notice thereof from Tenant. LANDLORD'S LIABILITY UNDER
THIS WARRANTY SHALL BE LIMITED STRICTLY TO THE COST OF CORRECTING SUCH DEFECTS
AND SHALL IN NO EVENT INCLUDE CONSEQUENTIAL DAMAGES. SUCH WARRANTY SHALL NOT
COVER ANY DEFECTS, DAMAGES, OR REPAIRS CAUSED BY OR RESULTING FROM, DIRECTLY OR
INDIRECTLY, THE MOVEMENT OF THE SOIL DUE TO CHANGES IN MOISTURE SATURATION.
LANDLORD MAKES NO WARRANTY OR REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO THE
SUITABILITY OF THE PREMISES OR AS TO IMPROVEMENTS CONSTRUCTED BY TENANT OR
TENANT'S CONTRACTORS.

-6-
<PAGE> 36
Exhibit C

CERTIFICATE OF ACCEPTANCE

Shopping Center: Midway Square

Landlord: Real Alchemy I, L.P.

Tenant: Midway Entertainment, Ltd.

This certificate is being executed pursuant to the Shopping Center Lease (the
"Lease") for space in the Shopping Center named above, executed on the 1st day
of December, 1995 between the landlord named above ("Landlord"), and the tenant
named above ("Tenant").

Tenant certifies to and agrees with Landlord and Landlord's successors, assigns,
prospective purchasers and prospective lenders that:

1. Landlord has fully completed any construction work and leasehold
improvements required of Landlord under the terms of the Lease and/or
any other agreement between Landlord and Tenant concerning the
Premises.

2. The Premises are tenantable, Landlord has no further obligation for
construction, and Tenant acknowledges that the Shopping Center and the
Premises are satisfactory in all respects. Further, the Premises are
suitable for the Permitted Use specified in the Lease.

3. Tenant has taken possession of and has accepted the Premises, and the
Minimum Rent and additional rent are presently accruing in accordance
with the terms of the Lease.

4. The Lease Term will expire the 1st day of December, 2000, unless sooner
terminated or extended pursuant to any provision of the Lease.

5. All capitalized terms not defined herein shall have the meaning
assigned to them in the Lease.

Certified and Agreed this 1st day of December, 1995.

TENANT: MIDWAY ENTERTAINMENT, LTD.

By: /s/ Paul R. Guernsey
-----------------------------------

Name: Paul R. Guernsey, President
----------------------------

Title: Fox & Hound II, Inc. General
----------------------------
Partner

-7-
<PAGE> 37
EXHIBIT F

RULES AND REGULATIONS

1. Signs Tenant shall not inscribe any inscription or post, place or in
any manner display any sign, notice, picture, placard or advertising
matter whatsoever anywhere in or about Premises at places visible
(either directly or indirectly as an outline or shadow on a glass pane)
from anywhere outside of the Premises or from public and common areas
within Premises without first obtaining Landlord's written consent
thereto and Landlord shall specify the color, size, style, and material
to be used.

2. Showcases No showcase shall be placed in front of or in the lobbies or
corridors of the Premises and Landlord reserves the right to remove all
showcases so placed and all signs other than those above provided for,
without notice and at the expense of the tenant responsible.

3. Installation of Signs All exterior and interior signs must be installed
by Landlord or someone designated by Landlord and the actual cost
thereof shall be paid by Tenant and all such signs are so placed at the
risk of the Tenant.

4. Telephone Connections If Tenant desires telegraphic, cable television,
or telephone connections, Landlord will direct electricians where the
wires are to be introduced and without such direction no boring or
cutting for wires shall be permitted.

5. Submission of Plans Tenant shall submit to Landlord for Landlord's
approval, a copy of its construction and equipment layout plan prior to
commencement of construction. In the event that Tenant is unable to
obtain Landlord's approval for said plans and layout, this Lease shall
at Tenant's sole option be deemed null and void and any amounts paid by
Tenant to Landlord pursuant to this lease shall be reimbursed to Tenant
without offset.

6. No Nuisances Tenant shall not do or permit anything to be done in the
Premises which will be dangerous to life, or limb, or which will tend
to create a nuisance or injure the reputation of the Building/s. Tenant
shall not use burning fluid, camphene, alcohol, kerosene, or anything
else in order to light or heat the Premises except steam, gas, or
electricity. Tenant shall not bring into the premises or keep therein
any heating or lighting apparatus other than that provided by Landlord;
or install any air conditioning or air cooling apparatus without the
written consent of Landlord; or in any way injure, modify, or tamper
with any of such apparatus in any manner or in any manner in violation
of the regulations of the Fire Department, or with any insurance policy
upon said Building/s or any part thereof. Tenant shall not do or permit
to be done in the Premises any activity in conflict with any of the
laws, rules, or regulations of any governmental agency or municipality
having jurisdiction, or use the Premises for an illegal or immoral
purpose. No beer, wine or intoxicating liquor shall be sold on or about
the Premises without the written consent of Landlord in each instance.

7. Passageways The sidewalk, passages, lobbies, corridors, elevators and
stairways shall not be obstructed by Tenant; or used except for ingress
and egress from and to the Premises. The doors, skylights, windows and
transoms that reflect or admit light into passageways or into any place
in said Building/s, shall not be covered or obstructed by Tenant.

-8-
<PAGE> 38
8. Water Closets The water closets and other apparatus shall not be used
for any purpose other than those for which they were constructed, and
no sweepings, rubbish, rags or other substances shall be thrown
therein. Any damage resulting to them from misuse shall be borne by the
tenant who shall cause it.

9. No Defacing or Offensive Business Tenant and its employees and guests
are not to injure or deface the Building/s nor the woodwork, nor the
walls of the Premises, nor to carry on upon the premises any noisome,
noxious, noisy or offensive business nor conduct an auction therein,
nor interfere in any way with other tenants or those having business
with them.

10. No Lodging No room or rooms on or about the Premises shall be occupied
or used as sleeping or lodging apartments.

11. Lock All Doors Tenant shall, when leaving Premises at close of
business, or unoccupied at any time, lock all doors and windows and for
any default or carelessness in this respect shall make good all injury
sustained by other tenants and by Landlord or by either of them, for
damages resulting from such default or carelessness.

12. No Animals No animal or bird shall be allowed in any part of the
Premises or Building/s without the consent of Landlord.

13. No Accumulation of Rubbish Tenant shall not accumulate or store on or
about the Premises any waste paper, discarded records, paper files,
sweepings, rags, rubbish or other combustible matter other than the
normal accumulation needed to conduct the Permitted Use of the
Premises. Nothing shall be thrown by Tenant, its employees or guests,
out of the windows or doors or down the passages or skylights or over
balcony rails of the Building/s or in the parking areas.

14. Exclusion of Peace Disturbers Landlord reserves the right to exclude
from the Premises or Building/s all drunken persons, idlers, diseased
persons, peddlers, solicitors, persons of a general character or
conduct so as to create a disturbance, and persons entering in crowds
or in such unusual numbers as to cause inconvenience to tenants of the
Building/s.

Changes to Rules Landlord reserves the right to change these rules and
to make such other and further reasonable rules and regulations either
as it affects one or all tenants as in its judgment may from time to
time be needed for the safety, care and cleanliness of the Center, for
the preservation of good order therein or for any other cause. When
such changes are made such modified or new rules shall be deemed a part
hereof with the same effect as if written herein, when a copy shall
have been delivered to Tenant or left with some person in charge of the
Premises.

15. No Live Christmas Trees No live or fresh cut Christmas Trees are
permitted on or about the Premises.

16. No Picnics No outside picnics or barbecues are permitted without the
prior written consent of Landlord.

17. No Outside Storage No outside storage or any material is permitted.

-9-

<PAGE> 1
Exhibit 10.11

FIRST AMENDMENT TO THE LEASE BETWEEN REAL ALCHEMY I, L.P.
("LANDLORD") AND MIDWAY ENTERTAINMENT, LTD. ("TENANT")

The Basic Lease Information is amended to read:

MINIMUM RENT

The minimum monthly rental is $11,867.63 ($13.50 per square foot) with a $1.50
expense stop for the month of January 1996.

Effective February 1, 1996 rent will be as follows:

<TABLE>
<CAPTION>
<S> <C>
Monthly rental for space $11,867.63
Monthly rental for additional parking lot use 3,000.00
----------
Total monthly rent $14,867.63
</TABLE>

APPROXIMATE FLOOR AREA OF THE PREMISES:

10,549 SQUARE FEET. (includes the cooler area)

Landlord: /s/ Stephen P. Hartnett 2/20/96
----------------------------------------- -------
Real Alchemy I, L.P. a Texas Limited Partnership Date
by Stephen P. Hartnett, President
Energy Alchemy, Inc., General Partner

Tenant: /s/ Paul R. Guernsey 2/20/96
------------------------------------------ -------
Midway Entertainment, Ltd., a Texas Date
Limited Partnership
by Paul R. Guernsey, Vice President
Fox & Hound II, Inc., General Partner

<PAGE> 1
Exhibit 10.12

AMENDMENT TO SHOPPING CENTER LEASE

This Amendment, dated December 6, 1996, is to a certain Shopping Center
Lease made and entered into the 1st day of June, 1995, between Real Alchemy I,
L.P., as Landlord, and Midway Entertainment, Ltd., as Tenant and that certain
First Amendment to the Lease, dated February 20, 1996.

In consideration of the covenants and conditions contained in said
Lease and this Amendment, the parties hereto do hereby agrees as follows:

1. To the extent the terms and conditions contained in this
Amendment alter or conflict with those contained in said
Lease, those contained herein shall be absolutely controlling.

2. Basic Lease Information, Article I, shall be deleted and the
following substituted, "Permitted Use: Sports tavern,
restaurant, nightclub, billiards, and related activity,
including the sale of alcoholic beverages for on-site
consumption."

3. Article 2.1 shall be deleted and the following substituted,
"Tenant shall use and occupy the Premises solely for the
permitted use specified in the Basic Lease Information. Tenant
shall conduct its business activity in the Premises during all
business hours typical for Tenant's type of business, unless
Tenant is prevented from doing so by Applicable Laws (as
defined below) or by strike, fire or other casualty beyond
Tenant's control and except during reasonable periods approved
by Landlord in advance for repairing, cleaning and decorating
the Premises."

4. Article 5 shall be deleted and the following substituted,
"Tenant shall not make any exterior alterations or additions
without first obtaining the written consent of Landlord, which
consent shall not be unreasonably withheld. Landlord's consent
shall not be required for interior alterations if the cost of
such alterations is less than $15,000.00. Upon receipt of
Landlord's consent to alterations or additions to the Premises
by Tenant, Tenant shall procure, at Tenant's expense, all
necessary permits before undertaking such work. All such
alterations and additions shall be done in accordance with
applicable laws, including applicable building codes and
regulations."

<PAGE> 2
5. The third sentence in Article 6.4 shall be deleted and the
following substituted, "CAM charges will also include
management fees and expenses, not to exceed three percent
(3%), and all costs of maintenance and repairs concerning the
Shopping Center (to the extent not covered by insurance),
whether or not allocable to the Common Areas, but will not
include leasing commissions and any costs incurred by Landlord
to make space in the Shopping Center ready for another
particular tenant."

6. The last sentence in Article 9.1 shall be deleted and the
following substituted, "Tenant's share of such items for each
calendar year or partial calendar year will be determined by
Landlord by multiplying the total amount thereof by a
fraction, the numerator of which is the floor area of the
Premises and the denominator of which is the gross rentable
floor area of the buildings on the property covered by such
items during the applicable calendar year."

7. The last two sentences of Article 10.1 shall be deleted and
the following substituted, "Tenant shall, at its cost,
maintain insurance covering: (i) its personal property,
equipment and trade fixtures, including insurance providing
protection against fire and extended coverage perils,
sprinkler damage, vandalism and malicious mischief. Tenant
agrees to replace any plate glass on the Premises, however,
does not agree to provide insurance protection for such plate
glass. Such insurance will be in the amount of the full
replacement value of the insured property, and Tenant shall
furnish Landlord with a certificate evidencing such insurance
from the applicable insurer upon request.

8. The last sentence of Article 10.2 shall be deleted and the
following substituted, ""Tenant's share of such items for each
calendar year or partial calendar year will be determined by
Landlord by multiplying the total amount thereof by a
fraction, the numerator of which is the floor area of the
Premises and the denominator of which is the gross rentable
floor area of the buildings on the property covered by such
items during the applicable calendar year."

9. Article 13 shall be amended by adding the following sentence,
"Landlord's consent to any request for assignment shall not be
unreasonably withheld and in no event, shall its consent by
withheld for an assignment to an affiliated company,
partnership or entity of Tenant."

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<PAGE> 3
10. Article 14.1(a) shall be deleted in its entirety and the
following substituted, "Tenant shall fail to pay any rental or
other sum of money when due hereunder and Tenant shall not
cure such failure within ten (10) days after notice thereof is
given by Landlord."

11. Article 14.5 shall be amended by adding the following
sentence, "Notwithstanding the foregoing, the prevailing party
will be entitled to "... attorneys' fees."

12. Article 15 shall be deleted in its entirety.

13. Article 17.2 shall be amended by adding the following
sentence, "In the event there is a mortgage, deed of trust or
similar debt agreement in which the Premises is security, in
whole or in part, the Landlord shall use its best efforts to
obtain a non-disturbance agreement in recordable form whereby
the secured party recognizes this Lease and Tenant's rights
hereunder in the event of any foreclosure and Tenant agrees to
attorn to such mortgagee in furtherance thereof."

14. Article 18(c) shall be deleted in its entirety.

15. Article 18(d) shall be deleted and the following substituted,
"to decorate and to make repairs, alterations, additions or
improvements (whether structural or otherwise) to and about
the Shopping Center and, for such purposes, to enter upon the
Premises, and to change the arrangement and location of the
parking areas, entrances, driveways and other Common Areas,
all without abatement of rent or impairing Tenant's
obligations so long as the Premises are reasonably accessible
and fit for the use expressly permitted in this Lease, and so
long as such change does not materially impair the visibility
of the Premises, access to or number of parking stalls
immediately surrounding the Premises; and"

16. Article 23.1 shall be amended to add the following, "All
notices to Tenant shall be sent to Tenant in care of Chris
Wetting, 224 E. Douglas, Suite 700, Wichita, Kansas 67202."

17. An Article shall be added to the Lease as follows, "Landlord
warrants that it will not lease or sell space in the shopping
center to a tenant with a similar, competing use. Such use
shall be as defined in the Basic Lease Information, Article
I."

18. Exhibit "A-1" shall be amended by attaching a legal
description of the Premises.

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<PAGE> 4
19. Exhibit "E" shall be amended by adding the following
paragraph, "However, in no event, shall the rental rate
increase more than 12% over the rental rate in the prior five
year term."

20. The additional parking space referenced in the First Amendment
to the Lease shall be specifically set forth on the attached
Exhibit.

This Amendment may be executed in counterparts and any signature on a
copy of the Amendment sent by facsimile shall be binding upon transmission by
fax and the fax copy can be utilized for the purposes of this Amendment.

It is so agreed by and between the parties hereto effective this ____
day of __________________, 1996.

LANDLORD: /s/ Stephen P. Hartnett
-----------------------------------
Real Alchemy I, L.P., a Texas Limited Partnership
by Stephen P. Hartnett, President
Energy Alchemy, Inc., General Partner

TENANT: /s/ Paul R. Guernsey
-----------------------------------
Midway Entertainment, Ltd., a Texas Limited Partnership
by Paul R. Guernsey, Vice President
Fox & Hound II, Inc., General Partner

-4-

<PAGE> 1
Exhibit 10.13

505 UNIVERSITY EAST
OFFICE LEASE

505 CENTER, L.P. (with its successors, called "Landlord") and 505 Entertainment,
Ltd. (with its successors, called "Tenant"), in consideration of their mutual
covenants and agreements in this Lease, agree as follows, all as of January 31,
1994.

1. SUMMARY AND DEFINITIONS. The following definitions apply in
this Lease:

(a) TERM: Three (3) years, beginning on April 1, 1994
("Commencement Date") or any deferred Commencement
Date that may apply under Exhibit C. Landlord and
Tenant will execute a certificate specifying the
revised Commencement Date and the last day of the
Term ("Termination Date"), should the Commencement
Date change from the date stated in this Section
1.(a).

(b) BASE RENT: $60,000 per annum ($.65 per rentable
square foot per month), in equal monthly installments
of $5,000.

(d) EXHIBITS AND RIDERS: Exhibits A, B, C, D, E, and
F and Rider 1, attached hereto, all a part of this
Lease.

(e) PREMISES: The space on the 1st floor of the Building
shown as Suites 307 and 309 of the Leased Premises on
Exhibit E. Premises does not include any mechanical,
electrical, telephone and similar rooms which service
the Building; janitor closets; elevator, pipe, and
other vertical shafts and ducts; flues; stairwells
(except any stairwells exclusively serving the
Premises); area above acoustical ceiling; and areas
not shown on Exhibit E as part of the Premises. The
rentable area of the Premises is approximately 7,720
square feet.

(f) BUILDING: The office building known as 505 University
East, Brazos County, College Station, Texas 77840;
with a total rentable area of approximately 34,701
square feet; together with the land described in
Exhibit A, on which said building is situated, and
with the building(s), parking facilities, and all
other structures, improvements, fixtures and
appurtenances from time

<PAGE> 2
to time on, appurtenant to or servicing that land
and the building.

(g) SECURITY DEPOSIT: $0

(h) PARKING AREA: All parking spaces not designated as
received shall be accessible to Tenant.

(i) BROKERS: Clarke & Wyndham, Inc. as Landlord's broker,
and N/A as Tenant's broker.

(j) TENANT'S SHARE: The rentable area of the Premises
divided by 95% of the rentable area of the Building.
The agreed-upon rentable areas of the Premises and
the Building shall be stated above, and Tenant's
Share shall be 23%. For any year in which either of
such areas materially changes, Tenant's Share and
Excess Operating Costs shall be based on the average
rentable area during such year.

(k) EXCESS OPERATING COSTS: For any calendar year, the
amount by which Operating Costs for that year exceed
the 1994 Operating Costs. If the rentable area of the
Building in that year differs from the rentable area
of the Building in 1994, then the 1994 Operating
Costs shall be appropriately adjusted.

(l) OPERATING COSTS: See Section 4(b)(i).

(m) ADDITIONAL RENT: See Section 4(b).

(n) EMPLOYEES: Employees, agents, partners, officers,
licensees, invitees, contractors or guests.

(o) ALTERATIONS: Alterations, improvements or additions
(including fixtures) in or to the Premises.

(p) ASSIGNMENT: See Section 10.

(q) ASSIGNEE: See Section 10.

(r) GUARANTOR: Any Guarantor of the obligations to this
Lease.

(s) MORTGAGE: Any mortgage or deed of trust covering any
part of the Building or any interest in Landlord.

(t) MORTGAGEE: Any holder of a Mortgage.

-2-

<PAGE> 3
(u) EVENT OF DEFAULT: See Section 22(a).

2. DEMISE. Landlord leases the Premises to Tenant for the Term, and Tenant
takes the same, all upon and subject to the terms and conditions of
this Lease.

3. CONSTRUCTION OF PREMISES. Tenant will construct the Premises in
accordance with Exhibit C, the Construction Agreement.

4. RENT. Tenant will pay the following to Landlord as rent, for the Term
plus any earlier period of Tenant's occupancy:

(a) BASE RENT. Base Rent, due in advance on the first day of each
calendar month (prorated, for any partial month, based on a
30-day month). The first full monthly installment will be paid
upon execution of this Lease.

(b) ADDITIONAL RENT. Tenant's Share of Excess Operating Costs for
each calendar year. This amount ("Additional Rent") will be
calculated as follows:

(i) "Operating Costs" means any and all costs, expenses
and disbursements of every kind and character which
Landlord incurs, pays or becomes obligated to pay in
connection with its ownership interest in the
Building and associated land and parking, or the
operation, maintenance, management, repair,
replacement, and security thereof. All the foregoing
shall be adjusted as provided herein. Operating Costs
specifically includes real property taxes,
assessments and other similar governmental charges,
computer and accounting costs, costs reasonably
incurred to reduce or contest items of Operating
Costs, and the cost of insurance, including
loss-of-rents coverage. Operating Costs excludes
costs required to be capitalized (other than such
costs for capital improvements or equipment which can
reasonably be expected to reduce Operating Costs, or
to comply with governmental requirements imposed
after the date of this Lease, all of which shall be
amortized over the useful life of the improvements or
equipment); expenses paid by net proceeds of
insurance; alterations attributable solely to tenants
of the Building other than Tenant; the cost of
electricity reimbursed to Landlord by tenants of the
Building; debt service payments; and depreciation.

-3-

<PAGE> 4
(ii) Landlord may require payments (on the first day of
each month) which, by the end of each year, will
total Landlord's estimate of Additional Rent for the
year. By the following April 1, or as soon thereafter
as practical, Landlord will furnish to Tenant a
statement of Operating Costs and Additional Rent for
such year, and any amounts owing or overpaid on
Additional Rent for that year shall within thirty
(30) days be paid by Tenant to Landlord, or refunded
or credited by Landlord to Tenant, as the case may
be. If the term commences on a day other than the
first day of the month or calendar year, or
terminates on a day other than the last day of the
month or calendar year, then Tenant shall be required
to pay only a prorata portion of the installments and
adjustments of rent due for such month or year. This
obligation shall survive termination or expiration of
this Lease.

(iii) In the event the Building is not fully occupied
during any year of the Term, an adjustment shall be
made in computing the Operating Costs for such year
as though the Building had been fully occupied during
the year and as though the entire Building had been
provided with the Building services described in
Section 5.

5. SERVICES PROVIDED.

(a) BUILDING SERVICES. Tenant shall pay the cost of electricity,
telephone, water, garbage, and sewer to the Premises during
the term of this Lease. Landlord shall furnish routine
maintenance, painting and electric lighting service for all
public areas and special service areas of the center in the
manner and to the extent deemed by Landlord to be standard.
Landlord may, in its sole discretion, provide additional
services not enumerated herein. Failure by Landlord to any
extent to furnish these defined services or any other services
not enumerated, or any cessation thereof, shall not render
Landlord liable in any respect for damages to either person or
property, be construed as an eviction of Tenant, work an
abatement of rent or relieve Tenant from fulfillment of any
covenant in this Lease. Should any of the equipment or
machinery break down, or for any cause cease to function
properly, Tenant shall use reasonable diligence to repair the
same promptly, but Tenant shall have no claim for rebate on
account of any interruption in service occasioned from the
repairs. Landlord reserves the right from time to time to make
changes in

-4-

<PAGE> 5
the delivery of utilities and service to the common areas of
the center.

(b) JANITORIAL SERVICE. Landlord shall not furnish janitorial
services to the leased premises but will through its Manager
provide services, as often as deemed necessary by Landlord, to
clean the public areas of the center and premises.

6. ACCEPTANCE OF PREMISES. By taking possession of the Premises, Tenant
shall conclusively evidence that (subject only to matters noted in any
punchlist which Tenant may concurrently deliver to Landlord) the
Premises are fully completed and are suitable for Tenant's purposes;
that the Building and every part of it, including the Premises, is in
good and satisfactory condition; and that Tenant waives any defects
therein.

7. USE OF PREMISES.

(a) PERMITTED USE. Tenants will use and occupy the Premises only
for the Permitted Use, using and maintaining them in a clean,
careful, safe, sanitary and proper manner.

(b) LIABILITY FOR MISUSE. Tenant will pay for any damage to the
Premises or to any other part of the Building caused by any
negligence or willful act or any misuse or abuse by Tenant or
its Employees.

(c) LIMITATION ON USE. Tenant will not cause anywhere in the
Building, or permit in the Premises: (i) any activity or thing
contrary to applicable law, ordinance, regulation or insurance
regulation; or which is in any way immoral or extra hazardous
or could jeopardize the coverage of normal insurance policies
or increase their cost; (ii) waste or nuisance, defacing or
injury of the Building, or any activity causing odors
perceptible outside the Premises; (iii) retail sales,
purchases or gifts of any merchandise, or storage therefor;
(iv) overloading of the floors or the structural or mechanical
systems of the Building. Tenant will conduct its business and
occupy the Premises and shall not create any nuisance or
interfere with, annoy, or disturb any other tenants in the
Building or the Landlord in its management thereof, and shall
not injure the reputation of the Building. Tenant shall not
erect or place any item (including but not limited to signs)
in, upon, or visible from the exterior or the common areas of
the Building, unless approved by Landlord.

-5-

<PAGE> 6
(d) EXCLUDED USES. No portion of the Premises shall be used for a
dental office, veterinary clinic, pet groomer, retailer of pet
supplies, or a hair and nail salon.

8. TENANT'S ALTERATIONS, REPAIR AND MAINTENANCE.

(a) TENANT'S MAINTENANCE OBLIGATIONS. Tenant will maintain the
Premises in good and usable condition and promptly make, at
its expense, all necessary non-structural repairs and
replacements to the Premises and perform and pay for the
operation, maintenance and repair of fixtures and of
supplemental air conditioning units; provided, however, that
any such payments required during the first ninety (90) days
following the commencement of this Lease will be paid by the
Landlord, except for those expenses incurred due to the gross
negligence of Tenant. Tenant will immediately pay the cost of
repair and replacement due to damage or injury to the Building
by Tenant or its Employees.

(b) APPROVAL OF TENANT ALTERATIONS. Tenant will not make or permit
Alterations without Landlord's prior written consent.

(c) TENANT ALTERATIONS. Alterations will be performed, if Landlord
elects, by Landlord or a contractor designated by Landlord, at
Tenant's cost and expense. All Alterations will immediately be
Landlord's property and a part of the Building without
compensation to Tenant but subject to Tenant's rights
hereunder, and Tenant will promptly notify Landlord of the
value thereof for insurance purposes. Subject to the
provisions of Section 12, Tenant will hold Landlord and its
Employees forever harmless against any and all claims,
expenses (including taxes) and liabilities of every kind which
may arise out of or in any way be connected with any work
performed by or on behalf of Tenant. Alterations, repairs and
replacements by Tenant shall be in accordance with all
applicable laws, rules and ordinances and the requirements of
any insurance carrier, and be of a quality and class at least
equal to the original work, performed in a good and
workmanlike manner with good grades of materials. Landlord
shall have the opportunity to inspect this work.

9. LIENS PROHIBITED. Tenant will not permit any lien on any part of the
Building allegedly resulting from any work or materials furnished or
obligations incurred by or for Tenant. If any such lien is filed,
Tenant will promptly (i) discharge any such lien of record or (ii) if
such lien is

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<PAGE> 7
filed in connection with a disputed matter, Tenant may instead procure
and maintain a bond around such lien to Landlord's satisfaction. Tenant
agrees to indemnify Landlord for any damages or costs sustained by
Landlord which are caused by the existence of any such lien placed on
any part of the Building by, through, or under Tenant. Neither this
Lease nor any request or consent of Landlord to the labor, materials or
obligations, is a consent to such a lien.

10. ASSIGNMENT; SUBLETTING. Except as expressly permitted hereby, Tenant
may not assign, transfer, or encumber this Lease or any estate or
interest therein, or permit the same to occur, or sublet or grant any
right of occupancy for any part of the Premises, or permit such
occupancy by any parties other than Tenant and Employees. (The
foregoing, and ny changes in the terms thereof, are collectively called
an "Assignment", and the other party thereto the "Assignee".) Any
prohibited Assignment is voidable by Landlord.

(a) CONDITIONS OF ASSIGNMENT. Landlord's consent to an Assignment
is in Landlord's sole discretion. Such consent shall be
effective only if in writing. Consent by Landlord to any
Assignment shall not be a waiver of Landlord's rights as to
any subsequent Assignments. Any approved sublease shall be
expressly subject to the terms and conditions of this Lease.
In the event of any Assignment, the assigning Tenant and any
Guarantor will remain fully responsible and liable for all of
Tenant's obligations under this Lease, and the Assignee will
automatically be jointly and severally liable to the extent of
the Assigned portion of the Premises. Upon an Event of
Default, as hereinafter defined, while an Assignment is in
effect, Landlord may collect directly from the Assignee all
sums becoming due to Tenant under the Assignment and apply
this amount against any sums due Landlord by Tenant, and
Tenant authorizes and directs any Assignee to make payments
directly to Landlord upon notice from Landlord. No direct
collection by Landlord from any Assignee shall constitute a
novation or release of Tenant or any Guarantor, a consent to
the Assignment or a waiver of the covenant prohibiting
Assignments.

(b) REQUEST TO ASSIGN OR SUBLET; CANCELLATION. With any request
for consent to an Assignment, Tenant will submit a copy of the
Assignment to Landlord and notify Landlord of the proposed
commencement date of the Assignment, the name of the proposed
Assignee (accompanied by evidence of the nature, character,
and financial condition of Assignee and its business), and

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all terms and conditions (including rental) of or relating to
the Assignment. Within thirty (30) days of such request (or
any time, if no request was given), Landlord, by notice to
Tenant, may terminate this Lease as to the portion of the
Premises that would have been affected by the Assignment, in
which event Tenant shall be relieved of all obligations under
this Lease as to such portion of the Premises, including
rentals hereunder in proportion to the portion of the Premises
affected thereby, as of the stated commencement date of the
Assignment.

(c) EXCESS RENT. If the consideration Tenant receives for any
Assignment exceeds the rent payable under this Lease for the
same period and portion of the Premises, the excess shall be
immediately due and payable by Tenant to Landlord as
additional rent under this Lease.

(d) CHANGE OF CONTROL. Tenant will notify Landlord of any change
in control of Tenant or any Guarantor, or any sale of more
than half its assets outside the ordinary course of business.
Concurrently, Tenant will submit current financial statements.

(e) CONVEYANCE BY LANDLORD. Landlord may transfer, assign and
convey any part of or interest in the Building or any of its
rights under this Lease. If Landlord assigns its rights under
this Lease, no further liability or obligation shall
thereafter accrue against Landlord under this Lease, and
Tenant will attorn and look solely to Landlord's successor in
interest for performance of this Lease.

11. LANDLORD'S LIABILITY. Tenant will protect its property and Employees,
and insure the same to its own satisfaction, and accordingly waives any
claim against Landlord, its affiliates and managing agent and their
respective Employees for loss or damage to any property, injury to any
person, or injury to Tenant's business from any cause. This waiver
shall not apply in the event of claims attributable to the gross
negligence of Landlord, except for the following type of loss: (i)
damage to any property other than normal office furniture, fixtures and
equipment and (ii) incidental or consequential damages including
business loss. Subject to the foregoing, Tenant for itself and its
Employees, assumes all risk of damage to property, proximate or remote;
all personal property on the Premises is at Tenant's risk only, and
Landlord shall not be liable for any damage to or theft of such
property.

12. TENANT'S INDEMNIFICATION. Tenant will indemnify and hold and save
Landlord, its affiliates and managing agent and

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their respective Employees harmless from all fines, suits, losses,
costs, expenses, liabilities, claims, demands, actions, damages and
judgments (for purposes of this Section 12 only, "Liabilities")
suffered by, recovered from or asserted against the indemnitee, of
every kind and character, resulting from any breach, violation or
nonperformance by Tenant of any provision of this Lease; or from injury
or damage to person or property incident to, arising out of, or caused
(proximately or remotely, in whole or part) by any act, omission,
negligence or misconduct by Tenant or its Employees, or in any other
way from their occupancy or use of the Premises. Tenant agrees that the
indemnity contained herein shall not be applicable if the Liabilities
suffered are caused in whole or in part by the negligence of the
indemnitee except in instances involving the following type of loss:
(i) damage to property other than normal office furnishings, fixtures
and equipment (including computer equipment), and (ii) incidental or
consequential damages and to business loss. If any such proceeding is
brought against Landlord or its Employees, Tenant will retain counsel
reasonably satisfactory to Landlord to defend Landlord or its Employees
(as the case may be) at Tenant's sole cost and expense. All such costs
and expenses, including attorneys' fees and court costs, shall be a
demand obligation owing by Tenant to Landlord. Tenant's obligations
under this Section shall survive the termination or expiration of this
Lease.

13. INSURANCE. Tenant will maintain as a minimum the following insurance
during the entire Term:

(a) comprehensive general liability insurance with combined single
limits not less than $1,000,000, for personal injury or death
and property damage occurring in or about or related to the
use of the Premises.

(b) "all risk" insurance for the full replacement cost of all
Tenant's property on the Premise and all fixtures. Unless this
Lease is terminated upon damage or destruction, the proceeds
of such insurance will be used to restore the foregoing.

All policies required hereunder will be issued by carriers rated A VII
or better by the then current Best's Key Rating Guide and authorized to
do business in the State of Texas. The policies shall name Landlord as
an additional insured, with primary coverage non-contributing to any
insurance Landlord may carry, and shall provide that coverage cannot be
cancelled or materially changed except upon 30 days prior written
notice to Landlord. Tenant shall furnish Landlord with an original
certificate of insurance evidencing the required coverage upon
execution of this Lease.

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14. NO SUBROGATION. If either party suffers a loss of or damage to property
in the Premises, in the Building, or related to this Lease, which is
covered by valid insurance policies (or would be covered by policies
which are required hereunder or which would be required but for any
specific provisions for self-insurance), that party waives any claim
therefor which it may have against the other party of its Employees
(excluding contractors), regardless of whether negligence or fault of
the latter party or its Employees (excluding contractors) may have
caused the loss or damage. Each party will have its appropriate
insurance policies properly endorsed, if necessary, to prevent any
invalidation of insurance coverage required hereunder due to these
mutual waivers.

15. FIRE AND CASUALTY. If the Premises or any part thereof is damaged by
fire or other casualty, Tenant will promptly notify Landlord.

(a) CANCELLATION OF LEASE; RESTORATION OF BUILDING. If the
Building or the Premises is damaged by fire or other casualty
to the extent that substantial alteration or reconstruction is
required in Landlord's sole opinion, or if any Mortgagee
requires that the insurance proceeds payable as a result of
the fire or other casualty be applied against the mortgage
debt, Landlord may terminate this Lease by notifying Tenant
within sixty (60) days after the later of the date the damage
occurs, or the date Landlord is so notified by its Mortgagee,
in which event the rent under this Lease will be abated as of
the date of the fire or other casualty. If this Lease is not
terminated, then within seventy-five (75) days after the fire
or other casualty, or such greater period as may be reasonably
necessary, Landlord will commence to repair and restore the
Premises and any portion of the Building required for access
to the Premises, and will diligently complete the same, but
Landlord is not required: (i) to expend more for such repair
of the Premises than the net insurance proceeds (after any
payment required under any Mortgage) reasonably allocable to
the Premises, or (ii) to rebuild, repair or replace any of
Tenant's furniture or furnishings or of fixtures and equipment
removable by Tenant under the provisions of this Lease.

(b) CASUALTY LOSS DURING LAST YEAR OF LEASE. If the Premises or
the Building is damaged by fire or other casualty during the
last twelve (12) months of the Term, whether or not the damage
requires substantial repair and reconstruction, Landlord may
cancel this

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<PAGE> 11
Lease as of the date of the fire or casualty by notice to
Tenant within thirty (30) days thereafter.

(c) ABATEMENT OF RENT. Landlord will allow Tenant a proportional
abatement of rentable square feet of the Premises that is
unfit for occupancy due to fire or other casualty. Except as
expressly provided to the contrary in this Lease, this Lease
will not terminate, and Tenant will not be entitled to damages
or to any abatement of rent or other charges, as a result of a
fire or other casualty, repair or restoration.

16. CONDEMNATION. If all or substantially all of the Building or of the
Premises is taken for any public or quasi-public use under any
governmental law, ordinance or regulation or by right of eminent domain
or is sold to the condemning authority in lieu of condemnation, then
this Lease will terminate when physical possession is taken by the
condemning authority. If a lesser but material portion of the Building
is thus taken or sold (whether or not the Premises are affected
thereby), Landlord may terminate this Lease by notice to Tenant within
sixty (60) days after the taking or sale, in which event this Lease
will terminate when physical possession is taken by the condemning
authority. If the Lease is not terminated, rent payable will be reduced
by the amount allocable to any portion of the Premises so taken or
sold, and Landlord, at its sole expense, will restore the affected
portion of the Building to substantially its former condition as far as
feasible, but not beyond the work done by Landlord in originally
constructing the affected portion of the Building and installing tenant
improvements in the Premises. However, Landlord need not spend more for
such restoration of the Premises than the Premises' allocable share of
the net compensation or damages received by Landlord for the part of
the Building taken. Landlord will be entitled to receive all of the
compensation awarded upon a taking of any part of or all of the
Building, including any award for any unexpired term of this Lease;
Tenant may seek an award in separate proceedings for its personal
property, trade fixtures, moving expenses and good will.

17. LANDLORD'S ACCESS. Landlord may enter any part of the Premises at all
reasonable hours (or, in any emergency or suspected emergency, at any
hour) to (i) inspect, test, clean, or make repairs, alterations and
additions to the Building or the Premises as Landlord believes
appropriate, or (ii) provide any service which Landlord is now or
hereafter obligated to furnish to tenants of the Building, or (iii)
show the Premises to prospective lenders, purchasers or (during the
last twelve (12) months of the Term), tenants and, if they are vacated,
to prepare them for

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reoccupancy. Rent will not abate because of Landlord's entry.

18. SURRENDER OF PREMISES. As soon as its right to possession ends, Tenant
will surrender the Premises to Landlord in as good repair and condition
as when Tenant first occupied, except for reasonable wear and tear and
for damage or destruction by fire or other casualty, and will
concurrently deliver to Landlord all keys to the Premises, and restore
any locks which it has changed to the system which existed at the
commencement of the Term. If possession is not immediately surrendered,
Landlord may enter upon and take possession of the Premises and expel
or remove Tenant and any other person who may be occupying them, or any
part thereof, without incurring any civil or criminal liability.

(a) LEASEHOLD IMPROVEMENTS AND FIXTURES. Upon surrendering the
Premises, Tenant will remove any parts specified by Landlord
of the initial construction, Alterations and personal property
in or upon the Premises. Except where Landlord requires
removal, Tenant (if it is not in default) may elect whether to
remove each item of moveable office furniture and equipment in
the Premises not attached to the Building, but all initial
construction and Alterations will remain without compensation
to Tenant. All removals by Tenant will be accomplished in a
good and workmanlike manner so as not to damage any portion of
the Building, and Tenant will promptly repair and restore all
damage done. If Tenant does not so remove any property which
it has the right or duty to remove, Landlord may immediately
either claim it as abandoned property, or remove, store and
dispose of it in any manner Landlord may choose, at Tenant's
cost and without liability to Tenant or any other party.

(b) HOLDING OVER. If Tenant does not surrender the Premises as
required, this creates a tenancy at sufferance only, on all
terms of this Lease except that Tenant will have no right to
renew, extend or expand, and the monthly rental will be twice
the total amount payable (disregarding abatements or credits)
by Tenant under this Lease (including without limitation
parking rental, if applicable) during the last full calendar
month before holding over. Nothing other than a written
agreement (executed by both parties) will create any other
relationship, notwithstanding any course of dealing. Tenant is
liable for all damage Landlord suffers from such holding over,
and will indemnify Landlord against any claims resulting from
delay by Landlord in delivering possession of the Premises to
other parties.

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19. TENANT'S PROPERTY TAXES. Tenant is liable for all taxes levied or
assessed against personal property or fixtures in the Premises or due
to the use thereof, and will pay Landlord on demand any taxes levied or
assessed against Landlord allocable to such property or use.

20. LIEN AND SECURITY INTEREST. This Lease constitutes a security agreement
under the Uniform Commercial Code of Texas. In addition to the
statutory landlord's lien and to secure its obligations, Tenant grants
Landlord a security interest in and an express contractual lien upon
all fixtures and personal property of Tenant in the Premises at any
time, and on all proceeds therefrom. This property may not be removed
from the Premises without Landlord's consent until all sums then due to
Landlord have been paid and all Tenant's obligations have been fully
complied with and performed. On an Event of Default by Tenant, Landlord
may enter the Premises and take possession of any personal property
there without liability for trespass or conversion, and sell the same,
with or without having the property at the sale, after notifying Tenant
at the time and place of public sale or of the time after which private
sale is to be made, at which sale Landlord or its assigns may purchase
the same. Any requirement of reasonable notice shall be met if given as
provided in this Lease at least five (5) days before the day of sale.
Any sale shall be considered a public sale conducted in a commercially
reasonable manner if held in the Premises after the time, place and
method of sale and a general description of the types of property to be
sold have been advertised in a newspaper published or circulated in
Brazos County, Texas for five (5) consecutive days prior to the sale.
The proceeds from any disposition less all expenses connected with
taking possession, holding and selling of the property (including
reasonable attorneys' fees and other expenses), will be credited
against the indebtedness secured by the security interest granted in
this section. At Landlord's request, Tenant will execute and deliver to
Landlord a financing statement sufficient to perfect this security
interest; Landlord may file a copy of the relevant portions of this
Lease as a financing statement.

21. SECURITY DEPOSIT. To secure its obligations under this Lease, Tenant,
upon execution of the Lease, will pay Landlord the Security Deposit.
Landlord may commingle the Security Deposit with other funds, and from
time to time may apply any of the Security Deposit to satisfy any
obligation of Tenant under this Lease. Tenant will pay to Landlord on
demand the amount applied. If Tenant is not in default at the
termination of this Lease, Landlord will return any remaining Security
Deposit, without interest, upon receipt of Tenant's forwarding address.
Tenant shall not assign or

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encumber the Security Deposit or attempt to do so, and Landlord shall
not be bound by such assignment or encumbrance. Regardless of any
Assignment, Landlord may return the Security Deposit to the original
Tenant.

22. DEFAULT AND REMEDIES.

(a) EVENTS OF DEFAULT. It shall be an "Event of Default" if:

(i) Tenant fails to make a payment within ten (10) days
after it is due hereunder, or three (3) times in a
calendar year fails to pay when due Base Rent,
Additional Rent or any other amount owed by Tenant
hereunder.

(ii) Tenant fails to comply with any other obligation
under this Lease and does not cure such failure as
soon as reasonably practicable and in any event
within twenty (20) days after notice.

(iii) Tenant or any Guarantor becomes insolvent, makes a
transfer in fraud of creditors or an assignment for
the benefit of creditors, admits in writing its
inability to pay its debts as they become due, or
files a petition under any section or chapter of the
United States Bankruptcy Code or any similar law or
statute; or an order for relief is entered with
respect to Tenant or any Guarantor in any bankruptcy,
reorganization or insolvency proceedings; or a
pleading seeking such an order is not discharged or
denied within sixty (60) days after its filing; or a
receiver or trustee is appointed for all or
substantially all assets of Tenant or any Guarantor
or of the Premises or any of Tenant's property
located thereon in any proceeding brought by Tenant
or any Guarantor, or any receiver or trustee is
appointed in any proceeding brought against Tenant or
any Guarantor and not discharged within sixty (60)
days after appointment or Tenant or the Guarantor
does not contest such appointment; or any part of
Tenant's estate under this Lease is taken by process
of law in any action against Tenant.

(iv) Tenant fails to move into or take possession of the
Premises within fifteen (15) days after the
Commencement Date, or abandons or vacates any
substantial portion thereof, or fails for a period of
ten (10) consecutive days to conduct its business
therefrom (unless the Premises are

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untenantable), or removes or attempts to remove
substantially all its removable property.

(b) REMEDIES. On any Event of Default, Landlord may terminate this
Lease by notice to Tenant, or continue this Lease, in full
force and effect, and/or perform Tenant's obligations on
Tenant's behalf and at Tenant's expense.

(i) If and when this Lease is so terminated, all rights
of Tenant and those claiming under it will terminate,
as if this Lease had expired by lapse of time.
Landlord may immediately recover from Tenant all
accrued, unpaid sums, plus interest and late charges,
if in arrears, under the terms of this Lease up to
the date of termination, and any amounts owing under
Sections 18 and 22(b)(iii). In addition, Tenant will
immediately pay Landlord the excess, if any, of (A)
the present value of all amounts which would have
become due under this Lease for the remainder of the
Term, over (B) the present value of any net amounts
which Tenant establishes Landlord can reasonably
expect to recover by reletting the Premises for the
remainder of the Term, taking into consideration the
cost of such reletting, including remodeling, the
availability of acceptable tenants and other market
conditions affecting leasing. Such present value
shall be calculated at a discount rate which is one
percent (1%) above the rate commonly called the
discount rate for 90-day commercial paper in effect
at the Federal Reserve Bank of Chicago on the date of
termination.

(ii) Until the Lease is so terminated, Landlord may
terminate Tenant's right of possession and, on
Tenant's behalf and at Tenant's expense and in
Landlord's sole discretion, may sublet any of the
Premises (and, on expiration or termination of the
sublease, may resublet), for all or part of the
remainder of the Term, on whatever terms and
conditions Landlord in its sole discretion deems
advisable. Against the rents and sums due from Tenant
to Landlord during the remainder of the Term, credit
will be given Tenant in the net amount of rent
received from the new tenant after deduction by
Landlord for: (1) the costs incurred by Landlord in
reletting the Premises (including, without
limitation, repair and remodeling costs, brokerage
fees, legal fees and the like); and (2) all accrued
sums, plus interest and late charges if in arrears,
under the terms of this Lease.

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(iii) Upon an Event of Default or when Tenant is no longer
entitled to possession, Landlord may enter the
Premises and dispose of Tenant's property as herein
provided, without any civil or criminal liability,
and may perform Tenant's obligations hereunder on
Tenant's behalf. Tenant will reimburse Landlord on
demand for Landlord's attorneys' fees and other
expenses in doing so, and Landlord shall not be
liable for any damages resulting to Tenant, whether
or not caused by Landlord's negligence or gross
negligence. This subsection 22(b)(iii) survives
expiration or termination of the Lease.

(c) CONTINUING LIABILITY. No repossession, re-entering or
reletting of the Premises or any part thereof by Landlord
relieves Tenant or any Guarantor of its liabilities and
obligations under this Lease.

(d) REMEDIES CUMULATIVE. All rights and remedies of Landlord under
this Lease will be nonexclusive of and in addition to any
remedies available to Landlord at law or in equity.

(e) NO EXEMPLARY OR PUNITIVE DAMAGES. In no event shall Tenant or
Landlord be subject to any exemplary or punitive damages
arising out of failure to perform as agreed in this Lease.

(f) NO WAIVER. Landlord's failure to insist on strict compliance
with any term hereof or to exercise any right or remedy, does
not waive the same. Waiver or any agreement regarding any
breach does not affect any subsequent or other breach, unless
so stated. A receipt by Landlord of any rent with knowledge of
the breach of any covenant or agreement contained in this
Lease shall not be a waiver of the breach, and no waiver by
Landlord of any violation or provision of this Lease shall be
effective unless expressed in writing and signed by Landlord.
Payment by Tenant or receipt by Landlord of a lesser amount
than due under this Lease may be applied to such of Tenant's
obligations as Landlord elects. No endorsement or statement on
any check, and no accompanying letter, shall make the same an
accord and satisfaction, and Landlord may accept any check or
payment without prejudice to Landlord's right to recover the
balance of the rent or pursue any other remedy provided in
this Lease.

23. ATTORNEYS' FEES. If either party prevails in any litigation between the
parties arising under this Lease or the

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relationship it creates, the non-prevailing party will on demand pay or
reimburse the prevailing party's attorneys' fees, costs and expenses.

24. WAIVER BY TENANT. Except as otherwise set forth in this Lease, Tenant
waives and surrenders any right and privilege which it may now or
hereafter have (i) to redeem the Premises or to have a continuance of
this Lease after termination of the Lease, Tenant's right of occupancy
or the Term, (ii) for exemption of property from liability for debt or
for distress for rent, and (iii) relating to notice, demand or delay
relating to any of Landlord's remedies or rights. Tenant waives jury
trial of any matters relating to Assignments, bankruptcy or similar
matters, or the prevention of damage to the structural components or
mechanical, electrical or plumbing systems of the Building.

25. SUBORDINATION. This Lease and all rights of Tenant under this Lease are
subject and subordinate to any of the following, and any modifications
thereof, which may now or hereafter affect any portion of the Building:
(i) any Mortgage, (ii) any ground or underlying lease covering any part
of the Building, (iii) any applicable laws, rules, statutes and
ordinances of any governmental authority having jurisdiction, and (iv)
all utility easements and agreements. On sale by foreclosure of a
Mortgage or sale in lieu of foreclosure, Tenant will attorn to the
purchaser if requested by such purchaser, and recognize the purchaser
as the Landlord under this Lease. These provisions are self- operative
and no further instrument is required to effect them; however, upon
demand from time to time, Tenant shall execute, acknowledge and deliver
to Landlord any instruments and certificates necessary or proper to
evidence such subordination and/or attornment or, if Landlord so
elects, to render any of the foregoing subordinate to this Lease or to
any or all rights of Tenant hereunder. Tenant further waives the
provisions of any current or future statute or rule or law which may
give or purport to give Tenant any right or election to terminate or
otherwise adversely affect this Lease and the obligation of Tenant
hereunder in the event of any such foreclosure proceeding or sale, and
agrees that this Lease shall not be affected in any way whatsoever by
any such proceeding or sale unless the Mortgagee, or the purchaser,
shall declare otherwise.

26. NOTICE TO LANDLORD AND MORTGAGEE. Tenant shall not sue Landlord for
damages or exercise any right to terminate until (i) it gives written
notice to any Mortgagee whose name and address have been furnished to
Tenant, and (ii) a reasonable time for remedying the act or omission
giving rise to such suit has elapsed following the giving of the
notice, without the same being remedied. During that time

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Landlord shall not be considered in default, and Landlord and/or any
Mortgagee and/or their Employees may enter the Premises and do therein
whatever may be necessary to remedy the act or omission.

27. RULES AND REGULATIONS. Tenant and its Employees shall comply with the
Rules and Regulations (as changed from time to time as therein
provided) attached as Exhibit C.

28. ESTOPPEL CERTIFICATE. Promptly upon not less than ten (10) days' prior
request, Tenant will from time to time execute and deliver to Landlord
a certification in writing as to such matters as may reasonably be
requested including, without limitation, that Tenant consents to the
assignment of this Lease and its rents, that (except as may be
specified in said certificate), this Lease is unmodified and in full
effect, that rent has been paid to and only to the end of the current
month, and that to the knowledge of the signer of the certificate
(after due investigation) no default exists under this Lease.
Notwithstanding the preceding sentence, Tenant shall only be required
to certify to truthful statements, thus any certification shall be
modified by Tenant to correctly set forth any specific exceptions
Tenant may have. Any such certification delivered may be relied upon by
Landlord and by any actual or prospective purchaser or mortgagee of any
part of the Building or of any interest in Landlord.

29. NO PERSONAL LIABILITY. Any liability of Landlord and its Employees to
Tenant and its Employees under this Lease, or arising from the
relationship under it, is limited in amount to the value of the
interest of Landlord in the Building, and Landlord and its Employees
shall not be personally liable for any deficiency. This clause does not
limit or deny any remedies which do not involve personal liability. If
Landlord impermissibly withholds, denies or delays any consent which
Tenant is required to obtain, Tenant may seek specific performance but
shall not be entitled to damages therefor. Landlord's review,
supervision, inspections, comments or approval regarding any aspect of
work to be done by or for Tenant (under the Construction Agreement, as
an Alteration or otherwise) are solely for Landlord's protection and,
except as expressly provided in writing, create no warranties or duties
to Tenant or to third parties.

30. PAYMENTS AND NOTICES.

(a) PAYMENTS. All payments required to be made by Tenant to
Landlord are to be paid to Landlord, without prior demand
except as may be specified and without any setoff, deduction
or counterclaim whatsoever, in legal

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tender of the United States of America at the address set
forth on the invoice or, if no invoice is submitted or no
address is set forth, at the address for Landlord set forth on
this Lease or at any other address as Landlord may specify
from time to time by written notice delivered in accordance
with this Section.

(b) NOTICES. All notices given hereunder shall be in writing and
shall be considered properly given if mailed by first class
United States Mail, postage prepaid, registered or certified
with return receipt requested, or by delivering same in person
to the intended addressee, or by telecopy. All notices shall
be effective upon receipt at the address set forth on this
Lease or at such other address as the parties may specify from
time to time by written notice delivered in accordance with
this Section 30; except that any notice mailed as above
provided shall be effective upon its deposit in the custody of
the U.S. Postal Service if such notice is returned undelivered
to the sender.

31. RIGHTS RESERVED BY LANDLORD. In addition to other rights retained or
reserved, Landlord reserves the following rights, exercisable without
notice and without liability to Tenant and without effecting an
eviction, constructive or actual, or in any way diminishing Tenant's
obligations: (a) to change the name or street address of the Building
or any part of it; (b) to install, affix and maintain, modify or remove
any and all signs on the exterior and interior of the Building; (c) to
designate and approve, prior to installation, all types of interior and
exterior window treatments, and to control all internal lighting that
may be visible from the exterior of the Building; (d) the exclusive
right to designate, limit, restrict and control any service in or to
the Building; (e) to keep, and to use in appropriate instances, keys to
all doors within and into the Premises (no locks shall be changed or
added without the prior written consent of Landlord); (f) to decorate
and make repairs, alterations, additions, changes or improvements
whether structural or otherwise (specifically including, without
limitation, those in conjunction with Landlord's construction of
additional buildings) in and about any part of the Building, and to
enter the Premises for these purposes and, during such work, to
temporarily close doors, entryways, public space and corridors in the
Building, to interrupt or temporarily suspend Building Services and
facilities and to change the arrangement and location of entrances or
passageways, windows, doors and doorways, corridors, elevators, stairs,
toilets, or other public parts of the Building; (g) to approve the
weight, size and location of safes and other heavy equipment and
articles in and about the Premises and the Building, and to require all

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<PAGE> 20
such items and furniture to be moved into and out of the Building and
Premises only at times and in manner as Landlord directs (movement of
Tenant's property are entirely at the risk and responsibility of
Tenant, and Landlord reserves the right to require permits before
allowing any property to be moved into or out of the Building); (h) to
have access for Landlord and other tenants of the Building to any mail
chutes located on the Premises according to the rules of the United
States Postal Service; and (i) to take all reasonable measures Landlord
considers advisable for the security of the Building and its occupants.

32. BROKERS. Landlord shall pay all commissions due and owing the Brokers
pursuant to Landlord's listing agreement in connection with this Lease.
Landlord will indemnify Tenant and hold Tenant harmless from and
against any costs, expenses or liability for commissions or other
compensation or charges claimed by any other broker or agent claiming
to represent Landlord with respect to this Lease. Tenant warrants that
it has had no dealing with any broker or agent other than the Brokers
in connection with the negotiation or execution of this Lease, and
Tenant will indemnify Landlord and hold Landlord harmless from and
against any and all costs, expenses or liability for commissions or
other compensation or charges claimed by any broker or agent with
respect to this Lease.

33. MISCELLANEOUS PROVISIONS

(a) COVENANT OF QUIET ENJOYMENT. Provided Tenant keeps and
fulfills all of the terms, covenants, agreements and
conditions to be paid or performed by it, at all times during
the Term, Tenant shall enjoy peaceable and quiet possession of
the Premises without any unreasonable disturbance from
Landlord or from any other person claiming by, through or
under Landlord, but not otherwise, subject to the terms of
this Lease and to any Mortgages, ground leases or other
matters to which this Lease is subject and subordinate.

(b) EMPLOYEES. Where either party agrees not to do a particular
thing, it also agrees not to permit its Employees to do so.
Where either party waives rights against the other party, it
also waives the same rights against the other party's
Employees. That waiver shall be considered a waiver on behalf
of the party making it, of all that party's Employees, and of
anyone claiming under any of them, including insurers and
creditors.

-20-

<PAGE> 21
shall be the reasonable and customary charge established by
Landlord from time to time, including a reasonable allocation
of Landlord's overhead, administrative and related costs
associated with the ownership and operation of the Building.
Failure to pay any reimbursable cost shall be treated as a
failure to pay rent.

(d) LATE PAYMENTS. If any sums due hereunder are not paid within
ten (10) days after they are due and payable, Tenant shall
also pay a late charge of five percent (5%) of all such past
due amounts, plus interest from the date due at eighteen
percent (18%) per annum, compounded monthly (but not more in
total than the maximum amount permitted by law).

(e) INVOICES. Tenant will promptly notify Landlord of any dispute
it may have regarding Landlord's invoices. If Tenant does not
notify Landlord within thirty (30) days after receiving the
invoice, it is conclusively deemed to have agreed to the
invoice and all underlying facts.

(f) BUSINESS DAYS AND HOURS; HOLIDAYS. The term "business days"
means Monday through Friday (except for holidays). The term
"normal business hours" means 7:00 a.m. to 6:00 p.m. on
business days. The term "holidays" means those days designated
by the government of the United States as the holidays for New
Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day, and such other holidays as
may be designated in the Rules and Regulations.

(g) SEVERABILITY. Every covenant and obligation contained in this
Lease, including the obligation to pay rent, is and shall be
construed to be a separate and independent covenant and
obligation and not as a condition. If any term or provision of
this Lease or its application to any person or circumstance is
invalid and unenforceable to any extent, the remainder of this
Lease, as well as such term or provision as otherwise applied,
shall not be affected thereby.

(h) NO MERGER OF ESTATES. There shall be no merger of this Lease
of the leasehold estate hereby created with the fee estate in
the Premises or any part thereof by reason of the fact that
the same person may acquire or hold, directly or indirectly,
any interest in this Lease or the leasehold estate created as
well as any interest in the fee estate in the Premises.

-21-

<PAGE> 22
(i) FORCE MAJEURE. When a period of time is herein prescribed for
action to be taken by Landlord, Landlord shall not be liable
or responsible for, and there is excluded from the computation
for any such period of time, any delays due to strikes, riots,
acts of God, shortages of labor or materials, war,
governmental laws, regulations or restrictions or any other
cause of any kind whatsoever which is beyond the control of
Landlord. Subject to the preceding sentence, time is of the
essence of every part of this Lease.

(j) INTERPRETATION OF LEASE. No amendment or modification of this
Lease is binding or valid unless expressed in writing and
executed by both parties. Tenant represents, warrants and
covenants that any financial statements heretofore or
hereafter provided to Landlord in connection with this Lease
are accurate and not materially misleading. The headings in
this Lease are for convenience only and shall not affect the
meaning of the text. Words of any gender include any other
gender, and words in the singular number include the plural,
unless the context otherwise requires. The term "hereunder" or
similar terms refers to this Lease as a whole. If any context
in which any defined term is used clearly conflicts with the
definition thereof, said context shall control only for that
use, and clearly related uses, of such term.

(k) JOINT AND SEVERAL LIABILITY. If there is more than one Tenant
or any Guarantor, the obligations imposed upon such parties
are joint and several obligations of each of them, and
Landlord need not first proceed against any of them before
proceeding against the others, nor shall any Guarantor be
released from its guarantee for any reason whatsoever,
including, without limitation, any amendment of this Lease,
any forbearance by Landlord or waiver of any of Landlord's
rights, the failure to give any Tenant or Guarantor any
notices, or the release of any party liable for the payment of
Tenant's obligations.

(l) GOVERNING LAW. Texas law governs this Lease. Except as
specifically provided, neither party may record this Lease or
a copy or memorandum thereof. The submission of this Lease to
Tenant is not an offer, nor does Tenant have any rights unless
and until each party executes a copy of this Lease and
delivers the same to the other. All covenants, agreements,
terms and conditions to be observed and performed by the
parties are binding upon their respective heirs, personal
representatives, successors and assigns.

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<PAGE> 23
(m) CONFIDENTIALITY. Tenant agrees that it will not reveal the
terms and conditions of this lease or any inducements provided
by Landlord in connection herewith.

THIS LEASE IS THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND/OR THE PARTIES'
AGENTS CONCERNING THE SUBJECT MATTER, SUPERSEDING ANY PRIOR WRITTEN OR ORAL
AGREEMENTS AND WITHOUT ANY IMPLIED AGREEMENTS, WARRANTIES OR UNDERSTANDINGS.

IN WITNESS WHEREOF, this Lease is hereby executed in multiple originals
as of the date first above stated.

TENANT: LANDLORD:

505 ENTERTAINMENT, LTD. 505 CENTER, L.P.

By: Clarke & Wyndham, Inc.
By: /s/ Paul R. Guernsey
----------------------------- Its: Attorney-in-Fact
Name: Paul R. Guernsey,
President
Fox & Hound, Inc. By: /s/ Paul J. Clarke
-------------------------- -------------------------------
Title: Its General Partner Name: Paul J. Clarke
-------------------------- -----------------------------
Tenant's Address: Its: President
------------------------------
505 University East Landlord's Address:
Suites 307 and 309
College Station, TX 77840 505 Center, L.P.
c/o Clarke & Wyndham, Inc.
Copy to: 3608 E. 29th St.
Suite 100
Mr. Paul Guernsey Bryan, TX 77802
505 Entertainment, Ltd.
4504 Winewood Court
Colleyville, TX 76034

Note: If Tenant shall be a corporation, the authorized officers must sign on
behalf of the corporation. The Lease must be executed by the president or
vice-president and the secretary or assistant secretary, unless the by-laws or a
resolution of the board of directors shall otherwise provide, in which event,
the by-laws or a certified copy of the resolution, as the case may be, must be
furnished. Also, the appropriate corporate seal must be affixed.

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<PAGE> 24
LIST OF EXHIBITS

AND

RIDERS

Exhibit A Property Description

Exhibit B Rules and Regulations

Exhibit C Construction Agreement

Exhibit D Parking

Exhibit E Premises

Exhibit F Options

Rider 1 Signage

<PAGE> 25
EXHIBIT A

PROPERTY DESCRIPTION

Being all that certain lot, tract or parcel of land lying and being situated in
Brazos County, Texas, and being Lot One (1), Block "F", COLLEGE HEIGHTS
ADDITION, an Addition to the City of College Station, Brazos County, Texas,
according to the plat recorded in Volume 466, Page 145, Deed Records of Brazos
County, Texas.

<PAGE> 26
EXHIBIT B
SHOPPING CENTER LEASE
RULES AND REGULATIONS

1. Tenant shall not block or obstruct any of the entries, passages, doors,
hallways, sidewalks, or stairways of the Center, or permit such areas
to be used at any time except for ingress and egress.

2. The movement of furniture, equipment, merchandise or materials within,
into or out of the Premises shall be through the rear entrance delivery
door, if any, and shall be restricted to time, method and routing of
movement as determined by Landlord, and Tenant assumes all liability
and risk in that movement. Any damage done to the Premises or Center
during such movement shall be paid by the Tenant. Landlord shall not be
responsible for watching or safekeeping any items delivered to Tenant.
Tenant shall keep and maintain in good order, condition and repair any
loading platform, truck dock and/or truck maneuvering space therefore
which is used by Tenant or to which Tenant has the right of exclusive
use, even if that area is not within the Premises.

3. No sign, advertisement or notice (including "sign vans", temporary
signs or other similar devices) shall be displayed, painted or affixed
by Tenant in or on any part of the Center or the Premises without prior
written consent of Landlord. All signs submitted for Landlord's prior
written approval shall conform to any sign requirements or restrictions
for the Center.

4. Landlord is not responsible for lost or stolen personal
property, equipment, money or any article taken from the
Premises or the Center.

5. Tenant shall keep the Premises and adjacent areas (including sidewalks,
service-ways, and loading areas) in a clean and tidy condition, and
free from dirt, rubbish or other obstructions at all times. Tenant
shall have the sole responsibility of the timely removal and disposal
of crates, boxes, and/or any other article of trash that will not fit
or was not intended for use in existing trash containers.

6. Tenant, its agents, servants and employees shall not install or operate
any refrigerating, heating or air conditioning apparatus or carry on
any mechanical operation or bring into the Premises or the Center any
inflammable, combustible, highly toxic, corrosive, or explosive fluids,
chemicals or substances without the prior written permission of
Landlord.

Exhibit B
Page 1 of 5

<PAGE> 27
7. No signaling, telegraphic or telephonic instruments or devices, or
other wires, instruments or devices, shall be installed in connection
with any demised premises without the prior written approval of
Landlord, which approval shall not be unreasonably withheld unless same
may affect the structural components of the Center or the mechanical,
electrical or plumbing systems of the Center. Such installations, and
the boring or cutting for wires, shall be made at the sole cost and
expense of the Tenant and under the control and direction of Landlord.
Landlord retains in all cases the right to require (1) the installation
and use of such electrical protecting devices that prevents the
transmissions of excessive current of electricity into or through the
Center, (2) the changing of wires and of their installation and
arrangement underground or otherwise as Landlord may direct, and (3)
compliance on the part of all using or seeking access to such wires
with such rules as Landlord may establish relating thereto. All such
wires used by Tenants must be clearly tagged at the distribution boards
and junction box and elsewhere in the Center, with (1) the number of
the demised premises to which said wires lead, (2) the purpose for
which said wires are used, and (3) the name of the company operating
same.

8. If Tenant desires signal, communication, alarm or other utility or
service connection installed or changed, the same shall be made at the
expense of Tenant, with approval and under direction of Landlord.

9. Except as set forth in any construction plans approved by Landlord, or
otherwise approved in writing by Landlord, no exterior lighting,
awnings, decorations, paintings, canopies or other projections may be
attached to the exterior surface of the walls enclosing the Premises.
No curtains, blinds, screens, lettering, placards, decorations, or
advertising media may be attached to or hung, or used in connection
with, any window or door of the Premises without the prior written
approval of Landlord as to the quality, type, design, color and manner
of attaching the same. No protective screen, grating, shade or other
enclosing device may be used on the portion of the Premises abutting
the Common Areas, courts or public corridors without Landlord's prior
written approval as to the quality, type, design, color and manner of
attaching the same, to the end that all storefronts facing the said
Common Area will be compatible, in Landlord's reasonable judgement, in
appearance. Tenant shall regularly clean, repair and, if necessary in
Landlord's reasonable judgement, replace any awnings used exclusively
in connection with the Premises.

Exhibit B
Page 2 of 5

<PAGE> 28
10. No additional locks shall be placed on any door in or providing access
to the Premises unless Landlord or the Center manager is given a key to
the lock at the time that it is installed. Tenant shall not have any
duplicate keys made and shall return all keys to Landlord promptly upon
termination of this Lease.

11. Tenant shall give Landlord prompt notice of all damage to or defects in
air conditioning equipment, plumbing, electrical facilities or any part
or appurtenance of the Premises.

12. Tenant shall not use the sidewalk adjacent to or any other space
outside the Premises for display, sale or any other similar purpose.

13. Tenant shall not use the plumbing facilities of the Premises for any
purpose other than that for which they were constructed. If Tenant uses
the premises for the sale, preparation, or service of food for
on-premises consumption, Tenant shall install any grease traps that may
be necessary or desirable to prevent the accumulation of grease or
other wastes in the plumbing facilities servicing the Premises.

14. Tenant shall not place a load on any floor exceeding the floor load per
square foot that the floor was designed to carry.

15. If Tenant is a food related tenant, then Tenant shall cause all garbage
to be removed daily between the hours of 10:00 p.m. and 8:00 a.m. only.
Otherwise, Tenant shall adhere to trash pick-up procedures established
from time to time by Landlord.

16. Canvassing, soliciting and peddling in the Center are prohibited, and
each Tenant shall cooperate to prevent the same.

17. All plate and other glass now in the Premises is situated there at the
risk of Tenant, and if broken, shall be replaced by and at the expense
of Tenant. Tenant shall maintain all display windows in a neat,
attractive condition. All signs visible through the windows and doors
shall comply with the signage provisions in this Lease. Tenant shall
keep the display windows electrically lighted during such reasonable
periods of time as Landlord requires.

18. Alterations and miscellaneous job orders shall at all times be directed
to the Center manager to facilitate the orderly and otherwise proper
processing of that work in accordance with any covenants of the Lease
applicable thereto.

Exhibit B
Page 3 of 5

<PAGE> 29
19. If the leased premises of any Tenant becomes infested with vermin and
such infestation is caused by Tenant's use of its premises, such
Tenant, at its sole cost and expense shall cause its leased premises to
be treated by a professional exterminator from time to time to the
satisfaction of the Landlord.

20. Tenant shall not install and operate machinery or any mechanical
devices of a nature not directly related to Tenant's ordinary use of
the Tenant's leased premises without the written permission of the
Landlord.

21. Tenant shall comply with parking rules and regulations as may be posted
and distributed from time to time.

22. Tenant shall use its best efforts to prohibit picketing or other union
activities involving its employees in the Center except in those
locations and subject to time and other limitations as to which
Landlord may give prior written consent.

23. Landlord shall in all cases retain the right to control or prevent
access to the common areas by all persons whose presence, in the
judgment of Landlord, shall be prejudicial to the safety, character,
reputation or interests of the Center and its tenants.

24. In case of invasion, riot, public excitement or other commotion,
Landlord reserves the right to prevent access to the Premises or Center
during the continuance of same. Landlord shall in no case be liable for
damages for the admission or exclusion of any person to from the
Premises or Center. Landlord has the right to evacuate the Premises or
Center in the event of an emergency or catastrophe.

25. Landlord may waive any one or more of these Rules for the benefit of
any particular tenant or tenants, but no waiver by Landlord shall be
construed as a waiver of such Rules in favor of any other tenant or
tenants, or prevent Landlord from thereafter enforcing all Rules
against any or all of the Tenants of the Center.

26. Landlord may amend these Rules and make other and further reasonable
rules as in its judgement are from time to time necessary and
desirable. Landlord shall not be responsible for any violation of the
foregoing rules and regulations by other tenants of the Building and
shall have no obligation to enforce the same against other tenants.

Exhibit B
Page 4 of 5

<PAGE> 30
TENANT: LANDLORD:

505 ENTERTAINMENT, LTD. 505 CENTER, L.P.

By: Clarke & Wyndham, Inc.
By: /s/ Paul R. Guernsey
--------------------------- Its: Attorney-In-Fact
Name: Paul R. Guernsey,
President
Fox & Hound, Inc. By: /s/ Paul J. Clarke
----------------------- ---------------------------
Title: Its General Partner Name: Paul J. Clarke
----------------------- -------------------------
Its: President
-------------------------

Exhibit B
Page 5 of 5

<PAGE> 31
EXHIBIT C

CONSTRUCTION AGREEMENT

Landlord shall provide Tenant a construction allowance of $10.00 p.s.f.
of rentable area. Tenant's construction drawings must be preapproved by Landlord
prior to the allowance being paid.

<PAGE> 32
EXHIBIT D
PARKING

1. At all times during the initial term of this Lease and conditioned upon
this Lease being in full force and effect and there being no Event of
Default by Tenant under this Lease, Tenant is permitted access to the
reasonable and non-exclusive use of the surface parking area attached
to the Building for the parking of ______ vehicles in an area for
unassigned parking spaces.

2. Neither Tenant nor Tenant's employees shall have the right to assign or
sublease such parking spaces except in connection with an Assignment of
this Lease.

3. Upon occupancy, Tenant shall provide to Landlord a list of Tenant's
employees who are utilizing the parking spaces provided by Landlord and
the state license numbers of such employees' vehicles. Tenant shall be
required to update such list when changes occur.

4. Tenant shall use the parking spaces in accordance with Landlord's
parking rules and regulations, which shall be made, modified, and
enforced by Landlord only.

5. Landlord may, at its option, provide a reasonable means of controlling
access to the parking area.

6. Landlord may relocate any parking areas or spaces from time to time,
and may also use portions of the parking area outside of the designated
areas for visitor, or other parking needs of Landlord.

7. Landlord may change the size of the parking area.

8. Tenant is responsible for ensuring that its employees and agents do not
park their automobiles in visitor parking areas or spaces, if any,
established by Landlord, or in parking spaces or areas, if any,
reserved or designated by Landlord for the use of other tenants of the
Building, or for other purposes (such as for retail tenants).

9. Landlord is not liable or responsible for any loss of or to any
automobile or vehicle or equipment or other property therein, or damage
to property or injury to person, unless the loss, damages or injury is
proximately caused by the gross negligence of Landlord or its
employees.

10. Landlord may, in its sole discretion from time to time, designate
parking spaces in any parking areas for the

Exhibit D
Page 1 of 2

<PAGE> 33
exclusive use of specified tenants of the Building. The location and
number of those spaces shall be determined by Landlord in its sole
discretion, and Landlord may from time to time change the location and
number of those spaces.

TENANT: LANDLORD:

505 ENTERTAINMENT, LTD. 505 CENTER, L.P.

By: Clarke & Wyndham, Inc.
By: /s/ Paul R. Guernsey
--------------------------- Its: Attorney-In-Fact
Name: Paul R. Guernsey,
President
Fox & Hound, Inc. By: /s/ Paul J. Clarke
------------------------ --------------------------
Title: Its General Partner Name: Paul J. Clarke
------------------------ -------------------------
Its: President
-------------------------

Exhibit D
Page 2 of 2

<PAGE> 34
[ARCHITECTS' SITE PLAN]

Exhibit E
Page 1

<PAGE> 35
[ARCHITECTS' FLOOR PLAN - BUILDING #3]

Exhibit E
Page 2

<PAGE> 36
EXHIBIT F
OPTION TO RENEW

Lessee at Lessee's sole option shall have the right, but not the obligation to
renew this Lease under the following terms and conditions, so long as Lessee is
not in default. Lessee shall provide Lessor written notification of its intent
to renew within 90 days of the expiration of the Lease or any applicable renewal
period.

<TABLE>
<CAPTION>
OPTION TERM RATE
------ ---- ----
<S> <C> <C>
1 5 Years $9.00

2 5 Years Market Rate

3 5 Years Market Rate
</TABLE>

All other terms of the Lease, except base monthly rental above, shall remain
unchanged in option periods. "Market Rate" shall be defined as the average
market rate for similar space within the Center.

Exhibit F
Page 1 of 1

<PAGE> 1
Exhibit 10.14

AMENDMENT TO OFFICE LEASE

This Amendment, dated December 6, 1996, is to a certain Office Lease
made and entered into the 31st day of January, 1994, between 505 Center, L.P.,
as Landlord, and 505 Entertainment, Ltd., as Tenant.

In consideration of the covenants and conditions contained in said
Lease and this Amendment, the parties hereto do hereby agree as follows:

1. To the extent the terms and conditions contained in this
Amendment alter or conflict with those contained in said Lease,
those contained herein shall be absolutely controlling.

2. Article 1 ( c ) shall be amended as follows: "Permitted
Use: Restaurant, nightclub, billiards, and related
activity, including the sale of alcoholic beverages for
on-site consumption."

3. Article 4(b)(i) shall be amended to add the following to
immediately follow the first sentence. "Provided,
however, in no event shall management fees exceed three
percent."

4. Article 8(b) shall be deleted and the following shall be
substituted, "Approval of Tenant Alterations. Tenant will not
make or permit Alterations without Landlord's prior written
consent. However, Landlord shall not unreasonably withhold its
consent. Additionally, Landlord's consent shall not be required
if the cost of alterations is less than $15,000.00."

5. Article 8( c) shall be amended to delete the first
sentence and substitute the following, " Alterations
shall be performed by Tenant or such other person
retained by Tenant. However, Tenant shall allow Landlord
the opportunity to bid on any alteration to be
performed."

6. Article 10(b) shall be deleted and the following shall be
substituted, " With any request for consent to an
Assignment, Tenant will submit a copy of the Assignment
to Landlord and notify Landlord of the proposed
commencement date of the Assignment, the name of the
proposed Assignee (accompanied by evidence of the nature,
character, and financial condition of Assignee and its
business), and all terms and conditions (including

-5-

<PAGE> 2
rental) of or relating to the Assignment. Landlord shall notify
Tenant, within thirty (30) days of Tenant's written request, of
its approval or disapproval of such requested assignment. In the
event Landlord grants its approval of the assignment, the current
Tenant shall be relieved of all obligations under the Lease and
such obligations shall become the responsibility of the
Assignee."

7. Article 10(c) shall be deleted in its entirety.

8. Article 20 shall be deleted in its entirety.

9. Article 22(a) shall be amended to add the following
unnumbered paragraph: "In any of the aforesaid events,
Landlord shall notify Tenant, in writing, of the alleged
default. The notification shall be sent as herein
provided, and evidenced by an appropriate receipt
therefor. Upon receipt of said notice the Tenant shall
have ten (10) days thereafter to cure non-payment of rent
and twenty (20) days thereafter to cure any other alleged
default pursuant to subsection (ii) or sixty (60) days as
provided in subsection (iii). If, upon expiration of any
of the above time periods, any of the above defaults are
not cured or in the event any default pursuant to
subsection (ii) is such that it is unable to be cured
within twenty (20) days and Tenant has not started to
cure the default, and/or is not diligently proceeding to
cure, then and in that event, the Landlord may, at its
option, terminate this Lease and/or reenter and repossess
itself of the premises and remove all persons and parties
therefrom with or without legal process, and of trespass,
forcible entry or detainer or other tort; and the
Landlord may, at its option, relet the premises or any
part thereof for the balance of the lease term either on
its own account or as agent for Tenant. In addition
Landlord shall have the right to undertake such action at
law or in equity for its benefit as may be permitted but
in no event shall Landlord accelerate the rentals due
hereunder nor shall Tenant be liable for consequential or
punitive damages."

10. Article 22(iv) shall be deleted in its entirety

11. Article 25 shall be amended by adding the following sentence:
"In the event there is a mortgage, deed of trust or similar debt
agreement in which the Premises is the security, in whole or in
part, the Landlord shall use its best efforts to obtain a
non-disturbance agreement in recordable form whereby the secured
party recognizes this Lease and Tenant's rights hereunder in

-6-

<PAGE> 3
the event of any foreclosure and Tenant agrees to attorn
to such mortgagee in furtherance thereof."

12. Article 30(b) shall be amended to add the following,
"All notices to Tenant shall be sent to Tenant in care
of Chris Wetting, 224 E. Douglas, Suite 700, Wichita,
Kansas 67202."

13. Delete Article 31(b), (c), (d), (e) and (f).

14. Article 33 (c) shall be deleted and the following shall
be substituted, "Landlord's Costs. Where Tenant is
required to pay or reimburse Landlord for the costs of
any item, the costs shall be the reasonable and
customary charge established by Landlord from time to
time, associated with the ownership and operation of the
Building. Failure to pay any reimbursable cost shall be
treated as a failure to pay rent."

15. An Article shall be added to the Lease as follows, "Landlord
warrants that it will not lease or sell space in the shopping
center to a tenant with a similar, competing use. Such use shall
be as defined in Article 1(c) hereof.

16. Exhibit "B", Paragraph 10 shall be deleted in its
entirety.

17. Exhibit "B", Paragraph 18 shall be deleted and the following
shall be substituted, "Any alterations or repairs that are the
responsibility of the Tenant shall be performed by Tenant or
such other person retained by Tenant. However, Tenant shall
allow Landlord the opportunity to bid on any alteration or
repair of the Premises."

18. Exhibit "D" Paragraph 1 shall be deleted and the
following shall be substituted, "At all times during the
initial term of this Lease and conditioned upon this
Lease being in full force and effect and there being no
Event of Default by Tenant under this Lease, Tenant is
permitted access to the reasonable and non-exclusive use
of the surface parking area attached to the Building for
the parking of a minimum of ___ vehicles for unassigned
parking spaces."

19. Exhibit "D" Paragraph 7 shall be deleted and the following
substituted, "Landlord may change the size of the parking area,
however, such area shall not be reduced so as to cause Tenant to
be in violation of any existing governmental regulations and in
no event shall Tenant have access to less than a ___ parking
spaces.

-7-

<PAGE> 4
20. Exhibit "F" The following paragraph shall be added:
"Commencing at the beginning of the second option term,
the rental rate shall be adjusted to the market rate.
However, in no event shall the rental rate increase more
than 12% over the rental rate in the prior option term."

-8-

<PAGE> 1
Exhibit 10.15

DEMAND NOTE PAYABLE

AMOUNT $500,000

DATE November 14, 1996

SECURITY Unsecured

On demand after date, F&H Restaurant Corp. promises to pay to Jamie B. Coulter,
or to his order, five hundred thousand dollars ($500,000) at Wichita, Kansas,
for value received, with base interest thereon at Intrust Bank, from date of
note until paid. Interest payable upon final payment of principal.

/s/ Jamie B. Coulter
- ------------------------------
Jamie B. Coulter
Chairman
F&H Restaurant Corp.

<PAGE> 1
Exhibit 10.16

DEMAND NOTE PAYABLE

AMOUNT $1,000,000

DATE December 6, 1996

SECURITY Unsecured

On demand after date, F&H Restaurant Corp. promises to pay to Jamie B. Coulter,
or to his order, one million dollars ($1,000,000) at Wichita, Kansas, for value
received, with base interest thereon at Intrust Bank, from date of note until
paid. Interest payable upon final payment of principal.

/s/ Jamie B. Coulter
- ------------------------------
Jamie B. Coulter
Chairman
F&H Restaurant Corp.

<PAGE> 1
Exhibit 10.17

DEMAND NOTE PAYABLE

AMOUNT $2,968,486.00

DATE January 3, 1997

SECURITY Unsecured

On demand after date, F&H Restaurant Corp. promises to pay to Jamie B. Coulter,
or to his order, two million nine hundred sixty-eight thousand four hundred
eighty-six dollars ($2,968,486) at Wichita, Kansas, for value received, with
base interest thereon at Intrust Bank, from date of note until paid. Interest
payable upon final payment of principal.

/s/ Jamie B. Coulter
- ------------------------------
Jamie B. Coulter
Chairman
F&H Restaurant Corp.

<PAGE> 1
Exhibit 10.18

DEMAND NOTE PAYABLE

AMOUNT $61,585.00

DATE January 21, 1997

SECURITY Unsecured

On demand after date, F&H Restaurant Corp. promises to pay to Jamie B. Coulter,
or to his order, sixty-one thousand five hundred eighty-five dollars
($61,585.00) at Wichita, Kansas, for value received, with base interest thereon
at Intrust Bank, from date of note until paid. Interest payable upon final
payment of principal.

/s/ Jamie B. Coulter
- ------------------------------
Jamie B. Coulter
Chairman
F&H Restaurant Corp.

<PAGE> 1
Exhibit 10.19

INTRUST
BANK
PROMISSORY NOTE
<TABLE>
<CAPTION>

=================================================================================================================
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$12,000,000.00 02-25-1997 06-01-1997 31045 04A0 A5/USC N-139242 BAL
- -----------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not
limit the applicability of this document to any particular loan or item.
=================================================================================================================
<S> <C>
Borrower: Eatertainment, Inc. Lender: INTRUST Bank, N.A.
P O Box 12248 P.O. Box One
Wichita, KS 67277-2248 105 N. Main
Wichita, KS 67201

Principal Amount: $12,000,000.00 Initial Rate: 8.250% Date of Note: February 25, 1997
</TABLE>

PROMISE TO PAY. Eatertainment, Inc. ("Borrower") promises to pay to INTRUST
Bank, N.A. ("Lender"), or order, in lawful money of the United States of
America, the principal amount of Twelve Million & 00/100 Dollars
($12,000,000.00) 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 June 1, 1997. In addition, Borrower will pay
regular monthly payments of accrued unpaid interest beginning April 1, 1997, and
all subsequent interest payments are due on the same day of each month after
that. Interest on this Note is computed on a 365/360 simple interest 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. 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.

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 Prime Rate as
published in the Wall Street Journal Southwestern Edition (the "Index'). The
Index is not necessarily the lowest rate charged by Lender on its loans. If 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. Borrower understands that Lender may make
loans based on other rates as well. The interest rate change will not occur more
often than each month on the first day of the month following the change of the
index. The Index currently is 8.250% per annum. The Interest rate to be applied
to the unpaid principal balance of this Note will be at a rate equal to the
Index, resulting in an initial rate of 8.250% per annum. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.

PREPAYMENT. 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, they will reduce the principal balance due.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment or $100.00,
whichever Is less.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Any representation or statement made or furnished to Lender
by Borrower or on Borrower's behalf is false or misleading in any material
respect either now or at the time made or furnished. (d) Borrower becomes
insolvent, a receiver is appointed for any part of Borrower's property, Borrower
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy or insolvency laws.
(e) Any creditor tries to take any of Borrower's property on or in which Lender
has a lien or security interest. This includes a garnishment of any of
Borrower's accounts with Lender. (f) Any guarantor dies or any of the other
events described in this default section occurs with respect to any guarantor of
this Note. (g) A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired. (h) Lender in good faith deems itself insecure.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also be permitted under
applicable law, increase the variable interest rate on this Note to 5.000
percentage points over the Index. The interest rate will not exceed the maximum
rate permitted by applicable law. Lender may hire or pay someone else who is not
a salaried employee of Lender to help collect this Note if Borrower does not
pay. Borrower will be liable for all reasonable costs incurred in the collection
of this Note, including but not limited to, court costs, attorneys' fees, and
collection agency fees, except that such costs of collection shall not include
the recovery of both attorneys' fees and collection agency fees. This Note has
been delivered to Lender and accepted by Lender in the State of Kansas. If there
is a lawsuit, Borrower agrees upon Lender's request to submit to the
jurisdiction of the courts of Sedgwick County, the State of Kansas. This Note
shall be governed by and construed in accordance with the laws of the State of
Kansas.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
<PAGE> 2
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note, as well as directions for 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. The
following party or parties are authorized to request advances under the line of
credit until Lender receives from Borrower at Lender's address shown above
written notice of revocation of their authority: Jamie B. Coulter, Chairman; and
Michael Nahkurst, President & CEO. 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 if: (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 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 deems itself insecure under this Note or any other agreement between
Lender and Borrower.

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
presentment, demand for payment, protest 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 time) 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.

02-25-1997 PROMISSORY NOTE Page 2
Loan No 31045 (Continued)

- --------------------------------------------------------------------------------

NO ORAL AGREEMENTS. This written agreement is the
Borrower's Initials final expression of the agreement between Lender
Initials and Borrower and may not be contradicted by
evidence of any prior oral agreement or of a
contemporaneous oral agreement between Lender and
Borrower.
/s/ JBC
NONSTANDARD TERMS. The following space contains all
nonstandard terms, including all previous oral
agreements, if any, between Lender and Borrower:

Lender's Initials

__________ By initialling the boxes to the left, Lender and
Borrower affirm that no unwritten oral agreement
exists between them.
- --------------------------------------------------------------------------------

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 AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.

BORROWER:

Eatertainment, Inc.

By: /s/ Jamie B. Coulter
--------------------------
Jamie B. Coulter, Chairman

-2-

<PAGE> 1
Exhibit 10.20
<TABLE>
<CAPTION>

COMMERCIAL GUARANTY
- --------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
04A0 A5/USC N-139242 BAL
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>

References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------

Borrower: Eatertainment, Inc. Lender: INTRUST Bank, N.A.
P O Box 12248 P O Box One
Wichita, KS 67277-2248 105 N. Main
Wichita, KS 67201
Guarantor: Jamie B. Coulter

AMOUNT OF GUARANTY. The amount of this Guaranty is Six Million & 00/100 Dollars
($6,000,000.00).

CONTINUING GUARANTY. For good and valuable consideration, Jamie B. Coulter
("Guarantor") absolutely and unconditionally guarantees and promises to pay to
INTRUST Bank, N.A. ("Lender") or its order, in legal tender of the United States
of America, the Indebtedness (as that term is defined below) of Eatertainment,
Inc. ("Borrower") to Lender on the terms and conditions set forth in this
Guaranty. The obligations of Guarantor under this Guaranty are continuing.

DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:

Borrower. The word "Borrower" means Eatertainment, Inc..

Guarantor. The word "Guarantor" means Jamie B. Coulter.

Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for
the benefit of Lender dated February 25, 1997.

Indebtedness. The word "Indebtedness" is used in its most comprehensive
sense and means and includes any and all of Borrower's liabilities
obligations, debts, and indebtedness to Lender, now existing or
hereinafter incurred or created, including, without limitation, all
loans, advances, interest, costs, debts, overdraft indebtedness, credit
card indebtedness, lease obligations, other obligations, and
liabilities of Borrower, or any of them, and any present or future
judgments against Borrower, or any of them; and whether any such
Indebtedness is voluntarily or involuntarily incurred, due or not due,
absolute or contingent, liquidated or unliquidated, determined or
undetermined; whether Borrower may be liable individually or jointly
with others, or primarily or secondarily, or as guarantor or surety;
whether recovery on the Indebtedness may be or may become barred or
unenforceable against Borrower for any reason whatsoever; and whether
the Indebtedness arises from transactions which may be voidable on
account of infancy, insanity, ultra vires, or otherwise.

Lender. The word "Lender" means INTRUST Bank, N.A., its successors and
assigns.

Related Documents. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guarantees, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.

MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall
not exceed at any one time $6,000,000.00 plus all costs and expenses of (a)
enforcement of this Guaranty and (b) collection and sale of any collateral
securing this Guaranty.

The above limitation on liability is not a restriction on the amount of the
Indebtedness of Borrower to Lender either in the aggregate or at any one time.
If Lender presently holds one or more guaranties, or hereafter receives
additional guaranties from Guarantor, the rights of Lender under all guarantees
shall be cumulative. This Guaranty shall not (unless specifically provided below
to the contrary) affect or invalidate any such other guaranties. The liability
of Guarantor will be the aggregate liability of Guarantor under the terms of
this Guaranty and any such other unterminated guaranties.

NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open and
continuous for so long as this Guaranty remains in force. Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all Indebtedness
within the limits set forth in the preceding section of this Guaranty.
Accordingly, no payments made upon the Indebtedness will discharge or diminish
the continuing liability of Guarantor in connection with any remaining portions
of the Indebtedness or any of the Indebtedness which subsequently arises or is
thereafter incurred or contracted.

DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all Indebtedness incurred or
contracted before receipt by Lender of any notice of revocation shall have been
fully and finally paid and satisfied and all other obligations of Guarantor
under this Guaranty shall have been performed in full. If Guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at the address
of Lender listed above or such other place as Lender may designate in writing.
Written revocation of this Guaranty will apply only to advances or new
Indebtedness created after actual receipt by Lender of Guarantor's written
revocation. For this purpose and without limitation, the term "new Indebtedness"
does not include Indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind
Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior
to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions or modifications of the Indebtedness. All
renewals, extensions, substitutions, and modifications of the Indebtedness
granted after Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new Indebtedness. This Guarantee shall

-3-
<PAGE> 2
bind the estate of Guarantor as to Indebtedness created both before and after
the death or incapacity of Guarantor, regardless of Lender's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of
the Indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation received by Lender from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty. It is
anticipated that fluctuations may occur in aggregate amount of Indebtedness
covered by this Guaranty, and It is specifically acknowledged and agreed by
Guarantor that reductions in the amount of Indebtedness, even to zero dollars
($0.00), prior to written revocation of this Guaranty by Guarantor shall not
constitute a termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantor's heirs, successors and assigns so long as any of a
guaranteed Indebtedness remains unpaid and even though the Indebtedness
guaranteed may from time to time be zero dollars ($0.00).

GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before
or after any revocation hereof, without notice or demand and without lessening
Guarantor's liability under this Guaranty, from time to time: (a) prior to
revocation as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (b) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times for time for
payment or other terms of the Indebtedness or any part of the Indebtedness,
including increases and decreases of the rate of interest on the Indebtedness;
extensions may be repeated and may be for longer than the original loan term;
(c) to take and hold security for the payment of this Guaranty or the
Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to
perfect, and release any such security, with or without the substitution of new
collateral; (d) to release, substitute, agree not to sue, or deal with any one
or more of Borrower's sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (e) to determine how, when and what application
of payments and credits shall be made on the Indebtedness; (f) to apply such
security and direct the order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in discretion may determine; (g)
to sell, transfer, assign, or grant participations In all or any part of the
Indebtedness; and (h) to assign or transfer this Guaranty in whole or In part.

GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (a) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty;
(b) this Guaranty is executed at Borrower's request and not at the request of
Lender; (c) Guarantor has full power, right and authority to enter into this
Guaranty; (d) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (f) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present the financial condition of Guarantor as
of the dates the financial information is provided; (g) no material adverse
change has occurred in Guarantor's financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor's financial condition; (h) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened;
(i) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (j) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.

-4-
<PAGE> 3
02-25-1997 COMMERCIAL GUARANTY Page 2
Loan No 31045 (Continued)

GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or extend other credit
to Borrower; (b) to make any presentment, protest, demand, or notice of any
kind, including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (d) to proceed directly against or exhaust any collateral held by
Lender from Borrower, any other guarantor, or any other person; (e) to pursue
any other remedy within Lender's power; or (f) to commit any act or omission of
any kind, or at any time, with respect to any matter whatsoever.

If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor
of Lender and Borrower, and their respective successors, any claim or right to
payment Guarantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Guarantor be or become a
"creditor" of Borrower within the meaning of 1 1 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.

Guarantor also waives any and all rights or defenses arising by reason of (a)
any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from bringing any action, including a claim for deficiency, against
Guarantor, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale; (b) any
election of remedies by Lender which destroys or otherwise adversely affects
Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower
for reimbursement, including without limitation, any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying, or discharging the
Indebtedness; (c) any disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal tender,
of the Indebtedness; (d) any right to claim discharge of the Indebtedness on the
basis of unjustified impairment of any collateral for the Indebtedness; (e) any
statute of limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced there is outstanding Indebtedness of Borrower to
Lender which is not barred by any applicable statute of limitations; or (f) any
defenses given to guarantors at law or in equity other than actual payment and
performance of the Indebtedness. If payment is made by Borrower, whether
voluntarily or otherwise, or by any third party, on the Indebtedness and
thereafter Lender is forced to remit the amount of that payment to Borrower's
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the Indebtedness shall be
considered unpaid for the purpose enforcement of this Guaranty.

Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.

GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor's full knowledge
of its significance and consequences and that, under the circumstances, the
waivers are reasonable and not contrary to public policy or law. If any such
waiver is determined to be contrary to any applicable law or public policy, such
waiver shall be effective only to the extent permitted by law or public policy.

LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender by
law, Lender shall have, with respect to Guarantor's obligations to Lender under
this Guaranty and to the extent permitted by law, a contractual possessory
security interest in and a right of setoff against, and Guarantor hereby
assigns, conveys, delivers, pledges, and transfers to Lender all of Guarantor's
right, title and interest in and to, all deposits, moneys, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Lender, whether held in a general or special account or deposit, whether held
jointly with someone else, or whether held for safekeeping or otherwise,
excluding however all IRA, Keogh, and trust accounts. Every such security
interest and right of setoff may exercised without demand upon or notice to
Guarantor. No security interest or right of setoff shall be deemed to have been
waived by any act conduct on the part of Lender or by any neglect to exercise
such right of setoff or to enforce such security interest or by any delay in so
doing. Every right of setoff and security interest shall continue in full force
and effect until such right of setoff or security interest is specifically
waived or released by an instrument in writing executed by Lender.

SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lender to the Indebtedness of Borrower the Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the Indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor,
from time to time to execute and file financing statements and continuation
statements and to execute such other documents and to take such other actions as
Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.

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

Amendments. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Guaranty. No alteration of or amendment
to this Guaranty 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.

Applicable Law. This Guaranty has been delivered to Lender and accepted
by Lender in the State of Kansas. If there is a lawsuit, Guarantor
agrees upon Lender's request to submit to the jurisdiction of the
courts of Sedgwick County, State of Kansas. This Guaranty shall be
governed by and construed in accordance with the laws of the State of
Kansas.

-5-
<PAGE> 4
ATTORNEYS' FEES; EXPENSES. Lender may pay someone else, who is not a
salaried employee of Lender, to help enforce this Guaranty, and
Guarantor shall pay the costs and expenses of such enforcement. Costs
and expenses include all reasonable costs incurred in the collection of
the Indebtedness, including but not limited to, court costs, attorneys'
fees, and collection agency fees, except that such costs of collection
shall not include the recovery of both attorneys' fees and collection
agency fees.

NOTICES. All notices required to be given by either party to the other
under this Guaranty shall be in writing, may be sent by telefacsimile,
and, except for revocation notices by Guarantor, shall be effective
when actually delivered or when deposited with a nationally recognized
overnight courier, or when deposited in the United States mail, first
class postage prepaid, addressed to the party to whom the notice is to
be given at the address shown above or to such other addresses as
either party may designate to the other in writing. All revocation
notices by Guarantor shall be in writing and shall be effective only
upon delivery to Lender as provided above in the section titled
"DURATION OF GUARANTY." If there is more than one Guarantor, notice to
any Guarantor will constitute notice to all Guarantors. For notice
purposes, Guarantor agrees to keep Lender informed at all times of
Guarantor's current address.

INTERPRETATION. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall
be deemed to have been used in the plural where the context and
construction so require; and where there is more than one Borrower
named in this Guaranty or when this Guaranty is executed by more than
one Guarantor, the words "Borrower" and "Guarantor" respectively shall
mean all and any one or more of them. The words "Guarantor,"
"Borrower," and "Lender" include the heirs, successors, assigns, and
transferees of each of them. Caption headings in this Guaranty are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Guaranty. If a court of competent jurisdiction
finds any provision of this Guaranty to be invalid or unenforceable as
to any person or circumstance, such finding shall not render that
provision invalid or unenforceable as to any other persons or
circumstances, and all provisions of this Guaranty in all other
respects shall remain valid and enforceable. If any one or more of
Borrower or Guarantor are corporations or partnerships, it is not
necessary for Lender to inquire into the powers of Borrower or
Guarantor or of the officers, directors, partners, or agents acting or
purporting to act on their behalf, and any Indebtedness made or created
in reliance upon the professed exercise of such powers shall be
guaranteed under this Guaranty.

WAIVER. Lender shall not be deemed to have waived any rights under this
Guaranty 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 Guaranty 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 Guaranty.
No prior waiver by Lender, nor any course of dealing between Lender and
Guarantor, shall constitute a waiver of any of Lender's rights or of
any of Guarantor's obligations as to any future transactions. Whenever
the consent of Lender is required under this Guaranty, 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.

02-25-1997 COMMERCIAL GUARANTY Page 3
Loan No. 31045 (Continued)

NO ORAL AGREEMENTS. This written agreement is the
Guarantor's final expression of the agreement between Lender and
Initials Guarantor and may not be contradicted by evidence of
any prior oral agreement or of a contemporaneous oral
agreement between Lender Guarantor.

/s/ JBC NONSTANDARD TERMS. The following space contains all
nonstandard terms, including all previous oral
agreements, if any, between Lender and Guarantor:

Lender's Initials

- -------------- By initialling the boxes to the left, Lender and
Guarantor affirm that no unwritten oral agreement
exists between them.

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED FEBRUARY 25, 1997.

GUARANTOR:

By: /s/ Jamie B. Coulter
--------------------------
Jamie B. Coulter, Chairman

LENDER:

INTRUST Bank, N.A.

By:--------------------------
Authorized Officer

-6-

<PAGE> 1
Exhibit 10.21

NOTE

$55,944.00 Charlotte, N.C. July 11, 1995.

FOR VALUE RECEIVED, to-wit, Bailey's of Nashville, Inc., promise to pay
to the order of Dennis L. Thompson at Charlotte, N.C., the sum of FIFTY-FIVE
THOUSAND NINE HUNDRED FORTY-FOUR DOLLARS ($55,944.00), with interest thereon
from 7/11/95 at the rate of NationsBank prime (_____%) per centum per annum, due
and payable as follows:

Timing of Repayment
at discretion of
Bailey's Board of Directors

It is understood and agreed that failure or default in making payment
of any one of the aforesaid installment payments of principal and/or interest
shall, at the option of the owner and holder of this note or bond, cause the
entire balance of both principal and interest unpaid and outstanding upon this
note or bond at said time to immediately become due and payable.

Payment of this note or bond is secured by deed of trust of even date
herewith to _________________________, Trustee, on real estate.

Protest, presentment and notice of dishonor waived by all parties to
this note, who also agree that the time of payment of principal and/or interest
hereof may be extended from time to time without notice to any of them, and
without thereby releasing any of the rights or securities of the payee or his
assigns.

WITNESS the following signature(s) and seal(s), the date above written.

/s/ Thomas A. Hager (SEAL)
-------------------------

-------------------------(SEAL)

Witness: -------------------------(SEAL)

/s/ Sharon J. Showmar -------------------------(SEAL)
- -----------------------

<PAGE> 1
Exhibit 10.22

NOTE

$69,930.00 Charlotte, N.C. July 11, 1995.

FOR VALUE RECEIVED, to-wit, Bailey's of Nashville, Inc., promise to pay
to the order of Thomas A. Hager at Charlotte, N.C., the sum of SIXTY-NINE
THOUSAND NINE HUNDRED THIRTY DOLLARS ($69,930.00), with interest thereon from
7/11/95 at the rate of NationsBank prime (_____%) per centum per annum, due and
payable as follows:

Timing of Repayment
at discretion of
Bailey's Board of Directors

Payment of this note or bond is secured by deed of trust of even date
herewith to _________________________, Trustee, on real estate.

WITNESS the following signature(s) and seal(s), the date above written.

/s/ Thomas A. Hager (SEAL)
-------------------------

-------------------------(SEAL)

Witness: -------------------------(SEAL)

/s/ Sharon J. Showmar -------------------------(SEAL)
- -----------------------

<PAGE> 1
Exhibit 10.23

NOTE

$174,650.00 Charlotte, N.C. October 4, 1994.

FOR VALUE RECEIVED, to-wit, Bailey's of Greenville, Inc., promise to
pay to the order of Dennis L. Thompson at Charlotte, N.C., the sum of ONE
HUNDRED SEVENTY-FOUR THOUSAND SIX HUNDRED FIFTY DOLLARS ($174,650.00), with
interest thereon from 10/4/94 at the rate of NationsBank prime (_____%) per
centum per annum, due and payable as follows:

Timing of Repayment
at discretion of
Bailey's Board of Directors

Payment of this note or bond is secured by deed of trust of even date
herewith to _________________________, Trustee, on real estate.

WITNESS the following signature(s) and seal(s), the date above written.

/s/ Thomas A. Hager (SEAL)
-------------------------

-------------------------(SEAL)

Witness: -------------------------(SEAL)

/s/ Sharon J. Showmar -------------------------(SEAL)
- -----------------------

<PAGE> 1
Exhibit 10.24

NOTE

$204,590.00 Charlotte, N.C. October 4, 1994.

FOR VALUE RECEIVED, to-wit, Bailey's of Greenville, Inc., promise to
pay to the order of Thomas A. Hager at Charlotte, N.C., the sum of TWO HUNDRED
FOUR THOUSAND FIVE HUNDRED NINETY DOLLARS ($204,590.00), with interest thereon
from 10/4/94 at the rate of NationsBank prime (_____%) per centum per annum, due
and payable as follows:

Timing of Repayment
at discretion of
Bailey's Board of Directors

Payment of this note or bond is secured by deed of trust of even date
herewith to _________________________, Trustee, on real estate.

WITNESS the following signature(s) and seal(s), the date above written.

/s/ Thomas A. Hager (SEAL)
-------------------------

-------------------------(SEAL)

Witness: -------------------------(SEAL)

/s/ Sharon J. Showmar -------------------------(SEAL)
- -----------------------

<PAGE> 1
NationsBank, N.A. Exhibit 10.25
Private Client Group
NC1-002-07-13
Charlotte, NC 28255
Tel 704 386-5000

NATIONSBANK

August 1, 1996
Ms. Ramey Millett
4201-K Stewart Andrew Blvd.
Charlotte, N.C. 28217

Dear Messrs. Hager, Hall, Ponce, Boyd, Thompson and Harris:

Thank you for the opportunity to make the following commitment.
NationsBank, N.A. (the "Bank") is pleased to have approved for Thomas
A. Hager, C. Wells Hall III, Octavio J. Ponce, Patrick C. Boyd, and
Dennis L. Thompson (the "Borrower") a credit facility consisting of
seven loans totaling $5,100,000 (the "loan"). This commitment is to be
used by you for the purpose of financing leasehold improvements,
furniture, fixtures and equipment for six new Bailey's Sports Bar and
Grille restaurants, and to finance the purchase of land and building in
Columbia, S.C.

This commitment is subject to the execution and delivery to the Bank of
legal documents yet to be prepared, including, without limitation, loan
agreements, promissory notes, guaranties (James E. Harris), and
collateral and security documents. All such documents must be
satisfactory in form and substance to the Bank (and its counsel).

The making and funding of any loans under this commitment (in addition
to any other conditions which may be required in the documents referred
to in the preceding paragraph) is expressly subject to the terms and
conditions set forth in the attached Terms and Conditions.

If you find the terms and conditions of this commitment to be
acceptable to you, please execute the enclosed copy of this letter and
return it to the undersigned. If not accepted, this commitment shall
expire on August 15, 1996, or such later date as the Bank may hereafter
agree to in writing.

We appreciate the opportunity to provide you with the financial
services of NationsBank, N.A. and look forward to a continuing mutually
beneficial relationship.

Sincerely,

/s/ Steven G. Grafton
---------------------
Steven G. Grafton
Vice President/Relationship Manager

U S A
Official Sponsor
<PAGE> 2
TERMS AND CONDITIONS

BORROWER: Dennis L. Thompson, Thomas A. Hager, Octavio J. Ponce, Patrick C.
Boyd, and C. Wells Hall, III.

USE OF PROCEEDS: To i) finance leasehold improvements, furniture, fixtures and
equipment for six new Bailey's Sports Bar and Grille restaurants ($700,000 per
restaurant) and ii) finance the purchase of land and building related to the
Columbia, S.C. location ($900,000).

LOAN AMOUNT: $5,100,000 (Six loans of $700,000 each and one loan for $900,000).
This is a $3,000,000 increase in addition to the three existing unfunded
commitments of $700,000 each totaling $2,100,000.

REPAYMENT TERMS: For each loan, interest only will be payable monthly for the
twelve months following the loan origination date, followed by monthly payments
of principal, equal to 1/84th of the maximum amount drawn under the note, plus
interest, with one final payment of all unpaid principal and interest due five
years from the origination date of the note. The origination date of the seventh
and final loan under this commitment shall be on or before December 31, 1997.

INTEREST RATE: Interest on the daily unpaid principal balance from date until
paid in full at a rate per annum of zero percentage points above the Prime Rate
in effect on each respective day. As used herein, the term "Prime Rate" is the
rate of interest announced by the Bank from time to time as its Prime Rate and
represents a reference used by the Bank in determining the interest rate on
certain loans and is not intended to be the lowest rate of interest charged on
any extension of credit to any customer.

GUARANTOR:

Limited Guarantee: This loan shall be unconditionally guaranteed by James E.
Harris whose obligations to the Bank shall be joint and several with Borrower
and all other guarantors, if any, but shall be limited in amount to no more than
the percentage of the balance outstanding on the loan when demand is made that
is consistent with his percentage ownership in Bailey's Sports Grille, Inc.

FEES: 1/4% fee on all new money committed.

FINANCIAL COVENANTS: A liquidity maintenance agreement in the amount of
$7,000,000 will be required of Dennis L. Thompson.

AFFIRMATIVE COVENANTS: Customary, including delivery of updated financial
statements for all co- borrowers, reports and other information requested by
Bank; continuation of business and maintenance of existence; compliance with
laws; payment of taxes; maintenance of property and notice of environmental
claims.

PREPAYMENT: Borrower shall reserve the right to prepay this Loan, in whole or in
part, at any time or times, without penalty and with interest payable only on
the amount of principal so prepaid to the date of such prepayment. Any such
prepayments shall apply to the latest maturing principal installments.

DOCUMENTS: The obligation of the Borrower hereunder shall be evidenced by a
Promissory Note, Security Agreement, Loan Agreement and such other documents and
assurances as the Bank may request from Borrower and its officers in order to
make the Loan in a form satisfactory to the Bank and its counsel.

LOAN AGREEMENT: This Loan shall be governed by a loan agreement to be prepared
by the Bank's counsel, setting forth the terms under which this loan is to be
made and administered and containing the terms

-2-
<PAGE> 3
set forth in this commitment and such other terms, conditions, covenants,
representations and warranties as the Bank may deem necessary or advisable, in
its discretion.

CONDITIONS TO FIRST LOAN ADVANCE: Prior to making by the Bank of the first
advance to the Borrower, the following conditions precedent shall have occurred.
The Bank shall have received, duly executed, all promissory notes, security
agreements, loan agreements and other documents and instruments necessary or
advisable in connection with the Loan, all of which shall be in form and
substance satisfactory to the Bank and its counsel.

CONDITIONS TO EACH LOAN ADVANCE: Prior to the disbursement by the Bank of any
advances to Borrower under the Loan, there shall exist no event of default; the
representations and warranties contained herein shall be true and accurate;
there shall have occurred no material adverse change in the financial condition
of the Borrower or any other person liable for repayment of the loan; and the
Bank shall not have determined that the prospect of payment or performance of
the Loan has been materially impaired.

ADVANCE PROCEDURE: Advances on the Loan will be made by telephonic or written
communication from a person reasonably believed by the Bank to be an authorized
representative of the Borrower. Unless otherwise agreed to by the Bank, all
advances will be made to a demand deposit account maintained at the Bank in the
name of the Borrower.

REPORTING REQUIREMENTS: So long as the Borrower is indebted to the Bank, the
Borrower shall submit to the Bank the following: 1. Annually, from each
co-borrower, financial statements in form and content satisfactory to the Bank
and the most recently filed federal income tax returns, including all supporting
schedules as well as any K-1 schedules, within thirty days of filing. 2.
Annually, a consolidating financial statement on Bailey's Sports Bar and Grille
prepared in accordance with generally accepted accounting principles on an
audited basis by an independent certified public accountant acceptable to the
Bank, including a balance sheet, income statement, changes in capital position,
and reconciliation of net worth and including all normal and reasonable
financial notes. Receipt of the financial statements by the Bank shall be no
later than 90 days following the end of Bailey's Sports Bar and Grille's fiscal
year.

REPRESENTATIONS AND WARRANTIES: Borrower represents and warrants to the Bank
that the loan documentation will contain those standard representations and
warranties customarily found in credit agreements of this nature, and others
appropriate to this transaction, including but not limited to the following: 1.
All information that has been furnished to the Bank prior to this commitment
being issued is true and accurate and the Borrower has not failed to disclose
any information of a material nature regarding its business or financial
condition. 2. This commitment, when accepted, and all documents and instruments
to be executed and delivered to the Bank in conjunction with this commitment and
the funding thereof, shall be duly authorized, valid, enforceable and binding on
the parties thereto, and shall not conflict with or constitute a breach of any
other agreements or corporate documents of the Borrower. 3. There is no
litigation or proceeding pending or threatened against the Borrower which may,
in any way, adversely affect the financial condition, operation or prospects of
the Borrower.

CLOSING COSTS AND EXPENSES: The Borrower shall pay all costs and expenses
incurred by the Bank in connection with the Bank's review, due diligence and
closing of the Loan.

MATERIAL ADVERSE CHANGE: This commitment may be terminated, in the sole
discretion of the Bank, upon the occurrence of a material adverse change in the
financial condition of the Borrower.

-3-
<PAGE> 4
SURVIVAL: The terms and provisions of this commitment shall survive the closing
of the Loan made hereunder, the delivery of all documents necessary to carry out
the provision of this commitment, and the funding and making of loans and
disbursements hereunder.

NON-ASSIGNABLE: This commitment and the right of Borrower to receive loans
hereunder may not be assigned by Borrower.

RELIANCE: This commitment constitutes an offer by the Bank to the Borrower to
make loans on the terms and conditions set forth herein and should not be relied
upon by any third party for any purpose.

AMENDMENT AND WAIVER: No alteration, modification, amendment or waiver of any
terms and conditions of this commitment, or of any of the documents required by
or delivered to the Bank under this commitment, shall be effective or
enforceable against the Bank unless set forth in a writing signed by the Bank.

GOVERNING LAW: This commitment and the Loan shall be governed by and construed
in accordance with the laws of the State of North Carolina.

INTEGRATION: The terms set forth above represent the entire understanding
between the Borrower and the Bank with respect to the subject matter of this
commitment, and this commitment supersedes any prior and contemporaneous
agreements, commitments, discussions and understandings, oral or written, with
respect to the subject matter of this commitment.

EXPIRATION: This commitment must be accepted no later than August 15, 1996.
Should this commitment not be accepted by the expiration date, then the Bank
shall have no further obligation to extend credit hereunder.

The terms and conditions set forth above are accepted this __ day of August,
1996.

BORROWERS:

By: /s/ Thomas A. Hager By: /s/ C. Wells Hall, III
- ------------------------------- -------------------------------
Thomas A. Hager C. Wells Hall, III

By: /s/ Octavio J. Ponce By: /s/ Dennis L. Thompson
- ------------------------------- -------------------------------
Octavio J. Ponce Dennis L. Thompson

By: /s/ Patrick C. Boyd
- -------------------------------
Patrick C. Boyd

GUARANTOR:

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

-4-

<PAGE> 1
Exhibit 10.26

NATIONSBANK, N.A.

CREDIT AGREEMENT
(INDIVIDUALS)

This Credit Agreement ("Agreement") dated as of August 8, 1996, by and
between NationsBank, N.A., a national banking association ("Bank") and the
Debtor described below:

In consideration of the financial accommodations described below and
the mutual covenants and agreements contained herein, and intending to be
legally bound hereby, Bank and Debtor agree as follows:

1. DEFINITIONS AND REFERENCE TERMS. In addition to any other terms
defined herein, the terms shall have the meaning set forth with respect thereto:

A. DEBTOR. Dennis L. Thompson, Thomas A. Hager,
Octavio J. Ponce, Patrick C. Boyd
and C. Wells Hall, Ill.

B. DEBTOR'S ADDRESS. 4201-K Stewart Andrew Boulevard
Charlotte, NC 28217

C. GUARANTOR(S). James E. Harris

D. CREDIT. Any Term Loan, Revolving Line of Credit, and Guaranty
described in Section 2 hereof, and any other loans and other financial
accommodations made by Bank to Borrower in the future which specifically
reference this Loan Agreement.

E. CREDIT DOCUMENTS. This Agreement, promissory note or notes
and guaranties executed pursuant to Section 2 hereof and any and all other
documents, instruments, certificates and agreements executed and/or delivered by
Borrower in connection therewith.

F. USE OF PROCEEDS To finance opening costs associated with new
Bailey's Sports Bar and Grille restaurant locations.

G. Other Referential Provisions. All accounting terms not
specifically defined or specified herein shall have the meanings generally
attributed to such terms under generally accepted accounting principles, as in
effect from time to time, consistently applied.

2. CREDIT.

[X] A. TERM LOAN. Any term loan extended now, existing now or
extended hereafter by Bank to Debtor and all renewals, extensions or
rearrangements thereof to Debtor by Bank in an amount, and having a maturity
date, repayment terms and interest rate as set forth on any promissory note or
notes evidencing the loan.

[X] B. GUARANTY. Any guaranties in favor of Bank existing now or
executed hereafter by Debtor, limited for James E. Harris in amount to no more
than the percentage of the balance outstanding on the loan when demand is made
that is consistent with his percentage ownership in Bailey's Sports Grille, Inc.

3. SECURITY. If required by Bank as a condition to the Credit, Debtor
agrees to grant to Bank a first lien (unless otherwise agreed to in
writing by Bank) in such collateral as Bank may require (the
"Collateral") and agrees to do all things as may be required by Bank to
perfect and protect the lien of Bank in such Collateral.

4. REPRESENTATIONS AND WARRANTIES. Debtor hereby represents and warrants
to Bank as follows:

A. AUTHORITY AND COMPLIANCE. Debtor has full power and authority to
execute and deliver the Credit Documents and to incur and perform the
obligations provided for therein, and has the power and authority to own its
property and to carry on business in each jurisdiction in which Debtor does
business. No consent or approval of any public authority or other third party is
required as a condition to the validity of any Credit Document, and Debtor is in
compliance with all laws and regulatory requirements to which it is subject.

B. BINDING AGREEMENT. This Agreement and the other Credit Documents
executed by Debtor constitute valid and legally binding obligations of Debtor,
enforceable in accordance with their terms.

C. LITIGATION. There is no proceeding involving Debtor pending or, to
the knowledge of Debtor, threatened by or before any court or governmental
authority, agency or arbitration authority, except as disclosed to Bank in
writing prior to the date of this Agreement.

CREDIT AGREEMENT/INDIVIDUAL - PAGE 5
<PAGE> 2
D. NO CONFLICTING AGREEMENTS. There is no provision of any existing
agreement, mortgage, indenture or contract binding on Debtor or affecting
Debtor's property, which would conflict with or in any way prevent the
execution, delivery or carrying out of the terms of this Agreement and the other
Credit Documents.

E. OWNERSHIP OF ASSETS. Debtor has good title to the Collateral and
Debtor's other assets, and the Collateral is free and clear of liens, except
those granted to Bank and as disclosed to Bank in writing prior to the date of
this Agreement.

F. TAXES. All income taxes and other taxes due and payable by Debtor
have been paid or are being contested in good faith by appropriate proceedings.

G. FINANCIAL STATEMENTS. The personal financial statements of Debtor
heretofore delivered to Bank properly reflect Debtor's financial condition as of
the date or dates thereof, and there has been no material adverse change since
the date of the financial statements. To the best of Debtor's knowledge, all
factual information furnished by Debtor to Bank in connection with this
Agreement is and will be accurate and complete on the date as of which such
information is delivered to Bank and is not incomplete by the omission of any
material fact necessary to make such information not misleading.

H. ENVIRONMENTAL MATTERS. Debtor is in compliance with all
Environmental Laws where failure to comply could have a material adverse effect
on Debtor's financial condition or operations. Debtor has not received notice of
any claim that Debtor is not in compliance with any Environmental Laws. Neither
Debtor, nor any of Debtor's present assets or operations or Debtor's past assets
or operations, is subject to any order, agreement, proceeding or investigation
by, with, or before any federal, state or local governmental agency or other
party respecting any Environmental Laws.

The term "Environmental Laws" means any federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning, any Hazardous Materials
or other hazardous or toxic substance, as now or at any time hereafter in
effect, including without limitation the Clean Air Act, 42 US Section 7401 et
seq.; Federal Water Pollution Control Act, 33 USC Section 1251 et seq.; Solid
Waste Disposal Act, 42 USC Section 6901 et seq.; Comprehensive Environmental
Response, Compensation and Liability Act, 42 USC Section 9601 et seq.; National
Environmental Policy Act, .42 USC Section 4321 et seq.; regulations of the
Environmental Protection Agency and any applicable local or state law, rule,
regulation or rule of common law and any judicial interpretation thereof
relating primarily to the environment or Hazardous Materials. The term
"Hazardous Material" shall mean and include (a) any asbestos, PCBs, or dioxins,
or insulation or other material composed of or containing asbestos, PCBs or
dioxins, (b) oil, petroleum and any petroleum product, and (c) any hazardous,
toxic, or dangerous waste, substance, or material defined as such in any
Environmental Law.

I. MARGIN STOCK. None of the proceeds of the Credits will be used for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System).
Debtor is not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the Board of Governors of the Federal Reserve System).

J. CONTINUATION OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made under this Agreement shall be deemed to be made at and as of
the date hereof and at and as of the date of any future advance under any
Credit.

5. AFFIRMATIVE COVENANTS. Until full payment and performance of all
obligations of Debtor under the Credit Documents, Debtor will, unless Bank
consents otherwise in writing (and without limiting any requirement of any other
Credit Document):

1. Furnish to Bank annual financial statements of each of the Debtors
within thirty (30) days after the anniversary date of the most recent
financial statement provided to Bank, which financial statements must
be in form and substance satisfactory to Bank, and including without
limitation a listing of all assets and liabilities, a listing of all
sources of income, a listing of the uses of income, the amount and
sources of contingent liabilities, identification of joint owners of
listed assets, and an annual projection of sources and uses of income.

2. Each Debtor will also furnish annually within thirty (30) days of
filing, copies of the most recent personal federal income tax return,
including all supporting schedules as well as any K-1 schedules.

3. Furnish to Bank annually, within ninety (90) days following fiscal
year end of Bailey's Sports Bar and Grille, consolidated financial
statement on Bailey's Sports Bar and Grille prepared in accordance with
generally accepted accounting principles on an audited basis by an
independent certified public accountant acceptable to the Bank,
including a balance sheet, income statement, changes in capital
position, and reconciliation of net worth and including all normal and
reasonable financial notes.

CREDIT AGREEMENT/INDIVIDUAL - PAGE 6
<PAGE> 3
A. COMPLIANCE. Maintain Debtor's qualification to do business, where
required, and comply with all laws, regulations and governmental requirements
including, without limitation, Environmental Laws applicable to Debtor or to any
of Debtor's property, business operations and transactions.

B. ADVERSE CONDITIONS OR EVENTS. Promptly advise Bank in writing of (i)
any condition, event or act which comes to Debtor's attention that would or
might materially adversely affect Debtor's financial condition or operations,
the Collateral, or Bank's rights under the Credit Documents; (ii) any litigation
filed by or against Debtor; (iii) any default under the Credit Documents; (iv)
any default under any agreement, mortgage, indenture or contract binding on
Debtor or affecting any of Debtor's property; (v) any and all enforcement,
cleanup, remedial removal or other governmental or regulatory actions
instituted, completed or threatened pursuant to any applicable federal, state or
local laws, ordinances or regulations relating to any Hazardous Materials
affecting Debtor's property or business operations; and (vi) all claims made or
threatened by any third party against Debtor relating to damages, contribution,
cost recovery, compensation, loss or injury resulting from any Hazardous
Materials. Debtor shall immediately notify Bank of any remedial action taken by
Debtor with respect to Debtor's property.

C. TAXES AND OTHER OBLIGATIONS. Pay all of Debtor's taxes and other
obligations as the same become due and payable, except to the extent being
contested in good faith by appropriate proceedings.

D. LIQUIDITY. Dennis L. Thompson will maintain Unencumbered Liquid
Assets, the aggregate market value of which exceeds $7,000,000.00. Unencumbered
Liquid Assets is defined as cash plus readily marketable securities acceptable
to the Bank which are not pledged as collateral for any obligation of Borrower
or otherwise encumbered. Verification of such liquidity will be provided
annually unless requested more frequently by the Bank.

6. NEGATIVE COVENANTS. Until full payment and performance of all
obligations of Debtor under the Credit Documents, Debtor will not, without the
prior written consent of Bank (and without limiting any requirement of any other
Credit Document):

A. TRANSFER OF ASSETS. Sell, lease, assign or otherwise dispose of or
transfer all or substantially all of Debtor's assets which in the aggregate
would have a material adverse effect.

B. OTHER COVENANTS. Violate or fail to comply with any covenants or
agreements regarding other indebtedness.

C. CHARACTER OF BUSINESS. Change the general character of business
conducted by Debtor at the date hereof, or engage in any type of business not
reasonably related to Debtor's business as presently conducted.

D. ENVIRONMENTAL LAW COMPLIANCE. Violate any Environmental Laws and
Debtor will not use or permit any other party to use any Hazardous Materials
except such materials as are incidental to Debtor's normal course of business,
maintenance and repairs.

Debtors agrees to permit Bank, its agents, contractors and employees to enter
and inspect Debtor's premises at any reasonable times upon three (3) days prior
notice for the purpose of conducting an environmental investigation and audit
(including taking physical samples) to ensure that Debtor is complying with this
covenant. Debtor shall provide Bank, its agents, contractors, employees and
representatives with access to and copies of any and all data and documents
relating to or dealing with any Hazardous Materials within five (5) days of the
request thereof.

7. DEFAULT. The occurrence of any of the following shall constitute a
default under this Agreement and under each of the other Credit Documents:

A. Debtor shall fail to pay in full when due any principal, interest,
fee or other amount payable to Bank under any Credit Document or any other
obligation of Debtor to Bank, whether at maturity or otherwise; or

B. The discovery by Bank that any representation or warranty by Debtor
or any guarantor in any Credit Document or in any financial statement,
certificate, report or opinion submitted to Bank in connection with the Credit
was incorrect or misleading in any material respect when made; or

C. Debtor shall fail to timely and properly observe, keep or perform
any term, covenant, agreement or condition in any Credit Document or in any
other security agreement, deed of trust, mortgage, assignment or other contract
securing payment of any indebtedness of Debtor to Bank, other than those
referred to in Subpart A and B above, and with respect to any such default which
by its nature can be cured, such default shall continue for a period of thirty
(30) days from written notice by Bank; or

D. Any judgment against Debtor or any guarantor or other levy or
attachment against any property of Debtor or any Guarantor in excess of
$50,000.00 remains unpaid, undischarged, not bonded or not dismissed for a
period of thirty (30) days; or

CREDIT AGREEMENT/INDIVIDUAL - PAGE 7
<PAGE> 4
E. The death or legal incapacity of Debtor or any guarantor; or

F. Debtor or any guarantor, or any general partner or joint venturer of
Debtor or any guarantor (i) makes an assignment for the benefit of creditors;
(ii) admits in writing its inability to pay or fails to pay its debts generally
as they become due; (iii) files a petition for relief under any chapter of the
Bankruptcy Code or any other bankruptcy or debtor relief law, domestic or
foreign, as now or hereafter in effect, or seeking the appointment of a trustee,
receiver, custodian, liquidator or similar official for it or any Collateral or
any of its other property; or any such action is commenced against it and it
admits, acquiesces in or does not contest diligently the material allegations
thereof, or the action results in entry of an order for relief against it, or it
does not obtain permanent dismissal and discharge thereof before the earlier of
trial thereon or 60 days after commencement of the action; or (iv) makes a
transfer or incurs an obligation which is fraudulent under any applicable law as
to any creditor.

G. The liquidation, termination, dissolution of any guarantor or
failure of any guarantor to maintain good standing in all appropriate states.

8. REMEDIES UPON DEFAULT. If an event of default shall occur,

A. Any indebtedness of Debtor under any of the Credit Documents shall,
at Bank's option, without notice become immediately due and payable without
presentment, demand, protest or notice of dishonor, all of which are hereby
expressly waived by Debtor;

B. The obligation, if any, of Bank to permit further borrowings under
any of the Credit Documents shall at Bank's option immediately cease and
terminate;

C. Bank shall have all rights, powers and remedies available under each
of the Credit Documents, or afforded by law, including without limitation the
right to resort to any or all of the Collateral and to exercise any or all of
the rights of a secured party pursuant to applicable law. All rights, powers and
remedies of Bank in connection with each of the Credit Documents may be
exercised at any time by the Bank and from time to time after the occurrence of
any event of default, are cumulative and not exclusive, and shall be in addition
to any other rights, powers or remedies provided by law or equity.

9. NOTICES. All notices, requests or demands which any party is required
or may desire to give to any other party under any provision of this Agreement
must be in writing delivered to each party at the following address:

Debtor: Dennis L. Thompson, Thomas A. Hager, Octavio J. Ponce, Patrick C. Boyd
and C. Wells Fall, III

C/O Ramey Millett
4201-K Stewart Andrew Boulevard
Charlotte, NC 28217

Bank: NationsBank, N.A.

Attn: Steven G. Grafton, Vice President
1O1 South Tryon Street, 7th Floor
Charlotte, NC 28255

or to such other address as any party may designate by written notice to all of
the parties. Each such notice, request and demand shall be deemed given or made
as follows:

A. If sent by hand delivery, upon delivery;

B. If sent by mail, upon the earlier of the date of receipt or five (5)
days after receipt in the U.S. Mail, first class postage prepaid.

10. MISCELLANEOUS. Debtor and Bank further covenant and agree as follows,
without limiting any of any other Credit Document except as provided in
paragraph 10.F. of this Agreement:

A. EXPENSES. Debtor agrees to pay all out-of-pocket expenses of Bank,
including but not limited to all reasonable attorney's fees and expenses,
incurred in connection with the Credit Documents and the enforcement and
collection of the Credit.

B. CUMULATIVE RIGHTS AND NO WAIVER. Each and every right granted to
Bank under any Credit Document, or allowed it by law or equity shall be
cumulative of each other and may be exercised in addition to any and all other
rights of Bank, and no delay in exercising any right shall operate as a waiver
thereof, nor shall any single or partial exercise by Bank of any right preclude
any other or future exercise thereof or the exercise of any other right. Debtor
expressly waives any presentment, demand, protest or other notice of any kind,
including but not limited to notice of intent to accelerate and notice of
acceleration. No notice to or demand on

CREDIT AGREEMENT/INDIVIDUAL - PAGE 8
<PAGE> 5
Debtor or any guarantor in any case shall, of itself, entitle Debtor to any
other or future notice or demand in similar or other circumstances.

C. APPLICABLE LAW. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State in which Bank is located as indicated by Bank's address in
Section 9 of this Agreement and applicable United States federal law.

D. AMENDMENT. No modification, consent, amendment or waiver of any
provision of this Agreement, nor consent to any departure by Debtor therefrom,
shall be effective unless the same shall be in writing and signed by an
Assistant Vice President or higher level officer of Bank, and then shall be
effective only in the specific instance and for the purpose for which given.
This Agreement is binding upon Debtor, Debtor's heirs, personal representatives,
successors and assigns, and inures to the benefit of Bank, its successors and
assigns; however, no assignment or other transfer of Debtor's rights or
obligations hereunder shall be made or be effective without Bank's prior written
consent nor shall it relieve Debtor of any obligations hereunder. There is no
third party beneficiary of this Agreement. If more than one person executes this
Agreement as Debtor, the obligations of Debtor hereunder shall be joint and
several.

E. DOCUMENTS. All documents, certificates and other items required
under this Agreement to be executed and/or delivered to Bank shall be in form
and content satisfactory to Bank and its counsel.

F. COMPLIANCE WITH USURY LAWS. All existing and future agreements
regarding the Credit are hereby limited so that in no event (including
prepayment, default, demand for payment, or acceleration) shall the interest
taken, reserved, contracted for, charged or received exceed the maximum
nonusurious amount permitted by applicable law (the "Maximum Amount"); any
document possibly to the contrary shall be automatically reformed and the
interest payable automatically reduced to the Maximum Amount, without necessity
of execution of any amendment or new document; if Bank ever receives interest in
an amount which apart from this provision would exceed the Maximum Amount, the
excess shall, without penalty, be applied to principal in inverse order of
maturity of installments or be refunded to the payor if the principal is paid in
full; and all interest paid or agreed to be paid shall be spread throughout the
full term (including extensions) of the debt so that the amount of interest does
not exceed the Maximum Amount.

G. PARTIAL INVALIDITY. A determination that any provision of any Credit
Document is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of any Credit Document to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.

H. APPRAISALS. When Collateral includes real property, Bank may at its
option obtain once in each year (or as otherwise requested by Bank) an appraisal
or evaluation of the Collateral or any part thereof prepared in accordance with
written instructions from Bank by a third party appraiser engaged directly by
Bank if any of the following occur as determined by Bank in its sole discretion:
(a) an event of default has occurred and is continuing, (b) an adverse change
has occurred in real estate market conditions in the area where the Collateral
is located; (c) an appraisal or evaluation is required or recommended by bank
examiners and/or auditors or pursuant to banking regulations or bank policy then
in effect; or (d) an adverse change has occurred in the financial condition of
Debtor. Each such appraiser and appraisal or evaluation shall be satisfactory to
Bank. To the extent not prohibited by applicable law, the costs of each such
appraisal shall be payable by Debtor to Bank on demand (which obligation Debtor
hereby promises to pay).

I. SURVIVABILITY. All covenants, agreements, representations and
warranties made herein or in the other Credit Documents shall survive the making
of the Credit and shall continue in full force and effect so long as the Credit
is outstanding or the obligation of the Bank to make any advances under the Line
shall not have expired.

11. ADDITIONAL PROVISIONS (which shall be controlling in the event of any
conflict with the preceding provisions, except that paragraph 10.F. of this
Agreement shall be controlling in any event).

12. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON OR
ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE
APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION
OF COMMERCIAL DISPUTES OF JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC.
(J.A.M.S.), AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO
COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES
IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.

CREDIT AGREEMENT/INDIVIDUAL - PAGE 9
<PAGE> 6
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF THE
BORROWER'S DOMICILE AT THE TIME OF THIS AGREEMENT'S EXECUTION AND ADMINISTERED
BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION
ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN NINETY
(90) DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY,
UPON SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING
FOR UP TO AN ADDITIONAL SIXTY (60) DAYS.

B. RESERVATION OF RIGHTS. NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO
(I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION
OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (II) BE A WAIVER BT
TEG BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE BANK HERETO
(A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B)
TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN
FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF OR THE APPOINTMENT OF A RECEIVER. THE BANK MAY EXERCISE SUCH
SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS AGREEMENT. AT BANK'S OPTION, FORECLOSURE
UNDER A DEED OF TRUST OR MORTGAGE MAY BE ACCOMPLISHED BY ANY OF THE FOLLOWING:
DEED OF TRUST OR MORTGAGE, OR BY JUDICIAL FORECLOSURE, NEITHER THIS EXERCISE OF
SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR
FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF
THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE
THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.

THIS WRITTEN AGREEMENT AND THE OTHER CREDIT DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

DEBTOR:

/s/ Dennis L. Thompson (Seal) /s/ Thomas A. Hager (Seal)
- --------------------------- -------------------------
Dennis L. Thompson Thomas A. Hager

/s/ Octavio J. Ponce (Seal) /s/ Patrick C. Boyd (Seal)
- --------------------------- -------------------------
Octavio J. Ponce Patrick C. Boyd

/s/ C. Wells Hall, III (Seal)
- ---------------------------
C. Wells Hall, III

CREDIT AGREEMENT/INDIVIDUAL - PAGE 10
<PAGE> 7
NATIONSBANK, N.A.

By: /s/ James E. Harris (Seal)
- ---------------------------
James E. Harris

By: /s/ Steven G. Grafton (Seal)
- ---------------------------
Steven G. Grafton, Vice President

CREDIT AGREEMENT/INDIVIDUAL - PAGE 11

<PAGE> 1
Exhibit 21.1

EXHIBIT 21.1

SUBSIDIARIES OF REGISTRANT

<TABLE>
<CAPTION>
SUBSIDIARY STATE OF INCORPORATION/ORGANIZATION
- ---------- ----------------------
<S> <C>
Bailey's Sports Grille, Inc. Delaware
F&H Restaurant Corp. Delaware
Fox & Hound, Inc. Texas
Fox & Hound II, Inc. Texas
F&H Dallas, Ltd. Texas
Midway Entertainment, Ltd. Texas
N. Collins Entertainment, Ltd. Texas
505 Entertainment, Ltd. Texas
</TABLE>

<PAGE> 1
Exhibit 23.1

Consent of Independent Auditors

We consent to the reference to our firm under the captions "Experts" and
"Selected Historical Financial Data" and to the use of our reports (i) dated
March 10, 1997, with respect to the consolidated financial statements of F&H
Restaurant Corp., (ii) dated March 10, 1997, with respect to the combined
financial statements of Fox & Hound Entertainment and Restaurant Group, and
(iii) dated March 10, 1997, with respect to the balance sheet of Eatertainment
Inc. (to be named Total Entertainment Restaurant Corp.) in the Registration
Statement and related Prospectus of Eatertainment Inc. for the registration of
2,000,000 shares of its common stock.

/s/ ERNST & YOUNG LLP

Wichita, Kansas
March 13, 1997

<PAGE> 1
EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Eatertainment Inc. on
Form S-1 of our report on Bailey's Sports Grille, Inc. dated March 11, 1997,
appearing in the Prospectus, which is part of this Registration Statement, and
to the reference to us under the heading "Experts" in such Prospectus.

/s/ DELOITTE & TOUCHE LLP

Charlotte, North Carolina
March 11, 1997

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FOR TOTAL ENTERTAINMENT
RESTAURANT CORP. THAT IS EXTRACTED FROM ITS REGISTRATION STATEMENT ON FORM S-1
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REGISTRATION STATEMENT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> FEB-07-1997
<PERIOD-END> FEB-07-1997
<CASH> 1,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FOR F & H RESTAURANT CORP.
THAT IS EXTRACTED FROM TOTAL ENTERTAINMENT RESTAURANT CORP.'S REGISTRATION
STATEMENT ON FORM S-1 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS INCLUDED IN SUCH REGISTRATION STATEMENT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> NOV-07-1996
<PERIOD-END> DEC-31-1996
<CASH> 254,463
<SECURITIES> 0
<RECEIVABLES> 33,346
<ALLOWANCES> 0
<INVENTORY> 92,455
<CURRENT-ASSETS> 453,311
<PP&E> 2,123,023
<DEPRECIATION> 19,302
<TOTAL-ASSETS> 6,009,082
<CURRENT-LIABILITIES> 5,538,819
<BONDS> 5,226,536
0
0
<COMMON> 1,000
<OTHER-SE> 11,992
<TOTAL-LIABILITY-AND-EQUITY> 12,992
<SALES> 384,522
<TOTAL-REVENUES> 384,522
<CGS> 115,725
<TOTAL-COSTS> 328,334
<OTHER-EXPENSES> 20,134
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,683
<INCOME-PRETAX> 25,146
<INCOME-TAX> 3,161
<INCOME-CONTINUING> 11,992
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,992
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FOR FOX & HOUND
ENTERTAINMENT AND RESTAURANT GROUP THAT IS EXTRACTED FROM TOTAL ENTERTAINMENT
RESTAURANT CORP.'S REGISTRATION STATEMENT ON FORM S-1 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN THE
REGISTRATION STATEMENT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 252,229
<SECURITIES> 0
<RECEIVABLES> 32,346
<ALLOWANCES> 0
<INVENTORY> 92,455
<CURRENT-ASSETS> 402,788
<PP&E> 2,487,115
<DEPRECIATION> 383,394
<TOTAL-ASSETS> 2,520,229
<CURRENT-LIABILITIES> 956,311
<BONDS> 696,465
0
0
<COMMON> 0
<OTHER-SE> 1,563,918
<TOTAL-LIABILITY-AND-EQUITY> 1,563,918
<SALES> 5,506,697
<TOTAL-REVENUES> 5,506,697
<CGS> 1,721,088
<TOTAL-COSTS> 4,790,748
<OTHER-EXPENSES> 296,016
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 78,813
<INCOME-PRETAX> 364,492
<INCOME-TAX> 0
<INCOME-CONTINUING> 364,492
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 364,492
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FOR BAILEY'S SPORTS GRILLE,
INC. THAT IS EXTRACTED FROM TOTAL ENTERTAINMENT RESTAURANT CORPS.'S REGISTRATION
STATEMENT ON FORM S-1 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS INCLUDED IN THE REGISTRATION STATEMENT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> DEC-27-1995
<PERIOD-END> DEC-31-1996
<CASH> 1,039,532
<SECURITIES> 0
<RECEIVABLES> 9,263
<ALLOWANCES> 0
<INVENTORY> 136,724
<CURRENT-ASSETS> 1,360,524
<PP&E> 5,799,181
<DEPRECIATION> 1,187,513
<TOTAL-ASSETS> 6,059,381
<CURRENT-LIABILITIES> 4,303,137
<BONDS> 0
0
0
<COMMON> 42,880
<OTHER-SE> 1,713,364
<TOTAL-LIABILITY-AND-EQUITY> 6,059,381
<SALES> 9,312,395
<TOTAL-REVENUES> 9,312,395
<CGS> 2,456,763
<TOTAL-COSTS> 7,603,582
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 237,002
<INCOME-PRETAX> 1,501,635
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,501,635
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,501,635
<EPS-PRIMARY> 150.16
<EPS-DILUTED> 150.16

</TABLE>

<PAGE> 1
Exhibit 99.1

March 13, 1997

Eatertainment Inc.
300 Crescent Court
Building 300, Suite 850
Dallas, Texas 75201

Gentlemen:

I hereby consent to your referencing me in the "Management Section" of your Form
S-1 Registration Statement as an individual who will become a director upon
completion of the public offering.

Sincerely,

/s/ Thomas A. Hager
- --------------------------------
Thomas A. Hager

<PAGE> 1
Exhibit 99.2

March 12, 1997

Eatertainment Inc.
300 Crescent Court
Building 300, Suite 850
Dallas, Texas 75201

Gentlemen:

I hereby consent to your referencing me in the "Management Section" of your Form
S-1 Registration Statement as an individual who will become a director upon
completion of the public offering.

Sincerely,

/s/ Steven Wolosky
- ------------------------------------
Steven Wolosky

<PAGE> 1

EXHIBIT 99.3

March 13, 1997

Eatertainment Inc.
300 Crescent Court
Building 300, Suite 850
Dallas, Texas 75201

Gentlemen:

I hereby consent to your referencing me in the "Management Section" of your Form
S-1 Registration Statement as an individual who will become a director upon
completion of the public offering.

Sincerely,

/s/ WILLIAM F. ORTHWEIN
- ---------------------------------------------------------
William F. Orthwein

<PAGE> 1

EXHIBIT 99.4

March 13, 1997

Eatertainment Inc.
300 Crescent Court
Building 300, Suite 850
Dallas, Texas 75201

Gentlemen:

I hereby consent to your referencing me in the "Management Section" of your Form
S-1 Registration Statement as an individual who will become a director upon
completion of the public offering.

Sincerely,

/s/ CHRISTOPHER GOLDSBURY
- ---------------------------------------------------------
Christopher Goldsbury