uWink Inc. (UWKI)

[Rawnoc]

Franchise update...

In connection with the implementation of our growth strategy to franchise the uWink concept, we have formed a subsidiary, uWink Franchise Corporation, to enter into agreements with our franchisees. On June 8, 2007, uWink Franchise Corporation entered into an area development agreement with OCC Partners, LLC for our first planned franchised restaurants. On August 11, 2008, this area development agreement was terminated due to OCC Partner's failure to secure a suitable location for the first planned restaurant. As a result of this termination, $20,000 of contingent area development fees held in escrow by an outside law firm were returned to OCC Partners. The return of these funds will have no effect on our financial statements because the escrowed $20,000 payment had not been previously reflected in our financials.