ASSIGNMENT OF RIGHTS AND ROYALTY AGREEMENT

     This Assignment of Rights  and  Royalty  Agreement  ("Agreement" is
made this  1st  day  of  January,  1997  by  and  between  Wells-Gardner
Electronics  Corporation, an Illinois  corporation  (the "Company"), and
Randall S. Wells, the  Executive Vice President  and General Manager  of
the  Company ("Wells") and Mark Komorowski,  Vice President  of Business
Services of  the  Company  ("Komorowski"  and  together with  Wells, the
"Employees").

WHEREAS, each Employee is currently an employee of the Company;

WHEREAS, on  the date  of this  Agreement,  the Employees  are  formally
transferring all of the rights to,  title to and interest in the  system
of manufacturing, marketing, distributing  and selling video  projection
systems known as the "Play Master Extreme"  as  is more fully  described
in the attached Exhibit A (2 specification sheets) (the "System");      

WHEREAS, in exchange for the rights  to the System, the Company  desires
to pay the  Employees a royalty  based on net  profits derived from  the
sales of System products; and

WHEREAS, The parties desire  to enter into  this Agreement to  formalize
the terms of such assignment and agreement.

NOW, THEREFORE,  in  consideration  of  the  foregoing  and  the  mutual
convenience and  promises  in this  Agreement  and for  other  good  and
valuable consideration, the receipt and  sufficiency of which is  hereby
acknowledged, the parties agree as follows:

Section 1.   Originality of System.  The Employees represent and warrant
that the  System  is  original, and  does  not,  to the  best  of  their
knowledge, infringe or  misappropriate the rights  or properties of  any
third parties.  Nothing in this Agreement shall be construed as warranty
or representation that any manufacture, sale, lease, use or  importation
will be free  from infringement of  patents, trademarks, copyrights,  or
other forms of intellectual property.

Section 2.  Assignment of Rights.

(a)  The Employees hereby assign and agree to assign all of their rights
to, title and interest in  the System and  all Embodiments  (as  defined
below), whether such  interest arises under  patent law, trademark  law,
copyright law, trade secret  law, or otherwise,  including the right  to
use the System in any and all manner throughout the world in  perpetuity
and the  right to  sue and  recover damages  for any  past, present  and
future infringement or  misappropriation of the  System or  Embodiments.
"Embodiments"  means  the Playmaster  Extreme  business  plan, (attached
hereto  as  Exhibit  C)  the  know-how  to  manufacture,  market,   use,
distribute and sell the System.

(b)  Each  Employee  shall   promptly  disclose  to   the  Company   all
Embodiments.

(c)  Each Employee hereby agrees that the Company may, in the  Company's
sole discretion, make any desired changes to any part of  the System  or 
any Embodiment, to combine it  with other ideas  in any  manner desired.
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(d)  At the request  of the Company,  each Employee  shall promptly  and
without additional compensation execute any and all patent applications,
trademark    registration    applications,    copyright     registration
applications, assignments, or other  instruments that the Company  deems
necessary or appropriate to  apply for or obtain  Letters Patent of  the
United States or any foreign country, trademark registrations, copyright
registrations or otherwise  to protect  the Company's  interest in  such
System and Embodiments,  the expenses  for which  will be  borne by  the
Company.  Each  Employee hereby irrevocably designates and appoints  the
Company and its duly  authorized officers and agents  as his agents  and
attorneys-in-fact to, if the Company is unable for any reason to  secure
such Employee's signature to any lawful and necessary document  required
or appropriate  to    apply  for  or  execute  any  patent  application,
trademark registration, application, copyright registration application,
or other  similar document  with respect  to the  System and  Embodiment
(including, without  limitation,  renewals,  extensions,  continuations,
divisions, or continuations  in part), (i)  act for and  in his  behalf,
(ii) execute and file any such document, and (iii) do all other lawfully 
permitted acts to further the prosecution of  the  same  legal force and  
effect   as if  executed  by  him.  This   designation  and  appointment
constitutes  an irrevocable power of attorney  coupled with an  interest 
with respect to the System and Embodiments.

(e)  The  obligations  of  each  Employee  set  forth  in  this  Section
(including,  without  limitation,   the  assignment  obligations)   will
continue beyond the  termination of this  Agreement whether pursuant  to
this Agreement or  otherwise.  Those  obligations will  be binding  upon
each Employee, his assignees permitted under this Agreement,  executors,
administrators, and other representatives.  In the event of termination,
either voluntary or involuntary,  of either or  both Employee(s) by  the
Company, this Agreement will remain in effect.  Nothing herein shall  be
construed as an  employment agreement  or the  right to  continue as  an
employee of the  Company.  Each  Employee shall be  responsible for  and
shall promptly discharge when  and as due any  taxes resulting from  the
receipt of payments hereunder.  Each  Employee shall indemnify and  hold
the Company harmless from and against any and all failures to pay  taxes
earned on amounts received hereunder.

Section 3.    Royalty.

(a)(i)    In consideration of the rights granted by the Employees to the
Company hereunder, the Company  shall pay the  Employees a royalty  (the
"Royalty")  equal to 20% of Net Profit  (as defined) made by the Company
for products from the System (the "Products") per Exhibit A, equivalents 
and any future improvements thereof for the Royalty Period (as defined).   
The Company will pay the Employees the total  sum of  $5,000  ($2,500 to 
each Employee)  (each, an "Advance") per  year  of  the  Agreement.  The 
payment shall be paid by January 31 of each year of the Agreement.  This 
amount  will  be  deducted  from  the  Royalty due  the Employees  as is 
outlined  in  this Section.  The  Company shall use its best efforts, as 
determined solely by its chief executive officer, to market and sell the 
System.
<PAGE>
(a)(ii)   At any time during the Royalty Period, if the Company  decides
to sell  the System and the Embodiments and any other related  equipment
or  inventory  (Collectively,  the  "System  Assets")  and  the  Company
receives  an  offer for the System Assets (the "Offer"),  the  Employees
shall have the  right, but not  the obligation, to  purchase the  System
Assets for  the same  price as  the  Offer and  on  the same  terms  and
conditions.  The Company shall promptly notify the Employees of any such
Offer.  The Employees shall promptly notify the Company if they wish  to
purchase the System Assets pursuant to this Section.  Such purchase  and
sale shall thereafter by promptly consummated.
      
(b)   "Net Profit" means  net  sales (minus any  allowance for  returns)
minus  the  cost  of  goods  sold,  minus  any  administrative,   sales,
advertising, trade  show,  warranty, research  and  development,  direct
inventory write-off, and other costs to  be mutually agreed upon by  the
Employee(s) and  the Company,  all as  is more  fully described  in  the
attached Exhibit  B.    Expenses  to be  allocated  to  the  Net  Profit
calculation are  based on  expenses incurred  during  each year  of  the
"Royalty Period". The "Royalty Period" shall commence on January 1, 1997 
and end on December 31, 1998.

(c)   The Royalty shall be  accounted for and paid  within 60 days after
the end  of each  semi-annual  period during  the  term of  the  Royalty
Period.  All payments shall be made in  US dollars and shall be made  in
accordance with the Employees reasonable instructions.

(d)   At the end  of each year,  the Company shall  reconcile Net Profit
with its final audited  financial statements to  the extent the  Company
has paid the  Employees an amount  in excess of  20% of  the actual  Net
Profit for that year,  such Employees shall  promptly repay any  amounts
due to the Company.  To the extent the Company has paid the Employees an
amount which is less than  20% of the actual  Net Profit for that  year,
the Company shall promptly  pay such amounts due  to the Employees.   To
the extent the Advances exceed the Royalties due to the Employees at the
end of  the Royalty  Period, the  Employees  shall promptly  repay  such
amounts to the Company.

(e)   The  Employee(s)  reserve  the  right  to  audit  the  net  profit
calculation and supporting documentation on a semi-annual basis  related
to the Royalty payment in Section 3.


Section 4.    Restrictive Covenant.

(a)  Restrictive Covenant.   Each Employee hereby  covenants and  agrees
that, during the term of  this Agreement, and for  a period of one  year
thereafter, each Employee will not, directly or indirectly, for  himself
or as an agent on  behalf of, or in  conjunction with any person,  firm,
association or corporation, compete with the Company or attempt to  sell
or sell any Company or equivalent products or service to any present  or
former (within the last 24 months) customer of the Company in the World.
<PAGE>
(b)  Modification By Court.   The parties hereto agree  that if for  any
reason, the covenants or  any portion of the  covenants provided for  in
this Section shall be deemed  too expensive and therefore  unreasonable,
they hereby expressly authorize the court  to modify those covenants  or
offending portions of the  covenants so as  to create limitations  which
are reasonable and enforceable.

(c)  Other than for acts or omissions which violate the representations,
terms or conditions of this Agreement or are illegal, the Company  shall
indemnify and  hold the  Employees harmless  from  any and  all  losses,
damages, or claims (including reasonable attorney's fees) resulting from
any acts of the Company's agents, employees, dealers, subcontractors, or
end users  or relating  in  any way  to  the content,  completeness,  or
performance of any products covered herein including but not limited  to
any third party claims of patent, trademark, or copyright  infringement.

(d)  Each party shall be responsible for their own litigation expenses.

Section 5.  Effect  of Prior Agreements.    This Agreement contains  the
entire understanding between the Company  and the Employees relating  to
the  subject  matter   hereof  and  supersedes   any  prior   agreement,
communication, or understanding  relating to the  subject matter  hereof
between the Company and the Employees.

Section 6.     Modification  and  Waiver.   This  Agreement may  not  be
modified or amended  except by an  instrument in writing  signed by  the
parties.  No term or condition of this Agreement will be deemed to  have
been waived, except by written instrument of the party charged with such
waiver.  No such written waiver will be deemed to be a continuing  wives
unless specifically stated  therein, and each  such waiver will  operate
only as to the specific term or condition waived and will not constitute
a waiver of such term or condition for the future or as to any act other
than that specifically waived.

Section 7.      Severability.  If, for any reason, any provision of this
Agreement is held  invalid, such invalidity  will not  affect any  other
provision of this Agreement, and each provision will to the full  extent
consistent with law continue in full force and effect.  If any provision
of this Agreement is  held invalid in part,  such invalidity will in  no
way affect the rest of such  provision, and the rest of such  provision,
together with all other provisions of this Agreement, will, to the  full
extent consistent with  law, continue  in full  force and  effect.   The
Employees are  jointly  and severally  liable  for any  breach  of  this
Agreement by either Employee.
<PAGE)
Section 8.     Notices.   Any notice  or consent  required or  permitted
pursuant to the provisions of this Agreement must be in writing and will
be deemed to have been properly given when sent by telecopier,  provided
that a copy is sent by United States mail, certified or registered;  one
day  after  deposit  with  a  nationally  recognized  overnight  courier
service; or when personally delivered, addressed as follows:

     If to the Company:
                         Wells-Gardner Electronics Corporation
                         2701 N. Kildare Avenue
                         Chicago, Illinois  60639
                         Attn:  Anthony Spier
                         Chairman and CEO
                         Telecopy No:  773 252-8072

     With a copy to:
                         Katten, Muchin & Zavis
                         525 West Monroe Street
                         Chicago, Illinois  60661
                         Attn:  David J. Kaufman
                         Telecopy No:  312 902-1061                       


     If to the Employees:
                         Randall S. Wells
                         515 N. Wisner
                         Park Ridge, Illinois  60068

                         Mark Komorowski
                         8581 Ventura Drive
                         St. John, Indiana  46373

Each party  will be  entitled to  specify a  different address  for  the
receipt of subsequent notices  by giving written  notice thereof to  the
other party in accordance with this Section.

Section 9.          Headings.  The headings  and other captions in  this
Agreement are included solely for convenience of reference and will  not
affect  the  meaning  and  interpretation  of  any  provision  of   this
Agreement.

Section 10.   Governing  Law.  This Agreement  has been executed in  the
State of Illinois,  and its validity,  interpretation, performance,  and
enforcement will be governed by the laws of such state without regard to
conflicts of laws principles.

Section 11.    Binding Effect.  This Agreement will be binding upon  and
inure to the benefit of each Employee, the Company, and their respective
successors and  permitted assigns.   The  Company  will be  entitled  to
assign its  rights and  duties under  this Agreement  provided that  the
Company will remain liable to each Employee should such assignee fail to
perform its obligations under this Agreement.

Section 12.       No Strict  Construction.   The language  used in  this
Agreement will be  deemed to be  the language chosen  by the parties  to
express their mutual intent, and no rule of strict construction will  be
applied against either party.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its  duly  authorized  officer and  each  Employee  has  signed  this
Agreement, as of the date first above written.

                         WELLS-GARDNER ELECTRONICS CORPORATION


                         By:  ANTHONY SPIER
                              Anthony Spier, Chairman and CEO

                              RANDALL S. WELLS
                              Randall S. Wells

                              MARK KOMOROWSKI
                              Mark Komorowski
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