Document:

Exhibit 10.1

              AMERICAN FAMILY COOKIES, INC. 2001 STOCK OPTION PLAN

1.       PURPOSE

                  The purpose of this plan (the "Plan") is to secure for
AMERICAN FAMILY COOKIES, INC. (the "Company") and its shareholders the benefits
arising from capital stock ownership by employees, officers, directors,
consultants and other service providers of the Company or an Affiliate (as that
term is defined in the Plan) who are expected to contribute to the Company's
future growth and success. The Plan is also designed to attract and retain other
persons who will provide services to the Company. Those provisions of the Plan
which make express reference to Section 422 of the Internal Revenue Code of
1986, as amended or replaced from time to time (the "Code"), shall apply only to
Incentive Stock Options (as that term is defined in the Plan).

2.       TYPE OF OPTIONS AND ADMINISTRATION

                  (1) TYPES OF OPTIONS. Options granted pursuant to the Plan
shall be authorized by action of the Board of Directors (the "Board") of the
Company (or the committee appointed by the Board in accordance with Section 2(b)
below) and may be either incentive stock options ("Incentive Stock Options")
intended to meet the requirements of Section 422 of the Code or non-statutory
options which are not intended to meet the requirements of Section 422 of the
Code ("Non-Qualified Options").

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                  (2) ADMINISTRATION. The Plan will be administered by the Board
or by a committee consisting of two or more directors each of whom shall be a
"non-employee director," within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor rule ("Rule 16b-3"), and an "outside director", within the meaning of
Treasury Regulation Section 1.162-27(e)(3) promulgated under Section 162(m) of
the Code, (the "Committee") appointed by the Board, in each case whose
construction and interpretation of the terms and provisions of the Plan shall be
final, conclusive and binding upon the optionee and all other persons interested
or claiming interests under the Plan. If the Board determines to create a
Committee to administer the Plan, the delegation of powers to the Committee
shall be consistent with applicable laws or regulations (including, without
limitation, applicable state law and Rule 16b-3). The Board or the Committee may
in its sole discretion grant options to purchase any class of the Company's
shares (the "Shares"), and issue Shares upon exercise of such options as
provided in the Plan. The Board or the Committee shall have authority, subject
to the express provisions of the Plan, to construe the respective option
agreements and the Plan; to prescribe, amend and rescind rules and regulations
relating to the Plan; to determine the terms and provisions of the respective
option agreements, which need not be identical; and to make all other
determinations in the judgment of the Board or the Committee necessary or
desirable for the administration of the Plan. The Board or the Committee may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any option agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect and it shall be the sole and final judge
of such expediency. No director or person acting pursuant to authority delegated
by the Board shall be liable for any action or determination under the Plan made
in good faith.

3.       ELIGIBILITY

                  Options may be granted to persons who are, at the time of
grant, employees, officers, directors, consultants or other service providers of
the Company or any parent or subsidiary of the Company as defined in Sections
424(e) and 424(f) of the Code ("Affiliate"), PROVIDED that Incentive Stock
Options may only be granted to individuals who are employees (within the meaning
of Section 3401(c) of the Code) of the Company or any Affiliate. Options may
also be granted to other persons, PROVIDED that such options shall be
Non-Qualified Options. A person who has been granted an option may, if he or she
is otherwise eligible, be granted additional options if the Board or the
Committee shall so determine. Notwithstanding anything in the Plan to the
contrary, no employee of the Company or an Affiliate shall be granted options
with respect to more than 100,000 Shares during any calendar year.

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4.       STOCK SUBJECT TO PLAN

                  The Shares subject to options granted under the Plan shall be
authorized but unissued Shares or reacquired Shares. Subject to adjustment as
provided in Section 15 below, the maximum number of Shares of the Company which
may be issued and sold under the Plan is 600,000. If an option granted under the
Plan shall expire, terminate or is cancelled for any reason without having been
exercised in full, the unpurchased Shares subject to such option shall again be
available for subsequent option grants under the Plan.

5.       FORMS OF OPTION AGREEMENTS

                  As a condition to the grant of an option under the Plan, each
recipient of an option shall execute an option agreement in such form not
inconsistent with the Plan and as may be approved by the Board or the Committee.
The terms of such option agreements may differ among recipients.

6.       PURCHASE PRICE

                  (1) GENERAL. The purchase price per Share issuable upon the
exercise of an option shall be determined by the Board or the Committee at the
time of grant of such option, PROVIDED, HOWEVER, that such exercise price (i) in
the case of Incentive Stock Options, shall not be less than 100% of the Fair
Market Value (as hereinafter defined) of such Shares at the time of grant of
such option, and for Incentive Stock Options granted to a "10% Shareholder" (as
defined in Section 11(b)), shall not be less than 110% of such Fair Market
Value, and (ii) in the case of Non-Qualified Options, shall not be less than 85%
of such Fair Market Value. "Fair Market

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Value" of a Share as of a specified date for purposes of the Plan shall mean the
closing price of a Share on the principal  securities exchange  (including,  but
not limited to, the Nasdaq  SmallCap  Market or the Nasdaq  National  Market) on
which such Shares are traded on the day  immediate0ly  preceding  the date as of
which Fair Market Value is being  determined,  or on the next  preceding date on
which  such  Shares  are  traded if no Shares  were  traded on such  immediately
preceding  day, or if the Shares are not traded on a securities  exchange,  Fair
Market  Value  shall be deemed to be the  average  of the high bid and low asked
prices of the  Shares  in the  over-the-counter  market  on the day  immediately
preceding  the date as of which Fair Market Value is being  determined or on the
next  preceding  date on which such high bid and low asked prices were recorded.
If the Shares are not publicly traded,  Fair Market Value of a Share (including,
in the case of any repurchase of Shares,  any distributions with respect thereto
which would be repurchased with the Shares) shall be determined in good faith by
the Board.  In no case shall Fair  Market  Value be  determined  with  regard to
restrictions other than restrictions which, by their terms, will never lapse.

                  (2) PAYMENT OF PURCHASE PRICE. Options granted under the Plan
may provide for the payment of the exercise price by delivery of cash or a check
to the order of the Company in an amount equal to the exercise price of such
options, or by any other means which the Board determines are consistent with
the purpose of the Plan and with applicable laws and regulations (including,
without limitation, the provisions of Rule 16b-3).

7.       EXERCISE OPTION PERIOD

                  Subject to earlier termination as provided in the Plan, each
option and all rights thereunder shall expire on such date as determined by the
Board or the Committee and set forth in the applicable option agreement,
PROVIDED that such date shall not be later than ten (10) years after the date on
which the option is granted, or as prescribed by Section 11(b) hereinbelow.

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8.       EXERCISE OF OPTIONS

                  Each option granted under the Plan shall be exercisable either
in full or in installments at such time or times and during such period as shall
be set forth in the option agreement evidencing such option, subject to the
provisions of the Plan. Subject to the requirements in the immediately preceding
sentence, if an option is not at the time of grant immediately exercisable, the
Board or the Committee may (i) in the agreement evidencing such option, provide
for the acceleration of the exercise date or dates of the subject option upon
the occurrence of specified events and/or (ii) at any time prior to the complete
termination of an option, accelerate the exercise date or dates of such option.

9.       NONTRANSFERABILITY OF OPTIONS

                  No option granted under this Plan shall be assignable or
otherwise transferable by the optionee, except by will or by the laws of descent
and distribution. An option may be exercised during the lifetime of the optionee
only by the optionee.

10.      EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP

                  (1) Except as provided in Section 11(b) with respect to
Incentive Stock Options and except as may otherwise be determined by the Board
or the Committee at the date of grant of an option, and subject to the
provisions of the Plan, an optionee may exercise an option at any time within
three (3) months following the termination of the optionee's employment or other
relationship with the Company and its Affiliates or within one (1) year if such
termination was due to the death or disability (within the meaning of Section
22(e)(3) of the Code or any successor provisions thereto) of the optionee (to
the extent such option is otherwise exercisable at the time of such termination)
but in no event later than the expiration date of the option.

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                  (2) Notwithstanding the foregoing and except as may otherwise
be determined by the Board or the Committee, if the termination of the
optionee's employment or other relationship with the Company and/or its
Affiliate is for cause, the option shall expire immediately upon such
termination. The Board or the Committee shall have the power to determine, in
its sole discretion, what constitutes a termination for cause, whether an
optionee has been terminated for cause, and the date upon which such termination
for cause occurs. Any such determinations shall be final and conclusive and
binding upon the optionee and all other persons interested or claiming interests
under the Plan.

11.      INCENTIVE STOCK OPTIONS

                  Options granted under the Plan which are intended to be
Incentive Stock Options shall be subject to the following additional terms and
conditions:

                  (1) EXPRESS DESIGNATION. All Incentive Stock Options granted
under the Plan shall, at the time of grant, be specifically designated as such
in the option agreement covering such Incentive Stock Options.

                  (2) 10% SHAREHOLDER. If any employee to whom an Incentive
Stock Option is to be granted under the Plan is, at the time of the grant of
such option, the owner of stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company (after taking into account
the attribution of stock ownership rules of Section 424(d) of the Code), then
the following special provisions shall be applicable to the Incentive Stock
Option granted to such individual:

                  (i) the purchase price per Share subject to such Incentive
         Stock Option shall not be less than 110% of the Fair Market Value of
         one Share at the time of grant; and

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                  (ii) the option exercise period shall not exceed five (5)
         years from the date of grant.

                  (3) DOLLAR LIMITATION. For so long as the Code shall so
provide, options granted to any employee under the Plan (and any other incentive
stock option plans of the Company) which are intended to constitute Incentive
Stock Options shall not constitute Incentive Stock Options to the extent that
such options, in the aggregate, become exercisable for the first time in any one
calendar year for Shares with an aggregate Fair Market Value, as of the
respective date or dates of grant, of more than $100,000.

                  (4) TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY. No
Incentive Stock Option may be exercised unless, at the time of such exercise,
the optionee is, and has been continuously since the date of grant of his or her
option, employed by the Company or an Affiliate, except that:

                  (i) an Incentive Stock Option may be exercised within the
         period of three (3) months after the date the optionee ceases to be an
         employee of the Company or an Affiliate (or within such lesser period
         as may be specified in the applicable option agreement), to the extent
         it is otherwise exercisable at the time of such cessation,

                  (ii) if the optionee dies while in the employ of the Company
         or an Affiliate, or within three (3) months after the optionee ceases
         to be such an employee, the Incentive Stock Option may be exercised by
         the person to whom it is transferred by will or the laws of descent and
         distribution within the period of one (1) year after the date of death
         (or within such lesser period as may be specified in the applicable
         option agreement), to the extent it is otherwise exercisable at the
         time of the optionee's death, and

                  (iii) if the optionee becomes disabled (within the meaning of
         Section 22(e)(3) of the Code or any successor provisions thereto) while
         in the employ of the Company or an Affiliate, the Incentive Stock
         Option may be exercised within the period of one (1) year after the
         date the optionee ceases to be such an employee because of such
         disability (or within such lesser period as may be specified in the
         applicable option agreement), to the extent it is otherwise exercisable
         at the time of such cessation.

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                  For all purposes of the Plan and any option granted hereunder,
"employment" shall be defined in accordance with the provisions of Section
1.421-7(h) of the Income Tax Regulations (or any successor regulations).
Notwithstanding the foregoing provisions, no Incentive Stock Option may be
exercised after its expiration date.

12.      ADDITIONAL PROVISIONS

                  (1) ADDITIONAL OPTION PROVISIONS. The Board or the Committee
may, in its sole discretion, include additional provisions in option agreements
covering options granted under the Plan, including without limitation,
restrictions on transfer, repurchase rights, rights of first refusal,
commitments to pay cash bonuses or to make, arrange for or guaranty loans or to
transfer other property to optionees upon exercise of options, or such other
provisions as shall be determined by the Board or the Committee, PROVIDED that
such additional provisions shall not be inconsistent with the requirements of
applicable law and such additional provisions shall not cause any Incentive
Stock Option granted under the Plan to fail to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Code.

                  (2) ACCELERATION, EXTENSION, ETC. The Board or the Committee
may, in its sole discretion (i) accelerate the date or dates on which all or any
particular option or options granted under the Plan may be exercised, or (ii)
extend the dates during which all, or any particular, option or options granted
under the Plan may be exercised, PROVIDED, HOWEVER, that no such acceleration or
extension shall be permitted if it would (i) cause any Incentive Stock Option
granted under the Plan to fail to qualify as an Incentive Stock Option within
the meaning of Section 422 of the Code, or (ii) cause the Plan or any option
granted under the Plan to fail to comply with Rule 16b-3 (if applicable to the
Plan or such option).

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13.      GENERAL RESTRICTIONS

                  (1) INVESTMENT REPRESENTATIONS. The Board or the Committee may
require any person to whom an option is granted, as a condition of exercising
such option or award, to give written assurances in substance and form
satisfactory to the Board or the Committee to the effect that such person is
acquiring the Shares subject to the option or award for his or her own account
for investment and not with any present intention of selling or otherwise
distributing the same, and to such other effects as the Board or the Committee
deems necessary or appropriate in order to comply with applicable federal and
state securities laws, or with covenants or representations made by the Company
in connection with any public offering of its Shares, including any "lock-up" or
other restriction on transferability.

                  (2) COMPLIANCE WITH SECURITIES LAW. Each option shall be
subject to the requirement that if, at any time, counsel to the Company shall
determine that the listing, registration or qualification of the Shares subject
to such option or award upon any securities exchange or automated quotation
system or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or that the disclosure of non-public
information or the satisfaction of any other condition, is necessary as a
condition of, or in connection with the issuance or purchase of Shares
thereunder, except to the extent expressly permitted by the Board, such option
or award may not be exercised, in whole or in part, unless such listing,
registration, qualification, consent or approval or satisfaction of such
condition shall have been effected or obtained on conditions acceptable to the
Board or the Committee. Nothing herein shall be deemed to require the Company to
apply for or to obtain such listing, registration, qualification, consent or
approval, or to satisfy such condition. In addition, Shares issued upon the
exercise of options may bear such legends as the Company may deem advisable to
reflect restrictions which may be imposed by law, including, without limitation,
the Securities Act of 1933, as amended, any state "blue sky" or other applicable
federal or state securities law.

14.      RIGHTS AS A SHAREHOLDER

                  The holder of an option shall have no rights as a shareholder
with respect to any shares covered by the option (including, without limitation,
any right to vote or to receive dividends or non-cash distributions with respect
to such shares) until the effective date of exercise of such option and then
only to the extent of the Shares so purchased. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date of
exercise.

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15.      ADJUSTMENT PROVISIONS FOR RECAPITALIZATIONS, REORGANIZATIONS AND
         RELATED TRANSACTIONS

                  (1) RECAPITALIZATIONS AND RELATED TRANSACTIONS. If, through or
as a result of any recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar transaction (i) the outstanding
Shares are increased, decreased or exchanged for a different number or kind of
shares or other securities of the Company, or (ii) additional Shares or new or
different shares or other non-cash assets are distributed with respect to such
Shares or other securities, an appropriate and proportionate adjustment shall be
made in (x) the maximum number and kind of Shares reserved for issuance under or
otherwise referred to in the Plan, (y) the number and kind of Shares or other
securities subject to any then-outstanding options under the Plan, and (z) the
price for each Share subject to any then-outstanding options under the Plan,
without changing the aggregate purchase price as to which such options remain
exercisable. Notwithstanding the foregoing, no adjustment shall be made pursuant
to this Section 15 if such adjustment (A) would cause any Incentive Stock Option
granted under the Plan to fail to qualify as an Incentive Stock Option within
the meaning of Section 422 of the Code, (B) would cause the Plan or any option
granted under the Plan to fail to comply with Rule 16b-3 (if applicable to the
Plan or such option), or (C) would be considered as the adoption of a new plan
requiring shareholder approval.

                  (2) BOARD AUTHORITY TO MAKE ADJUSTMENTS. Any adjustments under
this Section 15 will be made by the Board or the Committee, whose determination
as to what adjustments, if any, will be made and the extent thereof will be
final, binding and conclusive. No fractional shares will be issued under the
Plan on account of any such adjustments.

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16.      NO EMPLOYMENT RIGHTS

                  Nothing contained in the Plan or in any option agreement shall
confer upon any optionee any right with respect to the continuation of his or
her employment or other relationship with the Company or an Affiliate or
interfere in any way with the right of the Company or an Affiliate at any time
to terminate such employment or relationship or to increase or decrease the
compensation of the optionee.

17.      AMENDMENT, MODIFICATION OR TERMINATION OF THE PLAN

                  (1) The Board may at any time modify, amend or terminate the
Plan, PROVIDED that to the extent required by applicable law, any such
modification, amendment or termination shall be subject to the approval of the
shareholders of the Company.

                  (2) The modification, amendment or termination of the Plan
shall not, without the consent of an optionee, affect his or her rights under an
option previously granted to him or her. With the consent of the optionee
affected, the Board or the Committee may amend or modify outstanding option
agreements in a manner not inconsistent with the Plan. Notwithstanding the
foregoing, the Board shall have the right (but not the obligation), without the
consent of the optionee affected, to amend or modify (i) the terms and
provisions of the Plan and of any outstanding Incentive Stock Option agreements
to the extent necessary to qualify any or all such options for such favorable
federal income tax treatment (including deferral of taxation upon exercise) as
may be afforded incentive stock options under Section 422 of the Code, (ii) the
terms and provisions of the Plan and the option agreements entered into in
connection with any outstanding options to the extent necessary to ensure the
qualification of the Plan and such options under Rule 16b-3 (if applicable to
the Plan and such options), and (iii) the terms and provisions of the Plan and
the option agreements entered into in connection with any outstanding options to
the extent that the Board determines necessary to preserve the deduction of
compensation paid to certain optionees who are "covered employees," within the
meaning of Treasury Regulation Section 1.162-27(c)(2), as a result of the grant
or exercise of options under the Plan.

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18.      WITHHOLDING

                  (2) The Company shall have the right to deduct and withhold
from payments or distributions of any kind otherwise due to the optionee any
federal, state or local taxes of any kind required by law to be so deducted and
withheld with respect to any Shares issued upon exercise of options under the
Plan. Subject to the prior approval of the Company, which may be withheld by the
Company in its sole discretion, the optionee may elect to satisfy such
obligations, in whole or in part by (i) causing the Company to withhold Shares
otherwise issuable pursuant to the exercise of an option, (ii) delivering to the
Company Shares already owned by the optionee, or (iii) delivering to the Company
cash or a check to the order of the Company in an amount equal to the amount
required to be so deducted and withheld. The Shares delivered in accordance with
method (ii) above or withheld in accordance with method (i) above shall have a
Fair Market Value equal to such withholding obligation as of the date that the
amount of tax to be withheld is to be determined. An optionee who has made (with
the Company's approval) an election pursuant to method (i) or (ii) of this
Section 18(a) may only satisfy his or her withholding obligation with Shares
which are not subject to any repurchase, forfeiture, unfulfilled vesting or
other similar requirements.

                  (2) The acceptance of Shares upon exercise of an Incentive
Stock Option shall constitute an agreement by the optionee (i) to notify the
Company if any or all of such Shares are disposed of by the optionee within two
(2) years from the date the option was granted or within one (1) year from the
date the shares were issued to the optionee pursuant to the exercise of the
option, and (ii) if required by law, to remit to the Company, at the time of and
in the case of any such disposition, an amount sufficient to satisfy the
Company's federal, state and local withholding tax obligations with respect to
such disposition, whether or not, as to both (i) and (ii), the optionee is in
the employ of the Company or an Affiliate at the time of such disposition.

19.      CANCELLATION AND NEW GRANT OF OPTIONS, ETC.

                  The Board or the Committee shall have the authority to effect,
at any time and from time to time, with the consent of the affected optionee(s)
the (i) cancellation of any or all outstanding options under the Plan and the
grant in substitution therefor of new options under the Plan (or any successor
stock option plan of the Company) covering the same or different numbers of
Shares and having an option exercise price per Share which may be lower or
higher than the exercise price per share of the cancelled options, or (ii)

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amendment of the terms of the option agreements entered into in connection with
any and all outstanding options under the Plan to provide an option exercise
price per share which is higher or lower than the then-current exercise price
per Share of such outstanding options.

20.      EFFECTIVE DATE AND DURATION OF THE PLAN

                  (1) EFFECTIVE DATE. The Plan shall become effective when
adopted by the Board, but no Incentive Stock Option granted under the Plan shall
become exercisable unless and until the Plan shall have been approved by the
Company's shareholders. If such shareholder approval is not obtained within
twelve (12) months after the date of the Board's adoption of the Plan, no
options previously granted under the Plan shall be deemed to be Incentive Stock
Options and no Incentive Stock Options shall be granted thereafter. Amendments
to the Plan shall become effective as of the latest of (i) the date of adoption
by the Board, (ii) the date set forth in the amendments or (iii) in the case of
any amendment requiring shareholder approval (as set forth in Section 17), the
date such amendment is approved by the Company's shareholders. Notwithstanding
the foregoing, no Incentive Stock Option granted on or after the effective date
of such amendment shall become exercisable unless and until such amendment shall
have been approved by the Company's shareholders. If such shareholder approval
is not obtained within twelve (12) months of the Board's adoption of such
amendment, no options granted on or after the effective date of such amendment
shall be deemed Incentive Stock Options and no Incentive Stock Options shall be
granted thereafter. Subject to above limitations, options may be granted under
the Plan at any time after the effective date of the Plan and before the date
fixed for termination of the Plan.

                  (2) TERMINATION. Unless sooner terminated by the Board, the
Plan shall terminate upon the close of business on the day next preceding the
tenth anniversary of the date of its adoption by the Board. After termination of
the Plan, no further options may be granted under the Plan; PROVIDED, HOWEVER,
that such termination will not affect any options granted prior to termination
of the Plan.

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21.      GOVERNING LAW

                  The provisions of this Plan shall be governed and construed in
accordance with the laws of the State of Delaware without regard to the
principles thereof relating to the conflicts of laws.AMERICAN FAMILY COOKIES, INC.
                            (a Delaware Corporation)

                                 750,000 Shares

                           SELECTED DEALER'S AGREEMENT

         AMERICAN FAMILY COOKIES,  INC. a Delaware  corporation (the "Company"),
invites  your  participation  as a Selected  Dealer  ("Selected  Dealer")  in an
offering  of up to  750,000  Shares of its Common  Stock,  (the  "Shares").  The
Company is  offering  the  Shares  pursuant  to a  registration  statement  (the
"Registration  Statement")  filed under the  Securities  Act of 1933, as amended
(the "Act").  This  invitation  is made by the Company only if the Shares may be
lawfully  offered by dealers in your  state.  The terms and  conditions  of this
invitation are as follows:

         1.  APPLICATION TO PARTICIPATE.  If you desire to offer and sell any of
the Shares,  your application should reach us promptly by telephone or telegraph
at American Family Cookies, Inc., 112 Wheeler Street, LaVergne, Tennessee, 33086
(telephone (615)  793-9800).  You should sign and return to us the enclosed copy
of this letter agreement, whereupon we shall use our best efforts to comply with
your  request.  The  Company  reserves  the  right to  accept,  reject or modify
subscriptions,  in whole  or in  part,  to make  allotments,  and to  close  the
subscription  book at any time,  without  notice.  The Shares will be  confirmed
subject to the terms and  conditions of this  Agreement.  The Shares are offered
for  delivery  when,  as and if accepted by the Company and subject to the terms
stated herein and in the Prospectus filed as part the Registration Statement, as
well as to the  approval of counsel  for the Company as to legal  matters and to
withdrawal, cancellation or modification, without notice.

         2. OFFERING TO PUBLIC. You agree to make a bona fide public offering of
all Shares allotted to you, and you will not offer to sell any such Shares below
the public  offering  price of $2.00 per Share  before the  termination  of this
Agreement.

         3.  COMMISSIONS.  All Selected  Dealers will be allowed,  on all Shares
sold by them,  a  commission  of eight (8%)  percent of the total sales price or
$0.16  per  Share.   Each  Selected   Dealer  will,  in  connection   with  this
participation,  comply  with  the  provisions  of  Section  24 of  the  National
Association of Securities Dealers, Inc. ("NASD") Rules of Fair Practice and will
not grant any  concessions,  discounts  or any  other  allowances  which are not
permitted by those rules.

         4. SELECTED  DEALER'S  SALES.  The Selected  Dealer shall  purchase the
Shares for its  customers  only and all such  purchases  shall be made only upon
orders  received by the  Selected  Dealer from its  customers.  No Shares may be
purchased for the account of the Selected Dealer or its principals. In all sales
of the Shares hereunder, the Selected Dealer shall confirm as agent for a member
of the public.

         5. DELIVERY OF FUNDS.  The Selected  Dealer shall promptly  transmit to
Continental Stock Transfer & Trust Company (the "Escrow Agent") no later than 12
noon of the day subsequent to the receipt of funds received form purchasers with
a confirmation or a record of each sale which shall set forth the name, address,
and social security number of each  individual  purchaser,  the number of Shares
purchased,  and,  if  there is more  than  one  registered  owner,  whether  the
certificate or  certificates  evidencing  the  securities  comprising the Shares
purchased are to be issued to the purchaser in joint tenancy or otherwise. Also,
each  Selected  Dealer shall  report,  in writing,  to the Company the number of
persons in each such state who  purchase  the Shares from the  Selected  Dealer.
Each sale may be rejected by the Company, and if rejected, the Escrow Agent will
directly return funds to the rejected customer.

         6. PAYMENT FOR SALES.  Payment for the Company's Shares shall accompany
all  confirmations  and  applications  and shall be in clearing house funds. All
checks and other  orders for the payment of money  shall be made  payable to the
Escrow Agent for deposit into an escrow account maintained at JP Morgan
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Chase  Bank (the  "Escrow  Account").  All  subscribers'  checks  are to be made
payable to "Continental Stock Transfer & Trust Company, as Escrow Agent." Shares
sold by the Selected Dealer will be available for delivery at Continental  Stock
Transfer & Trust Company,  17 Battery Place, 8th Floor, New York, New York 10004
unless other arrangements are made by the Company for delivery.

         7. DEPOSIT OF SALES PROCEEDS.  The proceeds from the sale of all of the
Shares sold in the offering (the "Offering  Proceeds")  will be deposited in the
Escrow Account.  In the event that Offering  Proceeds in an amount of $1,200,000
have not been  deposited and cleared  within one hundred  twenty (120) days from
the  effective  date  of the  Registration  Statement  (unless  extended  for an
additional  thirty  (30)  days),  the full  amount  paid will be refunded to the
purchasers.  No  certificates  evidencing  the Shares will be issued  unless and
until  Offering  Proceeds in an amount of $1,200,000  have been cleared and such
funds have been released and the proceeds thereof  delivered to the Company.  If
Offering  Proceeds in an amount of $1,200,000 are cleared within the time period
provided  above,  all amounts so deposited will be delivered to the Company.  No
commissions  will be paid by the Company or  concessions  allowed by the Company
unless and until  Offering  Proceeds of  $1,200,000  have been  cleared and such
funds have been released and the net proceeds thereof delivered to the Company.

         8.  FAILURE  OF  ORDER.  If an order is  rejected  or if a  payment  is
received which proves insufficient, any compensation paid to the Selected Dealer
shall be returned by the Selected Dealer in cash.

         9. CONDITIONS OF OFFERING. All sales will be subject to delivery by the
Company of certificates evidencing the Shares.

         10. SELECTED DEALER'S UNDERTAKINGS. No person is authorized to make any
representations  concerning the Company's  Shares except those  contained in the
Company's  then  current  Prospectus.  The  Selected  Dealer  will  not sell the
Company's  Shares pursuant to this Agreement  unless the Prospectus is furnished
to the  purchaser  at lease  forty-eight  (48) hours prior to the mailing of the
confirmation of sale, or is sent to such persons under such  circumstances  that
it would be received by him 48 hours prior to his receipt of a  confirmation  of
the  sale.  The  Selected  Dealer  agrees  not to  use  any  supplemental  sales
literature of any kind without prior written  approval of the Company  unless it
is  furnished  by the Company  for such  purpose.  In  offering  and selling the
Company's  Shares,  the Selected Dealer will rely solely on the  representations
contained in the Company's  then current  Prospectus.  Additional  copies of the
then current Prospectus will be supplied by the Company in reasonable quantities
upon request.

         The Selected  Dealer  understands  that during the ninety (90) business
day period  after the first date upon which the  Company's  Shares are bona fide
offered to the  public,  all dealers  effecting  transactions  in the  Company's
Shares may be  required  to deliver  the  Company's  current  Prospectus  to any
purchaser thereof prior to or concurrent with the receipt of the confirmation of
sale.  Additional copies of the then current  Prospectus will be supplied by the
Company in reasonable quantities upon request.

         11.  REPRESENTATIONS  AND AGREEMENTS OF SELECTED DEALERS.  By accepting
this Agreement,  the Selected Dealer represents that either (a) it is registered
as a broker-dealer under the Securities and Exchange Act of 1934, as amended; is
qualified  to act as a dealer in the states or other  jurisdictions  in which it
offers the Company's  Shares;  is a member in good  standing with the NASD,  and
will maintain such registrations,  qualifications and memberships throughout the
term of this  Agreement  or (b) is a foreign  bank,  dealer or  institution  not
eligible for  membership in the NASD which agrees to make no sales in the United
States, its territories or possessions or to persons who are citizens thereof or
residents   therein,   and  in  making   other   sales  to  comply  with  NASD's
interpretation with respect to free-riding and withholding.

                                        2
<PAGE>

Further,  the Selected Dealer agrees to comply with all applicable Federal laws,
the laws of the  states  of other  jurisdictions  concerned  and the  Rules  and
Regulations of the NASD,  and in particular  the Selected  Dealer agrees that in
connection  with any purchase or sale of the Company's  Shares wherein a selling
concession,  discount or other allowance is received or granted (i) that it will
comply  with the  decisions  of Section 24 of Article II of the NASD's  Rules of
Fair  Practice  or (2) if a  non-NASD  member,  broker  or  dealer  in a foreign
country, it will also comply with the provisions of Sections 8 and 36 thereof as
though it were a NASD  member  and with the  provisions  of  Section  25 as such
Section 25 applies to a non-NASD member,  broker or dealer in a foreign country.
NASD members  shall comply with  Sections 8, 24, 25 and 36 of Article III of the
NASD's Rules of Fair Practice.  Further, the Selected Dealer agrees that it will
not offer to sell the Company's  Shares in any state or jurisdiction  except the
states in which it is licensed as a broker-dealer under the laws of such states.
The Selected Dealer shall not be entitled to any compensation  during any period
in which it has been suspended or expelled from membership in the NASD.

         12.  SELECTED  DEALER'S  EMPLOYEES.  By accepting this  Agreement,  the
Selected  Dealer  has  assumed  full  responsibility  for  proper  training  and
instruction of its representatives  concerning the selling methods to be used in
connection  with the  offer and sale of the  Company's  Shares,  giving  special
emphasis to the  principles of  suitability  and full  disclosure to prospective
investors and prohibitions against "free-riding and withholding."

         13. INDEMNIFICATION.  The Company agrees to indemnify and hold harmless
the Selected Dealer  (including  within the definition of Selected Dealer,  each
person,  if any, who controls the Selected  Dealer within the meaning of Section
15 of the Act or under any other statute or at common law and will reimburse the
Selected  Dealer  and each such  person  specified  above for any legal or other
expenses  (including the cost of any investigation  and preparation)  reasonably
incurred  by them or any of them in  connection  with  any  litigation  or claim
whether or not  resulting  in any  liability,  but only  insofar as such losses,
claims,  damages,  liabilities  or  actions  arise out of or are based  upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration  Statement or any  post-effective  amendment thereto or in any Blue
Sky  application  or omission to state  therein a material  fact  required to be
stated therein necessary to make the statements  therein not misleading,  all as
of the date when the Registration  Statement or such  post-effective  amendment,
the  filing  of any such  Blue  Sky  application  as the  case  may be,  becomes
effective or any untrue statement or alleged untrue statement of a material fact
contained in any  preliminary  prospectus or final  prospectus (as amended or as
supplemented  thereto),  or arise out of or are based upon the omission to state
therein a material fact  required to be stated  therein or necessary in order to
make  the  statements  therein,  not  misleading;  provided  however,  that  the
indemnity  agreement  contained in this  paragraph 12 shall not apply to amounts
paid in settlement of any such litigation if such settlement is effected without
the  consent of the Company  nor shall it extend to any  Selected  Dealer or any
person  controlling the Selected  Dealer in respect of any such losses,  claims,
damages,  liabilities  or actions  arising out of, or based upon any such untrue
statement  or omission  made in reliance  upon and in  conformity  with  written
information  furnished to the Company by the  Selected  Dealer on behalf of such
Selected Dealer  specifically  for use in connection with the preparation of the
Registration  Statement,  the  Prospectus  or  any  such  amendment  thereof  or
supplement thereto or Blue Sky application.

         14. SELECTED  DEALER'S  INDEMNIFICATION.  The Selected Dealer agrees to
indemnify  and hold  harmless the Company,  each of the  Company's  officers and
directors who signed the Registration  Statement,  and each person,  if any, who
controls the Company and within the meaning of Section 15 of the 33 Act, against
any and all loss,  liability,  claim,  damage and expense (a)  described  in the
indemnity contained in paragraph 13 of this Agreement,  but only with respect to
untrue statements or omissions or alleged untrue  statements or omissions,  made
in the  Registration  Statement or the Prospectus or any amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the  Company  by such  Selected  Dealer  expressly  for use in the  Registration
Statement  (or any  amendment  thereto) or the  Prospectus  (or any amendment or
supplement thereto) or (b) based upon alleged misrepresentations or

                                        3
<PAGE>

omissions to state  material  facts in connection  with  statements  made by the
Selected Dealer or the Selected  Dealer's salesmen orally or by other means; and
the Selected Dealer will reimburse the Company,  each of the Company's  officers
and directors who signed the Registration Statement and each person, if any, who
controls the Company  within the meaning of Section 15 of the Act, for any legal
or other expenses reasonably incurred in connection with the investigation of or
the defending of any such action or claim.

         15. REQUIRED NOTICES AND CLAIMS.  Each indemnified party is required to
give prompt notice to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder,  but failure to so notify
an  indemnifying  party  shall not  relieve it from any  liability  which it may
otherwise  have  on  account  of  the  indemnification  provisions  hereof.  Any
indemnifying  party may  participate  at its own  expense in the defense of such
action. If it so elects,  within a reasonable time after receipt of such notice,
an indemnifying  party,  jointly with any other  indemnifying  parties receiving
such notice, may assume the defense of such action with counsel chosen by it and
approved by the  indemnified  parties who are defendants in such action,  unless
such indemnified parties reasonably object to such assumption on the ground that
there may be legal  defenses  available to them which are  different  from or in
addition to those available to such indemnifying parties and shall not be liable
for any fees and  expenses  of  counsel  for the  indemnified  parties  incurred
thereafter in connection  with such action.  In no event shall the  indemnifying
parties be liable for the fees and  expenses  of more than one  counsel  for all
indemnified parties in connection with any one action or separate but similar or
related  actions  in the  same  jurisdiction  arising  out of the  same  general
allegations or circumstances.

         16. EXPENSES. No expenses will be charged to Selected Dealers. A single
transfer  tax, if any, on the sale of the Shares by the  Selected  Dealer to its
customers will be paid when such Shares are delivered to the Selected Dealer for
delivery to its customers.

         17. COMMUNICATIONS. All communications to the Company should be sent to
the  address  shown in the  first  page of this  Agreement.  Any  notice  to the
Selected  Dealer shall be properly given if mailed or telephoned to the Selected
Dealer at the address given below.  This agreement shall be construed  according
to the laws of the State of New York.

         18.  ASSIGNMENT AND TERMINATION.  This Agreement may not be assigned by
the Selected Dealer without the Company's  written consent.  This Agreement will
terminate upon the  termination of the offering of the Shares except that either
party may terminate  this  Agreement at any time by giving written notice to the
other.

         19.  INCORPORATION BY REFERENCE.  The Selected Dealer agrees that it is
bound by the terms of the  Escrow  Agreement  executed  by the  Company  and the
Escrow Agent.

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
Date of Acceptance set forth below.

                        AMERICAN FAMILY COOKIES, INC.

                        By:
                           -----------------------------------------------------
                           Robert Gregory, President

Agreed and Accepted:            Date of Acceptance:                       , 2002
                                                   ------------------ ----

                                        4
<PAGE>

Dealer Name:
             -----------------------------------------------------

Address:
         ---------------------------------------------------------

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

Accepted:
          --------------------------------------------------------
                Signature of Principal of Dealer

          --------------------------------------------------------
                Name of Principal of Dealer (print)

Telephone No.:
               ---------------------------------------------------

IRS Employer I.D. No.:
                       -------------------------------------------

Share Allocation:
                  ------------------------------------------------

                                       5

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