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Membership Interest Purchase Agreement - ALL AMERICAN SPORTPARK INC - 11-16-1998

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Membership Interest Purchase Agreement - ALL AMERICAN SPORTPARK INC - 11-16-1998 Powered By Docstoc
					MEMBERSHIP INTEREST PURCHASE AGREEMENT THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") is made and entered into as of May 5, 1998, by and among Callaway Golf Company, a California corporation ("Callaway Golf"), CGV, Inc., a California corporation ("CGV"), Saint Andrews Golf Corporation, a Nevada corporation ("Saint Andrews"), All-American SportPark, Inc., a Nevada corporation ("SportPark"), All-American Golf LLC, a California limited liability company ("AAG"), and Ron Boreta, an individual. Callaway Golf, CGV, Saint Andrews, SportPark, AAG and Boreta are sometimes collectively referred to herein as the "Parties" and individually as a "Party." Capitalized terms used herein and not otherwise defined herein have the meaning given to such terms in Section 10 below. RECITALS A. Saint Andrews and Callaway Golf are members of AAG and have entered into the Operating Agreement for All-American Golf LLC, a Limited Liability Company dated June 13, 1997 (the "Operating Agreement"). Currently, Saint Andrews owns an 80% membership interest in AAG and Callaway Golf owns a 20% membership interest in AAG. Boreta is a principal shareholder of Saint Andrews and has been responsible as an employee of Saint Andrews for managing AAG. B. On or about June 13, 1997, AAG executed and delivered to Callaway Golf a Secured Promissory Note in the original amount of Five Million Two Hundred Fifty Thousand Dollars ($5,250,000.00) (the "AAG Note"), evidencing a loan from Callaway Golf to AAG. The AAG Note is secured pursuant to a Continuing Security Agreement dated June 13, 1997 by and between AAG and Callaway Golf (the "AAG Security Agreement"), a Membership Interest Security Agreement dated June 13, 1997, by and between Callaway Golf and Saint Andrews (as amended as set forth below, the "Membership Interest Security Agreement"), and a Leasehold Deed of Trust, Assignment of Leases, Rents and Profits, Security Agreement and Fixture Filing dated June 13, 1997 executed by AAG in favor of Callaway Golf encumbering the Indenture of Lease dated June 13, 1997 by and between Urban Land of Nevada, a Nevada corporation and AAG (the "Deed of Trust"). There is now outstanding under the AAG Note the principal amount of $5,250,000.00 and accrued and unpaid interest as of May 5, 1998 of at least $300,000. C. Under the terms of the AAG Note, AAG was obligated to commence making payments of interest accrued on the principal outstanding thereunder on December 21, 1997 and to make monthly installments of interest accrued on the principal outstanding on the same day of each month thereafter until the Maturity Date (as defined in the AAG Note). As a result of the failure by AAG to make the payments referred in the AAG Note, a default occurred under the AAG Note. In connection therewith, on March 18, 1998, AAG, Saint Andrews and Callaway Golf entered into a Forbearance Agreement (the "Forbearance Agreement") pursuant to which Callaway Golf agreed to forbear from proceeding against AAG and Saint Andrews under the AAG Note and related loan documents on the terms and conditions set forth therein (The AAG Note, the AAG Security Agreement, the Membership Interest Security Agreement, the Deed of Trust and the Forbearance Agreement are collectively referred to as the "AAG Loan Documents").

D. Saint Andrews owns all of the outstanding capital stock of SportPark. On or about March 18, 1998, at the time of entering into the Forbearance Agreement, SportPark executed and delivered to Callaway Golf a Promissory Note in the original principal amount of Three Million Dollars ($3,000,000.00) (the "SportPark Note") evidencing a loan from Callaway Golf to SportPark. The SportPark Note is guarantied pursuant to a Guaranty executed as of March 18, 1998 by Saint Andrews in favor of Callaway Golf (the "Guaranty"). The Guaranty is secured by the Membership Interest Security Agreement as set forth and evidenced by, among other documents, the Amendment to Membership Interest Security Agreement entered into on March 18, 1998 by Saint Andrews and Callaway Golf (the "Amendment to Membership Interest Security Agreement"). (The SportPark Note and Guaranty are hereinafter collectively referred to as the "SportPark Loan Documents"). There is now outstanding under the SportPark Note the principal amount of $3,000,000.00 and accrued and unpaid interest as of May 5, 1998 of at least $26,178. E. The Forbearance Agreement is in default and other defaults exist under the AAG Loan Documents and the SportPark Loan Documents (collectively the "Loan Documents"). As a result of these defaults, among other rights and remedies, Callaway Golf has the immediate and unconditional right to proceed against AAG under the AAG Note, to collect amounts due thereunder and to exercise upon or enforce its rights to its collateral as set forth in the Loan Documents; and further, Callaway Golf has the immediate and unconditional right to proceed against SportPark under the SportPark Note, to collect amounts due thereunder and to exercise upon or enforce its rights under the Guaranty and the collateral therefor as set forth in the Loan Documents. F. Saint Andrews, SportPark and AAG have requested that Callaway Golf forbear from proceeding against such parties under the Loan Documents and to enter into the transactions contemplated by and as set forth in this Agreement. Among other things, Saint Andrews has requested that CGV purchase Saint Andrews' membership interest in AAG, and in connection therewith, have agreed to certain terms and conditions to provide the inducement to Callaway Golf and CGV for such purchase. G. CGV is the wholly owned subsidiary of Callaway Golf. NOW, THEREFORE, in consideration of the mutual covenants, agreements and understandings herein contained, the Parties hereby agree as follows: 1. Transaction. 1.1 Purchase of Membership Interest. Subject to the terms and conditions and in reliance on the representations and warranties set forth herein, Saint Andrews shall sell, assign, transfer, and deliver its entire Eighty Percent (80%) membership interest (the "Membership Interest") in AAG to CGV, at the Closing in return for the Purchase Price. 1.2 Unconditional and Absolute Transfer. The grant, assignment, conveyance and transfer of Saint Andrews' Membership Interest in AAG shall be unconditional and absolute and Saint Andrews shall not have (and does not reserve) any right, title or interest of any kind whatsoever in or to any part of its Membership Interest. Saint Andrews hereby forever waives and releases any all rights of redemption and other rights, if any, which it might have or have had in connection with its Membership Interest, whether arising from the grant, assignment, conveyance and transfer of the Membership Interest, or arising from any foreclosure sale which Callaway Golf might have elected to hold or may hereafter hold pursuant to the Loan Documents. CGV does not 2

assume, directly or indirectly, any liability, obligation, duty or responsibility whatsoever for the payment, discharge or other resolution of any liability, obligation, indebtedness, lien, security interest, encumbrance, claim or other problem, condition or matter which has been or may hereafter be created or assumed by Saint Andrews, anyone associated with Saint Andrews or any of Saint Andrews' predecessors in interest or which may otherwise presently exist with respect to the Membership Interest. Subject to the Option Agreement referred to in Section 6.8, herein, CGV may at any time sell, transfer, lease, assign or abandon the Membership Interest transferred to it pursuant to this Agreement and may take or omit to take any action which either of them in their discretion may deem to be in their respective best interests, and Saint Andrews shall have no right, title or interest in or to any portion of any consideration received by CGV in connection with any such sale, transfer, lease, assignment or abandonment of the Membership Interest. 1.3 Purchase Price. The total purchase price ("Purchase Price") to be paid by CGV for the Membership Interest shall be Four Million Five Hundred Twenty Six Thousand One Hundred Seventy Eight Dollars ($4,526,178). One Million Dollars ($1,000,000) of the Purchase Price shall be paid in cash at the Closing and Five Hundred Thousand Dollars ($500,000) of the Purchase shall be held back (the "Holdback") and paid pursuant to Section 9.2 below. The remaining Three Million Twenty Six Thousand One Hundred Seventy Eight Dollars ($3,026,178) shall consist of the release from personal liability by Callaway Golf of the SportPark under the SportPark Note and of Saint Andrews under the guaranty thereof. The cash portion of the Purchase Price shall be paid by Callaway Golf company check or wire transfer at the option of Saint Andrews. 1.4 Closing. The closing of the transaction (the "Closing") shall take place at the principal offices of Callaway Golf or at such other place as may be mutually agreeable to each of the Parties, on May 5, 1998 or at a time and date mutually agreeable to the Parties (the "Closing Date"). 2. Deliveries at Closing by Saint Andrews and SportPark. 2.1 Saint Andrews, shall deliver the following to Callaway Golf and CGV at the Closing: 2.1.1 Assignment of Membership Interest. Delivery of an Assignment of Membership Interest in the form acceptable to the Parties, duly executed by a duly authorized officer of Saint Andrews. 2.1.2 Resolutions of Saint Andrews. Certified copies of the resolutions duly adopted by Saint Andrews' board of directors authorizing the transfer of the Membership Interest and the execution, delivery and performance of this Agreement and each of the other agreements contemplated hereby; 2.1.3 Resolutions of SportPark. Certified copies of the resolutions duly adopted by SportPark's board of directors authorizing the execution, delivery and performance of this Agreement and each of the other agreements contemplated hereby; 2.1.4 Certificate from Officer of Saint Andrews. Delivery by Saint Andrews of a certificates, duly executed by a duly authorized officer, in form and substance satisfactory to CGV, certifying that each of the representations and warranties of Saint Andrews contained in this Agreement is true and correct and that each of the covenants of Saint Andrews have been performed. 3

2.1.5 Release of Liens. Evidence satisfactory to CGV that Saint Andrews has obtained releases of any and all Liens encumbering or purporting to encumber the Membership Interest, other than those Liens in favor of Callaway Golf. 2.1.6 Resignation of Saint Andrews. Delivery of a written resignation by Saint Andrews as manager of AAG duly executed by a duly authorized officer of Saint Andrews. 2.1.7 Third Party Approvals. Copies of any and all third party consents and approvals that are necessary for the consummation of the transactions contemplated hereby or that are required in order to prevent a breach of or default under, a termination or modification of, or acceleration of the terms of, any contract, agreement or document required to be listed on the Contracts Schedule attached hereto (collectively, the "Third Party Approvals"), in each case on terms and conditions reasonably satisfactory to CGV. 2.1.8 Other Documents. Such other documents relating to the transactions contemplated by this Agreement as Callaway Golf or CGV or their respective special counsel may reasonably request. 2.1.9 Waver. Any delivery specified in this section 2.1 may be waived if consented to in writing by Callaway Golf and CGV. 2.2 Deliveries at Closing by Callaway Golf and CGV. Callaway Golf and CGV shall deliver the following to Saint Andrews at the Closing: 2.2.1 Purchase Price. The Purchase Price in the manner and amount set forth in Section 1.3. 2.2.2 Resolutions. Certified copies of the resolutions duly adopted by Callaway Golf's and CGV's respective board of directors authorizing the execution, delivery and performance of this Agreement and each of the other agreements contemplated hereby. 2.2.3 Other Documents. Such other documents relating to the transactions contemplated by this Agreement as Saint Andrews or their special counsel may reasonably request. 2.2.4 Waiver. Any delivery specified in this Section 2.2 may be waived if consented to in writing by Saint Andrews. 3. Representations and Warranties of Saint Andrews and Boreta. As a material inducement to Callaway Golf and CGV to enter into this Agreement and purchase the Membership Interest hereunder, Saint Andrews and Boreta jointly and severally hereby represent and warrant to Callaway Golf and CGV as follows: 3.1 Organization. Saint Andrews and SportPark are each corporations duly organized, validly existing and in good standing under the laws of Nevada and are qualified to do business in every jurisdiction in which its ownership of property or conduct of business requires them to qualify as foreign corporations. Saint Andrews and SportPark have all necessary corporate powers and corporate authority to carry on their business as now conducted presently and presently proposed to be conducted and to execute, deliver and perform this Agreement and any related agreements to which they are a party. 4

3.2 Membership Interest and Related Matters. As of the date hereof, the Membership Interest represent Saint Andrews' entire ownership interest in AAG and is held beneficially and of record by Saint Andrews free and clear of all Liens other than those in favor of Callaway Golf. The assignment of its Membership Interest by Saint Andrews as provided for herein is an absolute conveyance to CGV of all of the right, title and interest of Saint Andrews to the membership interest in effect as well as in form, and is not intended as security for the payment or repayment of any indebtedness or the performance of any other obligation of Saint Andrews of any kind or nature whatsoever; Saint Andrews has no equity in the Membership Interest and the sum of (i) the current fair market value of the Membership Interest (taking into consideration all liens and encumbrances against the Membership Interest) and (ii) the value of any rights assigned to CGV pursuant to this Agreement, does not exceed the net amount of the obligations from which Saint Andrews is released pursuant or the consideration paid by Saint Andrews to this Agreement. 3.3 Authorization; No Breach. The execution, delivery and performance of this Agreement and all of the other agreements and instruments contemplated hereby to which either Saint Andrews or SportPark is a party have been duly authorized by Saint Andrews or SportPark, respectively. This Agreement constitutes a valid and binding obligation of Saint Andrews and SportPark, enforceable in accordance with its terms, and all other agreements and instruments contemplated hereby to which either Saint Andrews or SportPark is a party, when executed and delivered by Saint Andrews and SportPark in accordance with the terms hereof, shall each constitute a valid and binding obligation of Saint Andrews and SportPark, enforceable in accordance with their respective terms. The execution and delivery by Saint Andrews and SportPark of this Agreement and all other agreements and instruments contemplated hereby to which either Saint Andrews SportPark or AAG is a party and the fulfillment of and compliance with the respective terms hereof and thereof by Saint Andrews SportPark or AAG do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under (whether with or without the passage of time, the giving of notice or both), (iii) result in the creation of any lien upon the Membership Interest or material assets pursuant to, (iv) give any Person the right to modify, terminate or accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any Person or any court or administrative or governmental body or agency pursuant to, Saint Andrews' or SportPark's respective certificate of incorporation or bylaws, or any material law, statute, rule or regulation to which Saint Andrews or SportPark is subject, or any agreement, instrument, order, judgment or decree to which Saint Andrews or SportPark is subject. 3.4 Latest Balance Sheet. Attached hereto as the Latest Balance Sheet Schedule is the unaudited balance sheet of AAG as of March 31, 1998 (the "Latest Balance Sheet") and the related statements of earnings for the period then ended. The Latest Balance Sheet (including in all cases the notes thereto, if any) is accurate and complete in all respects, is consistent with the books and records of AAG (which, in turn, are accurate and complete in all respects), fairly presents the financial condition and operating results of AAG and has been prepared in accordance with GAAP consistently applied as of the date of the Latest Balance Sheet. 3.5 Absence of Undisclosed Liabilities. Except as set forth on the attached Liabilities Schedule, AAG does not have any obligation or liability (whether accrued, absolute, contingent, unliquidated or otherwise, whether due 5

or to become due and regardless of when asserted) arising out of transactions entered into at or prior to the date hereof, including, without limiting the generality of the foregoing, wrongful dismissal claims filed by former employees, any outstanding or pending long or short-term disability claims and any pending labor relations boards unions certification applications, or any action or inaction at or prior to the date hereof, or any state of facts existing at or prior to the date hereof, other than: (i) liabilities set forth on the liabilities side of the Latest Balance Sheet (including any notes thereto), (ii) liabilities and obligations which have arisen after the date of the Latest Balance Sheet in the ordinary course of business (none of which is a liability resulting from noncompliance with any applicable laws, breach of contract, breach of warranty (in excess of any warranty reserve specifically established with respect thereto and included on the Latest Balance Sheet), tort, infringement, claim or lawsuit) and (iii) other liabilities and obligations expressly disclosed in the Schedules referred to in this Section 4. 3.6 Accounts Receivable. Except as set forth on the attached Accounts Receivable Schedule, all accounts receivable reflected on the Latest Balance Sheet and all accounts receivable to be reflected on AAG's books and records as of the Closing Date (net of allowances for doubtful accounts as reflected thereon and as determined in accordance with GAAP consistently applied) are or shall be valid receivables arising in the ordinary course of business, and are or shall be current and collectible, subject to no valid counterclaims or setoffs. No person has any Liens on such receivables or any part thereof (except for Callaway Golf), and no agreement for deduction, free goods, discount or other deferred price or quantity adjustment has been made with respect to any such receivables. 3.7 Liability. Except as set forth on the attached Liabilities Schedule, AAG does not have any liability (and, to Saint Andrews' Knowledge, there is no reasonable basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand against it giving rise to any liability) arising out of any injury to individuals or property as a result of the ownership, possession or use of any products or equipment manufactured, sold, leased or delivered by AAG or with respect to any services rendered by AAG. 3.8 No Material Adverse Effect. There has occurred no fact, event or circumstance which has had or would reasonably be expected to have a Material Adverse Effect. 3.9 Assets. 3.9.1 The attached Assets Schedule contains a list of all of the properties and assets, tangible or intangible, used by AAG wherever located or shown on the Latest Balance Sheet (the "Assets"). Except as set forth on the attached Assets Schedule, AAG has good and valid marketable title to, a valid leasehold interest in, or a valid license to use, the Assets, free and clear of all Liens except for those of Callaway Golf. 3.9.2 Except as set forth on the attached Assets Schedule, all of AAG's buildings, equipment, machinery, fixtures, improvements and other tangible assets (whether owned or leased) are in good condition and repair (ordinary wear and tear excepted) and are fit for use in the ordinary course of AAG's business as presently conducted and as presently proposed to be conducted. All such assets have been installed and maintained in accordance with all applicable laws, regulations and ordinances. 6

3.9.2.1 The Intellectual Property currently used by AAG constitutes all of the Intellectual Property necessary in the conduct of the businesses of AAG, and there are no other items of Intellectual Property that are material to AAG or its business. 3.9.2.2 With respect to any license and sublicenses for Intellectual Property licensed or sublicensed to AAG: (i) such license or sublicense is valid and binding and in full force and effect and represents the entire agreement between the respective licensor and licensee with respect to the subject matter or such license of sublicense; (ii) the rights of AAG, in or to any Intellectual Property owned by or licensed to AAG do not conflict with or infringe on the right of any other Person. 3.9.3 Except as set forth on the attached Assets Schedule, AAG owns, has a valid leasehold interest in, or has a valid license to use, all of the assets, properties and rights, (including water rights) whether tangible or intangible, necessary for the conduct of its business as presently conducted and as presently proposed to be conducted. 3.10 Tax Matters. AAG has timely filed any and all required Tax Returns and has paid any and all Taxes due and has withheld and paid over all Taxes required to be withheld for all periods ending on or before the Closing Date. Each such Tax Returns filed are complete and correct and have been prepared in compliance with all applicable laws and regulations. 3.11 Contracts and Commitments. 3.11.1 Except as expressly contemplated by this Agreement or as set forth on the attached Contracts Schedule, the attached Employees Schedule, or the attached Employee Benefits Schedule, AAG is not a party to or bound by any written or oral: 3.11.1.1 pension, profit sharing, stock option, employee stock purchase or other plan or arrangement providing for deferred or other compensation to employees or any other employee benefit plan or material arrangement or practice; 3.11.1.2 collective bargaining agreement or any other contract with any labor union, or severance agreements, programs, policies or arrangements; 3.11.1.3 management agreement, contract for the employment of any officer, individual employee or other Person on a full-time, part-time, consulting or other basis; 3.11.1.4 contract or agreement requiring the consent of any party thereto upon a change in control of AAG, containing any provision which would result in a modification of any rights or obligations of any party thereunder upon a change in control of AAG or which would provide any party any remedy (including rescission or liquidated damages) in the event of a change in control of AAG; 7

3.11.1.5 contract under which it has advanced or loaned monies to any other Person or otherwise agreed to advance, loan or invest any funds (other than advances to AAG's employees in the ordinary course of business consistent with past practice); 3.11.1.6 agreement or indenture relating to borrowed money or other Indebtedness or the mortgaging, pledging or otherwise placing a Lien on any material asset or material group of assets of AAG or any letter of credit arrangements; 3.11.1.7 guaranty of any obligation for borrowed money or otherwise (other than endorsements made for collection in the ordinary course of business); 3.11.1.8 lease or agreement under which AAG is lessee of or holds or operates any property, real or personal, owned by any other Person; 3.11.1.9 lease or agreement under which AAG is lessor of or permits any third party to hold or operate any property, real or personal, owned or controlled by AAG; 3.11.1.10 license or royalty agreements; 3.11.1.11 nondisclosure or confidentiality agreements (other than those entered into in the ordinary course of business with customers, suppliers and employees); 3.11.1.12 contract or group of related contracts with the same party or group of affiliated parties for the purchase of raw materials, commodities, supplies, products, equipment or other personal property or for the receipt of services (other than purchase orders entered into in the ordinary course of business or contracts disclosed elsewhere in connection with this Section 3); 3.11.1.13 contract or group of related contracts with the same party or group of affiliated parties for the sale of raw materials, commodities, supplies, products or other personal property or for the furnishing of services (other than purchase orders entered into in the ordinary course of business or contracts disclosed elsewhere in connection with this Section 3); 3.11.1.14 other contract or group of related contracts with the same party or group of affiliated parties continuing over a period of more than six months from the date or dates thereof, not terminable by AAG upon 30 days' or less notice without penalty (other than purchase orders entered into in the ordinary course of business or contracts disclosed elsewhere in connection with this Section 3); 3.11.1.15 contract or group of related contracts requiring the payment of any fee, penalty or other amount by AAG in the event of any failure to perform or late performance of such contract or contracts by AAG; 3.11.1.16 contract relating to the marketing, sale, advertising or promotion of its products or services; 8

3.11.1.17 agreements relating to the ownership of or investments in any business or enterprise, including investments in joint ventures and minority equity investments; 3.11.1.18 assignment, license, indemnification or other agreement with respect to any intangible property;
3.11.1.19 grant of agency; 3.11.1.20 contract or agreement prohibiting it from power of attorney or other similar agreement or

freely engaging in any business or competing anywhere in the world; or 3.11.1.21 other agreement which is material to its operations or business prospects or involves an annual consideration in excess of $5,000.00 whether or not in the ordinary course of business. 3.11.2 All of the contracts, agreements and instruments set forth or required to be set forth on the attached Contracts Schedule are valid, binding and enforceable in accordance with their respective terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and other laws of general application effecting enforcement of creditors' rights generally, rules of law governing specific performance, injunctive relief or other equitable remedies, and limitations of public policy; and shall be in full force and effect without penalty in accordance with their terms upon consummation of the transactions contemplated hereby. Except as set forth on the Contracts Schedule, AAG has performed all material obligations required to be performed by it and is not in default under or in breach of nor in receipt of any claim of default or breach under any contract, agreement or instrument set forth or required to be set forth on the attached Contracts Schedule; no event has occurred which with the passage of time or the giving of notice or both would result in a default, breach or event of noncompliance by AAG under any such contract, agreement or instrument; AAG does not have any present expectation or intention of not fully performing on a timely basis all such obligations required to be performed by AAG under any contract, agreement or instrument to which AAG is subject; no partially-filled or unfilled customer purchase order or sales order is subject to cancellation or any other material modification by the other party thereto or is subject to any penalty, right of set-off or other charge by the other party thereto for late performance or delivery; and Saint Andrews does not have any Knowledge of any cancellation or anticipated cancellation or any breach by the other parties to any contract, agreement, instrument or commitment to which it is a party. AAG is not a party to any contract, agreement or commitment the performance of which could reasonably be expected to have a Material Adverse Effect. 3.11.3 CGV's special counsel has been supplied with a true and correct copy of each of the written instruments, plans, contracts and agreements and an accurate description of each of the oral arrangements, contracts and agreements which are referred to on the attached Contracts Schedule, together with all amendments, waivers or other changes thereto. 3.12 Litigation, etc. Except as set forth on the attached Litigation Schedule, there are no (and, during the two years preceding the date hereof, there have not been any) actions, suits, proceedings (including any arbitration proceedings), orders or, to Saint Andrews' Knowledge, investigations or claims pending or, to Saint Andrews' Knowledge, threatened against AAG (or to Saint Andrews' Knowledge, pending or threatened against any 9

of the members, managers, or employees of AAG with respect to its business or proposed business activities), or pending or threatened by AAG against any Person, at law or in equity, or before or by any governmental department, commission, board, bureau, agency or instrumentality (including any actions, suits, proceedings or investigations with respect to the transactions contemplated by this Agreement); AAG is not subject to any arbitration proceedings under collective bargaining agreements or otherwise or, to Saint Andrews' Knowledge, any governmental investigations or inquiries; and, to the Saint Andrews' Knowledge, there is no basis for any of the foregoing. The foregoing includes, without limitation, actions pending or threatened involving the prior employment of any of AAG's employees, their use in connection with AAG's businesses of any information or techniques allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers. Except as set forth thereon, AAG is fully insured with respect to each of the matters set forth on the attached Litigation Schedule. AAG is not subject to any judgment, order or decree of any court or other governmental agency, and AAG has not received any opinion or memorandum or advice from its legal counsel to the effect that it is exposed, from a legal standpoint, to any liability which could have a Material Adverse Effect. 3.13 Insurance. The attached Insurance Schedule contains a description of each insurance policy maintained by AAG with respect to its properties, assets and business, and each such policy shall be in full force and effect as of the Closing. AAG is not in default with respect to its obligations under any insurance policy maintained by it, and AAG has never been denied insurance coverage. Except as set forth on the attached Insurance Schedule, AAG has no self-insurance or co-insurance programs and the reserves set forth on the Latest Balance Sheet are adequate to cover all anticipated liabilities with respect to any such self-insurance or co-insurance programs. All materials assets, properties, and risks of AAG and for the past year has been, covered by valid and, except for the policies that have expired under their terms in the ordinary course, currently effective insurance policies or binders of insurance (including, without limitation, general liability insurance, property insurance, and workers' compensation insurance) issued in favor of AAG, in each case with responsible insurance companies in such types and amounts and covering such risks as are consistent with customary practices and standards of companies engaged in business and in operations similar to those of AAG. At the time of the Closing, all insurance policies currently in effect will be outstanding and duly in force. 3.14 Employees. To Saint Andrews' Knowledge, as of the date hereof, no executive or key employee of AAG and no group of employees of AAG has any plans to terminate employment with AAG. AAG has no labor relations problems (including any union organization activities, threatened or actual strikes or work stoppages or material grievances). The Employees Schedule attached hereto contains a correct and complete list of all employees of AAG. None of AAG's, to Saint Andrews' Knowledge, employees or consultants are subject to any noncompete, nondisclosure, confidentiality, intellectual property assignment, inventory assignment, employment, consulting or other agreement or judgment, decree or order of any court or administrative agency, relating to, affecting or in conflict with the present or proposed business activities of AAG or such Person's duties to AAG, except for agreements between AAG and its present and former employees. AAG has not received any notice alleging that any violation of any such agreements has occurred. The Employees Schedule attached hereto contains a correct and complete list of all employees and consultants of AAG which have executed and delivered to AAG any agreement providing for the 10

nondisclosure by such Person of any confidential information of AAG. AAG has made no oral or written representation to any employee regarding the length of notice such employee would receive on termination of his or her employment. AAG has made no oral or written representation to any employee regarding the length of time during which he or she would be employed by AAG. None of the employees of AAG have been hired for a fixed term. Except as set forth in the Employees Schedule, all of the employees of AAG have been hired on a full-time basis. 3.15 Employee Benefit Plans. 3.15.1 Except as set forth on the attached Employee Benefits Schedule, AAG does not maintain or have any obligation to contribute to (or any other liability with respect to) any plan or arrangement, whether or not terminated, which provides medical, health, life insurance, or any welfare-type or other similar benefits for current or future retired or terminated employees or any dependents of such employees. All required payments, premiums, contributions, reimbursements or accruals for all periods ending prior to or as of the Closing Date shall have been made or properly accrued. None of the plans has any material unfunded liabilities which are not reflected on the Latest Balance Sheet. 3.15.2 Except as set forth on the attached Employee Benefits Schedule, AAG does not maintain, contribute to or have any actual or potential liability under (or with respect to) any material plan or arrangement providing benefits or remuneration to current or former employees or any dependents of such employees or independent contractors, including (but not by way of limitation) any employment contract, bonus or incentive plan, plan for deferred compensation, employee health or other welfare benefit plan, severance arrangement or other material policy, program or arrangement, whether or not terminated. All required payments, premiums, contributions, reimbursements or accruals for all periods ending prior to or as of the Closing Date shall have been made or properly accrued. None of the plans has any material unfunded liabilities which are not reflected on the Latest Balance Sheet. The attached Employee Benefits Schedule sets forth the aggregate amount of bonuses and other incentive compensation expected to be paid by AAG for its fiscal year ending December 31, 1998. 3.15.3 The plans set forth on the Employee Benefit Schedule and all related trusts, insurance contracts and funds have been maintained, funded and administered in compliance in all material respects with the applicable provisions of applicable federal, provincial, and local laws. AAG has timely complied with all reporting and disclosure obligations as they apply to such plans. To Saint Andrews' Knowledge, none of AAG or any trustee or administrator of any plan has engaged in any transaction with respect to the plans which would subject AAG or any trustee or administrator of the plans, or any party dealing with any such plan, nor do the transactions contemplated by this Agreement constitute transactions which would subject any such party, to either a civil penalty assessed under the applicable laws. No actions, suits or claims with respect to the assets of the plans (other than routine claims for benefits) are pending or, to Saint Andrews' Knowledge, threatened which could result in or subject AAG to any liability and there are no circumstances which would give rise to or be expected to give rise to any such actions, suits or claims. 3.16 Compliance with Laws, Permits; Certain Operations. Except as set forth on the attached Compliance Schedule: 11

3.16.1 AAG has complied and is in compliance with all applicable laws, ordinances, codes, rules, requirements and regulations of foreign, federal, provincial and local governments and all agencies thereof relating to the operation of its business and the maintenance and operation of its properties and assets. No notices have been received by and, to Saint Andrews' Knowledge, no claims have been filed or threatened against AAG alleging a violation of any such laws, ordinances, codes, rules, requirements or regulations. 3.16.2 AAG holds and is in compliance with all permits, licenses, bonds, approvals, certificates, registrations, accreditations and other authorizations of all foreign, federal, provincial and local governmental agencies required for the conduct of its business and the ownership of its properties, and the attached Permits Schedule sets forth a list of all of such material permits, licenses, bonds, approvals, certificates, registrations, accreditations and other authorizations. No notices have been received by AAG alleging the failure to hold any of the foregoing. All of such permits, licenses, bonds, approvals, accreditations, certificates, registrations and authorizations will be available for use by AAG immediately after the Closing. 3.17 Environmental and Safety Matters. 3.17.1 Except as set forth on the attached Environmental Schedule: 3.17.1.1 To the Knowledge of Saint Andrews and Boreta, AAG has complied with and is in compliance with all Environmental and Safety Requirements. AAG has not received any oral or written notice, report or information regarding any actual or alleged violation of Environmental and Safety Requirements or any liabilities or potential liabilities relating to it or its facilities arising under Environmental and Safety Requirements. 3.17.1.2 To the Knowledge of Saint Andrews and Boreta, neither this Agreement nor the consummation of the transactions contemplated hereby will result in any obligations for site investigation or cleanup, or notification to or consent of any government agencies or third parties under any Environmental and Safety Requirements (including any so called "transaction-triggered" or "responsible property transfer" laws and regulations). 3.17.1.3 To the Knowledge of Saint Andrews and Boreta, none of the following exists at any property or facility owned, occupied or operated by AAG: (i) underground storage tanks; (ii) asbestos containing material in any form or condition; (iii) materials or equipment containing polychlorinated biphenyls; or (iv) landfills, surface impoundments or other disposal areas. 3.17.1.4 To the Knowledge of Saint Andrews and Boreta, AAG has not treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled or Released any substance (including any hazardous substance) or owned, occupied or operated any facility or property in a manner that has given or could give rise to any liabilities (including any liability for response costs, corrective action costs, personal injury, natural resource damages, property damage or attorneys fees or any investigative, corrective or remedial obligations) pursuant to applicable Environmental and Safety Requirements. 12

3.17.1.5 To the Knowledge of Saint Andrews and Boreta, AAG has not, either expressly or by operation of law, assumed or undertaken any liability or corrective, investigatory or remedial obligation of any other Person relating to any Environmental and Safety Requirements. 3.17.1.6 To the Knowledge of Saint Andrews and Boreta, no Environmental Lien has attached to any property owned, leased or operated by AAG. 3.18 Real Property. AAG does not own any real property. The Real Property Schedule attached hereto sets forth a list of all of the leases, subleases and licenses ("Leases") of real property (the "Leased Real Property") in which AAG has a leasehold, sublease hold and licensed interest. AAG holds a valid and existing leasehold, sublease hold or license interest under each of the Leases. With respect to each Lease listed on the attached Real Property Schedule, there are no disputes, oral agreements, or forbearance programs in effect as to such Lease and AAG has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the Lease except pursuant to Callaway Golf's leasehold deed of trust. Except for the Leased Real Property, there is no real property which is leased or otherwise used in AAG's business. 3.19 Existence and Power. AAG is a limited liability company duly formed. validly existing, and in good standing under the laws of the State of California, and has all requisite power and authority to own, operate, or lease the properties owned, operated or leased by AAG and to carry on its business as it has been and is currently conducted as of the date hereof and as contemplated by the Operating Agreement. 3.20 Activities. AAG has not engaged in any business or activity of any kind, other than the business and activities expressly contemplated and permitted by the Operating Agreement dated June 13, 1997 between Callaway Golf and Saint Andrews. AAG is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary or desirable. 3.21 Subsidiaries. There are no corporation, partnerships, joint ventures, associations or other entities in which AAG owns, of record or beneficially, any direct or indirect equity or other interest or any right (contingent or otherwise) to acquire the same, or in which AAG otherwise participates. 3.22 Use of Proceeds. All expenditures made by AAG since its date of organization were for the sole benefit of AAG or the Golf Center and not for the benefit of Saint Andrews, SportPark or any other person or entity. 3.23 Disclosure. All written statements, faxes, data, information, projections and materials made, furnished or provided from time to time by or on behalf of AAG or Saint Andrews to Callaway Golf and CGV relating to AAG or Saint Andrews shall be true and correct in all material respects, all material facts relating to AAG or Saint Andrews have been fully disclosed to Callaway Golf and CGV, and neither this Agreement, any of the Exhibits or Schedules attached hereto nor any of the written statements, documents, certificates or other items prepared and supplied to Callaway Golf and CGV by or on behalf of AAG or Saint Andrews with respect to the transactions contemplated hereby, when taken together as a whole, contain any untrue statement of a material 13

fact or omit a material fact necessary to make each statement contained herein or therein, in light of the circumstances in which they were made, not misleading. There is no information which Saint Andrews have not disclosed to Callaway Golf and CGV in writing and of which any of its stockholders, officers, directors or executive employees is aware which has had or would reasonably be expected to deter Callaway Golf and CGV from completing the transactions contemplated in this Agreement on the terms and conditions hereof. 4. Representations and Warranties of Callaway Golf and CGV. As a material inducement to Saint Andrews to enter into this Agreement and take the actions set forth in Section 1, Callaway Golf and CGV hereby represents and warrants to Saint Andrews as follows: 4.1 Organization, Power and Authority. Callaway Golf and CGV are each duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Callaway Golf and CGV possess all requisite power and authority necessary to carry out the transactions contemplated by this Agreement. 4.2 Authorization; No Breach. The execution, delivery and performance of this Agreement and all other agreements contemplated hereby to which Callaway Golf and CGV are parties have been duly authorized by Callaway Golf and CGV. This Agreement and all other agreements contemplated hereby to which Callaway Golf and CGV are parties, when executed and delivered by Callaway Golf and CGV in accordance with the terms hereof, shall each constitute valid and binding obligations of Callaway Golf and CGV , enforceable in accordance with its terms. The execution and delivery by Callaway Golf and CGV of this Agreement and all other agreements contemplated hereby to which Callaway Golf and CGV are parties, the purchase of the Membership Interest hereunder, and the fulfillment of and compliance with the respective terms hereof and thereof by Callaway Golf and CGV, do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under (whether with or without the passage of time, the giving of notice or both), (iii) give any third party the right to modify, terminate or accelerate any obligation under, (iv) result in a violation of, or (v) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant to, the organizational documents of Callaway Golf and CGV, or any material law, statute, rule or regulation to which Callaway Golf and CGV are subject, or any material agreement, instrument, order, judgment or decree to which Callaway Golf and CGV are subject. 5. Release of Obligations. Upon execution of this Agreement, Saint Andrews, Boreta and SportPark and each of their successors, heirs, assigns, agents, officers, directors, employees, agents, representatives, attorneys, subsidiaries, divisions, affiliates, and all persons acting by, through, under or in concert with them, or any of them hereby irrevocably and unconditionally release and forever discharge Callaway Golf, CGV, and AAG and each of their predecessors, successors, assigns, agents, officers, directors, employees, agents, representatives, attorneys, subsidiaries, divisions, affiliates, and all persons acting by, through, under or in concert with them, or any of them, from any and all manner of actions, causes of action, suits, debts, liens, contracts, rights, agreements, obligations, promises, liabilities, claims, demands, damages, controversies, losses, costs and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, fixed or contingent 14

which they now have, own or hold or claim to have, own or hold at any time, heretofore had, owned or held, or claim to have had, owned or held, or may hereafter have, own or hold or claim to have, own or hold, from the beginning of time to the date hereof; provided, however, nothing contained in this release is intended to release Callaway Golf and CGV from their obligations under this Agreement or the Option Agreement referred to in Section 6.8. This release shall apply to all unknown or unanticipated results of the foregoing, as well as those known and anticipated, and upon advice of legal counsel, each of Saint Andrews, SportPark and Boreta, do waive any and all rights under California Civil Code Section 1542, which section has been explained to each of such Parties, hereto, and reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." Any claim released by Saint Andrews, SportPark or Boreta pursuant to this Section 5 shall be deemed a capital contribution by Saint Andrews. 6. Conditions to Closing. 6.1 Consulting Agreement. Saint Andrews shall enter into a separate consulting agreement with AAG, the terms of such consulting agreement being acceptable to AAG in its sole and absolute discretion, whereby Saint Andrews shall cause Ron Boreta and John Wenzel to agree to provide to AAG consulting services on an asneeded basis for a period of ninety (90) days immediately following the Closing. No compensation shall be payable by Callaway Golf, AAG or CGV for such consulting services. 6.2 Tenant Leases. All existing tenant leases shall continue in place, except that the Saint Andrews Golf Shop lease will be amended to provide more specific operating standards acceptable to Callaway Golf in its sole discretion. 6.3 Phase I Environmental. CGV shall have conducted a Phase I Environmental assessment on the premises occupied by AAG and the results of such assessment shall be acceptable to CGV in its sole discretion. 6.4 Sierra Sportservice, Inc. Agreement. The Lease and Concession Agreement with Sierra Sportservice, Inc. ("Sportservice Agreement") shall be amended or a separate agreement will be entered into between AAG and Sportservice to remove AAG from any liability for Sportservice improvements on the premises operated by SportPark. Such amendment or separate agreement shall be acceptable to Callaway Golf in its sole and absolute discretion and shall also provide for ongoing food service at the premises operated by AAG. 6.5 Covenant Not to Compete. Saint Andrews and Ron Boreta shall each have entered into a noncompetition agreement with CGV for a period of two (2) years, the terms of which shall be acceptable to CGV in its sole and absolute discretion. 6.6 Ground Lease. The Parties shall have obtained the consent of Urban Land of Nevada, Inc. to the transfer of the Membership Interest from Saint Andrews to CGV. 15

6.7 Consulting Agreement for John Boreta. John Boreta shall have entered into a Consulting Agreement with AAG for a period of six months to provide consulting on an as needed basis at the monthly rate of $4,166.67 per month. The Consulting Agreement shall be acceptable to AAG in its sole and absolute discretion. 6.8 Repurchase Option. The Parties shall have executed a separate Option Agreement whereby Saint Andrews shall have the option for a period of two (2) years after the Closing Date to repurchase the Membership Interest on the terms and conditions set forth in the Option Agreement. The conditions set forth in this Section 6 are for the exclusive benefit of Callaway Golf and CGV and may be waived by Callaway Golf and CGV in whole or in part on the Closing Date; provided, however, such conditions may be waived by Callaway Golf and CGV in writing and any such waived conditions shall become post-closing covenants pursuant to Section 9.1. Notwithstanding any such waiver, the completion of the purchase and sale contemplated by this Agreement by Callaway Golf and CGV shall not prejudice or affect in any way the rights of Callaway Golf and CGV in respect of the representations and warranties of Saint Andrews and Boreta set forth in this Agreement and the representations of Saint Andrews and Boreta set forth in this Agreement shall survive the completion and payment of the Purchase Price, as set forth in Section 7.1. 7. Indemnification and other Agreements. 7.1 Survival of Representations and Warranties. Notwithstanding any investigation or inquiries made by Callaway Golf and CGV prior to Closing, Saint Andrews, SportPark and Boreta each acknowledge and agree that Callaway Golf and CGV have entered into this Agreement and has purchased the Membership Interest in reliance upon the representations and warranties by Saint Andrews and Boreta contained in this Agreement. Saint Andrews and Boreta further acknowledge and agree that the representations and warranties made by them and contained in this Agreement and in other documentation relating to the transaction contemplated hereby shall be true at the date of this Agreement and on the Closing Date as if such representations and warranties were made at such time. The representations and warranties in Section 3.1, 3.2, 3.3, 3.9 and 3.12 shall survive the Closing indefinitely. All other representations and warranties in this Agreement and the Schedules and Exhibits attached hereto or in any writing delivered by any Party to another Party in connection with this Agreement shall survive until expiration of the applicable statutes of limitations. 7.2 General Indemnification. 7.2.1 Indemnification by Saint Andrews and SportPark. Saint Andrews, ("Indemnifying Party") shall defend and indemnify each of AAG, Callaway Golf and CGV and their respective affiliates, stockholders, partners, officers, directors, employees, agents, representatives, successors and permitted assigns (collectively, the "Indemnified Parties") and save and hold each of them harmless against and pay on behalf of or reimburse such Indemnified Parties as and when incurred for any loss, liability, demand, claim, action, cause of action, cost, damage, deficiency, Tax, penalty, fine or expense, whether or not arising out of third party claims (including interest, penalties, reasonable attorneys' fees and expenses and all amounts paid in investigation, defense or settlement of any of the foregoing) (collectively, "Losses"), which any such Indemnified Parties may suffer, 16

sustain or become subject to, as a result of, in connection with, relating or incidental to or by virtue of: (a) any breach of any representation or warranty of Saint Andrews, or Boreta in this Agreement or in any of the Schedules or Exhibits attached hereto or in any of the certificates or other instruments furnished by Saint Andrews, SportPark or Boreta pursuant to this Agreement; (b) any nonfulfillment or breach of any covenant or agreement by Saint Andrews, SportPark or Boreta under this Agreement or any of the Schedules and Exhibits attached hereto required to be performed or complied with by Saint Andrews, SportPark or Boreta at or prior to the Closing; (c) any nonfulfillment or breach of any covenant or agreement by either Saint Andrews, SportPark or Boreta under this Agreement required to be performed or complied with by either Saint Andrews, SportPark or Boreta after the Closing; (d) any claim for failure to pay overtime or other employee compensation or benefits incurred on or prior to the Closing Date; or (e) the failure of AAG to possess the Required Assets. If and to the extent any provision of this Section 7.2 is unenforceable for any reason, Saint Andrews, hereby agrees to make the maximum contribution to the payment and satisfaction of any Loss for which indemnification is provided for in this Section 7.2 which is permissible under applicable laws. 7.2.2 Procedure for Indemnification - Notice of Claims. If an Indemnified Party becomes aware of facts or circumstances establishing a claim ("Claim") that an Indemnified Party has experienced or incurred any Loss or may experience or incur any Loss which will give rise to a right of set-off or indemnification under this Section, then such Indemnified Party shall give written notice to the Indemnifying Party of such Claim ("Indemnification Notice"). The Indemnification Notice shall be provided as soon as reasonably practicable, but in no event more than thirty (30) days after the Indemnified Party has received written notice or actual knowledge of such facts or circumstances (provided that failure to give an Indemnification Notice shall not limit the Indemnifying Party indemnification obligation hereunder, except to the extent that the delay in giving, or failure to give, the Indemnification Notice materially adversely affects the Indemnifying Party's ability to defend against a Claim). To the extent reasonably practicable, the Indemnification Notice will describe the nature, basis and amount of the Claim and include any relevant supporting documentation. Any Claim described in the Indemnification Notice shall be deemed final and binding (hereinafter, a "Permitted Indemnification Claim") if the Indemnifying Party does not object in writing to the propriety of the Claim or the amount of the Loss by delivering a notice of objection to the Indemnified Party (an "Indemnification Objection Notice") within thirty (30) days after receipt of the Indemnification Notice. The Indemnification Objection Notice shall detail the specific objections of the Indemnifying Party the Claim. If the parties are unable to resolve the disputed issues concerning the Claim within twenty (20) business days after the date the Indemnified Party received the Indemnification Objection Notice, the disputed issues shall be settled pursuant to Section 8. 7.2.3 Defense of Third Party Claims. Callaway Golf and/or CGV shall have the right to control the defense or settlement of any third party claim ("Third Party Claim"). Any legal and related expenses, and any judgment or settlement paid by Callaway Golf and/or CGV in connection with a Third Party Claim shall be included as part of the indemnification obligations of the Indemnifying Party under this Agreement. Saint Andrews shall have the right to participate in, but not control the defense of any Third Party Claim. Callaway Golf and CGV shall periodically apprise Saint Andrews of the progress of such defense. Callaway Golf and CGV shall not consent to the entry of any 17

judgement or enter into any settlement (except with the written consent of Saint Andrews which consent shall not be unreasonably withheld) which does not include as an unconditional term thereof, the giving by the claimant to Saint Andrews a release from all liability in respect of such Third Party Claim (which release only may exclude any obligations incurred in connection with any such settlement). 8. Dispute Resolution. 8.1 Direct Discussion. In the event of any dispute, claim, question, or disagreement arising out of or relating to this Agreement (a "Dispute"), the Parties involved in such Dispute shall use their best efforts to settle such Dispute. To this effect, senior management of the parties involved shall consult and negotiate with each other in good faith to attempt to reach a just and equitable solution satisfactory to both Parties. Any dispute which cannot be resolved within thirty (30) days may be submitted to binding arbitration as provided below. 8.2 Requirement of Arbitration. Any Dispute which cannot be resolved through mutual consultation and negotiation, shall be settled by final and binding arbitration conducted by the San Diego office of JAMS/Endispute. Nothing stated herein, however, shall preclude Callaway Golf or CGV from seeking and obtaining immediate injunctive relief (whether temporary, preliminary, or permanent) to prevent or restrain a breach by Saint Andrews or SportPark of this Agreement or to seek enforcement of this arbitration provision or to seek or enforce prejudgment or ancillary remedies. 8.3 Number of Arbitrators. The number of arbitrators shall be three (3). The three arbitrators shall be selected as follows: (a) within ten (10) days of delivery of any demand for arbitration, each party shall submit to the other party the name of three (3) candidates nominated from the then-current list of retired judges or justices at the San Diego office of JAMS/Endispute; (b) within five (5) days of delivery of the opposing party's list, each party shall submit to the other party the names of two (2) candidates proposed by the opposing party which are to be stricken from the opposing party's nomination list, with the non-challenged candidates serving as two (2) of the three (3) arbitrators; (c) the parties will then confer on the selection of a third arbitrator and, if no agreement can be reached within five (5) days, JAMS/Endispute shall appoint the third arbitrator from the list of retired judges or justices at the San Diego office of JAMS/Endispute. 8.4 Location; Commencement. The arbitration shall take place in San Diego, California, and shall be commenced within thirty (30) days of the selection of the arbitrator(s), unless otherwise agreed to by the parties or ordered by the arbitrator(s) for good cause shown. The arbitration hearing shall last no longer than two (2) days. 8.5 Discovery. It is expressly understood that the parties have chosen arbitration to avoid the burdens, costs and publicity of a court proceeding, and the arbitrators are expected to handle all aspects of the matter, including discovery, in a manner so as to minimize the expense, time, burden and publicity of the process, while assuring a fair and just result. The arbitrator shall limit and restrict the scope of discovery (e.g., number of depositions, document requests, etc.) to only those matters clearly relevant to the dispute. Subject to this limitation, the provisions of California Code of Civil Procedure section 1283.05 are incorporated into, made part of and are applicable to any arbitration conducted pursuant to this clause. 18

8.6 Arbitrator's Award. The arbitrator(s) shall issue a written award within twenty (20) days after the matter is submitted for decision. The arbitrator(s) shall apply the law of the State of California (excluding California choice of law provisions.) The arbitrator(s) shall not have the authority to award punitive or exemplary damages to any party. 8.7 Expenses. The expenses of the arbitration, including the arbitrators' fees, expert witness fees, and attorney's fees, may be awarded to the prevailing party, in the discretion of the arbitrators, or may be apportioned between the parties in any manner deemed appropriate by the arbitrators. Unless and until the arbitrators decide that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment of the arbitrators' fees as and when billed by the arbitrators. 8.8 Confidentiality. Except as set forth below, the parties shall keep confidential the fact of the arbitration, the dispute being arbitrated, the decision of the arbitrators, and any documents produced by the parties in the course of the arbitration. Notwithstanding the foregoing, the parties may disclose information about the arbitration to persons who have a need to know, such as directors, trustees, management employees, witnesses, experts, investors, attorneys, lenders, insurers, and others who may be directly affected. Once the arbitration award has become final, if the arbitration award is not promptly satisfied, then the prevailing party may, notwithstanding the foregoing, disclose information about the arbitration only to the extent necessary to obtain judicial enforcement of the award. 8.9 Enforcement of Award. The arbitration award shall be final and shall bind the parties. Any award may be enforced by an action filed in the San Diego Superior Court or the Federal District Court, Southern District of California. For purposes of this arbitration provision, the parties hereby agree to submit to the jurisdiction of these courts and hereby waive any or all objections as to personal jurisdiction, subject matter jurisdiction and/or venue with respect to such courts. In the event any award cannot be satisfied by Saint Andrews, SportPark or Boreta, Callaway Golf in its sole discretion may elect to have the award added to the option price in accordance with the terms of the Option Agreement. 9. Post-Closing Covenants. 9.1 Remaining Conditions to Closing. Saint Andrews shall use its best efforts to satisfy any Conditions to Closing set forth in Section 6 that have not been satisfied prior to or at the time of Closing. 9.2 Holdback. The Holdback shall be retained by CGV until it has determined, in its sole discretion, that AAG has all rights, entitlements, and other tangible and intangible assets reasonably necessary to operate the business of AAG (the "Required Assets") and that the conditions set forth in Sections 6.3 and 6.4 have been satisfied. Any deficiency in the Required Assets shall be treated as a Loss under Section 7.2.1; shall be subject to the notice and dispute resolution provisions of Sections 7.2.2 and 8; and any such Loss may be offset against the Holdback. If the conditions set forth in Section 6.3 and 6.4 have been satisfied by June 5, 1998, then Two Hundred Fifty Thousand Dollars ($250,000) of the Holdback after deduction for Losses, shall be released to Saint Andrews. If the conditions set forth in Section 6.3 and 6.4 have been satisfied by August 5, 1998, then the balance of the Holdback after deduction for Losses, shall be released to Saint Andrews. The amount of any Claim for a Loss, including, without limitation, a Loss related to a deficiency in the Required Assets, which has not been finally determined 19

pursuant to Section 7.2.2 or Section 8 shall not be subject to the preceding two sentences and no distribution, if any, shall be made until the Claim is resolved. If the conditions set forth in Section 6.3 and 6.4 have not been satisfied by June 5, 1998 or August 5, 1998, no release of the balance of the Holdback, if any, shall be made until the conditions set forth in Section 6.3 and 6.4 have been satisfied. Release of the Holdback, or any portion thereof, shall not release Saint Andrews from any of its indemnity obligations under this Agreement. 9.3 Pepsi Sponsor Agreement. Saint Andrews and Pepsi-Cola Company ("Pepsi-Cola") entered into a Sponsor Agreement, dated December 4, 1997 ("Sponsorship Agreement") whereby Pepsi-Cola agreed to pay to Saint Andrews a sum of $1,250,000, payable in installments, in return for Saint Andrews' granting exclusive rights to Pepsi-Cola to have Pepsi-Cola's beverage products distributed, represented, and promoted throughout the AllAmerican SportPark. Of the sum due Saint Andrews under the Sponsorship Agreement, AAG will be allocated and Saint Andrews will pay $25,000 to AAG for the period from January 1, 1998 to June 30, 1998 from the first payment received by Saint Andrews. After June 30, 1998 all payments received by Saint Andrews shall be allocated between AAG and SportPark based upon the number of gallons of syrup used at each facility. For example, if the total syrup used for the period ending December 31, 1998 was 1,000 gallons and 250 gallons has been used at the Golf Center, AAG would be entitled to 25% of any payment received by Saint Andrews. Within ten (10) days of Saint Andrews' receipt of monies from Pepsi-Cola pursuant to the Sponsor Agreement, Saint Andrews shall remit to AAG its share of the revenue from Pepsi-Cola sales. 9.4 Press Release and Announcements. Unless required by law (in which case each Party agrees to consult with the other Parties prior to any such disclosure as to the form and content of such disclosure), no press releases or other releases of information related to this Agreement or the transactions contemplated hereby will be issued or released without the consent of AAG, Callaway Golf, and CGV. 9.5 Confidentiality. Upon the Closing, the Saint Andrews shall return to Callaway Golf and keep confidential all information and materials regarding Callaway Golf reasonably designated by Callaway Golf as confidential (except to the extent (i) disclosure of such information is required by law, (ii) the information was previously known to Saint Andrews or (iii) the information becomes publicly known except through the actions or inactions of Saint Andrews). Saint Andrews agrees not to disclose or use at any time, either during Saint Andrews' consultancy with AAG or thereafter, any Confidential Information (whether or not such information is or was developed by Saint Andrews), except to the extent that such disclosure or use is directly related to and required by the performance of Saint Andrews' duties to AAG. Saint Andrews further agrees to take all appropriate steps to safeguard such Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. In the event Saint Andrews is required by law to disclose any Confidential Information, it shall promptly notify Callaway Golf in writing, which notification shall include the nature of the legal requirement and the extent of the required disclosure, and shall cooperate with AAG and Callaway Golf to preserve the confidentiality of such information consistent with applicable law. 9.6 Maintenance of 3-Acre Vacant Land. If used by Saint Andrews and/or SportPark, Saint Andrews and/or SportPark shall maintain the approximately 3-acre vacant parcel of land located at the south entrance to the Golf Center so that it shall be free of garbage, mobile trailers and debris and shall have a clean, neat and orderly appearance. 20

9.7 Signage. Saint Andrews and SportPark acknowledge that neither shall have any right to place any signs, billboards, or other advertising (including, without limitation, the proposed entry pylon sign with 40' electronic message board) on the premises occupied by AAG premises unless AAG gives its prior written consent which shall be in AAG's sole and absolute discretion. 9.8 Severance Obligations. Saint Andrews shall be pay all known severance obligations related to the employees of AAG employed as of the Closing Date. 9.9 No Contracting. Saint Andrews, SportPark and Boreta shall not at any time after the Closing enter into any contract, agreement or lease which binds or purports to bind AAG, Callaway Golf, CGV or the Golf Center. Saint Andrews, SportPark and Boreta acknowledge they have no right to bind or purport to bind AAG, Callaway Golf, CGV or the Golf Center. 9.10 Multiparty Contracts. The parties hereto acknowledge that certain contracts licenses, accounts and/or entitlements (i) for the benefit of AAG or the Golf Center may be in the name of Saint Andrews or SportPark or (ii) for the benefit of Saint Andrews or SportPark may be in the name of AAG. Such contracts may be, by way of example and not be way of limitation, contracts for trash removal, pay phones, water entitlement, the Sponsorship Agreement, the Agreement between and Saint Andrews and Frankel, etc. The Parties agree to use their reasonable best efforts to cause individual contracts, licenses, accounts and/or entitlements to be assigned to the Party which will benefit from the services or rights after the Closing. 9.11 Water Rights. SportPark and Saint Andrews recognize the unique need for water required by the Golf Center and covenant and agree not to engage in or permit any activity related to the All-American SportPark which will restrict the amount of water required by AAG or the Golf Center to operate the Golf Center in a first class, well maintained and garden green manner. SportPark and Saint Andrews shall cause this covenant regarding water rights to pass to all successors-in-interest to the All-American SportPark and/or any other lessor of the premises upon which the All-American SportPark is located. 9.12 Encroachment of Parking. The parking lot for the SportPark encroaches upon the property of AAG. After the Closing, AAG and SportPark will negotiate in good faith to agree upon a license whereby SportPark may use the encroachment for as long as Saint Andrews or SportPark operate the All-American SportPark. 9.13 Irrigation Computer System. The irrigation computer system for the Golf Center is located on the property of the SportPark. SportPark hereby grants AAG a license to access the irrigation computer system at all times. AAG and SportPark shall execute a license for this purpose after the Closing. 9.14 Right of First Refusal. After the Closing, AAG and Saint Andrews shall enter into a Right of First Refusal Agreement which grants AAG a right of first refusal to designate the name of the putting green at the SportPark. 9.15 Further Assurances. If at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement or the transactions contemplated hereby, each of the Parties will 21

take such further action (including the execution and delivery of such further instruments and documents) as any other Party may reasonably request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under Section 7 above). 10. Definitions. For the purposes of this Agreement, the following terms have the meanings set forth below: "GAAP" means generally accepted accounting principles. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. "Confidential Information" means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as "confidential"), in any form or medium, that is or was disclosed to, or developed or learned by, any Seller and that relates to the business, products, services or research or development of the Company or its Subsidiaries or their respective suppliers, distributors or customers. Confidential Information includes, but is not limited to, the following: (i) internal business information (including information relating to strategic and staffing plans and practices, business, training, marketing, promotional and sales plans and practices, cost, rate and pricing structures and accounting and business methods); (ii) identities of, individual requirements of, specific contractual arrangements with, and information about, the Company's suppliers, distributors and customers and their confidential information; (iii) trade secrets, know-how, compilations of data and analyses, techniques, systems, formulae, research, records, reports, manuals, documentation, models, data and data bases relating thereto; (iv) inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) and (v) other Intellectual Property Rights. Confidential Information shall not include information that a Seller can demonstrate is publicly known through no wrongful act or breach of any obligation of confidentiality or was rightfully received by such Seller from a third party without a breach of any obligation of confidentiality by such third party. "Environmental Lien" shall mean any Lien, whether recorded or unrecorded, in favor of any governmental entity, relating to any liability of the Company arising under any Environmental and Safety Requirements. "Environmental and Safety Requirements" shall mean all federal, provincial, local and foreign statutes, regulations, ordinances and other provisions having the force or effect of law, all judicial and administrative orders and determinations, all contractual obligations and all common law, in each case concerning public health and safety, worker health and safety and pollution or protection of the environment (including, without limitation, all those relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, Release, threatened Release, control or cleanup of any hazardous or otherwise regulated materials, substances or wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise, radiation or radon), each as amended and as now or hereafter in effect. "Golf Center" means the business operated by AAG. 22

"Indebtedness" means at a particular time, without duplication, (i) any indebtedness for borrowed money or issued in substitution for or exchange of indebtedness for borrowed money, (ii) any indebtedness evidenced by any note, bond, debenture or other debt security, (iii) any indebtedness for the deferred purchase price of property or services with respect to which a Person is liable, contingently or otherwise, as obligor or otherwise (other than trade payables and other current liabilities incurred in the ordinary course of business which are not more than six months past due), (iv) any commitment by which a Person assures a creditor against loss (including contingent reimbursement obligations with respect to letters of credit), (v) any indebtedness guaranteed in any manner by a Person (including guarantees in the form of an agreement to repurchase or reimburse), (vi) any obligations under capitalized leases with respect to which a Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or with respect to which obligations a Person assures a creditor against loss, (vii) any indebtedness secured by a Lien on a Person's assets and (viii) any unsatisfied obligation for "withdrawal liability" to a "multiemployer plan" as such terms are defined under ERISA. "Intellectual Property" means (a) inventions, whether ir not patentable, whether or not reduced to practice, and whether or not yet made the subject of a pending patent application or applications, (b) ideas and concepts of potentially patentable subject matter, including, without limitation, any patent disclosures, whether or not reduced to practice and whether or not yet made the subject of a pending patent application or applications, (c) national (including the United States) and multinational statutory invention registrations, patent, patents registrations and patent application (including all reissue, division, continuations, continuations-in-part, extensions, and reexaminations) and all rights therein provided by international treaties or conventions and all improvements to the inventions disclosed in which such registration, patent, or application, (d) trademarks, service marks, trade dress, logos, trade names, and corporate names, whether or not registered, including all common law rights, and registration and applications for registration thereof, including, but not limited to, all marks registered in the United States Patent and Trademark Office, the Trademark Offices of the States and Territories of the United State of America, and the Trademark Office of other nations throughout the world, and all rights therein provided by international treaties or conventions, (e) copyrights (registered or otherwise) and registrations and applications for registration thereof, and all rights therein provided by international treaties of conventions, (f) computer software, including, without limitation, source code, operating systems and specifications, data, data bases, filed, documentation and other materials related thereto, (g) trade secrets and confidential, technical and business information (including idea formulas, compositions, inventions, and conceptions of inventions where patentable or unpatentable and whether or not reduced to practice), (h) whether or not confidential, technology (including know-how and show-how), manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works,. financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, (i) copies and tangible embodiments of all the foregoing, in whatever form or medium, (j) all right to obtain and right to apply for patens, and to register trademarks and copyrights, and (k) all rights to sue or recover and retain damages and costs and attorney's fees for present and past infringement of any of the foregoing. 23

"Knowledge" or the phrase "to the Knowledge" means the actual knowledge, information and belief of Saint Andrews, its officers, directors and employees after due inquiry as a reasonably prudent person and/or corporation would conduct or commission in light of prevailing facts and circumstances. "Lien" or "Liens" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), any sale of receivables with recourse against the Company, any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or a similar statute (other than to reflect ownership by a third party of property leased to the Company under a lease which is not in the nature of a conditional sale or title retention agreement), or any subordination arrangement in favor of another Person. "Membership Interest" means (i) Saint Andrews' entire interest as a member in AAG, including all right, title and interest of Saint Andrews as a member in AAG and all rights and interests of any kind or nature under the Operating Agreement as a member, including without limitation all voting, inspection, management and rights in specific AAG property; (ii) any and all obligations of AAG to Saint Andrews as a member or on account of Saint Andrews' membership interest of any kind whatsoever, including without limitation all accounts, fees, general intangibles, chattel paper, documents, and promissory notes and other instruments, including all rights with respect any security therefore or guaranties or other securities in respect thereof; and (iii) all dividends, distributions and earnings arising out of any of the foregoing and all additions, replacements and substitutions to any and all of the foregoing. "Material Adverse Effect" means a material and adverse effect upon the business, operations, assets, liabilities, financial condition, operating results, cash flow, prospects, net worth or employee, customer or supplier relations of the Company. "Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. "Release" shall have the meaning set forth in CERCLA. "Subsidiary" means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control any managing director or general 24

partner of such limited liability company, partnership, association or other business entity. "Tax" or "Taxes" means federal, provincial, state, county, local, foreign or other income, business, assets, corporate capital, social services, gross receipts, ad valorem, franchise, profits, sales or use, transfer, registration, excise, utility, environmental, communications, real or personal property, capital stock, license, payroll, wage or other withholding, employment, social security, severance, stamp, occupation, alternative or add-on minimum, estimated and other taxes, assessments, or levies of any kind whatsoever (including deficiencies, penalties, additions to tax, and interest attributable thereto) whether disputed or not. "Tax Return" means any return, information report, election forms, or filing with respect to Taxes, including any schedules attached thereto and including any amendment thereof. 11. Miscellaneous. 11.1 No Merger/Ratification. It is the intent of the Parties that upon execution and delivery of the Assignment of Membership Interest and the consummation of the transactions contemplated by this Agreement, that Callaway Golf's and CGV's interest in the Membership Interest shall not merge with Callaway Golf's security interest in such Membership Interest as created by and as set forth in the Loan Documents and that Callaway Golf and its successors and assigns, shall continue to enjoy all rights and remedies set forth in the Loan Documents, including the right to foreclose on the Membership Interest. Callaway Golf and CGV hereby acknowledge and agree that the Membership Interest is pledged to Callaway Golf under the Loan Documents, agree to be bound by the Membership Interest Security Agreement and to any original parties thereto, and agree to execute such other documents as Callaway Golf shall request to further evidence the foregoing or validity thereto, including without limitation financing statements. The Parties hereby ratify and affirm all of their respective obligations under the Loan Documents. 11.2 Fees and Expenses. Each Party shall pay all of its own fees and expenses (including fees and expenses of legal counsel, accountants, investment bankers and other representatives and consultants) in connection with this Agreement and the consummation of the transactions contemplated hereby. If any legal action or other proceeding relating to this Agreement, the agreements contemplated hereby, the transactions contemplated hereby or thereby or the enforcement of any provision of this Agreement or the agreements contemplated hereby is brought against any Party, the prevailing Party in such action or proceeding shall be entitled to recover all reasonable expenses relating thereto (including attorneys' fees and expenses) from the Party against which such action or proceeding is brought in addition to any other relief to which such prevailing Party may be entitled. 11.3 Special Remedies and Enforcement. Each Party recognizes and agrees that a breach by one of the Parties ("Breaching Party"), of any of the covenants set forth in this Agreement could cause irreparable harm to the other Parties, that the Parties' remedies at law in the event of such breach would be inadequate, and that, accordingly, in the event of any such breach a restraining order or injunction or both may be issued against the Breaching Party in addition to any other rights and remedies which are available to the Parties. If this Section 11.3 is more restrictive than permitted by applicable Law, this Section 11.3 shall be limited to the extent required by such Law. 25

11.4 Entire Agreement. Modifications. This Agreement, together with exhibits and schedules attached hereto, contains the entire agreement between the parties hereto with respect to the transactions contemplated hereby, and contains all of the terms and conditions thereof and supersedes all prior agreements and understandings relating to the subject matter hereof. No changes or modifications of or additions to this Agreement shall be valid unless the same shall be in writing and signed by each party hereto. 11.5 Waivers. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provision of this Agreement, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver of any provision of this Agreement shall be binding on the parties hereto unless it is executed in writing by the party making the waiver. 11.6 Successors and Assigns. 11.6.1 This Agreement and all covenants and agreements contained herein and rights, interests or obligations hereunder, by or on behalf of any of the Parties hereto, shall bind and inure to the benefit of the respective successors and assigns of the Parties hereto whether so expressed or not. 11.6.2 Callaway Golf, CGV and AAG may assign their rights under this document. Saint Andrews, SportPark and Boreta may not, voluntarily or by operation of law, assign or otherwise transfer any of his, her or its rights or obligations under this Agreement, without obtaining the prior written consent of all other parties hereto. Any attempted assignment in violation of this Agreement shall be void and of no effect. 11.7 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by, illegal or unenforceable under applicable law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 11.8 Counterparts. This Agreement may be executed simultaneously in counterparts (including by means of telecopied signature pages), any one of which need not contain the signatures of more than one Party, but all such counterparts taken together shall constitute one and the same Agreement. 11.9 Descriptive Heading; Interpretation. The headings and captions used in this Agreement and the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized terms used in any Schedule or Exhibit attached hereto and not otherwise defined therein shall have the meanings set forth in this Agreement. The use of the word "including" herein shall mean "including without limitation." The Parties intend that each representation, warranty and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not 26

breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty or covenant. 11.10 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties and their permitted successors and assigns and nothing herein expressed or implied shall give or be construed to give any Person, other than the Parties and such permitted successors and assigns, any legal or equitable rights hereunder. 11.11 Schedules. Nothing in any Schedule attached hereto shall be adequate to disclose an exception to a representation or warranty made in this Agreement unless such Schedule identifies the exception with particularity. Without limiting the generality of the foregoing, the mere listing (or inclusion of a copy) of a document or other item shall not be adequate to disclose an exception to a representation or warranty made in this Agreement, unless the representation or warranty has to do with the existence of the document or other item itself. No exceptions to any representations or warranties disclosed on one Schedule shall constitute an exception to any other representations or warranties made in this Agreement unless the substance of such exception is disclosed as provided herein on each such other applicable Schedule or a specific cross-reference to a disclosure on another Schedule is made. 11.12 Cooperation on Tax Matters. The Parties shall cooperate fully, as and to the extent reasonably requested by each Party and at the requesting Party's expense, in connection with any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon any Party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Parties agree (i) to retain all books and records with respect to Tax matters pertinent to AAG relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by any Party, any extensions thereof) applicable to such taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (ii) to give each Party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if any Party so requests, the other party as the case may be, shall allow such party to take possession of such books and records. 11.13 Schedules and Exhibits. All Schedules and Exhibits attached hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. 11.14 Governing Law. This Agreement is made and shall be governed by, and construed and enforced in accordance with, the internal laws of the State of California, without regard to the conflict of laws principles thereof, as the same apply to agreements executed solely by residents of California and wholly to be performed within California. This Agreement shall be interpreted in accordance with and any disputes hereunder governed by the laws of the State of California. 11.15 Authority. Each of the persons executing this Agreement represents and warrants that it is authorized to execute this Agreement and the entity on whose behalf they are signing is bound by the terms hereof. 27

11.16 Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient, one day after being sent to the recipient by reputable overnight courier service (charges prepaid), upon machine-generated acknowledgment of receipt after transmittal by facsimile or five (5) days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications shall be sent to the Parties at the addresses indicated below or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.
To Callaway Golf, CGV or AAG: Callaway Golf Company 2285 Rutherford Road Carlsbad, CA 92008-8815 Attn: Donald H. Dye, President and Chief Executive Officer Callaway Golf Company 2285 Rutherford Road Carlsbad, CA 92008-8815 Attn: Steven C. McCracken, Executive Vice President, Licensing, Chief Legal Officer and Secretary Saint Andrews Golf Corporation 5325 South Valley View Boulevard, Suite 4 Las Vegas, Nevada 89118 Attn: Ron Boreta, President Joseph P. Mulhern, Esq. Gondecki & Del Guidice 221 North LaSalle Street, Suite 2200 Chicago, Illinois 60601

With a copy to:

To Saint Andrews, SportPark, or Boreta:

With a Copy to:

11.17 No Strict Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. 11.18 Incorporation of Recitals. The Recitals to this Agreement are incorporated herein by this referenced with the same force and effect as if set forth in full herein. 11.19 Brokers. No broker, finder, or investment banker is entitled to any brokerage, finder's, or other fee or commission in connection with the transactions hereunder based upon arrangements made by or on behalf of any party to this Agreement. [The balance of this page has been intentionally left blank] 28

IN WITNESS WHEREOF, the parties hereto have executed this Membership Interest Purchase Agreement on the date first written above. BORETA
By:/s/ Ron Boreta Ron Boreta

CGV, INC., a California corporation
By:/s/ Donald H. Dye Donald H. Dye, President and Chief Executive Officer By:/s/ Steven McCracken Its: Secretary and Chief Legal Officer CALLAWAY GOLF COMPANY, a California corporation By:/s/ Donald H. Dye Donald H. Dye, President and Chief Executive Officer By:/s/ Steven McCracken Its: Secretary and Chief Legal Officer SAINT ANDREWS GOLF CORPORATION, a Nevada corporation

By:/s/ Ron Boreta Ron Boreta, President By:/s/ Vaso Boreta Its: Chairman of the Board

ALL-AMERICAN SPORTPARK, INC., a Nevada corporation
By: /s/ Ron Boreta Its: General Manager, CEO, Secretary and Treasurer By:/s/ Vaso Boreta Its: Assistant General Manager ALL-AMERICAN GOLF LLC, a California limited liability company By:/s/ Ron Boreta Ron Boreta, President Saint Andrews Golf Corporation, a Nevada corporation, Manager

29

OPTION AGREEMENT This Option Agreement ("Option Agreement") is made and entered into as of this 5th day of May, 1998, at San Diego, California, by CGV, Inc. ("Optionor"), a California corporation, on the one hand, and Saint Andrews Golf Corporation, a Nevada corporation (hereinafter referred to as "Optionee"), on the other hand. RECITALS A. Concurrently with the execution of this Option Agreement, Optionor has purchased all of Optionee's right, title and interest in Optionee's Eighty Percent (80%) membership interest (the "Membership Interest") in All-American Golf LLC, a California limited liability company ("All- American Golf") pursuant to a Membership Interest Purchase Agreement ("Purchase Agreement"). B. Optionor now desires to grant Optionee the right to repurchase the Membership Interest in All-American Golf on the terms and conditions set forth herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Grant of Option. Optionor hereby grants to Optionee the right to purchase the Membership Interest at a price and under the terms and conditions set forth herein. This option may be exercised only once and upon exercise only for Optionor's entire eighty percent (80%) interest in All-American Golf. 2. Option Period. Subject to paragraph 6, Optionee may exercise this Option at any time prior to May 5, 2000. This Option shall expire if not exercised at midnight May 5, 2000. Nothing contained herein shall be deemed to obligate Optionee to exercise the Option. 3. Consideration. This Option is granted in consideration of Optionee's sale of the Membership Interest to Optionor contemporaneous with the execution of this Option Agreement. 4. Option Price. The option price ("Option Price") shall be the sum of the following: 4.1 Four Million Five Hundred Twenty Six Thousand One Hundred Seventy Eight Dollars ($4,526,178); 4.2 Eighty Percent (80%) of any net losses incurred by All-American Golf between the date of May 5, 1998 and the date of the exercise of the Option (all net income shall be distributed prior to computation of losses); 4.3 Eighty Percent (80%) of any capital investment made by Optionor in All-American Golf ("capital investment" shall mean any loans to or capital contributions made by Optionor to All-American Golf) after the date of this Option;

4.4 One Hundred Percent (100%) of any Losses, as that term is defined in section 7.2 of the Purchase Agreement, for which Optionor, Callaway Golf company ("Callaway Golf"), a California corporation, and AllAmerican Golf have not been indemnified by Saint Andrews Golf Corporation, a Nevada corporation. 5. Retention of Consideration. If for any reason the Option granted herein is not exercised, all sums paid and services rendered to Optionor by Optionee shall be retained by Optionor in consideration of the granting of this Option. 6. Exercise of Option. Optionee may exercise this Option by delivery to Optionor of written notice of exercise at any time prior to the expiration of the Option, or provided that at this time of exercise Optionee or Saint Andrews Golf Shop, Ltd. is not in breach or default of any their obligations under (i) this Agreement, (ii) the Covenant not to Compete of even date herewith, (iii) the Lease Agreement for Retail Operations between All-American Golf and Saint Andrews Golf Shop, Ltd. dated December 30, 1997, (iv) the Purchase Agreement, or (v) any other agreement between Optionee or any of its subsidiaries or affiliates and Optionor, Callaway Golf, All-American Golf or any of their subsidiaries or affiliates. 6.1 Payment of Option Price. The Option Price shall be paid by wire transfer to Optionor within thirty (30) days after notice of exercise of Option. 7. Transferability of Option. Neither the Option nor this Option Agreement may be transferred by Optionee without the prior written approval of Optionor which approval may be withheld for any reason or no reason without limiting any other condition which may be imposed by Optionor. As a condition to the exercise of the Option by any permitted transferee, the transferee must pay off the unpaid balance plus interest, of the loan (the "Loan") by Callaway Golf to All-American Golf in the original principal amount of Five Million Two Hundred Fifty Thousand Dollars ($5,250,000) evidence by a Secured Promissory Note dated June 13, 1997. The amount required to pay off the Loan shall be tendered with the payment of the Option Price. 8. Rights as Member Upon Exercise of Option. Optionee acknowledges that the only rights it shall have as a member of All-American Golf after exercise of the Option and payment of the Option Price shall be the right to: (i) allocation of eighty percent (80%) of the net income or losses from All-American Golf; (ii) distributions of eighty percent (80%) of the cash distributions from operations and eighty percent (80%) of the net proceeds from sale of the assets by All-American Golf; (iii) whatever value it may receive from the sale of its membership interest to a third party (subject to the restrictions on the transferability of its membership interest as set forth in the Operating Agreement); and (iv) right to inspect the books and records of All-American Golf. By way of example and not by way of limitation, Optionee shall have no right to: 2

(i) manage All-American Golf; (ii) remove or cause the removal of any manager of All-American Golf including Optionor (or its designee); or (iii) vote on any matter or cause a dissolution of All-American Golf. 9. Optionor's Rights During the Existence of the Option. The existence of the Option shall not restrict Optionor in any manner in its ownership and operation of All-American Golf. By way of example and not by way of limitation, Optionor shall have the right to: (i) cease or modify operations of All-American Golf; (ii) designate a new manager of All-American Golf; (iii) sell all or any portion of the assets of All-American Golf; (iv) remove the name Callaway Golf, or any variation there of, from the Golf Center; or (v) consistent with this Option Agreement, amend or change in any manner the Operating Agreement of AllAmerican Golf. 10. Transferability of Optionor's Interest. Subject to the provisions of paragraph 11, nothing contained herein shall be deemed in any manner to restrict Optionor's ability to transfer its membership interest in All-American Golf in whole or in part including any pledge thereof. 11. Notice of Sale. In the event Optionor intends to sell its membership interest in All-American Golf, or any portion thereof, or substantially all of the assets of All-American Golf, Optionor shall give Optionee thirty (30) days notice prior to the closing date of the proposed sale for the purpose of giving Optionee the opportunity to exercise the Option. If Option is not exercised, the sale shall be free of Option and Option shall be void and of no further force or effect. 12. Accounting. Within thirty (30) days after the request by Optionee, Optionor shall provide Optionee with an accounting which sets forth the unpaid balance of the Loan and the computation of the Option Price. The Option Price provided by the accounting in this paragraph 12 shall be the Option Price for a period of thirty (30) days from the date of the accounting. Optionor shall have no right to request an accounting more often than once every six (6) months during the term of this Option. 13. Operating Agreement for All-American Golf. As a condition to becoming a member in All-American Golf, Saint Andrews must execute an Operating Agreement (the "Operating Agreement") for All-American Golf. The Operating Agreement shall be consistent with Optionor's and Optionee's rights as set forth in this Option Agreement. Optionee acknowledges and agrees that the Operating Agreement shall contain all restrictions in the transfer of Optionee's interest as were set forth in the Operating Agreement for All-American Golf between Callaway Golf and Optionee dated June 13, 1997 including by way of example and not by way of limitation, restriction such as those that were set forth in Article VII of that Operating Agreement. 3

14. Notices. Unless otherwise provided herein, any notice, tender, or delivery to be given hereunder by either party to the other may be effected by personal delivery in writing, or by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed communicated as of actual receipt, or three (3) days from mailing. Mailed notices shall be addressed as set forth below, but each party may change his address by written notice in accordance with this paragraph.
To Optionor: CGV, Inc. c/o Callaway Golf Company 2285 Rutherford Road Carlsbad, CA 92008-8815 Attn: Donald H. Dye, President and Chief Executive Officer CGV, Inc. c/o Callaway Golf Company 2285 Rutherford Road Carlsbad, CA 92008-8815 Attn: Steven C. McCracken, Executive Vice President, Licensing, Chief Legal Officer and Secretary Saint Andrews Golf Corporation 5325 South Valley View Boulevard, Suite 4 Las Vegas, Nevada 89118 Attn: Ron Boreta, President Joseph P. Mulhern, Esq. Gondecki & Del Guidice 221 North LaSalle Street, Suite 2200 Chicago, Illinois 60601

With a copy to:

To Optionee:

With a Copy to:

15. Binding Effect. This Option Agreement shall bind and inure to the benefit of the respective heirs, personal representatives, successors, and assigns of the parties hereto, except as hereinabove expressly provided. 16. Construction. In the interpretation and construction of this Option Agreement, the parties acknowledge that the terms hereof reflect extensive negotiations between the parties and that this Option Agreement shall not be deemed, for the purpose of construction and interpretation, that either party drafted this Option Agreement. 17. Dispute Resolution. 17.1 Direct Discussion. In the event of any dispute, claim, question, or disagreement arising out of or relating to this Option Agreement (a "Dispute"), the Parties involved in such Dispute shall use their best efforts to settle such Dispute. To this effect, senior management of the parties involved shall consult and negotiate with each other in good faith to attempt to reach a just and equitable solution satisfactory to both Parties. Any dispute which cannot be resolved within thirty (30) days may be submitted to binding arbitration as provided below. 17.2 Requirement of Arbitration. Any Dispute which cannot be resolved through mutual consultation and negotiation, shall be settled by final and binding arbitration conducted by the San Diego office of JAMS/Endispute. Nothing stated herein, however, shall preclude any party 4

hereto from seeking and obtaining immediate injunctive relief (whether temporary, preliminary, or permanent) to prevent or restrain a breach by another party or to seek enforcement of this arbitration provision or to seek or enforce prejudgement or ancillary remedies. In the event JAMS/Endispute is no longer in existence or unwilling to conduct the arbitration, the arbitrators shall be appointed and the arbitration shall be conducted and governed by California Code of Civil Procedure section 1281, et seq. 17.3 Number of Arbitrators. The number of arbitrators shall be three (3). The three arbitrators shall be selected as follows: (a) within ten (10) days of delivery of any demand for arbitration, each party shall submit to the other party the name of three (3) candidates nominated from the then-current list of retired judges or justices at the San Diego office of JAMS/Endispute; (b) within five (5) days of delivery of the opposing party's list, each party shall submit to the other party the names of two (2) candidates proposed by the opposing party which are to be stricken from the opposing party's nomination list, with the non-challenged candidates serving as two (2) of the three (3) arbitrators; (c) the parties will then confer on the selection of a third arbitrator and, if no agreement can be reached within five (5) days, JAMS/Endispute shall appoint the third arbitrator from the list of retired judges or justices at the San Diego office of JAMS/Endispute. 17.4 Location; Commencement; Language. The arbitration shall take place in San Diego, California, and shall be commenced within thirty (30) days of the selection of the arbitrator(s), unless otherwise agreed to by the parties or ordered by the arbitrator(s) for good cause shown. The arbitration hearing shall last no longer than three (3) days. 17.5 Discovery. It is expressly understood that the parties have chosen arbitration to avoid the burdens, costs and publicity of a court proceeding, and the arbitrators are expected to handle all aspects of the matter, including discovery, in a manner so as to minimize the expense, time, burden and publicity of the process, while assuring a fair and just result. The arbitrator shall limit and restrict the scope of discovery (e.g., number of depositions, document requests, etc.) to only those matters clearly relevant to the dispute. Subject to this limitation, the provisions of California Code of Civil Procedure section 1283.05 are incorporated into, made part of and are applicable to any arbitration conducted pursuant to this clause. 17.6 Arbitrator's Award. The arbitrator(s) shall issue a written award within twenty (20) days after the matter is submitted for decision. The arbitrator(s) shall apply the law of the State of California (excluding California choice of law provisions.) The arbitrator(s) shall not have the authority to award punitive or exemplary damages to any party. 17.7 Expenses. The expenses of the arbitration, including the arbitrators' fees, expert witness fees, and attorney's fees, may be awarded to the prevailing party, in the discretion of the arbitrators, or may be apportioned between the parties in any manner deemed appropriate by the arbitrators. Unless and until the arbitrators decide that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment of the arbitrators' fees as and when billed by the arbitrators. 17.8 Confidentiality. Except as set forth below, the parties shall keep confidential the fact of the arbitration, the dispute being arbitrated, the decision of the arbitrators, and any documents produced by the parties in the course of the arbitration. Notwithstanding the foregoing, the parties may 5

disclose information about the arbitration to persons who have a need to know, such as directors, trustees, management employees, witnesses, experts, investors, attorneys, lenders, insurers, and others who may be directly affected. Once the arbitration award has become final, if the arbitration award is not promptly satisfied, then the prevailing party may, notwithstanding the foregoing, disclose information about the arbitration only to the extent necessary to obtain judicial enforcement of the award. 17.9 Enforcement of Award. The arbitration award shall be final and shall bind the parties. Any award may be enforced by an action filed in the San Diego Superior Court or the Federal District Court, Southern District of California. For purposes of this arbitration provision, the parties hereby agree to submit to the jurisdiction of these courts and hereby waive any or all objections as to personal jurisdiction, subject matter jurisdiction and/or venue with respect to such courts. 18. Entire Agreement. Modifications. This Option Agreement, together with exhibits and schedules attached hereto, contains the entire agreement between the parties hereto with respect to the transactions contemplated hereby, and contains all of the terms and conditions thereof and supersedes all prior agreements and understandings relating to the subject matter hereof. No changes or modifications of or additions to this Option Agreement shall be valid unless the same shall be in writing and signed by each party hereto. 19. Severability. The provisions of this Option Agreement shall be deemed severable and the invalidity or unenforceability of any one or more of the provisions hereof shall not affect the validity and enforceability of the other provisions hereof. 20. Waivers. No waiver of any of the provisions of this Option Agreement shall be deemed to be or shall constitute a waiver of any other provision of this Option Agreement, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver of any provision of this Option Agreement shall be binding on the parties hereto unless it is executed in writing by the party making the waiver. 21. Governing Law. This Agreement is made and shall be governed by, and construed and enforced in accordance with, the internal laws of the State of California, without regard to the conflict of laws principles thereof, as the same apply to agreements executed solely by residents of California and wholly to be performed within California. 22. Venue; Submission to Jurisdiction. Each of the parties submits to the jurisdiction of any state or federal court sitting in San Diego County, California, in any action or proceeding relating to the enforcement of paragraph 17 of this Option Agreement, and agrees not to bring any action or proceeding relating to the enforcement of paragraph 17 of this Operating Agreement in any other court. Each of the parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of any other party with respect thereto. 23. Authority. Each of the persons executing this Option Agreement represents and warrants that it is authorized to execute this Option Agreement and the entity on whose behalf they are signing is bound by the terms hereof. 6

24. Expenses. Except as otherwise provided for herein, each party hereto shall be responsible for its own expenses accrued in connection with the negotiation, execution and consummation of the transactions contemplated by this Option Agreement, including fees of his or its respective attorneys, accountants or consultants. IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement the day and year first above written. OPTIONOR: CGV, INC., a California corporation
By:/s/ Donald H. Dye Donald H. Dye, President and CEO By:/s/ Steven McCracken Its: Secretary and Chief Legal Officer OPTIONEE:

SAINT ANDREWS GOLF CORPORATION, a Nevada corporation
By:/s/ Ron Boreta Ron Boreta, President By:/s/ Vaso Boreta Vaso Boreta Chairman of the Board

7

TERM LOAN AGREEMENT This Term Loan Agreement (the "Agreement") is made and entered into this 15th day of September, 1998, by and between NEVADA STATE BANK, a Nevada banking corporation ("Lender") and ALL AMERICAN SPORTPARK LLC, a Nevada limited liability company ("Borrower"). In exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower and Lender agree as follows: ARTICLE 1 DEFINITIONS 1.1 Defined Terms. When used in this Agreement, the following terms shall have the following meanings: 1.1.1 "Additional Property" means the real property located in Clark County, State of Nevada, as that property is more particularly described in the Additional Trust Deed. 1.1.2 "Additional Trust Deed" means the Trust Deed, Assignment of Rents, Security Agreement and Fixture Filing dated the Closing Date and entered into by Voss Boreta, also known as Vaso Boreta in connection with the Loan which encumbers the Additional Property. 1.1.3 "Appraisal" means the appraisal of the Property, which appraisal indicates a value for the Project of not less than $27,000,000.00. 1.1.4 "Assignment of Ground Lease" means the Assignment of Ground Lease for Security dated the Closing Date and entered into in connection with the Loan. 1.1.5 "Assignment of Leases" means the Assignment of Leases dated the Closing Date and entered into by Borrower in connection with the Loan. 1.1.6 "Assignment of License Agreement" means collectively the Assignment of License Agreement dated the Closing Date and entered into by Borrower in connection with the Loan for each License Agreement, together with all consents from Licensors attached as exhibits to each Assignment of License Agreement. 1.1.7 "Borrower Trust Deed" means the Term Loan Trust Deed, Assignment of Rents, Security Agreement and Fixture Filing dated the Closing Date and entered into by Borrower in connection with the Loan which encumbers the Property. 1.1.8 "Closing Date" means the date of this Agreement set forth in the first paragraph on the first page of this Agreement. 1.1.9 "Collateral" means the property described in Section 2.4 of this Agreement as collateral for the Loan. 1.1.10 "Continuing Guaranty" means the Continuing Guaranty dated the Closing Date and executed by Guarantor in connection with the Loan.

1.1.11 "Debt Service Coverage Ratio" means the ratio, as calculated by Lender, of Borrower's net operating income before interest, taxes, depreciation and amortization to annual debt service, including, without limitation, principal and interest payments on the Loan, and payments under all capital leases to which Borrower is a party. 1.1.12 "Environmental Compliance Audit" means an audit of the Project for the purpose of determining whether Borrower and the Project are in full compliance with all applicable Environmental Laws. The audit shall include, without limitation, (i) a determination of all environmental registrations and notices required to be filed by Borrower with respect to the Project, (ii) a determination of all permits and approvals required to be obtained or maintained by Borrower with respect to the Project, (iii) an examination of the Project to determine whether there has been any disposal of Hazardous Materials on or under the Project or any other violation of any applicable Environmental Law affecting Borrower or the Project which requires remediation to be in compliance with Environmental Laws in effect as of the date of the audit, and (iv) a review of Borrower's facilities, records, policies, procedures and ongoing operations to determine whether Borrower's operations are being conducted in full compliance with all applicable Environmental Laws. 1.1.13 "Environmental Compliance Audit Certificate" means a certificate addressed to Lender issued by a competent, independent environmental consultant acceptable to Lender certifying that the consultant has completed an Environmental Compliance Audit of Borrower and the Project, and that, except as otherwise disclosed in the Environmental Report, (i) as of the effective date of the certificate, Borrower and the Project are in full compliance with all applicable Environmental Laws, (ii) there has been no known disposal of Hazardous Materials at, in, on or under the Project which requires remediation to be in compliance with Environmental Laws in effect as of the date of the audit, and (iii) in the consultant's opinion after due inquiry, there is no basis for the consultant to recommend or require further investigation or testing with respect to any suspected or possible disposal of Hazardous Materials at the Project. 1.1.14 "Environmental Laws" means all federal, state and local laws and ordinances pertaining to the generation, manufacture, refining, recycling, treatment, handling, use, storage, transportation, disposal and cleanup of hazardous, radioactive, reactive, flammable, infectious, toxic or dangerous substances or materials or the protection of public health or of the environment, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Sec. 9601, et seq.); the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Sec. 6901, et seq.); the Toxic Substances Control Act (15 U.S.C. Sec. 2601, et seq.); the Clean Air Act (42 U.S.C. Sec. 7401, et seq.); the Federal Water Pollution Control Act (33 U.S.C. Sec. 1251, et seq.); the Safe Drinking Water Act (42 U.S.C. Sec. 300(f) et seq.); the Hazardous Material Transportation Act (49 U.S.C. Sec. 1801, et seq.); the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Sec. 136 et seq.); the Occupational Safety and Health Act (29 U.S.C. Sec. 651 et seq.), including, without limitation, NRS Chapters 444, 445 and 459, NRS Section 447.045 and NRS Sections 618.750 through 618.850 and the Uniform Fire Code (1988 Edition); and any similar state law, including all amendments thereto and all regulations promulgated thereunder, and further including the conditions and requirements of all permits and regulatory approvals issued thereunder. 2

1.1.15 "Environmental Report" means individually and collectively the Environmental Sensitivity Questionnaire dated May 20, 1998 prepared by Borrower and delivered to Lender in connection with the Property, and the Level I Environmental Report dated May 20, 1998 prepared by Terracon and delivered to Lender in connection with the Property. 1.1.16 "Event of Default" has the meaning set forth in Article 7 of this Agreement. 1.1.17 "Ground Lease" means collectively (1) the Indenture of Lease dated June 9, 1997 entered into between Ground Lessor, as "Landlord", and All American Sportpark, Inc., a Nevada corporation ("Sportpark, Inc."), as "Tenant", wherein Ground Lessor leases the Property to Sportpark, Inc., (2) the Memorandum of Lease dated June 20, 1997 entered into between Ground Lessor and Sportpark, Inc. and recorded in the official records of Clark County, State of Nevada on June 23, 1997 as Document No. 00042, in Book 970623, (3) the Assignment and Assumption Agreement and Amendment to Memorandum of Lease dated September 17, 1997 entered into between Sportpark, Inc., as "Assignor", Saint Andrews Golf, as "Assignee", and Ground Lessor, as "Landlord" and recorded in the official records of Clark County, State of Nevada on September 22, 1997 as Document No. 00059, in Book 970922, wherein Sportpark, Inc. assigned all of its rights, duties and obligations under the Ground Lease to Saint Andrews Golf, and (4) the Assignment and Assumption Agreement and Amendment to Lease to be entered into between Saint Andrews Golf, as "Lessee", Sportpark, Inc., as "Assignor", Borrower, as "Borrower", and Ground Lessor, as "Lessor", to be recorded in the official records of Clark County, State of Nevada, wherein Saint Andrews Golf assigns all of its rights, duties and obligations under the Ground Lease to Sportpark, Inc., and Sportpark, Inc. assigns all of its rights, duties and obligations under the Ground Lease to Borrower. 1.1.18 "Ground Lease Estoppel Certificate" means the Ground Lease Estoppel Certificate and Consent dated the Closing Date and executed by Ground Lessor in connection with the Loan. 1.1.19 "Ground Lease Subordination Agreement" means the Ground Lease Subordination Agreement dated the Closing Date and executed by Ground Lessor in connection with the Loan.
1.1.20 corporation. 1.1.21 "Ground Lessor" means Urban Land of Nevada, Inc., a Nevada

"Ground Lessor Trust Deed" means the Trust Deed, Assignment

of Rents, Security Agreement and Fixture Filing dated the Closing Date and entered into by Ground Lessor in connection with the Loan which encumbers the Property. 1.1.22 "Guarantor" means individually and collectively Saint Andrews Golf and Las Vegas Golf. 1.1.23 "Hazardous Materials" means (a) "hazardous waste" as defined by the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), including any future amendments thereto, and regulations promulgated thereunder; (b) "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), and by NRS 40.504, including any future amendments thereto, and regulations promulgated thereunder; (c) asbestos; (d) polychlorinated biphenyls; (e) 3

underground storage tanks, whether empty or filled or partially filled with any substance; (f) any substance the presence of which is or becomes prohibited by any federal, state, or local law, ordinance, rule, or regulation; and (g) any hazardous or toxic substance, material, or waste which under any federal, state, or local law, ordinance, rule, or regulation requires special handling or notification in its collection, storage, treatment or disposal, and any matter or material defined as a "Hazardous Material", or other similar term, under the Ground Lease. 1.1.24 "Las Vegas Golf" means Las Vegas Discount Golf & Tennis, Inc., a Colorado corporation. 1.1.25 "License Agreements" means individually and collectively (1) the License Agreement dated August 1, 1995, as amended by the Amendment No. 2 to License Agreement dated May 6, 1997, and the Amendment No. 3 to License Agreement dated September 1, 1997, each entered into between the National Association for Stock Car Auto Racing, Inc., a Florida corporation, as "Licensor", and Saint Andrews Golf, as "Licensee", (2) the Sponsorship Agreement dated December 4, 1997 entered into between Pepsi-Cola Company, a division of PepsiCo, Inc., a North Carolina corporation, (3) the Letter Agreement dated December 22, 1994, as amended by the Amended Letter Agreement dated August 25, 1997, each entered into between the Major League Baseball Properties, Inc., acting on behalf of and as an agent for the Major League Baseball Clubs, and Saint Andrews Golf, and (4) any and all other license agreements entered into or to be entered into between Saint Andrews Golf or Borrower and any and all licensors ("Licensors") in connection with granting of certain rights in such licenses for use in connection the Project. 1.1.26 "Loan" means the loan described in Article 2 of this Agreement made by Lender to Borrower pursuant to the Loan Documents, which Loan is in the amount of the Principal Amount. 1.1.27 "Loan Documents" means this Agreement, the Note, Borrower Trust Deed, Assignment of Leases, SNDA, Continuing Guaranty, UCC-1 Financing Statement, Assignment of License Agreement, together with all consents from Licensors attached as exhibits to the Assignment of License Agreement, Assignment of Ground Lease, Ground Lease Estoppel Certificate, Ground Lease Subordination Agreement, Ground Lessor Trust Deed, Additional Trust Deed, and any other documents, whether now or hereafter existing, executed in connection with the Loan.
1.1.28 this Agreement. 1.1.29 "Loan Fee" means the loan fees described in Section 2.3 of

"Maturity Date" means September 1, 2013, the date on which

the Principal Indebtedness and all accrued and unpaid interest shall be due and owing. 1.1.30 "Note" means the Promissory Note dated the Closing Date and executed in connection with the Loan. 1.1.31 "Permitted Encumbrances" means the liens and encumbrances that have been approved by Lender to appear as exceptions to title in the Title Policy, pursuant to Lender's escrow instruction letter to the Title Company executed in connection with the Loan and delivered to the Title Company, and any other title matters approved by Lender in writing during the term of the Loan. 4

1.1.32 "Principal Amount" means Thirteen Million Five Hundred Thousand Dollars ($13,500,000.00). 1.1.33 "Principal Indebtedness" means the Principal Amount together with any additional advances, if any, and any additional amounts advanced by Lender, if any, pursuant to the Loan Documents. 1.1.34 "Project" means the Property together with all improvements on the Property, including all buildings. 1.1.35 "Property" means the real property located in Clark County, State of Nevada, as that property is described on the attached Exhibit A which is incorporated into this Agreement by this reference. 1.1.36 "Providers" means individually and collectively the key suppliers, vendors, and customers of Borrower whose business failure would, with reasonable probability, result in a material adverse change in the financial condition or prospects of Borrower. 1.1.37 "Saint Andrews Golf" means Saint Andrews Golf Corporation, a Nevada corporation. 1.1.38 "SNDA" means the Subordination, Non-Disturbance and Attornment Agreement satisfactory in form and content to Lender and Lender's counsel, from each tenant holding a leasehold interest in all or any part of the Project. 1.1.39 "Survey" means the current ALTA survey of the Property described in Section 5.3 of this Agreement. 1.1.40 "Title Commitment" means the commitment for title insurance described in Section 5.2 of this Agreement. 1.1.41 "Title Company" means Nevada Title Company, whose address is 3320 West Sahara Avenue, Suite 200, Las Vegas, Nevada 89102. 1.1.42 "Title Policy" means the policy of title insurance described in Section 6.10 of this Agreement. 1.1.43 "Trust Deed" means collectively the Borrower Trust Deed and the Ground Lessor Trust Deed. 1.1.44 "UCC-1 Financing Statement" means collectively the UCC-1 Financing Statements dated the Closing Date and entered into in connection with the Loan. 1.1.45 "Year 2000 Compliant" means, with regard to any entity, that all material software utilized by such entity is able to fully function without causing any error to such entity's date-sensitive data. ARTICLE 2 AMOUNT AND TERMS OF LOAN 2.1 Term of Loan. The Loan shall be an amortizing term loan for a term commencing on the Closing Date and ending on the Maturity Date, unless such completion date has been previously extended by Lender 5

2.2 Interest Rate and Payment. The Loan shall be payable on the date and upon the terms and conditions set forth in the Note. 2.3 Loan Fee. Borrower agrees to pay to Lender from the Loan proceeds, as a non-refundable fee for originating the Loan, an amount equal to One Hundred Thirty-five Thousand Dollars ($135,000.00), which sum is to be paid on the Closing Date. 2.4 Collateral. In addition to all other collateral described in any of the Loan Documents, the Loan shall be secured by the following documents and all of the collateral described in each of the following documents (the "Collateral"):
2.4.1 2.4.2 2.4.3 2.4.4 2.4.5 Agreement. 2.4.6 for security. 2.4.7 Borrower Trust Deed. The Borrower Trust Deed. The Ground Lessor Trust Deed.

Ground Lessor Trust Deed. Assignment of Leases.

The Assignment of Leases. The UCC-1 Financing Statement. The Assignment of License

UCC-1 Financing Statement.

Assignment of License Agreement.

Assignment of Ground Lease.

The Assignment of Ground Lease

Additional Trust Deed.

The Additional Trust Deed.

Lender

agrees to reconvey its interest in the Additional Property as Collateral for the Loan, at such time as the Borrower achieves a Debt Service Coverage Ratio equal to or greater than 1.75:1 for two consecutive quarters. 2.5 Continuing Guaranty. The performance of Borrower's obligations under the Loan shall be guaranteed by Guarantor in accordance with the Continuing Guaranty. ARTICLE 3 REPRESENTATIONS AND WARRANTIES Borrower makes the following representations and warranties to Lender: 3.1 Organization and Qualification. Borrower is a limited liability company duly organized and existing in good standing under the laws of the State of Nevada. Borrower is duly qualified to do business in each jurisdiction where the conduct of its business requires qualification. Borrower has the full power and authority to own its properties and to conduct the business in which it engages and to enter into and perform its obligations under the Loan Documents, and all agreements, documents, obligations, and transactions contemplated by this Agreement. The only manager of All American Sportpark LLC is SportPark Management, Inc. 3.2 Authorization. The execution, delivery, and performance by Borrower of the Loan Documents and all agreements, documents, obligations, and transactions contemplated by this Agreement have been duly authorized by all necessary action on the part of Borrower and are not inconsistent with Borrower's articles of organization and operating agreement or any resolution of the members of Borrower, do not and will not contravene any provision of, 6

or constitute a default under, any indenture, mortgage, contract, or other instrument to which Borrower is a party or by which it is bound, and that upon their execution and delivery the Loan Documents will constitute legal, valid, and binding agreements and obligations of Borrower, enforceable in accordance with their respective terms. The execution, delivery, and performance by any of the members or managers (collectively the "Manager") of Borrower of the Loan Documents and all agreements, documents, obligations, and transactions herein contemplated will not contravene any position of, or constitute a default under, any indenture, mortgage, contract, or other instrument to which the Manager is a party or by which it is bound, and that upon execution and delivery hereof and thereof, the Loan Documents will constitute legal, valid, and binding agreements and obligations of the Manager, in its capacity as manager of Borrower enforceable in accordance with their respective terms. 3.3 Pending Litigation. Except as set forth on the attached Exhibit B which is incorporated herein by this reference, there is no action, suit or proceeding pending or to the best of Borrower's knowledge, threatened, against or affecting Borrower or the Property, in any court of law or equity or before any governmental or quasigovernmental instrumentality, whether federal, state, county or municipal, which would materially and adversely affect Borrower's ability to perform under the Loan Documents. 3.4 Tax Returns. To the best of Borrower's knowledge, all tax returns and reports of Borrower required by law to be filed have been duly filed and all taxes, assessments, and other governmental charges upon Borrower and upon Borrower's properties, assets or income and upon the Property, which are due and payable, have been paid and shall continue to be so paid. 3.5 Compliance with Laws. The Project is in compliance with all applicable zoning, environmental protection (including, without limitation, wetlands and endangered species protection), use and building codes, planning, subdivision covenants, conditions, and restrictions recorded against the Property, laws, regulations and ordinances, including, without limitation to the extent applicable, the Miller Act (40 USC Section 270a and following), the Davis-Bacon Act (40 USC Section 276a and following), and all other federal law applicable to federal projects, and Borrower has no knowledge or notice of any violation of any laws, ordinances, codes, requirements or orders of any governmental instrumentality having jurisdiction of the Property, including, without limitation, all applicable federal, state and local laws, rules, ordinances and regulations relating to the use, storage, transportation, and disposal of any Hazardous Materials on, in or under the Project, and all applicable federal, state and local laws, rules, ordinances and regulations relating to wetlands or endangered species protection and the effect of the development, construction and use of the Project on any wetlands or endangered species. Borrower has no knowledge of any actions or proceedings pending before any court or administrative agency with respect to the validity of such laws, regulations and ordinances or with respect to any certificates issued thereunder. 3.6 Financial Statements and Other Information. Any and all financial statements delivered to Lender by Borrower are accurate, complete, prepared by an independent certified public accounting firm in accordance with generally accepted accounting principles consistently applied, or other accounting standards acceptable to Lender, and accurately represent the financial condition of Borrower and reflect accurately Borrower's assets, properties, and results of operation of Borrower's business as of the dates thereof. No 7

material adverse change has occurred in the financial condition of Borrower reflected therein since the dates thereof and no additional borrowings have been made by Borrower since the dates thereof, other than the borrowing contemplated hereby or approved by Lender. All other documents and information delivered to Lender by Borrower are accurate in all respects. 3.7 Hazardous Materials and Wetlands. No Hazardous Materials other than as set forth in the Environmental Report are now located on the Property, and neither Borrower nor any other person has ever caused or permitted any Hazardous Materials to be placed, held, located or disposed of on, under or at the Property, or any part thereof, except in full compliance with all applicable Environmental Laws. To the best of Borrower's knowledge, no investigation, administrative order, consent order and agreement, litigation or settlement with respect to Hazardous Materials is proposed, threatened, anticipated or in existence with respect the Property. The representations and warranties contained in this Section 3.7 shall survive the reconveyance of the Trust Deed. There are no wetlands on the Property, as wetlands are regulated pursuant to Section 404 of the Federal Water Pollution Control Act (Clean Water Act), and the regulations promulgated under the statute or its successor statute. 3.8 Title to Property. Ground Lessor has good and marketable title to the Property, subject to the terms and conditions of the Ground Lease. Borrower has a leasehold interest in the Property under the Ground Lease, subject only to the Permitted Encumbrances. The Property, and any and all improvements thereon, are free and clear of all liens and encumbrances, excepting the Permitted Encumbrances. 3.9 Commission. No brokerage or other fee, commission or compensation is to be paid by Lender, and Borrower hereby indemnifies Lender against any and all claims for brokerage fees or commissions which may be asserted against Lender, and hereby agrees to pay all expenses incurred by Lender in connection with the defense of any action or proceeding brought to collect any such brokerage fees or commissions, including but not limited to costs and attorneys fees. 3.10 Release. In recognition of Lender's right to have all its attorneys fees and expenses incurred in connection with this Agreement secured by the Collateral, notwithstanding payment in full of the obligations secured by the Collateral, Lender shall not be required to release, reconvey, or terminate any security interest or lien in or on the Collateral unless and until Borrower and Guarantor have executed and delivered to Lender general releases in form and substance satisfactory to Lender. 3.11 Americans with Disabilities Act. The improvements are accessible to and usable by persons with disabilities pursuant to the accessibility requirements of the Americans With Disabilities Act (the "Act"), and all applicable regulations promulgated by the U.S. Architectural and Transportation Barriers Compliance Board, by the U.S. Department of Justice, and by all other applicable agencies. The improvements comply with all accessibility requirements of the Act and regulations, together with the requirements of the Americans With Disabilities Act Accessibility Guidelines for Buildings and Facilities. 3.12 Ground Lease. The Ground Lease is a valid and binding obligation of Ground Lessor and Borrower enforceable in accordance with its terms, and is in full force and effect. As of the Closing Date, no defaults have occurred under the Ground Lease and no events have occurred nor do any conditions exist 8

which with the giving of notice, the passage of time, or both, would constitute a default under the Ground Lease. 3.13 License Agreements. The License Agreements are valid and binding obligations of Licensors and Borrower enforceable in accordance with their terms, and are in full force and effect. As of the Closing Date, no defaults have occurred under the License Agreements and no events have occurred nor do any conditions exist which with the giving of notice, the passage of time, or both, would constitute a default under the License Agreements. ARTICLE 4 GUARANTY 4.1 Guaranty. Borrower's obligations under the Loan Documents shall be guaranteed by Guarantor. Upon execution and delivery of this Agreement, Guarantor shall execute and deliver to Lender the Continuing Guaranty in a form acceptable to Lender. 4.2 Guarantor Organization and Qualification. Saint Andrews Golf represents and warrants that (i) it is a corporation duly organized and existing in good standing under the laws of the State of Nevada, (ii) it is duly qualified to do business in each jurisdiction where the conduct of its business requires qualification, and (iii) it has the full power and authority to own its properties and to conduct the business in which it engages and to enter into and perform its obligations under the Loan Documents, the Continuing Guaranty, and all agreements, documents, obligations, transactions contemplated by this Agreement. Las Vegas Golf represents and warrants that (i) it is a corporation duly organized and existing in good standing under the laws of the State of Colorado, (ii) it is duly qualified to do business in each jurisdiction where the conduct of its business requires qualification, and (iii) it has the full power and authority to own its properties and to conduct the business in which it engages and to enter into and perform its obligations under the Loan Documents, the Continuing Guaranty, and all agreements, documents, obligations, transactions contemplated by this Agreement. 4.3 Guarantor Authorization. Saint Andrews Golf represents and warrants that the execution, delivery, and performance by Saint Andrews Golf of this Agreement, the Continuing Guaranty and all agreements, documents, obligations, and transactions contemplated by this Agreement have been duly authorized by all necessary action on the part of Saint Andrews Golf and are not inconsistent with Saint Andrews Golf's articles of incorporation and bylaws or any resolution of the board of directors of Saint Andrews Golf, do not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract, or other instrument to which Saint Andrews Golf is a party or by which Saint Andrews Golf is bound, and that, upon their execution and delivery, of this Agreement and the Continuing Guaranty will constitute legal, valid, and binding agreements and obligations of Saint Andrews Golf, enforceable in accordance with their respective terms. Las Vegas Golf represents and warrants that the execution, delivery, and performance by Las Vegas Golf of this Agreement, the Continuing Guaranty and all agreements, documents, obligations, and transactions contemplated by this Agreement have been duly authorized by all necessary action on the part of Las Vegas Golf and are not inconsistent with Las Vegas Golf's articles of incorporation and bylaws or any resolution of the board of directors of Las 9

Vegas Golf, do not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract, or other instrument to which Las Vegas Golf is a party or by which Las Vegas Golf is bound, and that, upon their execution and delivery, of this Agreement and the Continuing Guaranty will constitute legal, valid, and binding agreements and obligations of Las Vegas Golf, enforceable in accordance with their respective terms. 4.4 Guarantor Financial Statements and Reports. Guarantor covenants that it shall provide Lender with such financial statements and reports as Lender may reasonably request, and that such statements and reports shall be prepared in accordance with generally accepted accounting principles consistently applied, or other accounting standards acceptable to Lender, and shall fully and fairly represent Guarantor's financial condition and the results of its operations for the period or periods covered. As to all financial statements and reports which Guarantor has furnished or may in the future furnish to Lender, Guarantor acknowledges and agrees that it has a fiduciary duty to ensure that such statements and reports are accurate and complete. Until requested otherwise by Lender, Guarantor shall provide the following financial statements and reports to Lender: Annual audited financial statements of Guarantor with an unqualified opinion for each fiscal year from an independent certified public accounting firm acceptable to Lender and in a form acceptable to Lender, to be delivered to Lender within one hundred twenty (120) days of the end of each fiscal year during the term of the Loan, commencing December 31, 1998 and shall cover the calendar year 1998. Guarantor shall also submit to Lender copies of any management letters or other reports submitted to Guarantor by independent certified public accountants in connection with examination of the financial statements of Guarantor made by such accountants. Annual tax returns for each fiscal year of Guarantor to be delivered to Lender within thirty (30) days of the date of filing of the return. The annual tax returns shall include a certification by Guarantor that each annual tax return is accurate, not misleading, and prepared in accordance with applicable law. 4.5 Accuracy of Guarantor Financial Statements. Guarantor represents and warrants that all of its financial statements, pro forma and actual, previously delivered to Lender have been prepared in accordance with generally accepted accounting principles consistently applied, or other accounting standards acceptable to Lender, and accurately represent Guarantor's actual and anticipated financial condition as of the date of such financial statements, and fully and fairly represent the results of Guarantor's operations for the period or periods covered. Guarantor represents and warrants that since the date of such financial statements, there has been no material adverse change in Guarantor's financial condition. ARTICLE 5 CONDITIONS PRECEDENT TO DISBURSEMENT As a condition precedent to the disbursement of any Loan proceeds, all of the following conditions must be fully satisfied as determined by Lender, in Lender's sole discretion: 10

5.1 Authority. Borrower has delivered to Lender a copy of its operating agreement, together with all amendments, and a certified copy of its articles of organization, together with certified copies of all amendments thereto and an original certificate of member resolutions of the members of Borrower acceptable to Lender. Borrower also has delivered to Lender such other evidence of Borrower's good standing and authority as Lender may request. 5.2 Title Commitment. Borrower has delivered to Lender a current commitment for title insurance or preliminary title report satisfactory to Lender, in Lender's sole discretion, respecting the Project from the Title Company on a current ALTA extended form coverage basis which is acceptable to Lender (the "Title Commitment"). The Title Commitment shall set forth a description of the Property that is the same as the description of the Property set forth in the Survey. The Title Commitment shall have attached copies of all instruments which appear as exceptions to title in the Title Commitment. The Title Commitment shall also include a judgment search respecting Borrower and any other party that holds title to all or any portion of the Project. 5.3 Survey. Borrower has delivered to Lender a current survey of the Project acceptable to Lender and the Title Company (the "Survey"). The Survey shall be prepared and certified by a land surveyor or engineer registered in the state in which the Project is located. The Survey must be prepared in compliance with the minimum standard detail requirements for Land Title Surveys as most recently adopted by ALTA. The Survey shall bear the land surveyor's or engineer's certificate in favor of Borrower, Lender and the Title Company that the Survey has been prepared in compliance with the minimum standard detail requirements. The Survey shall identify by reference to the exception number and recording information set forth in the Title Commitment each of the easements, rightsof-way, encroachments and other exceptions to title referred to in the Title Commitment that can be depicted on the Survey. 5.4 Opinion of Counsel. If required by Lender, Borrower has delivered to Lender an opinion from Borrower's counsel in form and content satisfactory to Lender. 5.5 Appraisal. Lender has received and approved the Appraisal. The Appraisal shall be prepared by a certified general M.A.I. appraiser satisfactory to Lender. 5.6 Environmental Report. Borrower has delivered to Lender the Environmental Report satisfactory to Lender evidencing that there is no Hazardous Material on the Property and certifying that the Property will not be affected by any environmental regulations or ordinances of any municipal or state agency or board. 5.7 Delivery of Loan Documents. All of the Loan Documents requested by Lender have been fully executed and the original executed documents delivered to Lender. 5.8 Recording and Filing of Loan Documents. All of the Loan Documents which require filing or recording have been properly filed and recorded so that all of the liens and security interests granted to Lender in connection with the Loan will be properly created and perfected and be priority liens on the Collateral. 11

5.9 Lien on Collateral. The Ground Lessor Trust Deed and other applicable Loan Documents shall constitute and create a valid first lien upon the Collateral, free of any prior mechanic's liens or materialmen's liens or special assessments for work completed or under construction on or before the Closing Date, subject only to the Permitted Encumbrances. The Ground Lease and the Borrower Trust Deed shall constitute and create a valid second lien and third lien, respectively, upon the Collateral, free of any prior mechanic's liens or materialmen's liens or special assessments for work completed or under construction on or before the Closing Date, subject only to the Permitted Encumbrances. 5.10 Ground Lease. Borrower has provided Lender with evidence satisfactory to Lender that the Ground Lease is in full force and effect and that no default has occurred under the Ground Lease and no events have occurred nor do any conditions exist which with the giving of notice, the passage of time, or both, would constitute a default under the Ground Lease. Borrower has delivered to Lender the fully executed Ground Lease Estoppel Certificate from Ground Lessor. 5.11 SNDA. Borrower has provided Lender, as Lender in its sole discretion may require, with duly executed, in recordable form, SNDAs, satisfactory in form and content to Lender and Lender's counsel, from tenants holding a leasehold interest to all or any part of the Project pursuant to which such tenant, among other things, subordinates all of such tenant's rights, title, and interest in and to the Project to the Loan Documents. ARTICLE 6 COVENANTS OF BORROWER Borrower agrees and covenants with Lender as follows: 6.1 Assignment. Borrower shall not, without the prior written consent of Lender, mortgage, assign, convey, transfer, sell or otherwise dispose of or encumber the Project, Borrower's interest in the Project, or any part of the Project, or the income to be derived from the Project. 6.2 Right of Inspection. Lender or Lender's agents shall at all times and at Borrower's expense have the right of entry upon and have free access to the Project and have the right to inspect all books, contracts and records of Borrower relating thereto. 6.3 Insurance. Borrower shall provide and maintain, or cause to be provided and maintained, at all times, the insurance policies required to be provided and maintained pursuant to the Ground Lease, and the following insurance policies: 6.3.1 Liability Insurance. Bodily injury and general liability insurance with a single limit per accident or occurrence of not less than $1,000,000.00 acceptable to Lender insuring against any and all liability of the insured with respect to the Project or arising out of the maintenance, use or occupancy thereof. 6.3.2 Property Hazard Insurance. Multi-peril property damage insurance, including, without limitation, fixtures and personal property to the extent they are maintained on the Property, and providing, as a minimum, fire and extended coverage (including all perils normally covered by the 12

standard "all risk" endorsement, if such is available) on a full replacement cost basis in an amount not less than 100% of the insurable value of the improvements, exclusive of the Property, foundations and other items normally excluded from coverage (based upon current replacement cost), with a single limit per accident or occurrence of not less than $1,000,000.00. 6.3.3 Flood Insurance. Flood insurance covering either the Principal Amount or the maximum amount of insurance available, whichever is more, or in lieu of such flood insurance, evidence, satisfactory to Lender, that no part of the Project is, or will be, within an area designated as a flood hazard area by the Federal Insurance Administration, Department of Housing and Urban Development. 6.3.4 Policies and Premiums. All policies of insurance required pursuant to this Section 6.3 shall be in form and substance acceptable to Lender and issued by insurance companies acceptable to Lender. No insurance company shall be acceptable to Lender unless it has a company rating of not less than "A" and a financial rating of not less than Class VII in the most recent edition of "Best's Insurance Reports". All policies of insurance required pursuant to the provisions of this Section 6.3 shall contain a standard "mortgagee protection clause", shall have attached a "lender's loss payable endorsement", and shall name Lender as an additional insured or loss payee, as appropriate. All such policies shall contain a provision that such policies will not be cancelled or materially amended or altered without at least thirty (30) days prior written notice to Lender. If Lender consents to Borrower providing any of the required insurance through blanket policies carried by Borrower and covering more than one location, then Borrower shall cause the insurance company to deliver to Lender a certificate of insurance in the form ACORD 27 of such policy which sets forth the coverage, the limits of liability, the name of the carrier, the policy number, expiration date and a statement that the insurance company will not cancel or materially modify or alter the coverage evidenced by the endorsement without first affording Lender at least thirty (30) days prior written notice. In the event Borrower fails to provide, maintain, keep in force or deliver to Lender the policies of insurance required by this Section 6.3, Lender may, but without any obligation to do so, procure such insurance for such risks covering Lender's interest and Borrower shall pay all premiums thereon promptly upon demand by Lender. If Borrower fails to pay any premiums after demand by Lender, Lender, at Lender's option, may advance any sums necessary to maintain and to keep in force such insurance. Any sums so advanced, together with interest on such sums at the then current rate under the Note, shall be secured by the Trust Deed. Borrower shall deliver to Lender a copy of the original of each of the policies of insurance that Borrower is required to obtain and maintain, or cause to be provided and maintained, under this Agreement. 6.4 Repair and Restoration. If the Improvements are partially or wholly damaged or destroyed by fire or any other cause, and (a) all insurance proceeds received by Lender together with any cash funds delivered by Borrower to Lender are sufficient to fully restore and repair the Project as determined by Lender, in Lender's sole discretion, and (b) Borrower is not in default under any of the Loan Documents, Lender shall disburse such proceeds in the manner provided herein for the disbursement of the proceeds of the Loan toward the cost of such restoration and repair. If Lender determines that such proceeds together with any cash funds provided by Borrower are insufficient to 13

fully restore the Project, Lender will apply any sums received by Lender under this Section first to the payment of all of Lender's costs and expenses (including but not limited to legal fees and costs) incurred in obtaining those sums, and then, in Lender's sole discretion and without regard to the adequacy of its security, to the payment of the Loan. If the amount of such proceeds exceeds the cost of restoration of the Project, Lender shall apply the excess proceeds to the payment of the Loan. If the proceeds of insurance are used to restore the Project and if the total estimated cost to restore the Project exceeds the amount of the proceeds of insurance, Borrower shall deliver to Lender prior to any disbursement of the proceeds of insurance, an amount equal to such difference in cash or cash equivalents satisfactory to Lender. After all obligations of Borrower under the Loan Documents have been paid in full, then all proceeds in excess of such obligations will be paid to Borrower. 6.5 Taxes and Impositions. Borrower shall promptly pay and discharge all lawful taxes and assessments imposed upon the Project or upon Borrower before they become past due and delinquent in accordance with the procedures and upon the terms set forth in the Trust Deed. 6.6 Hazardous Materials. Borrower shall not cause or permit any Hazardous Materials to be placed, held, located or disposed of on, under or at the Project or any part thereof which are in violation of any Environmental Laws or the Ground Lease. Borrower further agrees to give notice to Lender immediately upon Borrower's learning of the presence of any Hazardous Materials on the Property, to promptly comply with any governmental requirements requiring the removal, treatment or disposal of such Hazardous Materials, and to defend, indemnify and hold harmless Lender from any and all liabilities, claims, losses or costs (including, without limitation attorneys' fees) which may now or in the future be paid, incurred or suffered by or asserted against Lender by any person, entity or governmental agency with respect to the presence of Hazardous Materials on the Property or discharge of Hazardous Materials from the Property. Borrower's covenants in this Section shall survive payment of the Loan and foreclosure or other transfer of the Property. At any time Lender, in good faith, has reason to believe Hazardous Materials have been placed, held, located or disposed of on, under or at the Property or any part thereof, other than as stated in the Environmental Report, and upon written request by Lender and at Borrower's cost and expense, Borrower shall provide Lender with an Environmental Compliance Audit Certificate, effective as of a date no earlier than the date of the notice. Borrower shall certify to Lender in writing within thirty (30) days of the notice that the Project is in full compliance with Environmental Laws. In the event Borrower fails or refuses promptly to provide Lender with an Environmental Compliance Audit Certificate when required, Lender may, at Borrower's risk and expense, arrange to obtain such a certificate. In the event the Project is in a condition such that an Environmental Compliance Audit Certificate cannot be issued, Borrower agrees, at its own cost and expense, to take all action necessary to bring the Project into compliance with all Environmental Laws, including all remediation and cleanup, so an Environmental Compliance Audit Certificate can be issued. Lender and any consultant retained by or for the benefit of Lender shall have the right, without further permission from or notice to Borrower, to enter upon the Project for the purpose of performing any examination or testing required in order to provide such a certificate, and Borrower shall provide the consultant with reasonable access to Borrower's records for such purposes. Any costs incurred by Lender in obtaining such a certificate shall be added to the 14

Principal Indebtedness and shall be immediately due and payable, and shall bear interest at the default rate provided in the Note from the date incurred until paid by Borrower. 6.7 No Disposition or Merger. Borrower shall not enter into any merger or joint venture with any third party, or otherwise dispose of its assets other than in the ordinary course of Borrower's business without the prior written consent of Lender which consent shall not be unreasonably withheld. 6.8 Additional Debt, Leases or Guarantees. Borrower shall not enter into any lease or leases of all or any portion of the Project without the prior written consent of Lender which consent shall not be unreasonably withheld. Borrower shall maintain all such leases in full force and effect. Except for the Trust Deed, during the term of the Loan, Borrower shall not without the prior written consent of Lender create or incur or suffer to be created or incurred any encumbrance, mortgage, pledge, lien or charge of any kind upon the Project. 6.9 Financial Statements. Borrower covenants that it shall provide Lender with such financial statements and reports as Lender may reasonably request, and that such statements and reports shall be prepared in accordance with generally accepted accounting principles, or other accounting standards acceptable to Lender, consistently applied and shall fully and fairly represent Borrower's financial condition and the results of its operations for the period or periods covered. As to all financial statements and reports which Borrower has furnished or may in the future furnish to Lender, Borrower acknowledges and agrees that it has a fiduciary duty to ensure that such statements and reports are accurate and complete. Until requested otherwise by Lender, Borrower shall provide the following financial statements and reports to Lender: Annual audited financial statements of Borrower with an unqualified opinion for each fiscal year from an independent certified public accounting firm acceptable to Lender and in a form acceptable to Lender, to be delivered to Lender within one hundred twenty (120) days of the end of each fiscal year during the term of the Loan, commencing December 31, 1998 and shall cover the calendar year 1998. Borrower shall also submit to Lender copies of any management letters or other reports submitted to Borrower by independent certified public accountants in connection with examination of the financial statements of Borrower made by such accountants. Semi-annual compiled financial statements of Borrower from an independent certified public accounting firm acceptable to Lender and in a form acceptable to Lender, to be delivered to Lender within sixty (60) days of the end of each semi-annual period during the term of the Loan, commencing June 30, 1999. Borrower shall also submit to Lender copies of any management letters or other reports submitted to Borrower by independent certified public accountants in connection with examination of the financial statements of Borrower made by such accountants. Annual tax returns for each fiscal year of Borrower to be delivered to Lender within thirty (30) days of the date of filing of the return. The annual tax returns shall include a certification by Borrower that each annual tax return is accurate, not misleading, and prepared in accordance with applicable law. 15

6.10 Title Policy. Within sixty (60) days after the Closing Date, Borrower shall deliver to Lender a policy of title insurance on the Property which shall be (a) an ALTA extended coverage mortgagee's policy, (b) showing Ground Lessor as the sole, marketable, fee simple title owner of the Property and Borrower as the sole ground lessee of the Property, (c) be in the total amount of the Principal Amount, and (d) be issued by a title insurance company satisfactory to Lender through the Title Company (the "Title Policy"). The Title Policy shall insure that (a) the Ground Lessor Trust Deed is a valid first mortgage lien against the Property, (b) the Ground Lease is a valid second mortgage lien against the Property, (c) the Borrower Trust Deed is a valid third mortgage lien against the Property, and (d) that the Property is free and clear of all liens, encumbrances and other exceptions to title, except the Permitted Encumbrances. The Title Policy shall include such additional terms and special endorsements upon issuance as may be required by Lender, including, but not limited to, a foundation endorsement (CLTA 102.5 or its equivalent) to the Title Policy showing no encroachments. 6.11 Required Notices. Borrower shall give Lender prompt written notice of the following: 6.11.1 Any litigation or claims of any kind which might subject Borrower to any liability in an aggregate amount in excess of $10,000.00, whether covered by insurance or not and any litigation involving the Property. 6.11.2 All complaints and charges made by any governmental agency affecting the Property or exercising supervision or control of Borrower or Borrower's business which may impair the security of Lender. 6.11.3 Any default under any contracts to which Borrower is a party or acceleration of any other indebtedness incurred by Borrower. 6.11.4 Any event or conditions which constitute an Event of Default or, with the passage of time or the giving of notice, or both, would constitute an Event of Default. 6.11.5 Any material adverse change in the financial condition of Borrower or Guarantor. 6.12 Debt Service Coverage Ratio. Borrower will maintain at all times during the term of the Loan a Debt Service Coverage Ratio equal to or greater than 1.75:1, measured commencing with Borrower's June 30, 1999 semi-annual financial statements as required pursuant to Section 6.9 of this Agreement and annually thereafter. 6.13 Debt to Equity Ratio. Borrower will maintain at all times during the term of the Loan a ratio of total senior liabilities to tangible net worth of less than or equal to 1.75:1, measured commencing with Borrower's June 30, 1999 semi-annual financial statements as required pursuant to Section 6.9 of this Agreement and annually thereafter. Total senior liabilities means all senior debt, including bonds, debentures, bank debt, mortgages, deferred portions of long term debt, capital lease obligations, together with any other non-current liabilities including subordinated debt and liability reserves, excluding Borrower's obligations under the Ground Lease. 16

Tangible net worth means the excess of total assets over total liabilities, total assets and total liabilities each to be determined in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements previously submitted by Borrower to Lender excluding, however, from the determination of total assets all assets which would be classified as intangible assets under generally accepted accounting principles, including, without limitation, goodwill, licenses, patents, trademarks, trade names, copyrights, and franchises. 6.14 Year 2000 Compliant. Borrower has or will soon have (i) undertaken a detailed assessment of all areas within Borrower's business and operations that could be adversely affected by the failure of Borrower to be Year 2000 Compliant, (ii) developed and implemented a detailed plan for becoming Year 2000 Compliant on a timely basis, and (iii) made written inquiry of each of Borrower's Providers as to whether the Providers will be Year 2000 Compliant in all material respects. Borrower reasonably anticipates that Borrower and the Providers will be Year 2000 Compliant on a timely basis. Borrower will promptly advise Lender in writing upon the occurrence of any of the following: (i) Borrower determines or Borrower is advised by Borrower's accountants, financial advisers, consultants, or auditors or any Provider that Borrower or any Provider will not be Year 2000 Compliant on a timely basis, or (ii) Borrower or any Provider experiences data or data processing problems due to failure to be Year 2000 Compliant. 6.15 Limited Activities. As long as the Loan from Lender or any part of the Principal Indebtedness is outstanding: 6.15.1 Business. Borrower will not engage in any business other than the business of owning and managing the Project which is subject to the Loan. 6.15.2 Indebtedness. Except for liabilities incurred in the ordinary course of Borrower's business as set forth in the Loan Documents, Borrower shall not incur any indebtedness secured by the Project other than the Loan without Lender's express consent, which consent will not be unreasonably withheld. 6.15.3 Merger. Borrower shall not consolidate or merge with or into any other person or entity or sell, lease or otherwise transfer, directly or indirectly, all or any substantial part of its assets to any other person or entity, which consent will not be unreasonably withheld. 6.15.4 Transactions. Borrower shall not engage in any transaction with any of its affiliates unless such transaction is on a "arm-length" basis and on commercially reasonable terms. 6.15.5 Independent Owner. Borrower's members shall contain at least one "independent director" whose duties shall not include any day to day management of Borrower but shall be limited to voting on any bankruptcy action. 6.15.6 Bankruptcy Action. The unanimous consent of Borrower's members will be required for Borrower to take any bankruptcy action. 6.15.7 Records and Assets. Borrower shall: 17

6.15.7.1 Maintain books and records separate from any other person or entity; maintain separate financial statements, showing its assets and liabilities separate and apart from those of any person or entity; 6.15.7.2 Maintain adequate capital for its contemplated business operations; maintain bank accounts separate from any other person or entity; pay its own liabilities and expenses only out of its own funds; pay the salaries of its own employees from its own funds; 6.15.7.3 Not commingle its assets with those of any other person or entity and shall hold its assets only in its own name; not pledge its assets for the benefit of any other person or entity; not become liable for the debts of any other person or entity; not hold out its credit as being available to satisfy the obligations of any other person or entity; not acquire the obligations or securities of any of its affiliates or members; 6.15.7.4 Conduct its business in its own name; correct any misunderstandings regarding its separate identity; not identify itself as a division of any other person or entity; hold itself out as a separate identity; 6.15.7.5 Observe all corporate formalities (including, without limitation, the holding of annual member meetings and the passing of appropriate resolutions to authorize all necessary action by Borrower in connection with its business); 6.15.7.6 Maintain a sufficient number of employees in light of its contemplated business operations; fairly and reasonably allocate any overhead expenses that are shared with affiliates, including, without limitation, pay for office space and services performed by employees; 6.15.7.7 Maintain a separate phone number; use separate stationary, invoices and checks bearing its own name; and 6.15.7.8 Not make loans to any person or entity or buy or hold evidences of indebtedness issued by any other person or entity (other than investment-grade securities). 6.16 Amendments. Borrower shall not amend its organizational documents or such other documents or instruments without the prior written consent of Lender, which consent may be granted or withheld in Lender's sole discretion, and which may be conditioned upon delivery of legal opinions or other documentation requested by Lender. 6.17 Bankruptcy Actions. Borrower agrees that, in the event that any case is commenced by or against Borrower under the United States Bankruptcy Code: (i) Borrower will consent to and not oppose any motion made by Lender to lift the automatic stay provided by the United States Bankruptcy Code in order to allow Lender to enforce the lien of the Loan; and (ii) Borrower will not file any plan which has the effect, or may have the effect, of impairing Lender's rights as a secured creditor. 6.18 License Agreements. Within forty-five (45) days from the Closing Date, Borrower shall have provided Lender with evidence satisfactory to Lender that the License Agreements are in full force and effect and that no default has occurred under the License Agreements and no events have occurred nor do any conditions exist which with the giving of notice, the passage of time, or both, would constitute a default under the License Agreements. 18

Within forty-five (45) days from the Closing Date, Borrower shall also have delivered to Lender fully executed consents from Licensors attached as exhibits to the Assignment of License Agreement. 6.19 SNDA. Within thirty-days (30) days from the Closing Date, Borrower shall have provided Lender with duly executed, in recordable form, SNDAs, satisfactory in form and content to Lender and Lender's counsel, from each tenant holding a leasehold interest to all or any part of the Project pursuant to which such tenant, among other things, subordinates all of such tenant's rights, title, and interest in and to the Project to the Loan Documents. ARTICLE 7 EVENTS OF DEFAULT 7.1 Event of Default. Fifteen (15) days after written notice from Lender to Borrower for monetary defaults and thirty (30) days after written notice from Lender to Borrower for non-monetary defaults, if such defaults are not cured within such fifteen (15) day or thirty (30) day periods, respectively, each of the following shall constitute an event of default ("Event of Default") under this Agreement: 7.1.1 Default in Payment. If Borrower fails to make any payment due and payable under the terms of the Note, this Agreement or any other Loan Document. 7.1.2 Representations and Warranties. If any of the representations and warranties made by Borrower in this Agreement, or in any other Loan Document, shall be false or misleading at any time during the term of the Loan. 7.1.3 Covenants. If Borrower shall be in default under any of the terms, covenants, conditions, or obligations in this Agreement, or in any other Loan Document. 7.1.4 Cross Default. If a default occurs or any event occurs or condition exists, which with the passage of time, the giving of notice, or both, would constitute a default, occurs on any indebtedness of Borrower to Lender. 7.1.5 Leases. If a default occurs by Borrower under any leases of all or any portion of the Property, or any event occurs or condition exists, which with the passage of time, the giving of notice, or both, would constitute a default under any leases of all or any portion of the Property. 7.1.6 Ground Lease. If any default occurs by Borrower under the Ground Lease, or any event occurs or condition exists, which with the passage of time, the giving of notice, or both, would constitute a default under the Ground Lease, including, without limitation, the Ground Lease is not in effect at any time during the term of the Loan or the Ground Lease is terminated for any reason. 7.1.7 License Agreements. If any default occurs under the License Agreements, or any event occurs or condition exists, which with the passage of time, the giving of notice, or both, would constitute a default under the License Agreements. 19

7.1.8 Dissolution. If Borrower becomes dissolved or terminated. 7.1.9 Receiver. If a receiver, trustee, or custodian is appointed for any part of Borrower's property, or any part of Borrower's property is assigned for the benefit of creditors. 7.1.10 Impairment to Lien. If at any time the Trust Deed or any other applicable Loan Document creating a lien on any of the Collateral may be impaired by any lien, encumbrance or other defect other than the Permitted Encumbrances. 7.1.11 Bankruptcy. If a petition in bankruptcy is filed against Borrower, and such petition is not dismissed within ninety (90) days of filing, a petition in bankruptcy is filed by Borrower or any guarantor of the Loan or a receiver or trustee of the property of Borrower is appointed; or if Borrower files a petition for reorganization under any of the provisions of the Bankruptcy Act or any law, State or Federal, or makes an assignment for the benefit of creditors or is adjudged insolvent by any State or Federal Court of competent jurisdiction. 7.1.12 Judgment or Attachment. If a judgment is entered against Borrower or any attachment be made for an amount in excess of $100,000.00 and such judgment or attachment is not paid or otherwise fully satisfied within fifteen (15) days of the date it is entered. 7.1.13 Guarantor. If any of the foregoing events occur concerning Guarantor. ARTICLE 8 REMEDIES 8.1 Termination and Acceleration. Upon the occurrence of an Event of Default under this Agreement, all obligations of Lender under this Agreement, and under the other Loan Documents at the election of Lender, shall cease and terminate and Lender may declare the entire unpaid Principal Indebtedness immediately due and payable and may foreclose the Trust Deed and any other Collateral, and exercise all remedies available to a mortgagee under the Ground Lease, and may apply the undisbursed Loan proceeds against the Principal Indebtedness owed to Lender by Borrower. 8.2 Rights and Remedies Cumulative. All rights, remedies, and powers conferred in this Agreement are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and remedy that Lender may have, whether specifically granted in this Agreement, the Ground Lease, or existing at law, in equity, or by statute; and any and all such rights and remedies may be exercised from time to time and as often and in such order as Lender may deem expedient. Any forbearance or delay by Lender in exercising any of its rights, remedies, and powers shall not be deemed to be a waiver and the exercise or partial exercise of any right, remedy, or power, and shall not preclude the further exercise of such right, remedy, and power and the same shall continue in full force and effect until specifically waived by an instrument in writing executed by Lender. 8.3 Attorney-in-Fact. Upon the occurrence of an Event of Default, Borrower hereby irrevocably constitutes and appoints Lender Borrower's true and lawful attorney-in-fact to execute, acknowledge and deliver any 20

instruments and to do and perform any act such as referred to in this Agreement in the name and on behalf of Borrower. This power of attorney is irrevocable and is coupled with an interest. ARTICLE 9 ARBITRATION 9.1 Arbitration Disclosures. 9.1.1 ARBITRATION IS FINAL AND BINDING ON THE PARTIES AND SUBJECT TO ONLY VERY LIMITED REVIEW BY A COURT. 9.1.2 IN ARBITRATION THE PARTIES ARE WAIVING THEIR RIGHT TO LITIGATE IN COURT, INCLUDING THEIR RIGHT TO A JURY TRIAL.
9.1.3 COURT. 9.1.4 ARBITRATORS ARE NOT REQUIRED TO INCLUDE FACTUAL FINDINGS DISCOVERY IN ARBITRATION IS MORE LIMITED THAN DISCOVERY IN

OR LEGAL REASONING IN THEIR AWARDS. THE RIGHT TO APPEAL OR SEEK MODIFICATION OF ARBITRATORS' RULINGS IS VERY LIMITED. 9.1.5 A PANEL OF ARBITRATORS MIGHT INCLUDE AN ARBITRATOR WHO IS OR WAS AFFILIATED WITH THE BANKING INDUSTRY. 9.1.6 IF YOU HAVE QUESTIONS ABOUT ARBITRATION, CONSULT YOUR ATTORNEY OR THE AMERICAN ARBITRATION ASSOCIATION. 9.2 Arbitration Provisions. This concerns the resolution of any claim or controversy between or among the parties. In this regard: 9.2.1 Any claim or controversy ("Dispute") between or among the parties, including, but not limited to, Disputes arising out of or relating to the Loan, the Collateral, this Agreement, the Note, the Loan Documents, this Article 9 Arbitration ("arbitration clause"), or any related agreements or instruments relating hereto or delivered in connection herewith ("Related Documents"), and including, but not limited to, a Dispute based on or arising from an alleged tort, shall at the request of any party be resolved by binding arbitration in accordance with the applicable arbitration rules of the American Arbitration Association ("the Administrator"). The provisions of this arbitration clause shall survive any termination, amendment, or expiration of this Agreement or Related Documents. 9.2.2 The arbitration proceedings shall be conducted in Las Vegas, Nevada, at a place to be determined by the Administrator. The Administrator and the arbitrator(s) shall have the authority to the extent practicable to take any action to require the arbitration proceeding to be completed and the arbitrator(s)' award issued within onehundred-fifty (150) days of the filing of the Dispute with the Administrator. The arbitrator(s) shall have the authority to impose sanctions on any party that fails to comply with time periods imposed by the Administrator or the arbitrator(s), including the sanction of summarily dismissing any Dispute or defense with prejudice. The arbitrator(s) shall have the authority to resolve any Dispute regarding the terms of this Agreement, this arbitration clause or Related Documents, including any claim or controversy regarding the arbitrability of any Dispute. All limitations periods applicable to any Dispute or defense, whether by 21

statute or agreement, shall apply to any arbitration proceeding hereunder and the arbitrator(s) shall have the authority to decide whether any Dispute or defense is barred by a limitations period and, if so, to summarily dismiss any Dispute or defense on that basis. The doctrines of compulsory counterclaim, res judicata, and collateral estoppel shall apply to any arbitration proceeding hereunder so that a party must state as a counterclaim in the arbitration proceeding any claim or controversy which arises out of the transaction or occurrence that is the subject matter of the Dispute. The arbitrator(s) may in the arbitrator(s)' discretion and at the request of any party: (1) consolidate in a single arbitration proceeding any other claim or controversy involving another party that is substantially related to the Dispute where that other party is bound by an arbitration clause with Lender, such as borrowers, guarantors, sureties, and owners of collateral; (2) consolidate in a single arbitration proceeding any other claim or controversy that is substantially similar to the Dispute; and (3) administer multiple arbitration claims or controversies as class actions in accordance with the provisions of Rule 23 of the Federal Rules of Civil Procedure. 9.2.3 The arbitrator(s) shall be selected in accordance with the rules of the Administrator from panels maintained by the Administrator. A single arbitrator shall be knowledgeable in the subject matter of the Dispute. Where three arbitrators conduct an arbitration proceeding, the Dispute shall be decided by a majority vote of the three arbitrators, at least one of whom must be knowledgeable in the subject matter of the Dispute and at least one of whom must be a practicing attorney. The arbitrator(s) shall award recovery of all costs and fees (including attorneys' fees and costs, arbitration administration fees and costs, and arbitrator(s)' fees). The arbitrator(s), either during the pendency of the arbitration proceeding or as part of the arbitration award, also may grant provisional or ancillary remedies including but not limited to injunctive relief, foreclosure, sequestration, attachment, replevin, garnishment, or the appointment of a receiver. 9.2.4 Judgment upon an arbitration award may be entered in any court having jurisdiction, subject to the following limitation: the arbitration award is binding upon the parties only if the amount does not exceed four million dollars ($4,000,000.00); if the award exceeds that limit, either party may demand the right to a court trial. Such a demand must be filed with the Administrator within thirty (30) days following the date of the arbitration award; if such a demand is not made within that time period, the amount of the arbitration award shall be binding. The computation of the total amount of an arbitration award shall include amounts awarded for attorneys' fees and costs, arbitration administration fees and costs, and arbitrator(s)' fees. 9.2.5 No provision of this arbitration clause, nor the exercise of any rights hereunder, shall limit the right of any party to: (1) judicially or non-judicially foreclose against any real or personal property collateral or other security; (2) exercise self-help remedies, including but not limited to repossession and setoff rights; or (3) obtain from a court having jurisdiction thereover any provisional or ancillary remedies including but not limited to injunctive relief, foreclosure, sequestration, attachment, replevin, garnishment, or the appointment of a receiver. Such rights can be exercised at any time, before or during initiation of an arbitration proceeding, except to the extent such action is contrary to the arbitration award. The exercise of such rights shall not constitute a waiver of the right to submit any Dispute to arbitration, and any claim or controversy related to the exercise of such rights shall be a Dispute to be resolved under the provisions of this arbitration clause. 22

9.2.6 Notwithstanding the applicability of any other law to this Agreement, the arbitration clause, or Related Documents between or among the parties, the Federal Arbitration Act, 9 U.S.C. Sec. 1 et seq., shall apply to the construction and interpretation of this arbitration clause. ARTICLE 10 MISCELLANEOUS 10.1 Non-Waiver. No advance of Loan proceeds under this Agreement shall constitute a waiver of any of the conditions to be performed by Borrower and in the event Borrower is unable to satisfy any such conditions Lender shall not be precluded from declaring such failure to be an Event of Default. 10.2 Derivative Rights. Any obligation of Lender to make disbursements under this Agreement is imposed solely and exclusively for the benefit of Borrower and no other person, firm or corporation shall, under any circumstances, be deemed to be a beneficiary of such condition, nor shall it have any derivative claim or action against Lender. 10.3 Survival. All representations, warranties and covenants by Borrower shall survive the making of the disbursements under the Loan and the provisions of this Agreement shall be binding upon Borrower, Borrower's successors and assigns and inure to the benefit of Lender, Lender's successors and assigns. 10.4 Conflict. The Note, Trust Deed, and all other Loan Documents shall be subject to all the terms, covenants, conditions, obligations, stipulations and agreements contained in this Agreement. In the event there is any conflict between the terms and conditions of this Agreement, the Note, Trust Deed, or any other Loan Document, this Agreement shall prevail. 10.5 Assignment. Lender may assign the Loan Documents, in whole or in part, to any other person, firm or corporation provided that all provisions of this Agreement shall continue to apply in conjunction with the other Loan Documents. Borrower shall not assign this Agreement, or any interest of Borrower in or to this Agreement, the Loan proceeds, or any of the Loan Documents without the prior written consent of Lender. Any dissolution of Borrower or any transfer of any interest in Borrower without the prior written consent of Lender shall be assumed to be an assignment in violation of this Section. 10.6 Notices. All notices shall be in writing and shall be deemed to have been sufficiently given or served when personally delivered, deposited in the United States mail, by registered or certified mail, or deposited with a reputable overnight mail carrier which provides delivery of such mail to be traced, addressed as follows:
Lender: NEVADA STATE BANK Real Estate Loan Department 4240 West Flamingo Road P.O. Box 990 Las Vegas, Nevada 84125-0990 Attn: Barry Harrison 23

With copies to:

CALLISTER NEBEKER & McCULLOUGH Gateway Tower East, Suite 900 10 East South Temple Salt Lake City, Utah 84133 Attn: John B. Lindsay ALL AMERICAN SPORTPARK LLC 5325 South Valley View Blvd. Suite 4 Las Vegas, Nevada 89118 Attn: Ronald S. Boreta MARQUIS & AURBACH 228 South Fourth Street Las Vegas, Nevada 89101-5705 Attn: Avece M. Higbee URBAN LAND OF NEVADA, INC. 3271 South Highland Drive, Suite 704 Las Vegas, Nevada 89109 Attn: Theodore B. Lee

Borrower:

With copies to:

Ground Lessor:

Such addresses may be changed by notice to the other party given in the same manner provided in this Section. 10.7 Indemnification. Borrower agrees to pay, protect, defend, indemnify and hold harmless Lender for any and all claims and liabilities, and for damages which may be awarded or incurred by Lender, and for all reasonable attorney fees, legal expenses, and other out-of-pocket expenses incurred in defending such claims, arising from or related in any manner to the negotiation, execution, or performance by Lender of this Agreement, the Loan Documents, or any of the agreements, documents, obligations, or transactions contemplated by this Agreement, including, without limitation, any claims, liabilities, or causes of actions related to any Hazardous Materials located on, in, or under the Property, but excluding any such claims based upon breach or default by Lender or gross negligence or willful misconduct of Lender. This indemnification shall survive the payment of the Loan, reconveyance of the Trust Deed, and termination of this Agreement. Lender shall have the control of the defense of any such claims, but agrees to act reasonably in the defense of any such claims. Lender is hereby authorized to settle or otherwise compromise any such claims as Lender in good faith determines shall be in its best interests. Any indemnification amount owing to Lender pursuant to this Section 10.7 shall be secured by the Loan Documents and Collateral except that, notwithstanding anything to the contrary in this Agreement or the Loan Documents, any such indemnification amount owing to Lender shall not be secured in any way by the Property on, in or under which any Hazardous Materials is located. 10.8 Terms. Whenever used in this Agreement, the singular shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders. 24

10.9 Joint and Several Liability. All obligations and liabilities of Borrower and Guarantor imposed in this Agreement, or in any of the other Loan Documents upon Borrower and Guarantor shall be joint and several. 10.10 Invalidity. The invalidity of any one or more or any part of the conditions, covenants, articles, sections, phrases or sentences of this Agreement shall not affect the remaining portions of this Agreement. 10.11 Governing Law. This Agreement and all matters relating to this Agreement shall be governed by, construed and interpreted in accordance with the laws of the State of Nevada. 10.12 No Partnership. Nothing contained in this Agreement or in any of the other Loan Documents shall be construed as creating a joint venture or partnership between Borrower and Lender. There shall be no sharing of losses, costs and expenses between Borrower and Lender, and Lender shall have no right of control or supervision except as it may exercise its rights and remedies provided in the Loan Documents. 10.13 Attorneys' Fees. Upon the occurrence of an Event of Default, Lender may employ an attorney or attorneys to protect Lender's rights under this Agreement, and Borrower shall pay Lender reasonable attorneys' fees and costs actually incurred by Lender, whether or not action is actually commenced against Borrower by reason of such breach. Borrower shall also pay to Lender any attorneys fees and costs incurred by Lender with respect to any insolvency or bankruptcy proceeding or other action involving Borrower or any guarantor as a debtor. If Lender exercises the power of sale contained in the Trust Deed or initiates foreclosure proceedings, Borrower shall pay all costs incurred and attorney fees and costs as provided in the Trust Deed. 10.14 Waiver of Claims. Borrower (i) represents that Borrower has no defenses to or setoffs against any indebtedness or other obligations owing to Lender or Lender's affiliates, nor claims against Lender or Lender's affiliates for any matter whatsoever, related or unrelated to any indebtedness or other obligations owing to Lender or Lender's affiliates, and (ii) releases Lender and Lender's affiliates from all claims, causes of action, and costs, in law or equity, existing as of the Closing Date, which Borrower has or may have by reason of any matter of any conceivable kind or character whatsoever, related or unrelated to any indebtedness or other obligations owing to Lender or Lender's affiliates, including the subject matter of this Agreement. This provision shall not apply to claims for performance of express contractual obligations owing to Borrower by Lender or Lender's affiliates. 10.15 Setoff. In addition to any rights and remedies of Lender provided by law, if any Event of Default exists, Lender is authorized at any time and from time to time, without prior notice to Borrower, any such notice being waived by Borrower to the fullest extent permitted by law, to setoff and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by Lender to or for the credit or the account of Borrower against any and all obligations of Borrower under the Loan or any of the Loan Documents, now or hereafter existing, irrespective of whether or not Lender shall have made demand under the Loan, or otherwise, or under any Loan Document and although such amounts owed may be contingent or unmatured. Lender agrees promptly to notify Borrower after any such setoff and application made by Lender; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of Lender under this Section 10.15 are in addition to the other rights and remedies (including other rights of setoff) which Lender may have. 25

10.16 Severability of Invalid Provisions. With respect to this Agreement and all other Loan Documents, any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction only, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10.17 Integrated Agreement and Subsequent Amendment. The Loan Documents, and the other agreements, documents, obligations, and transactions contemplated by this Agreement constitute the entire agreement between Lender and Borrower with respect to the subject matter of these agreements, and may not be altered or amended except by written agreement signed by Lender and Borrower. BORROWER IS NOTIFIED THAT THESE AGREEMENTS ARE A FINAL EXPRESSION OF THE AGREEMENT BETWEEN LENDER AND BORROWER AND THESE AGREEMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED ORAL AGREEMENT. All prior and contemporaneous agreements, arrangements and understandings between the parties to this Agreement as to the subject matter of this Agreement, are, except as otherwise expressly provided in this Agreement, rescinded. DATED: September 15, 1998 BORROWER ALL AMERICAN SPORTPARK LLC, a Nevada limited liability company By: SPORTPARK MANAGEMENT, INC., a Nevada corporation, Manager
By:/s/ Ronald S. Boreta Ronald S. Boreta President Attest:

/s/ Vaso Boreta Secretary LENDER

NEVADA STATE BANK, a Nevada banking corporation
By:/s/ Barry Harrison Barry Harrison Senior Vice President

26

Guarantor hereby acknowledges and consents to the foregoing Term Loan Agreement, makes the representations, warranties and covenants set forth in Article 4 Guaranty, and agrees to the provisions of Article 9 Arbitration, Section 10.9 Joint and Several Liability, and all other applicable provisions of the foregoing Term Loan Agreement. DATED: September 15, 1998. GUARANTOR SAINT ANDREWS GOLF CORPORATION, a Nevada corporation
By:/s/ Ronald S. Boreta Ronald S. Boreta President Attest:

/s/ Vaso Boreta Secretary LAS VEGAS DISCOUNT GOLF & TENNIS, INC., a Colorado corporation

By:/s/ Vaso Boreta Vaso Boreta President Attest:

/s/ Ron Boreta Secretary

STATE OF NEVADA COUNTY OF CLARK

) ) ss. )

The foregoing instrument was acknowledged before me this 15th day of November 1998, by Ronald S. Boreta, President and Secretary, of SportPark Management, Inc., a Nevada corporation, Manager of ALL AMERICAN SPORTPARK LLC, a Nevada limited liability company.
/s/ Joy K. Hearn NOTARY PUBLIC My Commission Expires: 8/6/2000 Residing At:

27

STATE OF NEVADA COUNTY OF CLARK

) ) ss. )

The foregoing instrument was acknowledged before me this 15th day of September 1998, by Barry Harrison, Senior Vice President of NEVADA STATE BANK, a Nevada banking corporation.
/s/ Joy K. Hearn NOTARY PUBLIC My Commission Expires: 8/6/2000 Residing At:

STATE OF NEVADA COUNTY OF CLARK

) ) ss. )

The foregoing instrument was acknowledged before me this 15th day of September 1998, by Ronald S. Boreta, President and Secretary, of SAINT ANDREWS GOLF CORPORATION, a Nevada corporation.
/s/ Joy K. Hearn NOTARY PUBLIC My Commission Expires: 8/6/2000 Residing At:

STATE OF NEVADA COUNTY OF CLARK

) ) ss. )

The foregoing instrument was acknowledged before me this 15th day of September 1998, by Vaso Boreta, President and Secretary, of LAS VEGAS DISCOUNT GOLF & TENNIS, INC., a Colorado corporation.
/s/ Joy K. Hearn NOTARY PUBLIC My Commission Expires: 8/6/2000 Residing At:

28

EXHIBIT A REAL PROPERTY DESCRIPTION The real property located in Clark County, State of Nevada, and more particularly described as follows: Being a portion of the Northwest Quarter (NW 1/4) of Section 4, Township 22 South, Range 61 East, M.D.M., County of Clark, State of Nevada, more particularly described as follows: Commencing at the Northwest corner of said Section 4, said point being the centerline intersection of Las Vegas Boulevard South (SR-91) and Sunset Road; thence along the Northerly line thereof, said line also being the centerline of said Sunset Road, North 88o50'29" East 1016.24 feet; thence departing said line South 01o09'31" East, 50.00 feet to a point on the Southerly right-of-way line of Sunset Road, being 50.00 feet wide as per document recorded April 27, 1972, in Book 226, Instrument No. 185689, Official Records, said point also being the point of beginning; thence along said right-of-way line North 88o50'29" East 1365.65 feet to a line being 249.99 feet Westerly and parallel with measured at right angles from the Easterly line of the Northwest Quarter (NW 1/4); thence along said line South 00o35'14" East, 870.00 feet; thence departing said line South 89o24'46" West 957.01 feet; thence North 29o7'56" West 724.00 feet; thence South 88o50'29" West 59.92 feet; thence North 01o09'31" West 221.00 feet to the point of beginning.

EXHIBIT B PENDING LITIGATION None

ARTICLE 5 This schedule contains summary financial information extracted from the unaudited condensed balance sheets and unaudited condensed statements of income found on pages 3 and 4 of the Company's Form 10-QSB for the year to date, and is qualified in its entirety by reference to such financial statements. PERIOD TYPE: 9 MOS FISCAL YEAR END: DEC 31 1997 PERIOD END: SEP 30 1998 CASH: 43,700 SECURITIES: 0 RECEIVABLES: 2,456,700 ALLOWANCES: 0 INVENTORY: 111,700 CURRENT ASSETS: 2,742,800 PP&E: 135,000 DEPRECIATION: 12,000 TOTAL ASSETS: 26,127,700 CURRENT LIABILITIES: 3,397,600 BONDS: 0 COMMON: 3,000 PREFERRED MANDATORY: 0 PREFERRED: 4,740,000 OTHER SE: 3,099,000 TOTAL LIABILITY AND EQUITY: 26,127,700 SALES: 0 TOTAL REVENUES: 37,000 CGS: 0 TOTAL COSTS: 0 OTHER EXPENSES: 2,157,600 LOSS PROVISION: 0 INTEREST EXPENSE: 0 INCOME PRETAX: (2,139,600) INCOME TAX: 0 INCOME CONTINUING: 0 DISCONTINUED: 1,333,700 EXTRAORDINARY: 0 CHANGES: 0 NET INCOME: (805,900) EPS PRIMARY: (.71) EPS DILUTED: (.27)