<PAGE>


[LOGO]

                                 PROMISSORY NOTE

<TABLE>
<CAPTION>
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PRINCIPAL       LOAN DATE    MATURITY    LOAN NO    CALL    COLLATERAL    ACCOUNT       OFFICER   INITIALS
<S>             <C>          <C>         <C>        <C>     <C>           <C>           <C>       <C>
$5,000,000.00   02-01-1999   06-01-1999  00003                 000        00709056974     259      
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REFERENCES IN THE SHADED AREA ARE FOR LENDER'S USE ONLY AND DO NOT LIMIT THE APPLICABILITY OF THIS DOCUMENT TO ANY PARTICULAR 
LOAN OR ITEM.

BORROWER:      COASTCAST CORPORATION                LENDER: Imperial Bank
               3025 E. Victoria Street                      Los Angeles Airport Regional Office
               Rancho Dominguez, CA 90221-5616              9920 S. La Cienega Blvd., Suite 206
                                                            Inglewood, CA 90301-4423


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

Principal Amount: $5,000,000.00           Initial Rate: 7.750%             Date of Note: February 1, 1999

</TABLE>

PROMISE TO PAY. COASTCAST CORPORATION ("Borrower") promises to pay to 
Imperial Bank ("Lender"), or order, in lawful money of the United States of 
America, the principal amount of Five Million & 00/100 Dollars 
($5,000,000.00) or so much as may be outstanding, together with interest on 
the unpaid outstanding principal balance of each advance. Interest shall be 
calculated from the date of each advance until repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding 
principal plus all accrued unpaid interest on June 1, 1999.  In addition, 
Borrower will pay regular monthly payments of accrued unpaid interest 
beginning February 28, 1999, and all subsequent interest payments are due on 
the last day of each month after that. The annual interest rate for this Note 
is computed on a 365/360 basis; that is, by applying the ratio of the annual 
interest rate over a year of 360 days, multiplied by the outstanding 
principal balance, multiplied by the actual number of days the principal 
balance is outstanding. Borrower will pay Lender at Lender's address shown 
above or at such other place as Lender may designate in writing. Unless 
otherwise agreed or required by applicable law, payments will be applied 
first to any unpaid collection costs and any late charges, then to any unpaid 
interest, and any remaining amount to principal.

VARIABLE INTEREST RATE. Subject to designation of a different interest rate 
index by Borrower as provided below, the interest rate on this Note is 
subject to change from time to time based on changes in an index which is the 
Imperial Bank Prime Rate (the "Index"). The Prime Rate is the rate announced 
by Lender as its Prime Rate of Interest from time to time. Lender will tell 
Borrower the current index rate upon Borrower's request. Borrower understands 
that Lender may make loans based on other rates as well.  The interest rate 
change will not occur more often than each day. The index currently is 
7.750%. The interest rate to be applied to the unpaid principal balance of 
this Note will be at a rate equal to the index, resulting in an initial rate 
of 7.750%. NOTICE: Under no circumstances will the interest rate on this Note 
be more than the maximum rate allowed by applicable law.

INTEREST RATE OPTIONS. The following interest rate options are available 
under this Note:

    (a)  DEFAULT OPTION. The interest rate margin and index described in the 
    "VARIABLE INTEREST RATE" paragraph above (the "Default Option").

    (b)  LIBOR. A margin of 2,000 percentage points over LIBOR. For purposes 
    of this Note, LIBOR shall mean London Inter-Bank Offered Rate as 
    provided in the LIBOR ADDENDUM TO NOTE attached hereto and made a 
    part hereof.

When the interest rate is based on a fixed rate, the rate shall be in effect 
for a period of the number of days or months as indicated in the rate option 
description (the "Interest Period"), in any case extended to the next 
succeeding business day when necessary, beginning on a borrowing date, 
conversion date or expiration date of the then current Interest Period. 
Adjustments in the interest rate due to changes in the maximum nonusurious 
interest rate allowed (the "Highest Lawful Rate") shall be made on the 
effective day of any change in the Highest Lawful Rate.

Provided Borrower is not in default under this Note, Borrower may designate 
in advance which of the above interest rate indexes shall be applicable to 
any loan advance under this Note and shall designate any optional Interest 
Period applicable to any fixed rate loan or advance. In the absence of any 
such designation the interest rate option shall be the Default Option. 
Thereafter unpaid principal balances under this Note may be converted (at the 
end of an Interest Period if the index used to determine the interest rate 
therefore is a fixed rate) to another of the above interest rate options, or 
continued for an additional interest period, when applicable, as designated 
by Borrower in advance; and in the absence of sufficient advance designation 
as to conversion to or continuation of a fixed rate index, the index shall be 
converted to the Default Option. Notwithstanding the foregoing, a fixed rate 
index may not be elected for a loan or advance under this Note, nor any 
conversion to or continuation of a fixed rate index be elected, if the 
Interest Period thereof would extend beyond the maturity of this Note.

PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and 
other prepaid finance charges are earned fully as of the date of the loan and 
will not be subject to refund upon early payment (whether voluntary or as a 
result of default), except as otherwise required by law. In any event, even 
upon full prepayment of this Note, Borrower understands that Lender is 
entitled to a minimum interest charge of $250.00. Other than Borrower's 
obligation to pay any minimum interest charge, Borrower may pay without 
penalty all or a portion of the amount owed earlier than it is due. Early 
payments will not, unless agreed to by Lender in writing, relieve Borrower of 
Borrower's obligation to continue to make payments of accrued unpaid 
interest. Rather, they will reduce the principal balance due.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 
5.000% of the unpaid portion of the regularly scheduled payment.

DEFAULT.  Borrower will be in default if any of the following happens: (a) 
Borrower fails to make any payment when due. (b) Borrower breaks any promise 
Borrower has made to Lender, or Borrower fails to comply with or to perform 
when due any other term, obligation, covenant, or condition contained in this 
Note or any agreement related to this Note, or in any other agreement or loan 
Borrower has with Lender. (c) Any representation or statement made or 
furnished to Lender by Borrower or on Borrower's behalf is false or 
misleading in any material respect either now or at the time made or 
furnished. (d) Borrower becomes insolvent, a receiver is appointed for any 
part of Borrower's property, Borrower makes an assignment for the benefit of 
creditors, or any proceeding is commenced either by Borrower or against 
Borrower under any bankruptcy or insolvency laws. (e) Any creditor tries to 
take any of Borrower's property on or in which Lender has a lien or security 
interest. This includes a garnishment of any of Borrower's accounts with 
Lender. (f) Any guarantor dies or any of the other events described in this 
default section occurs with respect to any guarantor of this Note. (g) A 
material adverse change occurs in Borrower's financial condition, or Lender 
believes the prospect of payment or performance of the indebtedness is 
impaired. (h) Lender in good faith deems itself insecure.

If any default, other than a default in payment, is curable and if Borrower 
has not been given a notice of a breach of the same provision of this Note 
within the preceding twelve (12) months, it may be cured (and no event of 
default will have occurred) if Borrower, after receiving written notice from 
Lender demanding cure of such default: (a) cures the default within ten (10) 
days; or (b) if the cure requires more than ten (10) days, immediately 
initiates steps which Lender deems in Lender's sole discretion to be 
sufficient to cure the default and thereafter continues and completes all 
reasonable and necessary steps sufficient to produce compliance as soon as 
reasonably practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal 
balance on this Note and all accrued unpaid interest immediately due, without 
notice, and then Borrower will pay that amount. Upon Borrower's failure to 
pay all amounts declared due pursuant to this section, including failure to 
pay upon final maturity, Lender, at its option, may also, if permitted under 
applicable law, do one or both of the following: (a) increase the variable 
interest rate on this Note to 5.000 percentage points over the index, and (b) 
add any unpaid accrued interest to principal and such sum will bear interest 
therefrom until paid at the rate provided in this Note (including any 
increased rate). Lender may hire or pay someone else to help collect this 
Note if Borrower does not pay. Borrower also will pay Lender that amount. 
This includes, subject to any limits under applicable law, Lender's 
attorneys' fees and Lender's legal expenses whether or not there is a 
lawsuit, including attorneys' fees and legal expenses for bankruptcy 
proceedings (including efforts to modify or vacate any automatic stay or 
injunction), appeals, and any anticipated post-judgment collection services. 
Borrower also will pay any court costs, in addition to all other sums 
provided by law. This Note has been delivered to Lender and accepted by 
Lender in the State of California. If there is a lawsuit, Borrower agrees 
upon Lender's request to submit to the jurisdiction of the courts of Los 
Angeles County, the State of California. Lender and Borrower hereby waive the 
right to any jury trial in any action, proceeding, or counterclaim brought by 
either Lender or Borrower against the other. (Initial Here [Illegible]) This 
Note shall be governed by and construed in accordance with the laws of the 
State of California.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower 
makes a payment on Borrower's loan and the check or preauthorized charge with 
which Borrower pays is later dishonored.

RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest 
in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender 
all Borrower's right, title and interest in and to, Borrower's accounts with 
Lender (whether checking, savings, or some other account), including without 
limitation all accounts held jointly with someone else and all accounts 
Borrower may open in the future, excluding however all IRA and Keogh 
accounts, and all trust accounts for which the grant of a security interest 
would be prohibited by law. Borrower authorizes Lender, to the extent


<PAGE>

02-01-1999                     PROMISSORY NOTE                          Page 2
                                (Continued)

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

permitted by applicable law, to charge or setoff all sums owing on this Note 
against any and all such accounts.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances 
under this Note may be requested orally by Borrower or by an authorized 
person. All oral requests shall be confirmed in writing on the day of the 
request. All communications, instructions, or directions by telephone or 
otherwise to Lender are to be directed to Lender's office shown above. The 
following party or parties are authorized to request advances under the line 
of credit until Lender receives from Borrower at Lender's address shown above 
written notice of revocation of their authority: Hans Buehler, CEO & Chairman 
of the Board; and Robert C. Bruning, CFO & Secretary. Borrower agrees to be 
liable for all sums either: (a) advanced in accordance with the instructions 
of an authorized person or (b) credited to any of Borrower's accounts with 
Lender. The unpaid principal balance owing on this Note at any time may be 
evidenced by endorsements on this Note or by Lender's internal records, 
including daily computer print-outs. Lender will have no obligation to 
advance funds under this Note if: (a) Borrower or any guarantor is in default 
under the terms of this Note or any agreement that Borrower or any guarantor 
has with Lender, including any agreement made in connection with the signing 
of this Note; (b) Borrower or any guarantor ceases doing business or is 
insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit, 
modify or revoke such guarantor's guarantee of this Note or any other loan 
with Lender; (d) Borrower has applied funds provided pursuant to this Note 
for purposes other than those authorized by Lender; or (e) Lender in good 
faith deems itself insecure under this Note or any other agreement between 
Lender and Borrower.

REFERENCE PROVISION. 1. Other than (i) non-judicial foreclosure and all 
matters in connection therewith regarding security interests in real or 
personal property; or (ii) the appointment of a receiver, or the exercise of 
other provisional remedies (any and all of which may be initiated pursuant to 
applicable law), each controversy, dispute or claim between the parties 
arising out of or relating to this document ("Agreement"), which controversy, 
dispute or claim is not settled in writing within thirty (30) days after the 
"Claim Date" (defined as the date on which a party subject to the Agreement 
gives written notice to all other parties that a controversy, dispute or 
claim exists), will be settled by a reference proceeding in California in 
accordance with the provisions of Section 638 et seq. of the California Code 
of Civil Procedure, or their successor section ("CCP"), which shall 
constitute the exclusive remedy for the settlement of any controversy, 
dispute or claim concerning this Agreement, including whether such 
controversy, dispute or claim is subject to the reference proceeding and 
except as set forth above, the parties waive their rights to initiate any 
legal proceedings against each other in any court or jurisdiction other than 
the Superior Court in the County where the Real Property, if any, is located 
or Los Angeles County if none (the "Court"). The referee shall be a retired 
Judge of the Court selected by mutual agreement of the parties, and if they 
cannot so agree within forty-five (45) days after the Claim Date, the referee 
shall be promptly selected by the Presiding Judge of the Court (or his 
representative). The referee shall be appointed to sit as a temporary judge, 
with all of the powers for a temporary judge, as authorized by law, and upon 
selection should take and subscribe to the oath of office as provided for in 
Rule 244 of the California Rules of Court (or any subsequently enacted Rule). 
Each party shall have one peremptory challenge pursuant to CCP 170.6. The 
referee shall (a) be requested to set the matter for hearing within sixty 
(60) days after the Claim Date and (b) try any and all issues of law or fact 
and report a statement of decision upon them, if possible, within ninety (90) 
days of the Claim Date. Any decision rendered by the referee will be final, 
binding and conclusive and judgment shall be entered pursuant to CCP 644 in 
any court in the State of California having jurisdiction. Any party may apply 
for a reference proceeding at any time after thirty (30) days following 
notice to any other party of the nature of the controversy, dispute or claim, 
by filing a petition for a hearing and/or trial. All discovery permitted by 
this Agreement shall be completed no later than fifteen (15) days before the 
first hearing date established by the referee. The referee may extend such 
period in the event of a party's refusal to provide requested discovery for 
any reason whatsoever, including, without limitation, legal objections raised 
to such discovery or unavailability of a witness due to absence or illness.  
No party shall be entitled to "priority" in conducting discovery. Depositions 
may be taken by either party upon seven (7) days written notice, and request 
for production or inspection of documents shall be responded to within ten 
(10) days after service. All disputes relating to discovery which cannot be 
resolved by the parties shall be submitted to the referee whose decision 
shall be final and binding upon the parties. Pending appointment of the 
referee as provided herein, the Superior Court is empowered to issue 
temporary and/or provisional remedies, as appropriate.

2.  Except as expressly set forth in this Agreement, the referee shall 
determine the manner in which the reference proceeding is conducted including 
the time and place of all hearings, the order of presentation of evidence, 
and all other questions that arise with respect to the course of the 
reference proceeding. All proceedings and hearings conducted before the 
referee, except for trial, shall be conducted without a court reporter, 
except that when any party so requests, a court reporter will be used at any 
hearing conducted before the referee. The party making such a request shall 
have the obligation to arrange for and pay for the court reporter. The costs 
of the court reporter at the trial shall be borne equally by the parties.

3.  The referee shall be required to determine all issues in accordance with 
existing case law and the statutory laws of the State of California. The 
rules of evidence applicable to proceedings at law in the State of California 
will be applicable to the reference proceeding. The referee shall be 
empowered to enter equitable as well as legal relief, to provide all 
temporary and/or provisional remedies and to enter equitable orders that will 
be binding upon the parties. The referee shall issue a single judgment at the 
close of the reference proceeding which shall dispose of all of the claims of 
the parties that are the subject of the reference. The parties hereto 
expressly reserve the right to contest or appeal from the final judgment or 
any appealable order or appealable judgment entered by the referee. The 
parties hereto expressly reserve the right to findings of fact, conclusions 
of law, a written statement of decision, and the right to move for a new 
trial or a different judgment, which new trial, if granted, is also to be a 
reference proceeding under this provision.

4.  In the event that the enabling legislation which provides for appointment 
of a referee is repealed (and no successor statute is enacted), any dispute 
between the parties that would otherwise be determined by the reference 
procedure herein described will be resolved and determined by arbitration. 
The arbitration will be conducted by a retired judge of the Court, in 
accordance with the California Arbitration Act, 1280 through 1294.2 of the 
CCP as amended from time to time. The limitations with respect to discovery 
as set forth hereinabove shall apply to any such arbitration proceeding.

CREDIT AGREEMENT.  This Note is subject to the provisions of the Credit 
Agreement dated February 2, 1998, and all amendments thereto and replacements 
therefor.

GENERAL PROVISIONS.  Lender may delay or forgo enforcing any of its rights or 
remedies under this Note without losing them. Borrower and any other person 
who signs, guarantees or endorses this Note, to the extent allowed by law, 
waive any applicable statute of limitations, presentment, demand for payment, 
protest and notice of dishonor. Upon any change in the terms of this Note, 
and unless otherwise expressly stated in writing, no party who signs this 
Note, whether as maker, guarantor, accommodation maker or endorser, shall be 
released from liability. All such parties agree that Lender may renew or 
extend (repeatedly and for any length of time) this loan, or release any 
party or guarantor or collateral; or impair, fail to realize upon or perfect 
Lender's security interest in the collateral; and take any other action 
deemed necessary by Lender without the consent of or notice to anyone. All 
such parties also agree that Lender may modify this loan without the consent 
of or notice to anyone other than the party with whom the modification is 
made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS 
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER 
AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY 
OF THE NOTE.

BORROWER:

COASTCAST CORPORATION

x /s/ Robert C. Bruning
  -----------------------
    Authorized Officer

-------------------------------------------------------------------------------
Variable Rate, Line of Credit.     LASER PRO, Reg. U.S. Pat. & T.M. Off., 
                                    Ver.3.26b(c) 1989 CFI ProServices, Inc.
                                    All rights reserved. (CA-D20 
                                    09COAST.LNC1.OVL)


<PAGE>

[LOGO]                          LIBOR ADDENDUM
                                TO NOTE



     This Libor Addendum ("Addendum") is dated as of FEBRUARY 1, 1999, and is 
by and between COASTCAST CORPORATION ("Borrower") and Imperial Bank ("Bank"). 
This Addendum amends and supplements the NOTE to which it is attached (the 
"Note") and forms a part of and is incorporated into the Note.

     In the event of any inconsistency between the terms herein and the terms 
of the Note, the terms herein shall in all cases govern and control. All 
capitalized terms herein, unless otherwise defined herein, shall have the 
meanings set forth in the Note.

     1.    ADVANCES.

     1.1   PRIME LOANS.  Advances permitted pursuant to the terms of the Note 
or this Addendum which bear interest in relation to Bank's Prime Rate shall 
be referred to herein as "Prime Loans" and each such advance shall be a 
"Prime Loan." Each Prime Loan shall bear interest at an annual rate equal to 
the sum of 0.000% plus the Bank's Prime Rate. "Prime Rate" shall mean the 
rate of interest publicly announced by Bank from time to time in Inglewood, 
California, as its prime rate for lending. The Prime Rate is not intended to 
be the lowest rate of interest charged by Bank in connection with extensions 
of credit to borrowers.

     1.2   LIBOR LOANS.  Advances permitted pursuant to the terms of the Note 
or this Addendum which bear interest in relation to the Libor Rate shall be 
referred to herein as "Libor Loans" and each such advance shall be a "Libor 
Loan." Each Libor Loan shall bear interest at the Libor Rate, as defined 
below. A Libor Loan shall be in the minimum amount of FIVE HUNDRED THOUSAND 
DOLLARS ($500,000.00) or such greater amount which is an integral multiple of 
Fifty Thousand Dollars ($50,000). No Libor Loan shall be made after the last 
Business Day that is at least THREE (3) MONTHS prior to the Maturity Date 
described in the Note.

     2.    INTEREST ON LIBOR LOANS.

     2.1   RATE OF INTEREST.  Each Libor Loan shall bear interest on the 
unpaid principal amount thereof from the Loan Date through the date paid 
(whether by acceleration or otherwise) at a rate equal to the sum of 2.000% 
per annum plus the Libor Rate for the Interest Period.

           (a)   "Loan Date" shall mean the date on which (i) a Libor Loan is 
made, a Libor Loan is continued, or a Prime Loan is converted to a Libor Loan.

           (b)   "Interest Period" shall mean a period of ONE (1) MONTH, 
commencing on the applicable Loan Date, as selected by Borrower pursuant to 
Section 2.2; PROVIDED, HOWEVER, that Borrower may not select an Interest 
Period that would otherwise extend beyond the Maturity Date of the Loan. 
Borrower may also select a twelve (12) month Interest Period if and when Bank 
notifies Borrower that such Interest Period is available, as determined by 
Bank in its sole discretion.

           (c)   "Libor Rate" shall mean, for the applicable Interest Period 
for a Libor Loan, a rate per annum (rounded upwards, if necessary, to the 
nearest 1/16 of 1%) equal to (i) the Libor Base Rate for such Interest Period 
divided by (ii) 1.00 minus the Reserve Requirement Rate (expressed as a 
decimal fraction) for such Interest Period.

           (d)   "Libor Base Rate" shall mean with respect to any Interest 
Period, the rate equal to the arithmetic mean (rounded upwards, if necessary, 
to the nearest 1/16 of 1%) of:

                 (i)   the offered rates per annum for deposits in U.S. 
     Dollars for a period equal to such Interest Period which appears at 
     11:00 a.m., London time, on the Reuters Screen LIBOR Page on the 
     Business Day that is two (2) Business Days before the first day of such 
     Interest Period, in each case if at least four (4) such offered rates 
     appear on such page, or

                 (ii)  if clause (i) is inapplicable, (x) the offered rate 
     per annum for deposits in U.S. Dollars for a period equal to such 
     Interest Period which appears as of 11:00 a.m., London time on the 
     Telerate Monitor on Telerate Screen 3750 on the Business Day which is 
     two (2) Business Days before the first day of such Interest Period; or 
     (y) if clause (x) above is inapplicable, the arithmetic mean (rounded 
     upwards, if necessary, to the nearest 1/16 of 1%) of the interest rates 
     per annum offered by at least three (3) prime banks selected by Bank at 
     approximately 11:00 a.m. London time, on the Business Day which is two 
     (2) Business Days before such date for deposits in U.S. Dollars to prime 
     banks in the London interbank market, in each case for a period equal to 
     such Interest Period in an amount equal to the amount to which the Libor 
     Rate applies.

<PAGE>

           (e)   "Business Day" means any day on which Bank is open for 
business in the State of California.

           (f)   "Reuters Screen LIBOR Page" means the display designated as 
page LIBOR on the Reuters Monitor Money Rates Service or such other page as 
may replace the LIBOR page on that service for the purpose of displaying 
London interbank offered rates of major banks.

           (g)   "Reserve Requirement Rate" means, for any Interest Period, 
the aggregate of the rates, effective as of the Business Day which is two (2) 
Business Days before the first day of the Interest Period, at which:

                 (i)   reserves (including any marginal, supplemental or 
     emergency reserves) are required to be maintained during such Interest 
     Period under Regulation D against "Eurocurrency liabilities" (as such 
     term is used in Regulation D) by member banks of the Federal Reserve 
     System; and

                 (ii)  any additional reserves are required to be maintained 
     by Bank by reason of any Regulatory Change against (x) any category of 
     liabilities which includes deposits by reference to which the Libor Rate 
     is to be determined as provided in the definition of "Libor Base Rate;" 
     or (y) any category of extensions of credit or other assets which 
     include Libor Loans.

           (h)   "Regulatory Change" means, with respect to Bank, any change 
on or after the date of the Note and this Addendum in any Governmental 
Regulation, including the introduction of any new Governmental Regulation or 
the rescission of any existing Governmental Regulation.

           (i)   "Governmental Regulation" means any (i) United States 
Federal, state or foreign law or regulation (including without limitation 
Regulation D); and (ii) the adoption or making of any interpretation, 
application, directive or request applying to a class of lenders, including 
Bank, of or under any United States Federal, state, or any foreign law or 
regulation (whether or not having the force of law) by any court or by any 
governmental, central banking, monetary or taxing authority charged with the 
interpretation or administration of such law or regulation.

     2.2   DETERMINATION OF INTEREST RATES.  Subject to the terms and 
conditions of the Note and this Addendum, Borrower, at its option, may 
request an advance in the form of a Libor Loan, a continuation of a Libor 
Loan, or a conversion of a Prime Loan into a Libor Loan, only upon delivery 
to Bank of an irrevocable written notice received by Bank at least three (3) 
Business Days prior to the requested Loan Date, specifying (i) the principal 
amount of such Libor Loan, (ii) the requested Loan Date, and (iii) the 
selected Interest Period. Upon receiving such notice, Bank shall determine 
(which determination shall be in accordance with Section 2.1 and shall, 
absent manifest error, be final, conclusive and binding upon all parties 
hereto) the Libor Rate applicable to such Libor Loan two (2) Business Days 
prior to the Loan Date, and shall promptly give notice thereof (in writing or 
by telephone confirmed in writing) to Borrower. If Borrower shall fail to 
notify Bank of its selected Interest Period for a Libor Loan (including the 
continuation of an existing Libor Loan or the conversion of a Prime Loan into 
a Libor Loan), the Borrower shall be deemed to have selected an Interest 
Period of three (3) months.

     2.3   COMPUTATION OF INTEREST AND FEES.  All computations of interest 
and fees payable pursuant to the Note shall be calculated on the basis of a 
three hundred sixty (360) day year for the actual number of days elapsed 
(less the date of repayment).

     2.4   RECORDATION BY BANK.  Bank is hereby authorized to record the Loan 
Date, the applicable Interest Period, the principal amount, and the interest 
rate of each Libor Loan made (or continued or converted) by Bank, and the 
date and amount of each payment or prepayment of principal thereof, in Bank's 
records. Any such recordation shall constitute PRIMA FACIE evidence of the 
accuracy of the information recorded; PROVIDED that the failure to make any 
such recordation shall not in any way affect the Borrower's obligations 
hereunder.

     3.    CONVERSION TO PRIME LOANS.

     3.1   ELECTION BY BORROWER.  Subject to all the terms and conditions of 
this Addendum, Borrower may elect from time to time to convert a Libor Loan 
to a Prime Loan by giving Bank at least three (3) Business Days' prior 
irrevocable notice of such election, and any such conversion of a Libor Loan 
shall be made on the last day of the Interest Period with respect thereto.

     3.2   FAILURE OF NOTICE BY BORROWER.  If Borrower otherwise fails to 
give notice specifying its requests with respect to any Libor Loans that are 
scheduled to become due, such failure shall be deemed, in the absence of any 
notice from Borrower to the contrary, to be notice of a requested advance in 
the form of a Prime Loan in a principal amount equal to the amount of said 
Libor Loan.

     4.    PREPAYMENTS.

     4.1   VOLUNTARY PREPAYMENT BY BORROWER.  Subject to the terms and 
conditions of the Note and this Addendum, Borrower may, upon at least three 
(3) Business Days' irrevocable notice to Bank as provided herein, at any time 
and from time to time on any Business Day prepay any Prime Loan or Libor Loan 
in whole or in part, without penalty or premium, other than customary actual 
"Breakage Fees" and "Prepayment Costs" as defined below, resulting from 
prepayment of any Libor Loan prior to the expiration of the Interest Period 
relating thereto. The notice of prepayment shall specify the date and amount 
of the prepayment, and the Loan to which the 

<PAGE>


prepayment applies. Each partial prepayment of a Libor Loan shall be in an 
amount not less than Fifty Thousand Dollars ($50,000) or such greater amount 
which is an integral multiple of Fifty Thousand Dollars ($50,000); PROVIDED, 
that unless a Libor Loan is prepaid in full, no prepayment shall be made if, 
after giving effect to such prepayment, the aggregate principal amount of 
Libor Loans having the same Interest Period shall be less than FIVE HUNDRED 
THOUSAND DOLLARS ($500,000.00). Notice of prepayment having been delivered as 
aforesaid, the principal amount of the prepayment specified in such notice 
shall become due and payable on the prepayment date set forth in such notice. 
All payments of principal under this Section 4 shall be accompanied by 
accrued but unpaid interest on the amount being prepaid through the date of 
such prepayment.

     4.2   BREAKAGE FEES.   If for any reason (including voluntary or 
mandatory prepayment, voluntary or mandatory conversion of a Libor Loan into 
a Prime Loan, or acceleration), Bank receives all or part of the principal 
amount of a Libor Loan prior to the last day of the Interest Period for such 
Loan, Borrower shall immediately notify Borrower's account officer at Bank 
and, on demand by Bank, pay Bank the Breakage Fees, defined as the amount (if 
any) by which (i) the additional interest which would have been payable on 
the amount so received had it not been received until the last day of such 
Interest Period exceeds (ii) the interest which would have been recoverable 
by Bank (without regard to whether Bank actually so invests said funds) by 
placing the amount so received on deposit in the certificate of deposit 
markets or the offshore currency interbank markets or United States Treasury 
investment products, as the case may be, for a period starting on the date on 
which it was so received and ending on the last day of such Interest Period 
at the interest rate determined by Bank in its reasonable discretion. Bank's 
determination as to such amount shall be conclusive and final, absent 
manifest error.

     4.3   PREPAYMENT COSTS.  Borrower shall pay to Bank, upon the demand of 
Bank, such other amount or amounts as shall be sufficient (in the sole good 
faith opinion of Bank) to compensate it for any loss, costs or expense 
incurred by it as a result of any prepayment by Borrower (including voluntary 
or mandatory prepayment, voluntary or mandatory conversion of a Libor Loan 
into a Prime Loan, or prepayment due to acceleration) of all or part of the 
principal amount of a Libor Loan prior to the last day of the Interest Period 
for such Loan (including without limitation any failure by Borrower to 
borrow a Libor Loan on the Loan Date for such borrowing specified in the 
relevant notice of borrowing hereunder). Such costs shall include, without 
limitation, any interest or fees payable by Bank to lenders of funds obtained 
by it in order to make or maintain its loans based on the London interbank 
eurodollar market. Bank's determination as to such costs shall be conclusive 
and final, absent manifest error.

     5.    REMEDIES UPON EVENTS OF DEFAULT.

     5.1   CONVERSION TO PRIME LOANS.  If any Event of Default has occurred 
and is continuing under the Note or this Addendum, then in addition to all 
other remedies available to Bank under the Note, at the option of Bank and 
without demand or notice, all Libor Loans then outstanding shall be 
automatically converted to Prime Loans on the last day of each respective 
Interest Period for each Libor Loan.

     5.2   INDEMNITY.  Borrower agrees to pay and indemnify Bank for, and to 
hold Bank harmless from, any and all cost, loss or expense (including without 
limitation any such cost, loss or expense arising from interest or fees 
payable by Bank to lenders of funds obtained by it in order to maintain its 
Libor Loans hereunder, or in its reemployment of funds obtained in connection 
with the making or maintaining of Libor Loans) which Bank may sustain or 
incur as a consequence of any default by Borrower in connection with or 
related to: (a) payment of the principal amount of or interest on Libor 
Loans, (b) making a borrowing or conversion of a Libor Loan after Borrower 
has given a notice thereof in accordance with this Addendum, or (c) making a 
prepayment of a Libor Loan after Borrower has given a notice thereof in 
accordance with this Addendum, or any prepayment (whether optional or 
mandatory) of any Libor Loan prior to the end of the applicable Interest 
Period for such Loan.

     6.    ADDITIONAL PROVISIONS REGARDING LIBOR LOANS.

     6.1   LIBOR RATE TAXES.  All payments of principal, interest, fees, 
costs, expenses and all other amounts payable to Borrower pursuant to the 
Note and this Addendum shall be made free and clear of and without reduction 
by reason of all present and future income, stamp and other taxes or other 
charges whatsoever imposed, assessed, levied or collected by any national 
government or any political subdivision or taxing authority thereof or any 
organization of which it is a member (excluding (i) any taxes imposed on or 
measured by the overall net income or gross receipts of Bank by any such 
entity, and (ii) any taxes which would have been imposed even if no 
provisions for Libor Loans had appeared in this Addendum) (collectively, 
"Libor Taxes").

           If any Libor Taxes are required to be withheld from any amounts 
payable to Bank, Borrower shall pay such additional amounts as may be 
necessary so as to yield to Bank a net amount equal to the total amount of 
the payments provided for in this Addendum or under the Note which Bank would 
have received if such amounts had not been subject to Libor Taxes.

           If any Libor Taxes are payable directly by Borrower, they shall be 
paid by Borrower prior to the date on which penalties attach for failure to 
timely pay such Libor Taxes. Within forty five (45) days after the date on 
which payment of any such Libor Taxes is due pursuant to applicable law, 
Borrower will furnish Bank the original receipt for the full payment of such 
Libor Taxes or, if such is not available, evidence of such payment 
satisfactory in form and substance to Bank. Borrower shall indemnify and hold 
Bank harmless against, and will reimburse to Bank, upon demand, any 
incremental taxes, interest or penalties that may become payable by Bank as a 
result of any failure by Borrower to pay any Libor Taxes when due.


<PAGE>

     6.2   INABILITY TO DETERMINE FAIR INTEREST RATE.  If at any time Bank, 
in its sole and absolute discretion, determines that: (i) the amount of the 
Libor Loans for periods equal to the corresponding Interest Periods are not 
available to Bank in the offshore currency interbank markets, (ii) the Libor 
Rate does not accurately reflect the cost to Bank of lending the Libor Loan, 
or (iii) by reason of any changes arising after the date of the Note 
affecting the London interbank eurodollar market, adequate and fair means do 
not exist for ascertaining the applicable interest rate on the basis provided 
for in Sections 2.1 and 2.2 above, then Bank shall promptly give notice 
thereof to Borrower. Upon the giving of such notice, Bank's obligation to 
make Libor Loans shall terminate, unless Bank and the Borrower agree in 
writing to a different interest rate applicable to Libor Loans, or until such 
time as Bank notifies Borrower that the circumstances giving rise to Bank's 
notice no longer exist. While such circumstances continue to exist, (x) any 
requested Libor Loan shall be treated as a request for a Prime Loan, (y) any 
Prime Loan that was to have been converted to a Libor Loan shall be continued 
as a Prime Loan, and (z) any outstanding Libor Loan shall be converted 
retroactively, on the first day of the then current Interest Period with 
respect thereto, to a Prime Loan.

     6.3   ILLEGALITY OR IMPRACTICABILITY.  If (i) due to any Governmental 
Regulation it shall become unlawful for Bank to continue to fund or maintain 
any Libor Loans, or to perform its obligations hereunder, or (ii) due to any 
contingency occurring after the date of the Note which has a material adverse 
effect on the London interbank eurodollar market, it has become impracticable 
for Bank to continue to fund or maintain any Libor Loans, or to perform its 
obligations hereunder, then Bank shall promptly give notice thereof to 
Borrower. Upon the giving of such notice, Bank's obligation to make Libor 
Loans shall terminate, and in such event, (x) any requested Libor Loan shall 
be treated as a request for a Prime Loan, (y) any Prime Loan that was to have 
been converted to a Libor Loan shall be continued as a Prime Loan, and (z) 
any outstanding Libor Loan shall be converted retroactively, on the first day 
of the then current Interest Period with respect thereto, to a Prime Loan.

     6.4   GOVERNMENTAL REGULATIONS; INCREASED COSTS.  Borrower shall pay to 
Bank, within 15 days after demand by Bank, from time to time such amounts as 
Bank may determine to be necessary to compensate it for any increased costs 
incurred by Bank that Bank determines are attributable to its making or 
maintaining of any Libor Loans to Borrower (such increases in costs and 
reductions in amounts receivable being herein called "Additional Costs"), in 
each case resulting from any Regulatory Change which:

           (a)   imposes a new tax or changes the basis of taxation of any 
amounts payable to Bank under the Note or this Addendum in respect of any 
Libor Loans (other than changes which affect taxes measured by or imposed on 
the overall net income of Bank by the jurisdiction in which such Bank has its 
principal office); or

           (b)   imposes or modifies any reserve, special deposit or similar 
requirements relating to any extensions of credit or other assets of, or any 
deposits or other liabilities with or for the account of Bank (including any 
Libor Loans or any deposits referred to in the definition of Libor Base 
Rate); or 

           (c)   imposes any other condition affecting the Note (or any of 
such extensions of credit or liabilities); or

           (d)   imposes or modifies a Governmental Regulation regarding 
capital adequacy which has or would have the effect of reducing the rate of 
return on capital of Bank or any person or entity controlling Bank ("Parent") 
as a consequence of its obligations hereunder to a level below that which 
Bank (or its Parent) could have achieved but for such adoption, change or 
compliance (taking into consideration its policies with respect to capital 
adequacy) by an amount deemed by Bank to be material.

     Bank will notify Borrower of any event occurring after the date of the 
Note which will entitle Bank to Additional Costs pursuant to this Section 6.4 
as promptly as practicable after it obtains knowledge thereof and determines 
to request such compensation. Bank will furnish Borrower with a statement 
setting forth the basis and amount of each request by Bank for Additional 
Costs under this Section 6.4. Determinations and allocations by Bank for 
purposes of this Section 6.4 of the effect of any Regulatory Change on its 
costs of maintaining its obligations to make Libor Loans or of making or 
maintaining Libor Loans or on amounts receivable by it in respect of Libor 
Loans, and of the additional amounts required to compensate Bank in respect 
of any Additional Costs, shall be conclusive and final, absent manifest error.


     This Addendum is executed as of the date first written above.


BORROWER                                      BANK

Coastcast Corporation,                        Imperial Bank,
a California Corporation                      a California banking corporation

By /s/ Robert C. Bruning                         By /s/ Donald D. Douthwright
   ---------------------,                        -----------------------------
Its CFO                                          for Brougham Morris
    -------------------
                                                 Its Senior Vice President
                                                     -------------------------
By
   --------------------,
Its
   -------------------


<PAGE>


                            FIRST AMENDMENT TO
                             CREDIT AGREEMENT

This First Amendment ("Amendment") amends that certain Credit Terms and 
Conditions Agreement ("Agreement") dated February 2, 1998, by and between 
IMPERIAL BANK ("Bank") and COASTCAST CORPORATION ("Borrower") (the 
"Agreement") as follows:


1.   A new Paragraph 1.10 is hereby added to the Agreement to read in its 
entirety as follows:

     "YEAR 2000 COMPLIANCE. Borrower and its subsidiaries, as applicable, 
     represent and warrant that they have reviewed the areas within their 
     operations and business which could be adversely affected by, and have 
     developed or are developing a program to address on a timely basis, the 
     Year 2000 Problem and have made related appropriate inquiry of material 
     suppliers and vendors, and based on such review and program, the Year 2000
     Problem will not have a material adverse effect upon their financial 
     condition, operations or business as now conducted. "Year 2000 Problem" 
     means the possibility that any computer applications or equipment used by
     Borrower may be unable to recognize and properly perform date sensitive 
     functions involving certain dates prior to and any dates on or after 
     December 31, 1999."


2.   A new paragraph 2.13 is hereby added to the Agreement to read in its 
entirety as follows:

     "YEAR 2000 COMPLIANCE. Perform all acts reasonably necessary to ensure 
     that (a) Borrower and any business in which Borrower holds a substantial 
     interest, and (b) any customer, supplier or vendor whose compliance is 
     material to Borrower's business, becomes Year 2000 Compliant in a timely 
     manner. Such acts shall include, without limitation, performing a 
     comprehensive review and assessment of all Borrower's systems and 
     adopting a detailed plan, with itemized budget, for the remediation, 
     monitoring and testing of such systems. As used in this paragraph, "Year 
     2000 Compliant" shall mean, in regard to any entity, that all software, 
     hardware, firmware, equipment, goods or systems utilized by or material 
     to the business operations or financial condition of such entity, will 
     properly perform date sensitive functions before, during and after the 
     year 2000. Borrower shall, immediately upon request, provide to Agent 
     such certifications or other evidence of Borrower's compliance with the 
     terms of this paragraph as Agent may from time to time require."


<PAGE>



3.   Except as provided above, the Agreement remains unchanged.

4.   This Amendment shall be effective as of February 1, 1999, and the 
parties hereby confirm that the Agreement as amended is in full force and 
effect.


COASTCAST CORPORATION                     IMPERIAL BANK
"BORROWER"                                "BANK"


By: /s/ Robert C. Bruning             By: /s/ Donald D. Douthwright
    ---------------------                 ------------------------
     Robert C. Bruning                    for Brougham J. Morris
     Chief Financial Officer              Senior Vice President