<PAGE>   1
                            [SANTA MONICA BANK LOGO]

                     DISBURSEMENT REQUEST AND AUTHORIZATION

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
 PRINCIPAL     LOAN DATE     MATURITY      LOAN NO      CALL     COLLATERAL    ACCOUNT    OFFICER    INITIALS
$700,000.00                 07-06-2000    2000314557                5015                    RDB    [Illegible]
--------------------------------------------------------------------------------------------------------------
                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.
--------------------------------------------------------------------------------------------------------------
<S>                                                         <C>
     BORROWER:  CALIFORNIA BEACH RESTAURANTS, INC.,                   LENDER:  SANTA MONICA BANK
                A CALIFORNIA CORPORATION (TIN: 95-2693503)                     LOAN SERVICING CENTER
                17383 SUNSET BOULEVARD, #140                                   1231 4TH STREET
                PACIFIC PALISADES, CA 90272                                    SANTA MONICA, CA 90401
==============================================================================================================
</TABLE>

LOAN TYPE:  This is a Variable Rate (1.000% over Prime rate as published in the
Wall Street Journal. When a range of rates has been published, the higher of
the rates will be used, making an initial rate of 9.250%), Revolving Line of
Credit Loan to a Corporation for $700,000.00 due on July 6, 2000.

PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:

-----
[ILLEGIBLE] [ ]  PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR PERSONAL INVESTMENT.
-----
 INT        [X]  BUSINESS (INCLUDING REAL ESTATE INVESTMENT).
-----

SPECIFIC PURPOSE.  The specific purpose of this loan is: INCREASE OF REVOLVING
LINE OF CREDIT ORIGINALLY GRANTED FOR SHORT-TERM WORKING CAPITAL DURING
SEASONAL SLOW PERIODS AND/OR ADVERSE WEATHER PERIODS. LETTER OF CREDIT
SUB-LIMIT FOR THE PURPOSE OF ISSUING A STANDBY LETTER OF CREDIT TO THE COUNTY
OF LOS ANGELES ON BEHALF OF SEA VIEW RESTAURANTS, INC. AS A 3 MONTH SECURITY
DEPOSIT FOR THE USE OF THE BEACH SITE LOCATION OF GLADSTONES 4 FISH.

DISBURSEMENT INSTRUCTIONS.  Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $700,000.00 as follows:

<TABLE>
          <S>                                     <C>
          AMOUNT PAID TO BORROWER DIRECTLY:             $0.00
          UNDISBURSED FUNDS:                      $700,000.00
                                                  -----------
          NOTE PRINCIPAL:                         $700,000.00
</TABLE>

CHARGES PAID IN CASH.  Borrower has paid or will pay in cash as agreed the
following charges:

<TABLE>
          <S>                                       <C>
          PREPAID FINANCE CHARGES PAID IN CASH:     $1,000.00
            $1,000.00 Loan Fees
                                                    ---------
          TOTAL CHARGES PAID IN CASH:               $1,000.00
</TABLE>

LIEN RELEASE FEES.  In addition to all other charges, Borrower agrees, to the
extent not prohibited by law, to pay all governmental fees for release of
Lender's security interests in collateral securing this loan. Borrower will pay
these fees at the time the lien or liens are released. The estimated amount of
these future lien release fees is $20.00.

AUTOMATIC PAYMENTS.  Borrower hereby authorizes Lender automatically to deduct
from Borrower's account numbered 14 021-620 the amount of any loan payment. If
the funds in the account are insufficient to cover any payment, Lender shall
not be obligated to advance funds to cover the payment. At any time and for any
reason, Borrower or Lender may voluntarily terminate Automatic Payments.

AVAILABILITY OF FUNDS. Additional $200,000.00 increase to the 500,000.00 line
of credit, to be made available November 1, 1999 through March 31, 2000.

FINANCIAL CONDITION.  BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL
CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER.
THIS AUTHORIZATION IS DATED SEPTEMBER 30, 1999.


BORROWER:

CALIFORNIA BEACH RESTAURANTS, INC., A CALIFORNIA CORPORATION


By: /s/ ALAN REDHEAD
    ------------------------------
    ALAN REDHEAD, PRESIDENT

================================================================================

<PAGE>   2

                            [SANTA MONICA BANK LOGO]


                           CHANGE IN TERMS AGREEMENT

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
 PRINCIPAL     LOAN DATE     MATURITY      LOAN NO      CALL     COLLATERAL    ACCOUNT    OFFICER    INITIALS
$700,000.00                 07-06-2000    2000314557                5015                    RDB    [ILLEGIBLE]
--------------------------------------------------------------------------------------------------------------
                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.
--------------------------------------------------------------------------------------------------------------
<S>                                                         <C>
     BORROWER:  CALIFORNIA BEACH RESTAURANTS, INC.,                   LENDER:  SANTA MONICA BANK
                A CALIFORNIA CORPORATION (TIN: 95-2693503)                     LOAN SERVICING CENTER
                17383 SUNSET BOULEVARD, #140                                   1231 4TH STREET
                PACIFIC PALISADES, CA 90272                                    SANTA MONICA, CA 90401
==============================================================================================================
</TABLE>

PRINCIPAL AMOUNT: $700,000.00              DATE OF AGREEMENT: SEPTEMBER 30, 1999

DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory Note dated July 7, 1999 in the
amount of $500,000.00 and any renewals, modifications, substitutions or
consolidations thereof.

PROMISE TO PAY. CALIFORNIA BEACH RESTAURANTS, INC., A CALIFORNIA CORPORATION
("BORROWER") PROMISES TO PAY TO SANTA MONICA BANK ("LENDER"), OR ORDER, IN
LAWFUL MONEY OF THE UNITED STATES OF AMERICA, THE PRINCIPAL AMOUNT OF SEVEN
HUNDRED THOUSAND & 00/100 DOLLARS ($700,000.00) 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 ON DEMAND, OR IF NO DEMAND
                IS MADE, IN ONE PAYMENT OF ALL OUTSTANDING PRINCIPAL PLUS ALL
                ACCRUED UNPAID INTEREST ON JULY 6, 2000. IN ADDITION, BORROWER
                WILL PAY REGULAR MONTHLY PAYMENTS OF ACCRUED UNPAID INTEREST
                BEGINNING OCTOBER 6, 1999, AND ALL SUBSEQUENT INTEREST PAYMENTS
-------------   ARE DUE ON THE SAME DAY OF EACH MONTH AFTER THAT. The annual
 [ILLEGIBLE]    interest rate for this Agreement is computed on a 365/360 basis;
-------------   that is, by applying the ratio of the annual interest rate over
     INT        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 accrued unpaid
                interest, then to principal, and any remaining amount to any
                unpaid collection costs and late charges.

VARIABLE INTEREST RATE. The interest rate on this Agreement is subject to
change from time to time based on changes in an independent index which is the
Prime rate as published in the Wall Street Journal. When a range of rates has
been published, the higher of the rates will be used (the "Index"). The Index
is not necessarily the lowest rate charged by Lender on its loans. If the Index
becomes unavailable during the term of this loan, Lender may designate a
substitute index after notice to Borrower. 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 8.250%. THE INTEREST
RATE TO BE APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS AGREEMENT WILL BE AT
A RATE OF 1.000 PERCENTAGE POINT OVER THE INDEX, RESULTING IN AN INITIAL RATE
OF 9.250%. NOTICE: Under no circumstances will the interest rate on this
Agreement be more than the maximum rate allowed by applicable law.

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 Agreement, Borrower understands that Lender is entitled
to a MINIMUM INTEREST CHARGE OF $50.00. 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 15 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT OR $5.00, WHICHEVER IS GREATER.

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, obligations, covenant, or condition contained in this
Agreement or any agreement related to this Agreement, or in any other agreement
or loan Borrower has with Lender. (c) Borrower defaults under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially
affect any of Borrower's property or Borrower's ability to repay this Note or
perform Borrower's obligations under this Note or any of the Related Documents.
(d) 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. (e) 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. (f) 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. (g) Any guarantor dies or any of the other events described in
this default section occurs with respect to any guarantor of this Agreement.
(h) A material adverse change occurs in Borrower's financial condition, or
Lender believes the prospect of payment or performance of the Indebtedness is
impaired.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Agreement 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, increase the variable interest rate on this Agreement to 7.000
percentage points over the Index. Lender may hire or pay someone else to help
collect this Agreement 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 AGREEMENT 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. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

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
<PAGE>   3
09-30-1999                 CHANGE IN TERMS AGREEMENT                      PAGE 2
LOAN NO 2000314557                (CONTINUED)

================================================================================

accounts, and all trust accounts for which the grant of a security interest
would be prohibited by law. Borrower authorizes Lender, to the extent permitted
by applicable law, to charge or setoff all sums owing on this Agreement against
any and all such accounts.

LINE OF CREDIT. This Agreement evidences a revolving line of credit. Advances
under this Agreement may be requested either orally or in writing by Borrower or
as provided in this paragraph. Lender may, but need not, require that all oral
requests be confirmed in writing. 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 as provided in
this paragraph 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: ALAN REDHEAD, PRESIDENT; AND SAMUEL E. CHILAKOS,
SECRETARY. ANY ONE OF THE AUTHORIZED OFFICERS MAY REQUEST ADVANCES. 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 Agreement at
any time may be evidenced by endorsements on this Agreement or by Lender's
internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this Agreement if: (a) Borrower or any
guarantor is in default under the terms of this Agreement or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Agreement; (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
Agreement or any other loan with Lender; or (d) Borrower has applied funds
provided pursuant to this Agreement for purposes other than those authorized by
Lender.

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms
of the original obligation or obligations, including all agreements evidenced
or securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender's right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a
satisfaction of the obligation(s). It is the intention of Lender to retain as
liable parties all makers and endorsers of the original obligation(s),
including accommodation parties, unless a party is expressly released by Lender
in writing. Any maker or endorser, including accommodation makers, will not be
released by virtue of this Agreement. If any person who signed the original
obligation does not sign this Agreement below, then all persons signing below
acknowledge that this Agreement is given conditionally, based on the
representation to Lender that the non-signing party consents to the changes and
provisions of this Agreement or otherwise will not be released by it. This
waiver applies not only to any initial extension, modification or release, but
also to all such subsequent actions.

SIXTY DAY OUT OF DEBT REQUIREMENT. Borrower agrees to be out of debt on this
credit for at least sixty (60) consecutive days after the Note date and before
the Note maturity date.

BUSINESS LOAN AGREEMENT. This Note is additionally subject to all terms and
conditions of a Business Laon Agreement dated July 6, 1999 and any replacements
or modifications thereof.

MISCELLANEOUS PROVISIONS. This Agreement is payable on demand. The inclusion of
specific default provisions or rights of Lender shall not preclude Lender's
right to declare payment of this Agreement on its demand. Lender may delay or
forgo enforcing any of its rights or remedies under this Agreement without
losing them. Borrower and any other person who signs, guarantees or endorses
this Agreement, 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 Agreement, and unless otherwise expressly
stated in writing, no party who signs this Agreement, 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 AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
BORROWER AGREES TO THE TERMS OF THE AGREEMENT AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COPY OF THE AGREEMENT.

BORROWER:

CALIFORNIA BEACH RESTAURANTS, INC., A CALIFORNIA CORPORATION


By: /s/ ALAN REDHEAD
    -----------------------------
    ALAN REDHEAD, PRESIDENT


================================================================================
<PAGE>   4
                              COMMERCIAL GUARANTY

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL      LOAN DATE      MATURITY       LOAN NO   CALL      COLLATERAL     ACCOUNT    OFFICER    INITIALS
<S>            <C>            <C>            <C>       <C>       <C>            <C>        <C>        <C>
                                                                    5015                     RDB
-----------------------------------------------------------------------------------------------------------------------------------
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.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
<S>                                                         <C>
BORROWER:      CALIFORNIA BEACH RESTAURANTS, INC., A        LENDER:   SANTA MONICA BANK
               CALIFORNIA CORPORATION (TIN: 95-2693503)               LOAN SERVICING CENTER
               17383 SUNSET BOULEVARD, #140                           1231 4TH STREET
               PACIFIC PALISADES, CA 90272                            SANTA MONICA, CA 90401

GUARANTOR:     SEA VIEW RESTAURANTS, INC., A CALIFORNIA CORPORATION
               17383 SUNSET BOULEVARD, #140
               PACIFIC PALISADES, CA 90272
</TABLE>
================================================================================

AMOUNT OF GUARANTY. THE AMOUNT OF THIS GUARANTY IS UNLIMITED.

CONTINUING UNLIMITED GUARANTY. FOR GOOD AND VALUABLE CONSIDERATION, SEA VIEW
RESTAURANTS, INC., A CALIFORNIA CORPORATION ("GUARANTOR") ABSOLUTELY AND
UNCONDITIONALLY GUARANTEES AND PROMISES TO PAY TO SANTA MONICA BANK ("LENDER")
OR ITS ORDER, ON DEMAND, IN LEGAL TENDER OF THE UNITED STATES OF AMERICA, THE
INDEBTEDNESS (AS THAT TERM IS DEFINED BELOW) OF CALIFORNIA BEACH RESTAURANTS,
INC., A CALIFORNIA CORPORATION ("BORROWER") TO LENDER ON THE TERMS AND
CONDITIONS SET FORTH IN THIS GUARANTY. UNDER THIS GUARANTY, THE LIABILITY OF
GUARANTOR IS UNLIMITED AND THE OBLIGATIONS OF GUARANTOR ARE CONTINUING.

DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:

     BORROWER. The word "Borrower" means CALIFORNIA BEACH RESTAURANTS, INC., A
     CALIFORNIA CORPORATION.

     GUARANTOR. The word "Guarantor" means SEA VIEW RESTAURANTS, INC., A
     CALIFORNIA CORPORATION.

     GUARANTY. The word "Guaranty" means this Guaranty made by Guarantor for
     the benefit of Lender dated September 30, 1999.

     INDEBTEDNESS. The word "Indebtedness" is used in its most comprehensive
     sense and means and includes any and all of Borrower's liabilities,
     obligations, debts, and indebtedness to Lender, now existing or hereinafter
     incurred or created, including, without limitation, all loans, advances,
     interest, costs, debts, overdraft indebtedness, credit card indebtedness,
     lease obligations, other obligations, and liabilities of Borrower, or any
     of them, and any present or future judgments against Borrower, or any of
     them; and whether any such Indebtedness is voluntarily or involuntarily
     incurred, due or not due, absolute or contingent, liquidated or
     unliquidated, determined or undetermined; whether Borrower may be liable
     individually or jointly with others, or primarily or secondarily, or as
     guarantor or surety; whether recovery on the Indebtedness may be or may
     become barred or unenforceable against Borrower for any reason whatsoever;
     and whether the Indebtedness arises from transactions which may be voidable
     on account of infancy, insanity, ultra vires, or otherwise.

     LENDER. The word "Lender" means SANTA MONICA BANK, its successors and
     assigns.

     RELATED DOCUMENTS. The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Indebtedness.

NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open and
continuous for so long as this Guaranty remains in force. Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all
Indebtedness. Accordingly, no payments made upon the Indebtedness will
discharge or diminish the continuing liability of Guarantor in connection with
any remaining portions of the Indebtedness or any of the Indebtedness which
subsequently arises or is thereafter incurred or contracted. Any married person
who signs this Guaranty hereby expressly agrees that recourse may be had
against both his or her separate property and community property.

DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all Indebtedness incurred or
contracted before receipt by Lender of any notice of revocation shall have been
fully and finally paid and satisfied and all other obligations of Guarantor
under this Guaranty shall have been performed in full. If Guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at the address
of Lender listed above or such other place as Lender may designate in writing.
Written revocation of this Guaranty will apply only to advances or new
Indebtedness created after actual receipt by Lender of Guarantor's written
revocation. For this purpose and without limitation, the term "new Indebtedness"
does not include Indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind
Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior
to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions or modifications of the Indebtedness. All
renewals, extensions, substitutions, and modifications of the Indebtedness
granted after Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new Indebtedness. This Guaranty shall
bind the estate of Guarantor as to Indebtedness created both before and after
the death or incapacity of Guarantor, regardless of Lender's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of
the Indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation received by Lender from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty. The
obligations of Guarantor under this Guaranty shall be in addition to any
obligations of Guarantor, or any of them, under any other guaranties of the
Indebtedness of Borrower or any other person heretofore or hereafter given to
Lender unless such other guaranties are modified or revoked in writing; and this
Guaranty shall not, unless herein provided, affect, invalidate, or supersede any
such other guaranty. IT IS ANTICIPATED THAT FLUCTUATIONS MAY OCCUR IN THE
AGGREGATE AMOUNT OF INDEBTEDNESS COVERED BY THIS GUARANTY, AND IT IS
SPECIFICALLY ACKNOWLEDGED AND AGREED BY GUARANTOR THAT REDUCTIONS IN THE AMOUNT
OF INDEBTEDNESS, EVEN TO ZERO DOLLARS ($0.00), PRIOR TO WRITTEN REVOCATION OF
THIS GUARANTY BY GUARANTOR SHALL NOT CONSTITUTE A TERMINATION OF THIS GUARANTY.
THIS GUARANTY IS BINDING UPON GUARANTOR AND GUARANTOR'S HEIRS, SUCCESSORS AND
ASSIGNS SO LONG AS ANY OF THE GUARANTEED INDEBTEDNESS REMAINS UNPAID AND EVEN
THOUGH THE INDEBTEDNESS GUARANTEED MAY FROM TIME TO TIME BE ZERO DOLLARS
($0.00).

GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before
or after any revocation hereof, WITHOUT NOTICE OR DEMAND AND WITHOUT LESSENING
GUARANTOR'S LIABILITY UNDER THIS GUARANTY, FROM TIME TO TIME: (a) PRIOR TO
REVOCATION AS SET FORTH ABOVE, TO MAKE ONE OR MORE ADDITIONAL SECURED OR
UNSECURED LOANS TO BORROWER, TO LEASE EQUIPMENT OR OTHER GOODS TO BORROWER, OR
OTHERWISE TO EXTEND ADDITIONAL CREDIT TO BORROWER; (b) TO ALTER, COMPROMISE,
RENEW, EXTEND, ACCELERATE, OR OTHERWISE CHANGE ONE OR MORE TIMES THE TIME FOR
PAYMENT OR OTHER TERMS OF THE INDEBTEDNESS OR ANY PART OF THE INDEBTEDNESS,
INCLUDING INCREASES AND DECREASES OF THE RATE OF INTEREST ON THE INDEBTEDNESS;
EXTENSIONS MAY BE REPEATED AND MAY BE FOR LONGER THAN THE ORIGINAL LOAN TERM;
(c) TO TAKE AND HOLD SECURITY FOR THE PAYMENT OF THIS GUARANTY OR THE
INDEBTEDNESS, AND EXCHANGE, ENFORCE, WAIVE, SUBORDINATE, FALL OR DECIDE NOT TO
PERFECT, AND RELEASE ANY SUCH SECURITY, WITH OR WITHOUT THE SUBSTITUTION OF NEW
COLLATERAL; (d) TO RELEASE, SUBSTITUTE, AGREE NOT TO SUE, OR DEAL WITH ANY ONE
OR MORE OF BORROWER'S
<PAGE>   5
09-30-1999                     COMMERCIAL GUARANTY                        PAGE 2
LOAN NO 2000314557                 (CONTINUED)
================================================================================

SURETIES, ENDORSERS, OR OTHER GUARANTORS ON ANY TERMS OR IN ANY MANNER LENDER
MAY CHOOSE; (e) TO DETERMINE HOW, WHEN AND WHAT APPLICATION OF PAYMENTS AND
CREDITS SHALL BE MADE ON THE INDEBTEDNESS; (f) TO APPLY SUCH SECURITY AND DIRECT
THE ORDER OR MANNER OF SALE THEREOF, INCLUDING WITHOUT LIMITATION, ANY
NONJUDICIAL SALE PERMITTED BY THE TERMS OF THE CONTROLLING SECURITY AGREEMENT
OR DEED OF TRUST, AS LENDER IN ITS DISCRETION MAY DETERMINE; (g) TO SELL,
TRANSFER, ASSIGN, OR GRANT PARTICIPATIONS IN ALL OR ANY PART OF THE
INDEBTEDNESS; AND (h) TO ASSIGN OR TRANSFER THIS GUARANTY IN WHOLE OR IN PART.

GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (a) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty;
(b) this Guaranty is executed at Borrower's request and not at the request of
the Lender; (c) Guarantor has full power, right and authority to enter into this
Guaranty; (d) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (f) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present the financial condition of Guarantor as
of the dates the financial information is provided; (g) no material adverse
change has occurred in Guarantor's financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor's financial condition; (h) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened;
(i) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (j) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.

GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender to (a) make any presentment, protest, demand, or
notice of any kind, including notice of change of any terms of repayment of the
Indebtedness, default by Borrower or any other guarantor or surety, any action
or nonaction taken by Borrower, Lender or any other guarantor or surety of
Borrower, or the creation of new or additional Indebtedness; (b) proceed
against any person, including Borrower, before proceeding against Guarantor; (c)
proceed against any collateral for the Indebtedness, including Borrower's
collateral, before proceeding against Guarantor; (d) apply any payments or
proceeds received against the Indebtedness in any order; (e) give notice of the
terms, time, and place of any sale of the collateral pursuant to the Uniform
Commercial Code or any other law governing such sale; (f) disclose any
information about the Indebtedness, the Borrower, the collateral, or any other
guarantor or surety, or about any action or nonaction of Lender; or (g) pursue
any remedy or course of action in Lender's power whatsoever.

Guarantor also waives any and all rights or defenses arising by reason of (h)
any disability or other defense of Borrower, any other guarantor or surety or
any other person; (i) the cessation from any cause whatsoever, other than
payment in full, of the Indebtedness; (j) the application of proceeds of the
indebtedness by Borrower for purposes other than the purposes understood and
intended by Guarantor and Lender; (k) any act of omission or commission by
Lender which directly or indirectly results in or contributes to the discharge
of Borrower or any other guarantor or surety, or the Indebtedness, or the loss
or release of any collateral by operation of law or otherwise; (l) any statute
of limitations in any action under this Guaranty or on the indebtedness; or (m)
any modification or change in terms of the Indebtedness, whatsoever, including
without limitation, the renewal, extension, acceleration, or other change in
the time payment of the Indebtedness is due and any change in the interest
rate, and including any such modification or change in terms after revocation
of this Guaranty on Indebtedness incurred prior to such revocation.

Guarantor waives all rights and any defenses arising out of an election of
remedies by Lender even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
Guarantor's rights of subrogation and reimbursement against Borrower by
operation of Section 580d of the California Code of Civil Procedure or
otherwise.

Guarantor waives all rights and defenses that Guarantor may have because
Borrower's obligation is secured by real property. This means among other
things: (1) Lender may collect from Guarantor without first foreclosing on any
real or personal property collateral pledged by Borrower. (2) If Lender
forecloses on any real property collateral pledged by Borrower: (A) The amount
of Borrower's obligation may be reduced only by the price for which the
collateral is sold at the foreclosure sale, even if the collateral is worth
more than the sale price. (B) Lender may collect from Guarantor even if Lender,
by foreclosing on the real property collateral, has destroyed any right
Guarantor may have to collect from Borrower. This is an unconditional waiver of
any rights and defenses Guarantor may have because Borrower's obligation is
secured by real property. These rights and defenses include, but are not
limited to, any rights and defenses based upon Section 580a, 580b, 580d, or 726
of the Code of Civil Procedure.

Guarantor understands and agrees that the foregoing waivers are waivers of
substantive rights and defenses to which Guarantor might otherwise be entitled
under state and federal law. The rights and defenses waived include, without
limitation, those provided by California laws of suretyship and guaranty,
anti-deficiency laws, and the Uniform Commercial Code. Guarantor acknowledges
that Guarantor has provided these waivers of rights and defenses with the
intention that they be fully relied upon by Lender. Until all Indebtedness is
paid in full, Guarantor waives any right to enforce any remedy Lender may have
against Borrower or any other guarantor, surety,or other person, and further,
Guarantor waives any right to participate in any collateral for the
Indebtedness now or hereafter held by Lender.

If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor
of Lender and Borrower, and their respective successors, any claim or right to
payment Guarantor may now have or hereafter have or acquire against Borrower,
by subrogation or otherwise, so that at no time shall Guarantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.

GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor's full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy or
law. If any such waiver is determined to be contrary to any applicable law or
public policy, such wavier shall be effective only to the extent permitted by
law or public policy.

LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender
by law, Lender shall have, with respect to Guarantor's obligations to Lender
under this Guaranty and to the extent permitted by law, a contractual security
interest in and a right of setoff against, and Guarantor hereby assigns,
conveys, delivers, pledges, and transfers to Lender all of Guarantor's right,
title and interest in and to, all deposits, moneys, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Lender, whether held in a general or special account or deposit, whether held
jointly with someone else, or whether held for safekeeping or otherwise,
excluding however, all IRA, Keogh, and trust accounts. Every such security
interest and right of setoff may be exercised without demand upon or notice to
Guarantor. No security interest or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender or by any neglect to exercise
such right of setoff or to enforce such security interest or by any delay in so
doing. Every right of setoff and security interest shall continue in full force
and effect until such right of setoff or security interest is specifically
waived or released by an instrument in writing executed by Lender.

SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower





<PAGE>   6

09-30-1999                    COMMERCIAL GUARANTY                         PAGE 3
LOAN NO. 2000314557               (CONTINUED)
================================================================================
becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor
may have against Borrower, upon any account whatsoever, to any claim that
Lender may now or hereafter have against Borrower. In the event of insolvency
and consequent liquidation of the assets of Borrower, through bankruptcy, by an
assignment for the benefit of creditors, by voluntary liquidation, or
otherwise, the assets of Borrower applicable to the payment of the claims of
both Lender and Guarantor shall be paid to Lender and shall be first applied by
Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign
to Lender all claims which it may have or acquire against Borrower or against
any assignee or trustee in bankruptcy of Borrower; provided however, that such
assignment shall be effective only for the purpose of assuring to Lender full
payment in legal tender of the Indebtedness. If Lender so requests, any notes
or credit agreements now or hereafter evidencing any debts or obligations of
Borrower to Guarantor shall be marked with a legend that the same are subject
to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender
hereby is authorized, in the name of Guarantor, from time to time to execute
and file financing statements and continuation statements and to execute such
other documents and to take such other actions as Lender deems necessary or
appropriate to perfect, preserve and enforce its rights under this Guaranty.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:

     INTEGRATION, AMENDMENT. Guarantor warrants, represents and agrees that
     this Guaranty, together with any exhibits or schedules incorporated
     herein, fully incorporates the agreements and understandings of Guarantor
     with Lender with respect to the subject matter hereof and all prior
     negotiations, drafts, and other extrinsic communications between Guarantor
     and Lender shall have no evidentiary effect whatsoever. Guarantor further
     agrees that Guarantor has read and fully understands the terms of this
     Guaranty; Guarantor has had the opportunity to be advised by Guarantor's
     attorney with respect to this Guaranty; the Guaranty fully reflects
     Guarantor's intentions and parol evidence is not required to interpret the
     terms of this Guaranty. Guarantor hereby indemnifies and holds Lender
     harmless from all losses, claims, damages, and costs (including Lender's
     attorneys' fees) suffered or incurred by Lender as a result of any breach
     by Guarantor of the warranties, representations and agreements of this
     paragraph. No alteration or amendment to this Guaranty shall be effective
     unless given in writing and signed by the parties sought to be charged or
     bound by the alteration or amendment.

     APPLICABLE LAW. This Guaranty has been delivered to Lender and accepted by
     Lender in the State of California. If there is a lawsuit, Guarantor agrees
     upon Lender's request to submit to the jurisdiction of the courts of LOS
     ANGELES County, State of California. This Guaranty shall be governed by
     and construed in accordance with the laws of the State of California.

     ATTORNEYS' FEES; EXPENSES. Guarantor agrees to pay upon demand all of
     Lender's costs and expenses, including attorneys' fees and Lender's legal
     expenses, incurred in connection with the enforcement of this Guaranty.
     Lender may pay someone else to help enforce this Guaranty, and Guarantor
     shall pay the costs and expenses of such enforcement. Costs and expenses
     include Lender's attorneys' fees and legal expenses whether or not there
     is a lawsuit, including attorneys' fees and legal expenses for bankruptcy
     proceedings (and including efforts to modify or vacate any automatic stay
     or injunction), appeals, and any anticipated post-judgment collection
     services. Guarantor also shall pay all court costs and such additional
     fees as may be directed by the court.

     NOTICES. All notices required to be given by either party to the other
     under this Guaranty shall be in writing, may be sent by telefacsimile
     (unless otherwise required by law), and, except for revocation notices by
     Guarantor, shall be effective when actually delivered or when deposited
     with a nationally recognized overnight courier, or when deposited in the
     United States mail, first class postage prepaid, addressed to the party to
     whom the notice is to be given at the address shown above or to such other
     addresses as either party may designate to the other in writing. All
     revocation notices by Guarantor shall be in writing and shall be effective
     only upon delivery to Lender as provided above in the section titled
     "DURATION OF GUARANTY." If there is more than one Guarantor, notice to any
     Guarantor will constitute notice to all Guarantors. For notice purposes,
     Guarantor agrees to keep Lender informed at all times of Guarantor's
     current address.

     INTERPRETATION. In all cases where there is more than one Borrower or
     Guarantor, then all words used in this Guaranty in the singular shall be
     deemed to have been used in the plural where the context and construction
     so require; and where there is more than one Borrower named in this
     Guaranty or when this Guaranty is executed by more than one Guarantor, the
     words "Borrower" and "Guarantor" respectively shall mean all and any one
     or more of them. The words "Guarantor," "Borrower," and "Lender" include
     the heirs, successors, assigns, and transferees of each of them. Caption
     headings in this Guaranty are for convenience purposes only and are not to
     be used to interpret or define the provisions of this Guaranty. If a court
     of competent jurisdiction finds any provision of this Guaranty to be
     invalid or unenforceable as to any person or circumstance, such finding
     shall not render that provision invalid or unenforceable as to any other
     persons or circumstances, and all provisions of this Guaranty in all other
     respects shall remain valid and enforceable. If any one or more of
     Borrower or Guarantor are corporations or partnerships, it is not
     necessary for Lender to inquire into the powers of Borrower or Guarantor
     or of the officers, directors, partners, or agents acting or purporting
     to act on their behalf, and any Indebtedness made or created in reliance
     upon the professed exercise of such powers shall be guaranteed under this
     Guaranty.

     WAIVER. Lender shall not be deemed to have waived any rights under this
     Guaranty unless such waiver is given in writing and signed by Lender. No
     delay or omission on the part of Lender in exercising any right shall
     operate as a waiver of such right or any other right. A waiver by Lender
     of a provision of this Guaranty shall not prejudice or constitute a waiver
     of Lender's right otherwise to demand strict compliance with that
     provision or any other provision of this Guaranty. No prior waiver by
     Lender, nor any course of dealing between Lender and Guarantor, shall
     constitute a waiver of any of Lender's rights or of any of Guarantor's
     obligations as to any future transactions. Whenever the consent of Lender
     is required under this Guaranty, the granting of such consent by Lender in
     any instance shall not constitute continuing consent to subsequent
     instances where such consent is required and in all cases such consent
     may be granted or withheld in the sole discretion of Lender.

REINSTATEMENT OF LIABILITY. The liability of Guarantor hereunder shall be
reinstated and revived, and the rights of Lender shall continue with respect to
any amounts on account of the Indebtedness, which shall thereafter be required
to be restored or returned by Lender upon the bankruptcy, insolvency or
reorganization of Borrower or for any other reason, as though such amount had
not been paid.

OTHER GUARANTIES. The liability of Guarantor hereunder shall be reinstated and
revived, and the rights of Lender shall continue with respect to any amounts on
account of the Indebtedness, which shall thereafter be required to be restored
or returned by Lender upon the bankruptcy, insolvency or reorganization of
Borrower or for any other reason, as though such amount had not been paid.

<PAGE>   7
09-30-1999                    COMMERCIAL GUARANTY                         PAGE 4
LOAN NO 2000314557                (CONTINUED)

================================================================================

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS
GUARANTY IS DATED SEPTEMBER 30, 1999.

GUARANTOR:

SEA VIEW RESTAURANTS, INC., A CALIFORNIA CORPORATION

BY: /s/ ALAN REDHEAD
   -------------------------
   ALAN REDHEAD, PRESIDENT

================================================================================
<PAGE>   8

                            [SANTA MONICA BANK LOGO]

                         COMMERCIAL SECURITY AGREEMENT

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
PRINCIPAL   LOAN DATE   MATURITY     LOAN NO      CALL     COLLATERAL   ACCOUNT   OFFICER  INITIALS
<S>         <C>        <C>          <C>           <C>         <C>       <C>       <C>      <C>
$700,000               07-06-2000   2000314557                5015                  RDB
----------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
<S>                                                  <C>
BORROWER: CALIFORNIA BEACH RESTAURANTS, INC. A       LENDER: SANTA MONICA BANK
          CALIFORNIA CORPORATION (TIN: 95-2693503)           LOAN SERVICING CENTER
          17383 SUNSET BOULEVARD, #140                       1231 4TH STREET
          PACIFIC PALISADES, CA 90272                        SANTA MONICA, CA 90401

GRANTOR:  SEA VIEW RESTAURANTS, INC., A CALIFORNIA CORPORATION (TIN: 95-4232409)
          17383 SUNSET BOULEVARD, #140,
          PACIFIC PALISADES, CA 90272
</TABLE>

================================================================================

THIS COMMERCIAL SECURITY AGREEMENT IS ENTERED INTO AMONG CALIFORNIA BEACH
RESTAURANTS, INC., A CALIFORNIA CORPORATION (REFERRED TO BELOW AS "BORROWER");
SEA VIEW RESTAURANTS, INC., A CALIFORNIA CORPORATION (REFERRED TO BELOW AS
"GRANTOR"); AND SANTA MONICA BANK (REFERRED TO BELOW AS "LENDER"). FOR VALUABLE
CONSIDERATION, GRANTOR GRANTS TO LENDER A SECURITY INTEREST IN THE COLLATERAL
TO SECURE THE INDEBTEDNESS AND AGREES THAT LENDER SHALL HAVE THE RIGHTS STATED
IN THIS AGREEMENT WITH RESPECT TO THE COLLATERAL, IN ADDITION TO ALL OTHER
RIGHTS WHICH LENDER MAY HAVE BY LAW.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.

     AGREEMENT. The word "Agreement" means this Commercial Security Agreement,
     as this Commercial Security Agreement may be amended or modified from time
     to time, together with all exhibits and schedules attached to this
     Commercial Security Agreement from time to time.

     BORROWER. The word "Borrower" means each and every person or entity signing
     the Note, including without limitation CALIFORNIA BEACH RESTAURANTS, INC.,
     A CALIFORNIA CORPORATION.

     COLLATERAL. The word "Collateral" means the following described property of
     Grantor, whether now owned or hereafter acquired, whether now existing or
     hereafter arising, and wherever located:

          ALL INVENTORY, CHATTEL PAPER, ACCOUNTS, EQUIPMENT AND GENERAL
          INTANGIBLES

     In addition, the word "Collateral" includes all the following, whether now
     owned or hereafter acquired, whether now existing or hereafter arising, and
     wherever located:

          (a)  All attachments, accessions, accessories, tools, parts, supplies,
          increases, and additions to and all replacements of and substitutions
          for any property described above.

          (b)  All products and produce of any of the property described in this
          Collateral section.

          (c)  All accounts, general intangibles, instruments, rents, monies,
          payments, and all other rights, arising out of a sale, lease, or other
          disposition of any of the property described in this Collateral
          section.

          (d)  All proceeds (including insurance proceeds) from the sale,
          destruction, loss, or other disposition of nay of the property
          described in this Collateral section.

          (e)  All records and data relating to any of the property described in
          this Collateral section, whether in the form of a writing, photograph,
          microfilm, microfiche, or electronic media, together with all of
          Grantor's right, title, and interest in and to all computer software
          required to utilize, create, maintain, and process any such records or
          data on electronic media.

     EVENT OF DEFAULT. The words "Event of Default" mean and include without
     limitation any of the Events of Default set forth below in the section
     titled "Events of Default."

     GRANTOR. The word "Grantor" means SEA VIEW RESTAURANTS, INC., A CALIFORNIA
     CORPORATION. Any Grantor who signs this Agreement, but does not sign the
     Note, is signing this Agreement only to grant a security interest in
     Grantor's interest in the Collateral to Lender and is not personally liable
     under the Note except as otherwise provided by contract or law (e.g.,
     personal liability under a guaranty or as a surety).

     GUARANTOR. The word "Guarantor" means and includes without limitation each
     and all of the guarantors, sureties, and accommodation parties in
     connection with the Indebtedness.

     INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
     the Note, including all principal and interest, together with all other
     indebtedness and costs and expenses for which Grantor or Borrower is
     responsible under this Agreement or under any of the Related Documents.

     LENDER. The word "Lender" means SANTA MONICA BANK, its successors and
     assigns.

     NOTE. The word "Note" means the Change in Terms Agreement between Borrower
     and Lender dated September 30, 1999, which modifies the following described
     existing indebtedness: Promissory Note dated July 7, 1999 in the amount of
     $500,000.00 and any renewals, modifications, substitutions or
     consolidations thereof.

     RELATED DOCUMENTS. The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Indebtedness.

BORROWER'S WAIVERS AND RESPONSIBILITIES. Except as otherwise required under
this Agreement or by applicable law, (a) Borrower agrees





<PAGE>   9
09-30-1999               COMMERCIAL SECURITY AGREEMENT                    PAGE 2
LOAN NO 2000314557                (CONTINUED)

================================================================================

that Lender need not tell Borrower about any action or inaction Lender takes in
connection with this Agreement; (b) Borrower assumes the responsibility for
being and keeping informed about the Collateral; and (c) Borrower waives any
defenses that may arise because of any action or inaction of Lender, including
without limitation any failure of Lender to realize upon the Collateral or any
delay by Lender in realizing upon the Collateral; and Borrower agrees to remain
liable under the Note no matter what action Lender takes or fails to take under
this Agreement.

GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this
Agreement is executed at Borrower's request and not at the request of Lender;
(b) Grantor has the full right, power and authority to enter into this
Agreement and to pledge the Collateral to Lender; (c) Grantor has established
adequate means of obtaining from Borrower on a continuing basis information
about Borrower's financial condition; and (d) Lender has made no representation
to Grantor about Borrower or Borrower's creditworthiness.

GRANTOR'S WAIVERS. Except as prohibited by applicable law, Grantor waives any
right to require Lender to (a) make any presentment, protest, demand, or notice
of any kind, including notice of change of any terms of repayment of the
Indebtedness, default by Borrower or any other guarantor or surety, any action
or nonaction taken by Borrower, Lender, or any other guarantor or surety of
Borrower, or the creation of new or additional Indebtedness; (b) proceed
against any person, including Borrower, before proceeding against Grantor; (c)
proceed against any collateral for the Indebtedness, including Borrower's
collateral, before proceeding against Grantor; (d) apply any payments or
proceeds received against the Indebtedness in any order; (e) give notice of the
terms, time, and place of any sale of any collateral pursuant to the Uniform
Commercial Code or any other law governing such sale; (f) disclose any
information about the Indebtedness, the Borrower, any collateral, or any other
guarantor or surety, or about any action or nonaction of Lender; or (g) pursue
any remedy or course of action in Lender's power whatsoever.

Grantor also waives any and all rights or defenses arising by reason of (h) any
disability or other defense of Borrower, any other guarantor or surety or any
other person; (i) the cessation from any cause whatsoever, other than payment
in full, of the Indebtedness; (j) the application of proceeds of the
Indebtedness by Borrower for purposes other than the purposes understood and
intended by Grantor and Lender; (k) any act of omission or commission by Lender
which directly or indirectly results in or contributes to the discharge of
Borrower or any other guarantor or surety, or the indebtedness, or the loss or
release of any collateral by operation of law or otherwise; (l) any statute of
limitations in any action under this Agreement or on the Indebtedness; or (m)
any modification or change in terms of the Indebtedness, whatsoever, including
without limitation, the renewal, extension, acceleration, or other change in
the time payment of the Indebtedness is due and any change in the interest rate.

Grantor waives all rights and defenses arising out of an election of remedies
by Lender, even though that election of remedies, such as nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
Grantor's rights of subrogation and reimbursement against Borrower by the
operation of Section 580d of the California Code of Civil Procedure, or
otherwise.

This waiver includes, without limitation, any loss of rights Grantor may suffer
by reason of any rights or protections of Borrower in connection with any
anti-deficiency laws, or other laws limiting or discharging the Indebtedness or
Borrower's obligations (including, without limitation, Section 726, 580a, 580b,
and 580d of the California Code of Civil Procedure). Grantor waives all rights
and protections of any kind which Grantor may have for any reason, which would
affect or limit the amount of any recovery by Lender from Grantor following a
nonjudicial sale or judicial foreclosure of any real or personal property
security for the Indebtedness including, but not limited to, the right to any
fair market value hearing pursuant to California Code of Civil Procedure
Section 580a.

Grantor understands and agrees that the foregoing waivers are waivers of
substantive rights and defenses to which Grantor might otherwise be entitled
under state and federal law. The rights and defenses waived include, without
limitation, those provided by California laws of suretyship and guaranty,
anti-deficiency laws, and the Uniform Commercial Code. Grantor acknowledges
that Grantor has provided these waivers of rights and defenses with the
intention that they be fully relied upon by Lender. Until all Indebtedness is
paid in full, Grantor waives any right to enforce any remedy Lender may have
against Borrower or any other guarantor, surety, or other person, and further,
Grantor waives any right to participate in any collateral for the Indebtedness
now or hereafter held by Lender.

If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Grantor hereby forever waives and relinquishes in favor of
Lender and Borrower, and their respective successors, any claim or right to
payment Grantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Grantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.

RIGHT OF SETOFF. Grantor hereby grants Lender a contractual security interest
in and hereby assigns, conveys, delivers, pledges, and transfers all of
Grantor's right, title and interest in and to Grantor's accounts with Lender
(whether checking, savings, or some other account), including all accounts held
jointly with someone else and all accounts Grantor 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. Grantor
authorizes Lender, to the extent permitted by applicable law, to charge or
setoff all Indebtedness against any and all such accounts.

OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as follows:

     PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such financing
     statements and to take whatever other actions are requested by Lender to
     perfect and continue Lender's security interest in the Collateral. Upon
     request of Lender, Grantor will deliver to Lender any and all of the
     documents evidencing or constituting the Collateral, and Grantor will note
     Lender's interest upon any and all chattel paper if not delivered to Lender
     for possession by Lender. Grantor hereby appoints Lender as its irrevocable
     attorney-in-fact for the purpose of executing any documents necessary to
     perfect or to continue the security interest granted in this Agreement.
     Lender may at any time, and without further authorization from Grantor,
     file a carbon, photographic or other reproduction of any financing
     statement or of this Agreement for use as a financing statement. Grantor
     will reimburse Lender for all expenses for the perfection and the
     continuation of the perfection of Lender's security interest in the
     Collateral. Grantor promptly will notify Lender before any change in
     Grantor's name including any change to the assumed business names of
     Grantor. THIS IS A CONTINUING SECURITY AGREEMENT AND WILL CONTINUE IN
     EFFECT EVEN THOUGH ALL OR ANY PART OF THE INDEBTEDNESS IS PAID IN FULL AND
     EVEN THOUGH FOR A PERIOD OF TIME BORROWER MAY NOT BE INDEBTED TO LENDER.

     NO VIOLATION. The execution and delivery of this Agreement will not violate
     any law or agreement governing Grantor or to which Grantor is a party, and
     its certificate or articles of incorporation and bylaws do not prohibit any
     term or condition of this Agreement.

     ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
     accounts, chattel paper, or general intangibles, the Collateral is
     enforceable in accordance with its terms, is genuine, and complies with
     applicable laws concerning form, content and manner of preparation and
     execution, and all persons appearing to be obligated on the Collateral have
     authority and capacity to contract and are in fact obligated as they appear
     to be on the Collateral. At the time any account becomes subject to a
     security interest in favor of Lender, the account shall be a good and valid
     account representing an undisputed, bona fide indebtedness incurred by the
     account debtor, for merchandise held subject to delivery instructions or
     theretofore shipped or delivered pursuant to a contract of sale, or for
     services theretofore performed by Grantor with or for the account debtor;
     there shall be no setoffs or counterclaims against any such account; and no
     agreement under which any deductions or discounts may be claimed shall have
     been made with the account debtor except those disclosed to Lender in
     writing.

     LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, will deliver
     to Lender in form satisfactory to Lender a schedule of real properties and
     Collateral locations relating to Grantor's operations, including without
     limitation the following: (a) all real property owned or being purchased by
     Grantor; (b) all real property being rented or leased by Grantor; (c) all
     storage facilities owned, rented, leased, or being used by Grantor; and (d)
     all other properties where Collateral is or may be located. Except in the
     ordinary course of its business, Grantor shall not remove the

<PAGE>   10

09-30-1999                  COMMERCIAL SECURITY AGREEMENT                 PAGE 3
LOAN NO 2000314557                  (CONTINUED)
================================================================================
Collateral from its existing locations without prior written consent of Lender.

REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the extent the
Collateral consists of intangible property such as accounts, the records
concerning the Collateral) at Grantor's address shown above, or at such other
locations as are acceptable to Lender. Except in the ordinary course of its
business, including the sales of inventory, Grantor shall not remove the
Collateral from its existing locations without the prior written consent of
Lender. To the extent that the Collateral consists of vehicles, or other titled
property. Grantor shall not take or permit any action which would require
application for certificates of title for the vehicles outside the State of
California, without the prior written consent of Lender.

TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall not sell,
offer to sell, or otherwise transfer or dispose of the Collateral. While
Grantor is not in default under this Agreement, Grantor may sell inventory, but
only in the ordinary course of its business and only to buyers who qualify as a
buyer in the ordinary course of business. A sale in the ordinary course of
Grantor's business does not include a transfer in partial or total satisfaction
of a debt or any bulk sale. Grantor shall not pledge, mortgage, encumber or
otherwise permit the Collateral to be subject to any lien, security interest,
encumbrance, or charge, other than the security interest provided for in this
Agreement, without the prior written consent of Lender. This includes security
interests even if junior in right to the security interests granted under this
Agreement. Unless waived by Lender, all proceeds from any disposition of the
Collateral (for whatever reason) shall be held in trust for Lender and shall
not be commingled with any other funds; provided however, this requirement
shall not constitute consent by Lender to any sale or other disposition. Upon
receipt, Grantor shall immediately deliver any such proceeds to Lender.

TITLE: Grantor represents and warrants to Lender that it holds good and
marketable title to the Collateral, free and clear of all liens and
encumbrances except for the lien of this Agreement. No financing statement
covering any of the Collateral is on file in any public office other than those
which reflect the security interest created by this Agreement or to which
Lender has specifically consented. Grantor shall defend Lender's right in the
Collateral against the claims and demands of all other persons.

COLLATERAL SCHEDULES AND LOCATIONS. As often as Lender shall require, and
insofar as the Collateral consists of accounts and general intangibles, Grantor
shall deliver to Lender schedules of such Collateral, including such
information as Lender may require, including without limitation names and
addresses of account debtors and agings of accounts and general intangibles.
Insofar as the Collateral consists of inventory and equipment, Grantor shall
deliver to Lender, as often as Lender shall require, such lists, descriptions,
and designations of such Collateral as Lender may require to identify the
nature, extent, and location of such Collateral. Such information shall be
submitted for Grantor and each of its subsidiaries or related companies.

MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all tangible
Collateral in good condition and repair. Grantor will not commit or permit
damage to or destruction of the Collateral or any part of the Collateral.
Lender and its designated representatives and agents shall have the right at all
reasonable times to examine, inspect, and audit the Collateral wherever
located. Grantor shall immediately notify Lender of all cases involving the
return, rejection, repossession, loss or damage of or to any Collateral; of any
request for credit or adjustment or of any other dispute arising with respect
to the Collateral; and generally of all happenings and events affecting the
Collateral or the value or the amount of the Collateral.

TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes, assessments
and liens upon the Collateral, its use or operation, upon this Agreement, upon
any promissory note or notes evidencing the Indebtedness, or upon any of the
other Related Documents. Grantor may withhold any such payment or may elect to
contest any lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender's interest in
the Collateral is not jeopardized in Lender's sole opinion. If the Collateral
is subjected to a lien which is not discharged within fifteen (15) days,
Grantor shall deposit with Lender cash, a sufficient corporate surety bond or
other security satisfactory to Lender in an amount adequate to provide for the
discharge of the lien plus any interest, costs, attorneys' fees or other
charges that could accrue as a result of foreclosure or sale of the Collateral.
In any contest Grantor shall defend itself and Lender and shall satisfy any
final adverse judgment before enforcement against the Collateral. Grantor shall
name Lender as an additional obligee under any surety bond furnished in the
contest proceedings.

COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply promptly with
all laws, ordinances, rules and regulations of all governmental authorities,
now or hereafter in effect, applicable to the ownership, production,
disposition, or use of the Collateral. Grantor may contest in good faith any
such law, ordinance or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as Lender's interest in the
Collateral, in Lender's opinion, is not jeopardized.

HAZARDOUS SUBSTANCES. Grantor represents and warrants that the Collateral never
has been, and never will be so long as this Agreement remains a lien on the
Collateral, used for the generation, manufacture, storage, transportation,
treatment, disposal, release or threatened release of any hazardous waste or
substance, as those terms are defined in the Comprehensive Environment Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub.
L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California
Health and Safety Code, Section 25100, et seq., or other applicable state of
Federal laws, rules, or regulations adopted pursuant to any of the foregoing.
The terms "hazardous waste" and "hazardous substance" shall also include,
without limitation, petroleum and petroleum by-products or any fraction thereof
and asbestos. The representations and warranties contained herein are based on
Grantor's due diligence in investigating the Collateral for hazardous wastes and
substances. Grantor hereby (a) releases and waives any future claims against
Lender for indemnity or contribution in the event Grantor becomes liable for
cleanup or other costs under any such laws, and (b) agrees to indemnify and hold
harmless Lender against any and all claims and losses resulting from a breach of
this provision of this Agreement. This obligation to indemnify shall survive the
payment of the Indebtedness and the satisfaction of this Agreement.

MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain all
risks insurance, including without limitation fire, theft and liability
coverage together with such other insurance as Lender may require with respect
to the Collateral, in form, amounts, coverages and basis reasonably acceptable
to Lender and issued by a company or companies reasonably acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at least
ten (10) days' prior written notice to Lender and not including any disclaimer
of the insurer's liability for failure to give such a notice. Each insurance
policy also shall include an endorsement providing that coverage in favor of
Lender will not be impaired in any way by any act, omission or default of
Grantor or any other person. In connection with all policies covering assets in
which Lender holds or is offered a security interest, Grantor will provide
Lender with such loss payable or other endorsements as Lender may require. If
Grantor at any time fails to obtain or maintain any insurance as required under
this Agreement, Lender may (but shall not be obligated to) obtain such
insurance as Lender deems appropriate, including if it so chooses "single
interest insurance," which will cover only Lender's interest in the Collateral.

APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender of any
loss or damage to the Collateral. Lender may make proof of loss if Grantor
fails to do so within fifteen (15) days of the casualty. All proceeds of any
insurance on the Collateral, including accrued proceeds thereon, shall be held
by Lender as part of the Collateral. If Lender consents to repair or
replacement of the damaged or destroyed Collateral, Lender shall, upon
satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds
for the reasonable cost of repair or restoration, if Lender does not consent to
repair or replacement of the Collateral. Lender shall retain a sufficient
amount of the proceeds to pay all of the

<PAGE>   11
09-30-1999                 COMMERCIAL SECURITY AGREEMENT                  PAGE 4
LOAN NO 2000314557                  (CONTINUED)
================================================================================


      Indebtedness, and shall pay the balance to Grantor. Any proceeds which
      have not been disbursed within six (6) months after their receipt and
      which Grantor has not committed to the repair or restoration of the
      Collateral shall be used to prepay the Indebtedness.

      INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
      reserves for payment of insurance premiums, which reserves shall be
      created by monthly payments from Grantor of a sum estimated by Lender to
      be sufficient to produce, at least fifteen (15) days before the premium
      due date, amounts at least equal to the insurance premiums to be paid. If
      fifteen (15) days before payment is due, the reserve funds are
      insufficient, Grantor shall upon demand pay any deficiency to Lender. The
      reserve funds shall be held by Lender as a general deposit and shall
      constitute a non-interest-bearing account which Lender may satisfy by
      payment of the insurance premiums required to be paid by Grantor as they
      become due. Lender does not hold the reserve funds in trust for Grantor,
      and Lender is not the agent of Grantor for payment of the insurance
      premiums required to be paid by Grantor. The responsibility for the
      payment of premiums shall remain Grantor's sole responsibility.

      INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
      Lender reports on each existing policy of insurance showing such
      information as Lender may reasonably request including the following: (a)
      the name of the insurer; (b) the risks insured; (c) the amount of the
      policy; (d) the property insured; (e) the then current value on the basis
      of which insurance has been obtained and the manner of determining that
      value; and (f) the expiration date of the policy. In addition, Grantor
      shall upon request by Lender (however not more often than annually) have
      an independent appraiser satisfactory to Lender determine, as applicable,
      the cash value or replacement cost of the Collateral.

GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest
in such Collateral. Until otherwise notified by Lender, Grantor may collect any
of the Collateral consisting of accounts. At any time and even though no Event
of Default exists, Lender may exercise its right to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the Indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as
Lender, in Lender's sole discretion, shall deem appropriate under the
circumstances, but failure to honor any request by Grantor shall not of itself
be deemed to be a failure to exercise reasonable care. Lender shall not be
required to take any steps necessary to preserve any rights in the Collateral
against prior parties, nor to protect, preserve or maintain any security
interest given to secure the Indebtedness.

EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances, and other claims, at any
time levied or placed on the Collateral. Lender also may (but shall not be
obligated to) pay all costs for insuring, maintaining and preserving the
Collateral. All such expenditures incurred or paid by Lender for such purposes
will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Grantor. All such
expenses shall become a part of the Indebtedness and, at Lender's option, will
(a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will be
due and payable at the Note's maturity. This Agreement also will secure payment
of these amounts. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon the occurrence of an Event of
Default.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

      DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due
      on the Indebtedness.

      OTHER DEFAULTS. Failure of Grantor or Borrower to comply with or to
      perform any other term, obligation, covenant or condition contained in
      this Agreement or in any of the Related Documents or failure of Borrower
      to comply with or to perform any term, obligation, covenant or condition
      contained in any other agreement between Lender and Borrower.

      DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
      under any loan, extension of credit, security agreement, purchase or sales
      agreement, or any other agreement, in favor of any other credit or person
      that may materially affect any of Borrower's property or Borrower's or any
      Grantor's ability to repay the Loans or perform their respective
      obligations under this Agreement or any of the Related Documents.

      FALSE STATEMENTS. Any warranty, representation or statement made or
      furnished to Lender by or on behalf of Grantor or Borrower under this
      Agreement, the Note or the Related Documents is false or misleading in any
      material respect, either now or at the time made or furnished.

      DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
      Documents ceases to be in full force and effect (including failure of any
      collateral documents to create and valid and perfected security interest
      or lien) at any time and for any reason.

      INSOLVENCY. The dissolution or termination of Grantor or Borrower's
      existence as a going business, the insolvency of Grantor or Borrower, the
      appointment of a receiver for any part of Grantor's or Borrower's
      property, any assignment for the benefit of creditors, any type of credit
      workout, or the commencement of any proceeding under any bankruptcy or
      insolvency laws by or against Grantor or Borrower.

      CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
      forfeiture proceedings, whether by judicial proceeding, self-help,
      repossession or any other method, by any creditor of Grantor or Borrower
      or by any governmental agency against the Collateral or any other
      collateral securing the Indebtedness. This includes a garnishment of any
      of Grantor's or Borrower's deposit accounts with Lender.

      EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
      respect to any Guarantor of any of the Indebtedness or such Guarantor dies
      or becomes incompetent.

      ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
      condition, or Lender believes the prospect of payment or performance of
      the Indebtedness is impaired.

RIGHTS AND REMEDIES OF DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the California Uniform Commercial Code. In addition and
without limitation, Lender may exercise any one or more of the following rights
and remedies:

      ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
      including any prepayment penalty which Borrower would be required to pay,
      immediately due and payable, without notice.

      ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender all
      or any portion of the Collateral and any and all certificates of title and
      other documents relating to the Collateral. Lender may require Grantor to
      assemble the Collateral and make it available to Lender at a place to be
      designated by Lender. Lender also shall have full power to enter upon the
      property of Grantor to take possession of and remove the Collateral. If
      the Collateral contains other goods not covered by this Agreement at the
      time of repossession, Grantor agrees Lender may take such other goods,
      provided that Lender makes reasonable efforts to return them to Grantor
      after repossession.

      SELL THE COLLATERAL. Lender shall have full power to sell, lease,
      transfer, or otherwise deal with the Collateral or proceeds thereof in its
      own name or that of Grantor. Lender may sell the Collateral at public
      auction or private sale. Unless the Collateral threatens to decline
      speedily in value or is of a type customarily sold on a recognized market,
      Lender will give Grantor reasonable notice of the time after which any
      private sale or any
<PAGE>   12
9-30-1999                COMMERCIAL SECURITY AGREEMENT                    PAGE 5
LOAN NO 2000314557                (CONTINUED)

================================================================================

    other intended disposition of the Collateral is to be made. The requirements
    of reasonable notice shall be met if such notice is given at least ten (10)
    days, or such lesser time as required by state law, before the time of the
    sale or disposition. All expenses relating to the disposition of the
    Collateral, including without limitation the expenses of retaking, holding,
    insuring, preparing for sale and selling the Collateral, shall become a part
    of the Indebtedness secured by this Agreement and shall be payable on
    demand, with interest at the Note rate from date of expenditure until
    repaid.

    APPOINT RECEIVER. To the extent permitted by applicable law, Lender shall
    have the following rights and remedies regarding the appointment of a
    receiver: (a) Lender may have a receiver appointed as a matter of right, (b)
    the receiver may be an employee of Lender and may serve without bond, and
    (c) all fees of the receiver and his or her attorney shall become part of
    the Indebtedness secured by this Agreement and shall be payable on demand,
    with interest at the Note rate from date of expenditure until repaid.

    COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
    receiver, may collect the payments, rents, income, and revenues from the
    Collateral. Lender may at any time in its discretion transfer any Collateral
    into its own name or that of its nominee and receive the payments, rents,
    income, and revenues therefrom and hold the same as security for the
    Indebtedness or apply it to payment of the Indebtedness in such order of
    preference as Lender may determine. Insofar as the Collateral consists of
    accounts, general intangibles, insurance policies, instruments, chattel
    paper, chooses in action, or similar property, Lender may demand, collect,
    receipt for, settle, compromise, adjust, sue for, foreclose, or realize on
    the Collateral as Lender may determine, whether or not Indebtedness or
    Collateral is then due. For these purposes, Lender may, on behalf of and in
    the name of Grantor, receive, open and dispose of mail addressed to Grantor;
    change any address to which mail and payments are to be sent; and endorse
    notes, checks, drafts, money orders, documents of title, instruments and
    items pertaining to payment, shipment, or storage of any Collateral. To
    facilitate collection, Lender may notify account debtors and obligors on any
    Collateral to make payments directly to Lender.

    OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the Collateral,
    Lender may obtain a judgment against Borrower for any deficiency remaining
    on the Indebtedness due to Lender after application of all amounts received
    from the exercise of the rights provided in this Agreement. Borrower shall
    be liable for a deficiency even if the transaction described in this
    subsection is a sale of accounts or chattel paper.

    OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and remedies of
    a secured creditor under the provisions of the Uniform Commercial Code, as
    may be amended from time to time. In addition, Lender shall have and may
    exercise any or all other rights and remedies it may have available at law,
    in equity, or otherwise.

    CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether evidenced
    by this Agreement or the Related Documents or by any other writing, shall be
    cumulative and may be exercised singularly or concurrently. Election by
    Lender or pursue any remedy shall not exclude pursuit of any other remedy,
    and an election to make expenditures or to take action to perform an
    obligation of Grantor or Borrower under this Agreement, after Grantor or
    Borrower's failure to perform, shall not affect Lender's right to declare a
    default and to exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
    this Agreement:

    AMENDMENTS. This Agreement, together with any Related Documents, constitutes
    the entire understanding and agreement of the parties as to the matters set
    forth in this Agreement. No alteration of or amendment to this Agreement
    shall be effective unless given in writing and signed by the party or
    parties sought to be charged or bound by the alteration or amendment.

    APPLICABLE LAW. This Agreement has been delivered to Lender and accepted by
    Lender in the State of California. If there is a lawsuit, Grantor and
    Borrower agree upon Lender's request to submit to the jurisdiction of the
    courts of the State of California. This Agreement shall be governed by and
    construed in accordance with the laws of the State of California.

    ATTORNEYS' FEES; EXPENSES. Grantor and Borrower agree to pay upon demand all
    of Lender's costs and expenses, including attorneys' fees and Lender's legal
    expenses, incurred in connection with the enforcement of this Agreement.
    Lender may pay someone else to help enforce this Agreement, and Grantor and
    Borrower shall pay the costs and expenses of such enforcement. Costs and
    expenses include Lender's attorney's fees and legal expenses whether or not
    there is a lawsuit, including attorneys' fees and legal expenses for
    bankruptcy proceedings (and including efforts to modify or vacate any
    automatic stay or injunction), appeals, and any anticipated post-judgment
    collection services. Grantor and Borrower also shall pay all courts costs
    and such additional fees as may be directed by the court.

    CAPTION HEADINGS. Caption headings in this Agreement are for convenience
    purposes only and are not to be used to interpret or define the provisions
    of this Agreement.

    MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Grantor and
    Borrower under this Agreement shall be joint and several, and all references
    to Borrower shall mean each and every Borrower, and all references to
    Grantor shall mean each and every Grantor. This means that each of the
    persons signing below is responsible for all obligations in this Agreement.

    NOTICES. All notices required to be given under this Agreement shall be
    given in writing, may be sent by telefacsimile (unless otherwise required by
    law), and shall be effective when actually delivered or when deposited with
    a nationally recognized overnight courier or deposited in the United States
    mail, first class, postage prepaid, addressed to the party to whom the
    notice is to be given at the address shown above. Any party may change its
    address for notices under this Agreement by giving formal written notice to
    the other parties, specifying that the purpose of the notice is to change
    the party's address. To the extent permitted by applicable law, if there is
    more than one Grantor or Borrower, notice to any Grantor or Borrower will
    constitute notice to all Grantor and Borrowers. For notice purposes, Grantor
    and Borrower will keep Lender informed at all times of Grantor and
    Borrower's current address(es).

    POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and lawful
    attorney-in-fact, irrevocably, with full power of substitution to do the
    following: (a) to demand, collect, receive, receipt for, sue and recover all
    sums of money or other property which may now or hereafter become due, owing
    or payable from the Collateral; (b) to execute, sign and endorse any and all
    claims, instruments, receipts, checks, drafts or warrants issued in payment
    for the Collateral; (c) to settle or compromise any and all claims arising
    under the Collateral, and, in the place and stead of Grantor, to execute
    and deliver its release and settlement for the claim; and (d) to file any
    claim or claims or to take any action or institute or take part in any
    proceedings, either in its own name or in the name of Grantor, or otherwise,
    which in the discretion of Lender may seem to be necessary or advisable.
    This power is given as security for the Indebtedness, and the authority
    hereby conferred is and shall be irrevocable and shall remain in full force
    and effect until renounced by Lender.

    PREFERENCE PAYMENTS. Any monies Lender pays because of an asserted
    preference claim in Borrower's bankruptcy will become a part of the
    Indebtedness and, at Lender's option, shall be payable by Borrower as
    provided above in the "EXPENDITURES BY LENDER" paragraph.

    SEVERABILITY. If a court of competent jurisdiction finds any provision of
    this Agreement to be invalid or unenforceable as to any person or
    circumstance, such finding shall not render that provision invalid or
    unenforceable as to any other persons or circumstances. If feasible, any
    such offending provision shall be deemed to be modified to be within the
    limits of enforceability or validity; however, if the offending provision
    cannot be so modified, it shall be stricken and all other provisions of this
    Agreement in all other respects shall remain valid and enforceable.

    SUCCESSOR INTERESTS. Subject to the limitations set forth above on transfer
    of the Collateral, this Agreement shall be binding upon and inure to the
    benefit of the parties, their successors and assigns.
<PAGE>   13
09-30-1999                 COMMERCIAL SECURITY AGREEMENT                  PAGE 6
LOAN NO 2000314557                   (CONTINUED)
================================================================================

      WAIVER. Lender shall not be deemed to have waived any rights under this
      Agreement unless such waiver is given in writing and signed by Lender. No
      delay or omission on the part of Lender in exercising any right shall
      operate as a waiver of such right or any other right. A waiver by Lender
      of a provision of this Agreement shall not prejudice or constitute a
      waiver of Lender's right otherwise to demand strict compliance with that
      provision or any other provision of this Agreement. No prior waiver by
      Lender, nor any course of dealing between Lender and Grantor, shall
      constitute a waiver of any of Lender's rights or of any of Grantor's
      obligations as to any future transactions. Whenever the consent of Lender
      is required under this Agreement, the granting of such consent by Lender
      in any instance shall not constitute continuing consent to subsequent
      instances where such consent is required and in all cases such consent may
      be granted or withheld in the sole discretion of Lender.

      WAIVER OF CO-OBLIGOR'S RIGHTS. If more than one person is obligated for
      the Indebtedness, Borrower irrevocably waives, disclaims, and relinquishes
      all claims against such other person which Borrower has or would otherwise
      have by virtue of payment of the Indebtedness or any part thereof,
      specifically including but not limited to all rights of indemnity,
      contribution or exoneration.

BORROWER AND GRANTOR ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS
COMMERCIAL SECURITY AGREEMENT, AND BORROWER AND GRANTOR AGREE TO ITS TERMS.
THIS AGREEMENT IS DATED SEPTEMBER 30, 1999.

BORROWER:

CALIFORNIA BEACH RESTAURANTS, INC., A CALIFORNIA CORPORATION

By: /s/ ALAN REDHEAD
   ------------------------------------
   ALAN REDHEAD, PRESIDENT


GRANTOR:

SEA VIEW RESTAURANTS, INC., A CALIFORNIA CORPORATION

By: /s/ ALAN REDHEAD
   ------------------------------------
   ALAN REDHEAD, PRESIDENT

================================================================================
<PAGE>   14
                         AGREEMENT TO PROVIDE INSURANCE

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
PRINCIPAL   LOAN DATE   MATURITY     LOAN NO      CALL     COLLATERAL   ACCOUNT   OFFICER  INITIALS
<S>         <C>        <C>          <C>           <C>         <C>       <C>       <C>      <C>
$700,000.00            07-06-2000   2000314557                5015                  RDB
----------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
<S>        <C>                                              <C>
BORROWER:  CALIFORNIA BEACH RESTAURANTS, INC.               LENDER: SANTA MONICA BANK
           A CALIFORNIA CORPORATION (TIN: 95-2693503)               LOAN SERVICING CENTER
           17383 SUNSET BOULEVARD, #140                             1231 4TH STREET
           PACIFIC PALISADES, CA 90272                              SANTA MONICA, CA 90401

GRANTOR:   SEA VIEW RESTAURANTS, INC., A CALIFORNIA CORPORATION (TIN: 95-4232409)
           17383 SUNSET BOULEVARD, #140,
           PACIFIC PALISADES, CA 90272
====================================================================================================
</TABLE>

INSURANCE REQUIREMENTS. SEA VIEW RESTAURANTS, INC., A CALIFORNIA CORPORATION
("Grantor") understands that insurance coverage is required in connection with
the extending of a loan or the providing of other financial accommodations to
CALIFORNIA BEACH RESTAURANTS, INC., A CALIFORNIA CORPORATION ("Borrower") by
Lender. These requirements are set forth in the security documents. The
following minimum insurance coverages must be provided on the following
described collateral (the "Collateral"):

COLLATERAL:  ALL INVENTORY AND EQUIPMENT.
             TYPE. All risks, including fire, theft and liability.
             AMOUNT. Full insurable value.
             BASIS. Replacement value.
             ENDORSEMENTS. Lender's loss payable clause with stipulation that
             coverage will not be cancelled or diminished without a minimum of
             ten (10) days' prior written notice to Lender.

INSURANCE COMPANY.  Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender. Grantor understands
that credit may not be denied solely because insurance was not purchased
through Lender.

FAILURE TO PROVIDE INSURANCE.  Grantor agrees to deliver to Lender, seven (7)
days from the date of this Agreement, evidence of the required insurance as
provided above, with an effective date of September 30, 1999, or earlier.
Grantor acknowledges and agrees that if Grantor fails to provide any required
insurance or fails to continue such insurance in force, Lender may do so at
Grantor's expense as provided in the applicable security document. The cost of
any such insurance, at the option of Lender, shall be payable on demand or
shall be added to the indebtedness as provided in the security document.
GRANTOR ACKNOWLEDGES THAT IF LENDER SO PURCHASES ANY SUCH INSURANCE, THE
INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE TO THE
COLLATERAL, UP TO THE BALANCE OF THE LOAN; HOWEVER, GRANTOR'S EQUITY IN THE
COLLATERAL MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE ANY
PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET
REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.

AUTHORIZATION.  For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO
PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED SEPTEMBER
30, 1999.

GRANTOR:

SEA VIEW RESTAURANTS, INC., A CALIFORNIA CORPORATION

By: /s/ ALAN REDHEAD
    ----------------------------
    ALAN REDHEAD, PRESIDENT


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

                             INSURANCE VERIFICATION
                                                         PHONE: ________________
DATE: _______________

AGENT'S NAME: _______________________________________

INSURANCE COMPANY: _____________________________________________________________

POLICY NUMBER: _________________________________________________________________

EFFECTIVE DATES: _______________________________________________________________

COMMENTS: ______________________________________________________________________

--------------------------------------------------------------------------------
<PAGE>   15

                           NOTICE OF FINAL AGREEMENT

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
 PRINCIPAL                  MATURITY      LOAN NO.                 COLLATERAL                OFFICER
<S>           <C>          <C>           <C>               <C>     <C>             <C>       <C>        <C>
$700,000.00   LOAN DATE    07-06-2000    2000314557        CALL       5015         ACCOUNT     RDB      INITIALS
----------------------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
<S>                                                                   <C>
BORROWER: CALIFORNIA BEACH RESTAURANTS, INC.,                         LENDER: SANTA MONICA BANK
          A CALIFORNIA CORPORATION (TIN: 95-2693503)                          LOAN SERVICING CENTER
          17383 SUNSET BOULEVARD, #140                                        1231 4TH STREET
          PACIFIC PALISADES, CA 90272                                         SANTA MONICA, CA 90401

</TABLE>
===============================================================================

BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THE WRITTEN
LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THE WRITTEN LOAN
AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

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

AS USED IN THIS NOTICE, THE FOLLOWING TERMS HAVE THE FOLLOWING MEANINGS:

    LOAN: The term "Loan" means the following described loan: a Variable
    Rate (1.000% over Prime rate as published in the Wall Street Journal.
    When a range of rates has been published, the higher of the rates will
    be used, making an initial rate of 9.250%), Nondisclosable Revolving
    Line of Credit Loan to a Corporation for $700,000.00 due on July 6,
    2000.

    PARTIES. The term "Parties" means SANTA MONICA BANK and any and all
    entities or individuals who are obligated to repay the loan or have
    pledged property as security for the Loan, including without limitation
    the following:

        BORROWER:       CALIFORNIA BEACH RESTAURANTS, INC., A CALIFORNIA
                        CORPORATION

        GRANTOR #1:     SEA VIEW RESTAURANTS, INC., A CALIFORNIA
                        CORPORATION

        GUARANTOR:      SEA VIEW RESTAURANTS, INC., A CALIFORNIA
                        CORPORATION

    LOAN AGREEMENT. The term "Loan Agreement" means one or more promises,
    promissory notes, agreements, undertakings, security agreements, deeds
    of trust or other documents, or commitments, or any combination of those
    actions or documents, relating to the Loan including without limitation
    the following:

                                NECESSARY FORMS

    Corporate Resolution to Borrow             Corporate Resolution to Guarantee
    Corporate Resolution to Grant Collateral   Loan Agreement/Negative Pledge
    Promissory Note/Change in Terms Agr.       Commercial Guaranty
    Security Agreement                         Commercial Pledge Agreement
    UCC -- 1                                   Agreement to Provide Insurance
    Disbursement Request and Authorization     Notice of Final Agreement

-------------------------------------------------------------------------------
<PAGE>   16
09-30-1999                NOTICE OF FINAL AGREEMENT                       PAGE 2
LOAN NO 2000314557                (CONTINUED)
================================================================================

EACH PARTY WHO SIGNS BELOW, OTHER THAN SANTA MONICA BANK, ACKNOWLEDGES,
REPRESENTS, AND WARRANTS TO SANTA MONICA BANK THAT IT HAS RECEIVED, READ AND
UNDERSTOOD THIS NOTICE OF FINAL AGREEMENT. THIS NOTICE IS DATED SEPTEMBER 30,
1999.


BORROWER:

CALIFORNIA BEACH RESTAURANTS, INC., A CALIFORNIA CORPORATION

By: /s/ ALAN REDHEAD
    ----------------------------
    ALAN REDHEAD, PRESIDENT


GRANTOR:

SEA VIEW RESTAURANTS, INC.,
  A CALIFORNIA CORPORATION

By: /s/ ALAN REDHEAD                    By: /s/ SAMUEL E. CHILAKOS
    ----------------------------            --------------------------------
    ALAN REDHEAD, PRESIDENT                 SAMUEL E. CHILAKOS, SECRETARY


GUARANTOR:

SEA VIEW RESTAURANTS, INC.,
  A CALIFORNIA CORPORATION

By: /s/ ALAN REDHEAD                    By: /s/ SAMUEL E. CHILAKOS
    ----------------------------            --------------------------------
    ALAN REDHEAD, PRESIDENT                 SAMUEL E. CHILAKOS, SECRETARY


LENDER:

SANTA MONICA BANK

By: /s/ RICK BERGER
    ----------------------------
    Authorized Officer


================================================================================