EXHIBIT 10.17


                             MEMORANDUM OF AGREEMENT

     THIS MEMORANDUM OF AGREEMENT (this "Agreement") is made as of July 6, 2001,
by and among  Kahala  Corp.,  a Florida  corporation  ("Kahala"),  and Ranch * 1
Acquisition,  L.L.C., an Arizona limited  liability company ("Ranch")  (jointly,
"Borrower"),  on the one hand, and  [...***...]  ("Lender"),  on the other hand,
with respect to the following facts:

     A. Ranch and Lender have been in negotiation  for Lender,  or its designee,
to make a loan to Ranch in the principal amount of up to $2,500,000 (the "Loan")
for the purpose of permitting Ranch to provide debtor-in possession financing to
Ranch  *1,  Inc.,  a  Delaware  corporation,   and  certain  of  its  affiliates
(collectively,  "Debtor"),  pursuant to the terms and conditions of that certain
Debtor-In-Possession  Loan and Security Agreement entered into between Ranch and
Debtor (the  "Debtor  Loan  Agreement"),  a copy of which is attached  hereto as
Exhibit A and incorporated herein by this reference.

     B. Debtor are the debtors and the debtors-in-possession  under that certain
Chapter 11 bankruptcy proceeding filed in the United States Bankruptcy Court for
the Southern District of New York,  Bankruptcy Case Nos.: 01-41853 (AJG) through
01-41881 (AJG) (the "Bankruptcy Case.")

     C. Kahala is the sole Member of Ranch.

     D.  Lender is  willing  to make the Loan to Ranch and Ranch is  willing  to
accept the Loan from Lender, all on the following terms and conditions:

     NOW, THEREFORE, for and in consideration of the foregoing premises, and the
mutual undertakings set forth below, the parties hereto hereby agree as follows:

     1.  AGREEMENT  TO MAKE LOAN.  Lender  hereby  agrees  that  Lender,  or its
designee,  will make a loan to Ranch of the principal amount of up to $2,500,000
(the  "Maximum  Loan  Amount"),  on the terms and  conditions  contained in this
Agreement and in accordance with the terms and conditions for advances, interest
payments,  late  charges,  standby  and  early  termination  fees and  principal
payments as set forth in the Debtor  Loan  Agreement.  The parties  specifically
acknowledge and agree that the Loan shall not be a revolving loan.

     2. LOAN  DISBURSEMENT.  The proceeds of the Loan will be disbursed to Ranch
according the following schedule.

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          2.1 Lender shall  disburse to Ranch during the first 30 days following
the filing of the Bankruptcy  Case, an aggregate  amount not to exceed  $500,000
(collectively,  the  "Initial  Disbursement").  The amount of each  disbursement
comprising the Initial  Disbursement  shall be the same as the amount ordered by
the Court in the  Bankruptcy  Case. The date of the first such  disbursement  is
hereinafter referred to as the "Initial Disbursement Date."

          2.2   Commencing  no  sooner  than  30  days   following  the  Initial
Disbursement  Date and no more  frequently  than every 30 days  thereafter  (the
"Requested Disbursement Date"), Lender shall make disbursements to Ranch in such
amounts as Ranch, in accordance with the terms and provisions of the Debtor Loan
Agreement,  may request,  by a written notice from Ranch delivered to Lender not
later  than 3  business  days prior to the  Requested  Disbursement  Date of the
requested amount, not to exceed $250,000 per month, until the full amount of the
Loan has been disbursed by Lender to Ranch.

     3. INTEREST AND OTHER COMPENSATION TO LENDER.

          3.1  INTEREST  AND LATE  CHARGES.  Interest  on the  unpaid  principal
balance  of the Loan  from  time to time  shall  accrue at the rate per year set
forth in the Debtor Loan Agreement (and, if applicable, at the rate set forth in
any approved plan of  reorganization  in the  Bankruptcy  Case)  (including  any
default rate in either such case), commencing upon the Initial Disbursement Date
and continuing until the entire principal of the Loan has been repaid.  Interest
shall be payable  monthly,  in  arrears,  commencing  one month from the Initial
Disbursement  Date and on the same day of each  succeeding  month until the full
amount of the principal  balance of the Loan and all accrued but unpaid interest
thereon is paid. Any late charges paid by Debtor to Ranch shall be paid entirely
to Lender within 10 days of the receipt thereof by Ranch.

          3.2 LOAN ORIGINATION FEE. Ranch shall pay to Lender a Loan Origination
Fee in the amount of $12,500.  The Loan Origination Fee shall be due and payable
to Lender at the time of disbursement of the Initial  Disbursement.  Lender,  at
its  option,  may add the amount of this  $12,500  Loan  Origination  Fee to the
Initial  Disbursement  in which case, such amount shall be considered as part of
the Loan balance.

          3.3  STANDBY  FEE.  For so long as the  Debtor  Loan  Agreement  is in
effect,  Ranch  shall pay to Lender a monthly  Standby Fee equal to 0.25% of the
average  daily  undisbursed  portion of the  Maximum  Loan  Amount.  The monthly
Standby  Fee shall be due and payable  within 3 business  days of its receipt by
Ranch from Debtor.

          3.4 EARLY TERMINATION FEE. Ranch shall pay to Lender 60% of any "Early
Termination  Fee" (as such term is defined in the Debtor Loan Agreement) paid to
Ranch by Debtor pursuant to the Debtor Loan Agreement, which amount shall be due
and payable to Lender within 10 days following  receipt of the Early Termination
Fee by Ranch.

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          3.5  ADDITIONAL  PAYMENT.  As additional  consideration  for the Loan,
Ranch shall pay to Lender the sum of [...***...] (the "Additional Payment"). The
Additional  Payment shall be paid to Lender in accordance with the provisions of
Paragraph 5 hereof.

Payments  received by Lender  from Ranch  shall be applied  first to unpaid loan
fees, then to interest then due and unpaid, and then to principal.

     4. PRINCIPAL  REPAYMENT.  [...***...] Ranch acknowledges and agrees that no
part of the  principal  of the Loan repaid to Lender will be re-loaned by Lender
to Ranch.

     5. PAYMENT OF ADDITIONAL PAYMENT.  Following Ranch's repayment to Lender of
the full amount of the principal of the Loan together with all interest  accrued
thereon,  Ranch shall  [...***...] . No interest shall accrue or be payable with
respect to the Additional Payment.

     6.  RIGHTS OF  INSPECTION.  Ranch  agrees to  furnish  to Lender  copies of
Ranch's monthly bank statements within 30 days following Ranch's receipt of such
statements,  and  quarterly  financial  statements  for  Ranch  within  30  days
following the end of each quarterly  financial  period of Ranch.  Lender and its
representatives  shall  have the  right to audit  and  copy  Ranch's  books  and
records,  from time to time,  to verify  receipts of  [...***...]  generated  by
Debtor and received by Company.

     7.  MANAGEMENT  OF  RANCH.  For so long as there  remains  any sum owing to
Lender hereunder,  including,  without limitation, the Additional Payment, Ranch
and Kahala covenant and agree that Ranch shall be managed by 2 Managers.  Lender
shall be  entitled  to  designate  one of the 2  Managers  and  Kahala  shall be
entitled to designate the other of the 2 Managers. [...***...].

     8. DEFAULT BY BORROWER. In the event of any default under this Agreement by
either  Ranch or Kahala  (and  provided  that  Lender  has given  notice of such
alleged default to Ranch and Kahala, setting forth the details thereof, and such
default is not cured within 10 days of such notice), or in the event of Debtor's
default under the Debtor Loan Agreement, Lender shall have no obligation to make
any further  disbursements  under the Loan and Kahala  agrees that Lender  shall
have the  option,  exercisable  in Lender's  sole and  absolute  discretion,  to
acquire the entire membership  interest in Ranch, for no  consideration,  and to
remove any manager of Ranch appointed by Kahala.

     9. REPRESENTATIONS AND WARRANTIES.  Ranch and Kahala each hereby represents
and warrants to Lender as follows:

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          9.1  Ranch  is a  limited  liability  company  organized  and in  good
standing under the laws of the State of Arizona.

          9.2 Kahala is a corporation formed and in good standing under the laws
of the State of Florida.

          9.3 Kahala is the sole member of Ranch.

          9.4  Kahala  has  delivered  to  Lender,  Resolutions  of the Board of
Directors  of  Kahala,  acting in its  capacity  as sole  Member of Ranch and on
behalf of Ranch,  authorizing  and  approving the execution and delivery of this
Agreement.

          9.5  Attached  hereto  as  Exhibit B and  incorporated  herein by this
reference is a true and complete copy of that certain Debtor's  Emergency Motion
for Order Authorizing The Debtor To Obtain  Post-Petition  Secured Financing And
Approving Joint Franchise Marketing Arrangement, filed in the Bankruptcy Case on
July 5, 2001 (the "Motion.")

          9.6  Attached  hereto  as  Exhibit C and  incorporated  herein by this
reference is a true and  complete  copy of that certain  Order  Authorizing  The
Debtor To Obtain  Post-Petition  Secured Financing And Approving Joint Franchise
Marketing  Arrangement,  filed in the Bankruptcy Case on July 5, 2001, approving
the Motion.

          9.7 Ranch and Kahala  acknowledge and agree that the  representations,
warranties  and covenants of Ranch and Kahala  contained in this Agreement are a
material  inducement  to Lender in entering  into this  Agreement  and Lender is
relying on such  representations,  warranties and covenants  notwithstanding its
own investigations.

          9.8 Ranch  and  Kahala  acknowledge  and  agree  that the  transaction
described in this Agreement is not usurious.

     10. MISCELLANEOUS. The following miscellaneous provisions are also included
in this Agreement:

          10.1  NOTICES.  Any  notice,  request,  demand,  instruction  or other
communication  given  hereunder  by any  party  must be in  writing  and will be
validly and timely given or made to another party if (i) served personally, (ii)
deposited in the United States mail,  certified or registered,  postage prepaid,

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return receipt requested,  (iii) delivered by overnight courier, or (iv) sent by
telecopier, to each of the parties as set forth below:

          If to Ranch:    Kahala Corp.
                          Attn: David Guarino
                          7730 E. Greenway Road, Suite 104
                          Scottsdale, AZ  85260
                          Telephone: (480) 443-0200, Ext. 17
                          Fax: (480) 443-1972

          If to Kahala:   Kahala Corp.
                          Attn: Kevin Blackwell
                          7730 E. Greenway Road, Suite 104
                          Scottsdale, AZ  85260
                          Telephone: (480) 443-0200, Ext. 15
                          Fax: (480) 443-1972

          With a copy to: Michael Reagan, Esq.
                          Kahala Corp.
                          7730 E. Greenway Road, Suite 104
                          Scottsdale, AZ  85260
                          Telephone: (480) 443-0200, Ext. 18
                          Fax: (480) 443-1972

          If to Lender:   [...***...]

          With a copy to: Warren J. Kessler, Esq.
                          Kessler & Kessler,
                          A Law Corporation
                          2029 Century Park East, Suite 1520
                          Los Angeles, CA  90067
                          Telephone: (310) 552-9800
                          Fax: (310) 552-0442

If such notice is served  personally,  such notice will be deemed to be given at
the time of such personal service. If notice is served by mail, such notice will
be deemed to be given two days after the  deposit  of same in any United  States
mail post office box. If such notice is served by overnight courier, such notice
will be deemed to be given on the next business day following the  acceptance of
such notice for  delivery  by such other  overnight  courier.  If such notice is
served by  telecopier,  such  notice will be deemed to be given at the time such
notice is sent, provided that an additional copy of such notice is sent the same
day by another  acceptable means of giving notice under this Paragraph 10.1. Any
person entitled to receive notice under this agreement may change the address or
telecopier  number to which such notice may be sent,  by giving  notice  thereof
pursuant to this Paragraph 10.1.

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          10.2  ATTORNEYS'  FEES.  Should any legal  action be  brought  for the
enforcement of this Agreement or any term hereof, or due to any alleged dispute,
breach,  default or  misrepresentation  in connection with any provisions herein
contained,  the prevailing party shall be entitled to its reasonable  attorneys'
fees and costs and other costs  incurred in any such  action or  proceeding  and
including  any  such  action  to  collect  any  award  or  judgment,   including
representation  in  bankruptcy  court,  which results in an  arbitration  of the
matters herein, in addition to such other relief as may be granted by the courts
or arbitration proceedings.

          10.3  APPLICABLE  LAW.  The  existence,  validity,   construction  and
operational  effect of this Agreement and all matters pertaining hereto shall be
determined in accordance with the laws of the State of Arizona.

          10.4  FURTHER  ASSURANCES.  Each of the  parties  agrees that it will,
without  further  consideration,  execute,  acknowledge  and deliver  such other
documents  and take such other  actions as may be  reasonably  requested  by the
other party in order to  consummate  the  purposes  and subject  matter  hereof,
including Ranch providing security to Lender for the Loan.

          10.5  ASSIGNMENT.  Neither party may assign its rights or delegate its
obligations  under this Agreement without the prior written consent of the other
party, which consent shall not be unreasonably withheld.

          10.6 VALIDITY. Any provision of this Agreement which may be prohibited
by law or otherwise held invalid shall be ineffective only to the extent of such
prohibition  or  invalidity  and  shall  not  invalidate  or  otherwise   render
ineffective the remaining provisions of this Agreement.

          10.7 ENTIRE AGREEMENT.  All understandings  and agreements  heretofore
made by and between the parties hereto,  whether in writing or oral, with regard
to the subject  matter hereof are merged into this  Agreement  which alone fully
and completely  expresses the parties' agreement.  This Agreement may be amended
only by a writing  dated  subsequent  to the date  hereof,  signed by all of the
parties hereto.

          10.8 NO  WAIVER.  The  waiver by one party of the  performance  of any
covenant,  condition or promise shall not invalidate this Agreement nor shall it
be considered a waiver by such party of any other covenant, condition or promise
hereunder.  The waiver by any party of the time for performing any act shall not
constitute a waiver of the time for performing any other act or an identical act
required to be performed  at a later time.  The exercise of any remedy shall not
exclude the exercise of other consistent remedies.

          10.9 HEADINGS. The paragraph headings of the various provisions hereof
are intended  solely for  convenience  of reference  and shall not in any manner
amplify,  limit or modify, or otherwise be used in the interpretation of, any of
said provisions.

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          10.10 NEUTRAL  INTERPRETATION.  In any action to construe the terms of
this Agreement, this Agreement shall be considered the product of negotiation by
and among the parties hereto.  No clause or provision shall be interpreted  more
strongly  in favor of one  party or the  other,  based  upon the  source  of the
draftsmanship, but shall be interpreted in a neutral manner.

          10.11   COUNTERPARTS.   This   Agreement  may  be  signed  in  several
counterparts,  each of which  shall be an  original,  but all of which  together
shall constitute one and the same instrument.  Delivery of a signed  counterpart
by telephone facsimile transmission shall be effective as delivery of a manually
signed counterpart of this Agreement.

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          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                    "LENDER":

                                    [...***...]

                                    "RANCH":

                                    RANCH *1 ACQUISITION, L.L.C.,
                                    an Arizona limited liability company

                                    By: Kahala Corp.,
                                        a Florida corporation
                                        Its: Member

                                        By: /s/ David Guarino
                                            ------------------------------------
                                           Its: VP-CFO

                                    "KAHALA":

                                    KAHALA CORP.,
                                    a Florida corporation


                                    By: /s/ David Guarino
                                        ----------------------------------------
                                        Its: VP-CFO

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