<PAGE>   1


                                                                   EXHIBIT 10.79

[US BANK LOGO]

                            BUSINESS LOAN AGREEMENT

<Table>
<Caption>

Principal      Loan Date     Maturity    Loan No.  Call  Collateral   Account    Officer    Initials
<S>            <C>          <C>          <C>       <C>   <C>         <C>         <C>       <C>
$500,000.00    06-22-2001   09-15-2002   2789-34            070      1105622447   R-B83    /s/[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.
</Table>

<Table>
<S>                                                    <C>
BORROWER: CALIFORNIA BEACH RESTAURANTS, INC.           LENDER:   U.S. Bank National Association
          17383 SUNSET BOULEVARD, SUITE 140                      15910 Ventura Boulevard
          PACIFIC PALISADES, CA 90272                            Encino, CA 91438
</Table>

THIS BUSINESS LOAN AGREEMENT BETWEEN CALIFORNIA BEACH RESTAURANTS, INC.
("BORROWER") AND U.S. BANK NATIONAL ASSOCIATION ("LENDER") IS MADE AND EXECUTED
ON THE FOLLOWING TERMS AND CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL
LOANS FROM LENDER OR HAS APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS AND
OTHER FINANCIAL ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY
EXHIBIT OR SCHEDULE ATTACHED TO THIS AGREEMENT. ALL SUCH LOANS AND FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL ACCOMMODATIONS FROM
LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS THE "LOAN"
AND COLLECTIVELY AS THE "LOANS." BORROWER UNDERSTANDS AND AGREES THAT: (a) IN
GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON BORROWER'S
REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THIS AGREEMENT: (b)
THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL TIMES SHALL BE
SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRETION; AND (c) ALL SUCH LOANS SHALL
BE AND SHALL REMAIN SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS OF THIS
AGREEMENT.

TERM. This Agreement shall be effective as of June 22, 2001, and shall continue
thereafter until all Indebtedness of Borrower to Lender has been performed in
full and the parties terminate the Agreement in writing.

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 Business Loan Agreement, as this
     Business Loan Agreement may be amended or modified from time to time,
     together with all exhibits and schedules attached to this Business Loan
     Agreement from time to time.

     BORROWER. The word "Borrower" means CALIFORNIA BEACH RESTAURANTS, INC. The
     word "Borrower" also includes, as applicable, all subsidiaries and
     affiliates of Borrower as provided below in the paragraph titled
     "Subsidiaries and Affiliates."

     CERCLA. The word "CERCLA" means the Comprehensive Environmental Response,
     Compensation, and Liability Act of 1980, as amended.

     CASH FLOW. The words "Cash Flow" mean net income after taxes, and exclusive
     of extraordinary gains and income, plus depreciation and amortization.

     COLLATERAL. The word "Collateral" means and includes without limitation all
     property and assets granted as collateral security for a Loan, whether real
     or personal property, whether granted directly or indirectly, whether
     granted now or in the future, and whether granted in the form of a security
     interest, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt, lien, charge, lien or title retention contract, lease or
     consignment intended as a security device, or any other security or lien
     interest whatsoever, whether created by law, contract, or otherwise.

     DEBT. The word "Debt" means all of Borrower's liabilities excluding
     Subordinated Debt.

     ERISA. The word "ERISA" means the Employee Retirement Income Security Act
     of 1974, as amended.

     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 and includes without limitation each and
     all of the persons or entities granting a Security Interest in any
     Collateral for the Indebtedness, including without limitation all
     Borrowers granting such a Security Interest.

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

     INDEBTEDNESS. The word "Indebtedness" means and includes without
     limitation all Loans, together with all other obligations, debts and
     liabilities of Borrower to Lender, or any one or more of them, as well as
     all claims by Lender against Borrower, or any one or more of them; whether
     now or hereafter existing, voluntary or involuntary, due or not due,
     absolute or contingent, liquidated or unliquidated; whether Borrower may
     be liable individually or jointly with others; whether Borrower may be
     obligated as a guarantor, surety, or otherwise; whether recovery upon such
     Indebtedness may be or hereafter may become barred by any statute of
     limitations; and whether such Indebtedness may be or hereafter may become
     otherwise unenforceable.

     LENDER. The word "Lender" means U.S. Bank National Association, its
     successors and assigns.

     LIQUID ASSETS. The words "Liquid Assets" mean Borrower's cash on hand plus
     Borrower's readily marketable securities.

     LOAN. The word "Loan" or "Loans" means and includes without limitation any
     and all commercial loans and financial accommodations from Lender to
     Borrower, whether now or hereafter existing, and however evidenced,
     including without limitation those loans and financial accommodations
     described herein or described on any exhibit or schedule attached to this
     Agreement from time to time.

     NOTE. The word "Note" means and includes without limitation Borrower's
     promissory note or notes, if any, evidencing Borrower's Loan obligations
     in favor of Lender, as well as any substitute, replacement or refinancing
     note or notes therefor.

     PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and security
     interests securing Indebtedness owed by Borrower to Lender; (b) liens for
     taxes, assessments, or similar charges either not yet due or being
     contested in good faith; (c) liens of materialmen, mechanics,
     warehousemen, or carriers, or other like liens arising in the ordinary
     course of business and securing obligations which are not yet delinquent;
     (d) purchase money liens or purchase money security interests upon or in
     any property acquired or held by Borrower in the ordinary course of
     business to secure Indebtedness outstanding on the date of this Agreement
     or permitted to be incurred under the paragraph of this Agreement titled
     "Indebtedness and Liens"; (e) liens and security interests which, as of
     the date of this Agreement, have been disclosed to and approved by the
     Lender in writing; and (f) those liens and security interests which in the
     aggregate constitute an immaterial and insignificant monetary amount with
     respect to the net value of Borrower's assets.

     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.




<PAGE>   2
06-22-2001                  BUSINESS LOAN AGREEMENT                       PAGE 2
LOAN NO 2789-34                  (CONTINUED)
================================================================================

      SECURITY AGREEMENT. The words "Security Agreement" mean and include
      without limitation any agreements, promises, covenants, arrangements,
      understandings or other agreements, whether created by law, contract, or
      otherwise, evidencing, governing, representing, or creating a Security
      Interest.

      SECURITY INTEREST. The words "Security Interest" mean and include without
      limitation any type of collateral security, whether in the form of a
      lien, charge, mortgage, deed of trust, assignment, pledge, chattel
      mortgage, chattel trust, factor's lien, equipment trust, conditional
      sale, trust receipt, lien or title retention contract, lease or
      consignment intended as a security device, or any other security or lien
      interest whatsoever, whether created by law, contract, or otherwise.

      SARA. The word "SARA" means the Superfund Amendments and Reauthorization
      Act of 1986 as now or hereafter amended.

      SUBORDINATED DEBT. The words "Subordinated Debt" mean indebtedness and
      liabilities of Borrower which have been subordinated by written agreement
      to indebtedness owed by Borrower to Lender in form and substance
      acceptable to Lender.

      TANGIBLE NET WORTH. The words "Tangible Net Worth" mean Borrower's total
      assets excluding all intangible assets (i.e., goodwill, trademarks,
      patents, copyrights, organizational expenses, and similar intangible
      items, but including leaseholds and leasehold improvements) less total
      Debt.

      WORKING CAPITAL. The words "Working Capital" mean Borrower's current
      assets, excluding prepaid expenses, less Borrower's current liabilities.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions
set forth in this Agreement and in the Related Documents.

      LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory to
      Lender the following documents for the Loan: (a) the Note, (b) Security
      Agreements granting to Lender security interests in the Collateral, (c)
      Financing Statements perfecting Lender's Security Interests; (d) evidence
      of insurance as required below; and (e) any other documents required
      under this Agreement or by Lender or its counsel, including without
      limitation any guaranties described below.

      BORROWER'S AUTHORIZATION. Borrower shall have provided in form and
      substance satisfactory to Lender properly certified resolutions, duly
      authorizing the execution and delivery of this Agreement, the Note and
      the Related Documents, and such other authorizations and other documents
      and instruments as Lender or its counsel, in their sole discretion, may
      require.

      PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all
      fees, charges, and other expenses which are then due and payable as
      specified in this Agreement or any Related Document.

      REPRESENTATIONS AND WARRANTIES. The representations and warranties set
      forth in this Agreement, in the Related Documents, and in any document or
      certificate delivered to Lender under this Agreement are true and correct.

      NO EVENT OF DEFAULT. There shall not exist at the time of any advance a
      condition which would constitute an Event of Default under this Agreement.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any indebtedness exists:

      ORGANIZATION. Borrower is a corporation which is duly organized, validly
      existing, and in good standing under the laws of the state of Borrower's
      incorporation and is validly existing and in good standing in all states
      in which Borrower is doing business. Borrower has the full power and
      authority to own its properties and to transact the businesses in which it
      is presently engaged or presently proposes to engage. Borrower also is
      duly qualified as a foreign corporation and is in good standing in all
      states in which the failure to so qualify would have a material adverse
      effect on its businesses or financial condition.

      AUTHORIZATION. The execution, delivery, and performance of this Agreement
      and all Related Documents by Borrower, to the extent to be executed,
      delivered or performed by Borrower, have been duly authorized by all
      necessary action by Borrower, do not require the consent or approval of
      any other person, regulatory authority or governmental body; and do not
      conflict with, result in a violation of, or constitute a default under
      (a) any provision of its articles of incorporation or organization, or
      bylaws, or any agreement or other instrument binding upon Borrower or (b)
      any law, governmental regulation, court decree, or order applicable to
      Borrower.

      FINANCIAL INFORMATION. Each financial statement of Borrower supplied to
      Lender truly and completely disclosed Borrower's financial condition as
      of the date of the statement, and there has been no material adverse
      change in Borrower's financial condition subsequent to the date of the
      most recent financial statement supplied to Lender. Borrower has no
      material contingent obligations except as disclosed in such financial
      statements.

      LEGAL EFFECT. This Agreement constitutes, and any instrument or agreement
      required hereunder to be given by Borrower when delivered will
      constitute, legal, valid and binding obligations of Borrower enforceable
      against Borrower in accordance with their respective terms.

      PROPERTIES. Except as contemplated by this Agreement or as previously
      disclosed in Borrower's financial statements or in writing to Lender and
      as accepted by Lender, and except for property tax liens for taxes not
      presently due and payable, Borrower owns and has good title to all of
      Borrower's properties free and clear of all Security interests, and has
      not executed any security documents or financing statements relating to
      such properties. All of Borrower's properties are titled in Borrower's
      legal name, and Borrower has not used, or filed a financing statement
      under, any other name for at least the last five (5) years.

      HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous substance,"
      "disposal," "release," and "threatened release," as used in this
      Agreement, shall have the same meanings as set forth in the "CERCLA,"
      "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 or Federal laws, rules, or regulations adopted pursuant
      to any of the foregoing. Except as disclosed to and acknowledged by
      Lender in writing, Borrower represents and warrants that: (a) During the
      period of Borrower's ownership of the properties, there has been no use,
      generation, manufacture, storage, treatment, disposal, release or
      threatened release of any hazardous waste or substance by any person on,
      under, about or from any of the properties. (b) Borrower has no knowledge
      of, or reason to believe that there has been (i) any use, generation,
      manufacture, storage, treatment, disposal, release, or threatened release
      of any hazardous waste or substance on, under, about or from the
      properties by any prior owners or occupants of any of the properties, or
      (ii) any actual or threatened litigation or claims of any kind by any
      person relating to such matters. (c) Neither Borrower nor any tenant,
      contractor, agent or other authorized user of any of the properties shall
      use, generate, manufacture, store, treat, dispose of, or release any
      hazardous waste or substance on, under, about or from any of the
      properties; and any such activity shall be conducted in compliance with
      all applicable federal, state, and local laws, regulations, and
      ordinances, including without limitation those laws, regulations and
      ordinances described above. Borrower authorizes Lender and its agents to
      enter upon the properties to make such inspections and tests as Lender
      may deem appropriate to determine compliance of the properties with this
      section of the Agreement. Any inspections or tests made by Lender shall
      be at Borrower's expense and for Lender's purposes only and shall not be
      construed to create any responsibility or liability on the part of Lender
      to Borrower or to any other person. The representations and warranties
      contained herein are based on Borrower's due diligence in investigating
      the properties for hazardous waste and hazardous substances. Borrower
      hereby (a) releases and waives any future claims against Lender for
      indemnity or contribution in the event Borrower becomes liable for
      cleanup or other costs under any such laws, and (b) agrees to indemnify
      and hold harmless Lender against any and


<PAGE>   3
06-22-2001                 BUSINESS LOAN AGREEMENT                       PAGE 3
LOAN NO 2789-34                  (CONTINUED)

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

     all claims, losses, liabilities, damages, penalties, and expenses which
     Lender may directly or indirectly sustain or suffer resulting from a
     breach of this section of the Agreement or as a consequence of any use,
     generation, manufacture, storage, disposal, release or threatened release
     of a hazardous waste or substance on the properties. The provisions of
     this section of the Agreement, including the obligation to indemnify,
     shall survive the payment of the indebtedness and the termination or
     expiration of this Agreement and shall not be affected by Lender's
     acquisition of any interest in any of the properties, whether by
     foreclosure or otherwise.

     LITIGATION AND CLAIMS. No litigation, claim, investigation, administrative
     proceeding or similar action (including those for unpaid taxes) against
     Borrower is pending or threatened, and no other event has occurred which
     may materially adversely affect Borrower's financial condition or
     properties, other than litigation, claims, or other events, if any, that
     have been disclosed to and acknowledged by Lender in writing.

     TAXES. To the best of Borrower's knowledge, all tax returns and reports of
     Borrower that are or were required to be filed, have been filed, and all
     taxes, assessments and other governmental charges have been paid in full,
     except those presently being or to be contested by Borrower in good faith
     in the ordinary course of business and for which adequate reserves have
     been provided.

     LIEN PRIORITY. Unless otherwise previously disclosed to Lender in writing,
     Borrower has not entered into or granted any Security Agreements, or
     permitted the filing or attachment of any Security Interests on or
     affecting any of the Collateral directly or indirectly securing repayment
     of Borrower's Loan and Note, that would be prior or that may in any way be
     superior to Lender's Security Interests and rights in and to such
     Collateral.

     BINDING EFFECT. This Agreement, the Note, all Security Agreements directly
     or indirectly securing repayment of Borrower's Loan and Note and all of
     the Related Documents are binding upon Borrower as well as upon Borrower's
     successors, representatives and assigns, and are legally enforceable in
     accordance with their respective terms.

     COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely for
     business or commercial related purposes.

     EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower
     may have any liability complies in all material respects with all
     applicable requirements of law and regulations, and (i) no Reportable
     Event nor Prohibited Transaction (as defined in ERISA) has occurred with
     respect to any such plan, (ii) Borrower has not withdrawn from any such
     plan or initiated steps to do so, (iii) no steps have been taken to
     terminate any such plan, and (iv) there are no unfunded liabilities other
     than those previously disclosed to Lender in writing.

     LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business,
     or Borrower's Chief executive office, if Borrower has more than one place
     of business, is located at 17383 SUNSET BOULEVARD, SUITE 140, PACIFIC
     PALISADES, CA 90272. Unless Borrower has designated otherwise in writing
     this location is also the office or offices where Borrower keeps its
     records concerning the Collateral.

     INFORMATION. All information heretofore or contemporaneously herewith
     furnished by Borrower to Lender for the purposes of or in connection with
     this Agreement or any transaction contemplated hereby is, and all
     information hereafter furnished by or on behalf of Borrower to Lender will
     be, true and accurate in every material respect on the date as of which
     such information is dated or certified; and none of such information is or
     will be incomplete by omitting to state any material fact necessary to
     make such information not misleading.

     SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and
     agrees that Lender, without independent investigation, is relying upon the
     above representations and warranties in extending Loan Advances to
     Borrower. Borrower further agrees that the foregoing representations and
     warranties shall be continuing in nature and shall remain in full force
     and effect until such time as Borrower's indebtedness shall be paid in
     full, or until this Agreement shall be terminated in the manner provided
     above, whichever is the last to occur.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:

     LITIGATION. Promptly inform Lender in writing of (a) all material adverse
     changes in Borrower's financial condition, and (b) all existing and all
     threatened litigation, claims, investigations, administrative proceedings
     or similar actions affecting Borrower or any Guarantor which could
     materially affect the financial condition of Borrower or the financial
     condition of any Guarantor.

     FINANCIAL RECORDS. Maintain its books and records in accordance with
     generally accepted accounting principles, applied on a consistent basis,
     and permit Lender to examine and audit Borrower's books and records at all
     reasonable times.

     FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in no
     event later than one hundred five (105) days after the end of each fiscal
     year, Borrower's balance sheet and income statement for the year ended,
     audited by a certified public accountant satisfactory to Lender. All
     financial reports required to be provided under this Agreement shall be
     prepared in accordance with generally accepted accounting principles,
     applied on a consistent basis, and certified by Borrower as being true and
     correct.

     ADDITIONAL INFORMATION. Furnish such additional information and
     statements, lists of assets and liabilities, agings of receivables and
     payables, inventory schedules, budgets, forecasts, tax returns, and other
     reports with respect to Borrower's financial condition and business
     operations as Lender may request from time to time.

     FINANCIAL COVENANTS AND RATIOS. Comply with the following covenants and
     ratios:

          OTHER RATIO. Maintain a ratio of (Debt Before Interest, Taxes,
          Depreciation and Amortization) divided by (Current Portion Long Term
          Debt plus Interest) of 1.25 to 1.00.

     The following provisions shall apply for purposes of determining
     compliance with the foregoing financial covenants and ratios: Compliance
     with all covenants and ratios shall be determined by calculating the
     ratios/amounts as of the end of each fiscal quarter. Except as provided
     above, all computations made to determine compliance with the requirements
     contained in this paragraph shall be made in accordance with generally
     accepted accounting principles, applied on a consistent basis, and
     certified by Borrower as being true and correct.

     INSURANCE. Maintain fire and other risk insurance, public liability
     insurance, and such other insurance as Lender may require with respect to
     Borrower's properties and operations, in form, amounts, coverages and with
     insurance companies reasonably acceptable to Lender. Borrower, 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. 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 Borrower or any other person. In connection with all policies covering
     assets in which Lender holds or is offered as security interest for the
     Loans, Borrower will provide Lender with such loss payable or other
     endorsements as Lender may require.

     INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
     each existing insurance policy showing such information as Lender may
     reasonable request, including without limitation the following: (a) the
     name of the insurer, (b) the risks insured; (c) the amount of the policy;
     (d) the properties insured; (e) the then current property values on the
     basis of which insurance has been obtained, and the manner of determining
     those values; and (f) the expiration date of the policy. In addition, upon
     request of Lender (however not more often than annually), Borrower will
     have an independent appraiser satisfactory to Lender determine, as
     applicable, the actual cash value or replacement cost of any Collateral.
     The cost of such appraisal shall be paid by Borrower.

     GUARANTIES. Prior to disbursement of any Loan proceeds, furnish executed
     guaranties of the Loans in favor of Lender, executed by the guarantor
     named below, on Lender's forms, and in the amount and under the conditions
     spelled out in those guaranties.



<PAGE>   4
06-22-2001                  BUSINESS LOAN AGREEMENT                       PAGE 4
LOAN NO 2789-34                  (CONTINUED)
================================================================================

<Table>
<Caption>
          GUARANTOR                               AMOUNT
          ---------                               ------

          <S>                                     <C>
          SEA VIEW RESTAURANTS, INC.              UNLIMITED
</Table>

     OTHER AGREEMENTS. Comply with all terms and conditions of all other
     agreements, whether now or hereafter existing, between Borrower and any
     other party and notify Lender immediately in writing of any default in
     connection with any other such agreements.

     LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
     operations, unless specifically consented to the contrary by Lender in
     writing.

     TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
     indebtedness and obligations, including without limitation all assessments,
     taxes, governmental charges, levies and liens, of every kind and nature,
     imposed upon Borrower or its properties, income, or profits, prior to the
     date on which penalties would attach, and all lawful claims that, if
     unpaid, might become a lien or charge upon any of Borrower's properties,
     income, or profits. Provided however, Borrower will not be required to pay
     and discharge any such assessment, tax, charge, levy, lien or claim so long
     as (a) the legality of the same shall be contested in good faith by
     appropriate proceedings, and (b) Borrower shall have established on its
     books adequate reserves with respect to such contested assessment, tax,
     charge, levy, lien, or claim in accordance with generally accepted
     accounting practices. Borrower, upon demand of Lender, will furnish to
     Lender evidence of payment of the assessments, taxes, charges, levies,
     liens and claims and will authorize the appropriate governmental official
     to deliver to Lender at any time a written statement of any assessments,
     taxes, charges, levies, liens and claims against Borrower's properties,
     income, or profits.

     PERFORMANCE. Perform and comply with all terms, conditions, and provisions
     set forth in this Agreement and in the Related Documents in a timely
     manner, and promptly notify Lender if Borrower learns of the occurrence of
     any event which constitutes an Event of Default under this Agreement or
     under any of the Related Documents.

     OPERATIONS. Maintain executive and management personnel with substantially
     the same qualifications and experience as the present executive and
     management personnel; provide written notice to Lender of any change in
     executive and management personnel; conduct its business affairs in a
     reasonable and prudent manner and in compliance with all applicable
     federal, state and municipal laws, ordinances, rules and regulations
     respecting its properties, charters, businesses and operations, including
     without limitation, compliance with the Americans With Disabilities Act and
     with all minimum funding standards and other requirements of ERISA and
     other laws applicable to Borrower's employee benefit plans.

     INSPECTION. Permit employees or agents of Lender at any reasonable time to
     inspect any and all Collateral for the Loan or Loans and Borrower's other
     properties and to examine or audit Borrower's books, accounts, and records
     and to make copies and memoranda of Borrower's books, accounts, and
     records. If Borrower now or at any time hereafter maintains any records
     (including without limitation computer generated records and computer
     software programs for the generation of such records) in the possession of
     a third party, Borrower, upon request of Lender, shall notify such party to
     permit Lender free access to such records at all reasonable times and to
     provide Lender with copies of any records it may request, all at Borrower's
     expense.

     COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide Lender
     not required and at the time of each disbursement of Loan proceeds with a
     certificate executed by Borrower's chief financial officer, or other
     officer or person acceptable to Lender, certifying that the representations
     and warranties set forth in this Agreement are true and correct as of the
     date of the certificate and further certifying that, as of the date of the
     certificate, no Event of Default exists under this Agreement.

     ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all respects
     with all environmental protection federal, state and local laws, statutes,
     regulations and ordinances; not cause or permit to exist, as a result of an
     intentional or unintentional action or omission on its part or on the part
     of any third party, on property owned and/or occupied by Borrower, any
     environmental activity where damage may result to the environment, unless
     such environmental activity is pursuant to and in compliance with the
     conditions of a permit issued by the appropriate federal, state or local
     governmental authorities; shall furnish to Lender promptly and in any event
     within thirty (30) days after receipt thereof a copy of any notice,
     summons, lien, citation, directive, letter or other communication from any
     governmental agency or instrumentality concerning any intentional or
     unintentional action or omission on Borrower's part in connection with any
     environmental activity whether or not there is damage to the environment
     and/or other natural resources.

     ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such promissory
     notes, mortgages, deeds of trust, security agreements, financing
     statements, instruments, documents and other agreements as Lender or its
     attorneys may reasonably request to evidence and secure the Loans and to
     perfect all Security Interests.

RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law,
rule, regulation or guideline, or the interpretation or application of any
thereof by any court or administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except U.S. federal, state or local income or franchise
taxes imposed on Lender), reserve requirements, capital adequacy requirements
or other obligations which would (a) increase the cost to Lender for extending
or maintaining the credit facilities to which this Agreement relates, (b)
reduce the amounts payable to Lender under this Agreement or the Related
Documents, or (c) reduce the rate of return on Lender's capital as a
consequence of Lender's obligations with respect to the credit facilities to
which this Agreement relates, then Borrower agrees to pay Lender such
additional amounts as will compensate Lender therefor, within five (5) days
after Lender's written demand for such payment, which demand shall be
accompanied by an explanation of such imposition or charge and a calculation in
reasonable detail of the additional amounts payable by Borrower, which
explanation and calculations shall be conclusive in the absence of manifest
error.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent
of Lender.

     INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the normal
     course of business and indebtedness to Lender contemplated by this
     Agreement, create, incur or assume indebtedness for borrowed money,
     including capital leases, (b) except as allowed as a Permitted Lien, sell,
     transfer, mortgage, assign, pledge, lease, grant a security interest in, or
     encumber any of Borrower's assets, or (c) sell with recourse any of
     Borrower's accounts, except to Lender.

     CONTINUITY OF OPERATIONS. (a) Engage in any business activities
     substantially different than those in which Borrower is presently engaged,
     (b) cease operations, liquidate, merge, transfer, acquire or consolidate
     with any other entity, change ownership, change its name, dissolve or
     transfer or sell Collateral out of the ordinary course of business, (c) pay
     any dividends on Borrower's stock (other than dividends payable in its
     stock), provided, however that notwithstanding the foregoing, but only so
     long as no Event of Default has occurred and is continuing or would result
     from the payment of dividends, if Borrower is a "Subchapter S Corporation"
     (as defined in the Internal Revenue Code of 1986, as amended), Borrower may
     pay cash dividends on its stock to its shareholders from time to time in
     amounts necessary to enable the shareholders to pay income taxes and make
     estimated income tax payments to satisfy their liabilities under federal
     and state law which arise solely from their status as Shareholders of a
     Subchapter S Corporation because of their ownership of shares of stock of
     Borrower, or (d) purchase or retire any of Borrower's outstanding shares or
     alter or amend Borrower's capital structure.

     LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance money or
     assets, (b) purchase, create or acquire any interest in any other
     enterprise or entity, or (c) incur any obligation as surety or guarantor
     other than in the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other
<PAGE>   5
06-22-2001                      BUSINESS LOAN AGREEMENT                   PAGE 5
LOAN NO 2789-34                       (CONTINUED)
================================================================================

agreement, Lender shall have no obligation to make Loan Advances or to disburse
Loan proceeds if: (a) Borrower or any Guarantor is in default under the terms of
this Agreement or any of the Related Documents or any other agreement that
Borrower or any Guarantor has with Lender, (b) Borrower or any Guarantor becomes
insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged
a bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (e) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.

ACCESS LAWS. Without limiting the generality of any provision of this agreement
requiring Borrower to comply with applicable laws, rules, and regulations,
Borrower agrees that it will at all times comply with applicable laws relating
to disabled access including, but not limited to, all applicable titles of the
Americans with Disabilities Act of 1990.

LETTERS OF CREDIT.

Subject to the terms of this agreement, lender will issue Standby Letters of
Credit (each a "letter of credit") on behalf of borrower to support borrower's
purchase of inventory or for other business purposes agreed to by lender. At no
time, however, shall the total face amount of all letters credit outstanding,
less any partial draws paid under the letters of credit will exceed the sum of
$450,000.00. There will be a 2.00% per annum fee for the issuance of Letters of
Credit.

(a) Upon lender's request, borrower promptly shall pay to lender issuance fees
and such other fees, commissions, costs and any out-of-pocket expenses charged
or incurred by lender with respect to any letter of credit.

(b) The commitment by lender to issue letters of credit shall, unless earlier
terminated in accordance with the terms of this agreement, automatically
terminate on the maturity date.

(c) Each letter of credit shall be in form and substance satisfactory to lender
and in favor of beneficiaries satisfactory to lender, provided that lender may
refuse to issue a letter of credit due to the nature of the transaction or its
terms or in connection with any transaction where lender, due to beneficiary or
the nationality or residence of the beneficiary, would be prohibited by any
applicable law, regulation, or order from issuing such letter of credit.

(d) Prior to the issuance of each letter of credit and in all events prior to
any daily cutoff time lender may have established for purposes thereof, borrower
shall deliver to lender a duly executed form lender's standard form of
application for issuance of letter of credit with proper insertions.

OUT OF DEBT PERIOD. Borrower agrees with Lender that Borrower shall rest the
Line of Credit Facility with no outstanding principal balance for a minimum of
sixty (60) consecutive days during the term of the loan.

ADDITIONAL PROVISIONS.

Borrower and Lender, hereby agree, that while this Agreement is in effect:

1) Borrower will furnish Lender with, no later than one hundred five (105) days
after Fiscal Year End, a copy of Borrower's 10-K report.

2) Borrower will furnish Lender with, no later than sixty (60) days after
quarter end, a copy of Borrower's 10-Q report.

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

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 Loans.

     OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
     perform when due 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 other 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 creditor 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 Borrower or any Grantor under this
     Agreement or the Related Documents is false or misleading in any material
     respect at the time made or furnished, or becomes false or misleading at
     anytime thereafter.

     DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
     ceases to be in full force and effect (including failure or any Security
     Agreement to create a valid and perfected Security Investment) at any time
     and for any reason.

     INSOLVENCY. The dissolution or termination of Borrower's existence as a
     going business, the insolvency of Borrower, the appointment of a receiver
     for any part of Borrower's property, any assignment for the benefit of
     creditors, any type of creditor workout, or the commencement of any
     proceeding under any bankruptcy or insolvency laws by or against 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 Borrower, any creditor
     of any Grantor against any collateral securing the Indebtedness, or by any
     governmental agency. This includes a garnishment, attachment, or levy on or
     of any of 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 any Guarantor dies or
     becomes incompetent, or revokes or disputes the validity of, or liability
     under, any Guaranty of the Indebtedness.

     CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent (25%)
     or more of the common stock of Borrower.

     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.

     INSECURITY. Lender, in good faith, deems itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement, or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
Loan Advances or disbursements), and, at Lender's option, all Indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "Insolvency" subsection above, such acceleration shall be automatic and
not optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, in equity, or otherwise.
Except as may be prohibited by applicable law, all of Lender's rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other

<PAGE>   6

06-22-2001                  BUSINESS LOAN AGREEMENT                       PAGE 6
LOAN NO 2789-34                   (CONTINUED)
================================================================================
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not effect Lender's right to
declare a default and to exercise its rights and 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, Borrower
     agrees upon Lender's request to submit to the jurisdiction of the courts
     of Sacramento County, the State of California. Lender and Borrower hereby
     waive the right to any jury trial in any action, proceeding, or
     counterclaim brought by either Lender or Borrower against the other. This
     Agreement shall be governed by and construed in accordance with the laws
     of the State of California.

     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.

     CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
     sale or transfer, whether now or later, of one or more participation
     interests in the Loans to one or more purchasers, whether related or
     unrelated to Lender. Lender may provide, without any limitation
     whatsoever, to any one or more purchasers, or potential purchasers, any
     information or knowledge Lender may have about Borrower or about any other
     matter relating to the Loan, and Borrower hereby waives any rights to
     privacy it may have with respect to such matters. Borrower additionally
     waives any and all notices of sale of participation interests, as well as
     all notices of any repurchase of such participation interests. Borrower
     also agrees that the purchasers of any such participation interests will
     be considered as the absolute owners of such interests in the Loans and
     will have all the rights granted under the participation agreement or
     agreements governing the sale of such participation interests. Borrower
     further waives all rights of offset or counterclaim that it may have now
     or later against Lender or against any purchaser of such a participation
     interest and unconditionally agrees that either Lender or such purchaser
     may enforce Borrower's obligation under the Loans irrespective of the
     failure or insolvency of any holder of any interest in the Loans. Borrower
     further agrees that the purchaser of any such participation interests may
     enforce its interests irrespective of any personal claims or defenses that
     Borrower may have against Lender.

     COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
     expenses, including without limitation attorneys' fees, incurred in
     connection with the preparation, execution, enforcement, modification and
     collection of this Agreement or in connection with the Loans made pursuant
     to this Agreement. Lender may pay someone else to help collect the Loans
     and to enforce this Agreement, and Borrower will pay 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 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.

     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 Borrower, notice to any Borrower will constitute
     notice to all Borrowers. For notice purposes, Borrower will keep Lender
     informed at all times of Borrower's current address(es).

     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.

     SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of any
     provisions of this Agreement makes it appropriate, including without
     limitation any representation, warranty or covenant, the word "Borrower"
     as used herein shall include all subsidiaries and affiliates of Borrower.
     Notwithstanding the foregoing however, under no circumstances shall this
     Agreement be construed to require Lender to make any Loan or other
     financial accommodation to any subsidiary or affiliate of Borrower.

     SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
     behalf of Borrower shall bind its successors and assigns and shall inure
     to the benefit of Lender, its successors and assigns. Borrower shall not,
     however, have the right to assign its rights under this Agreement or any
     interest therein, without the prior written consent of Lender.

     SURVIVAL. All warranties, representations, and covenants made by Borrower
     in this Agreement or in any certificate or other instrument delivered by
     Borrower to Lender under this Agreement shall be considered to have been
     relied upon by Lender and will survive the making of the Loan and delivery
     to Lender of the Related Documents, regardless of any investigation made
     by Lender or on Lender's behalf.

     TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
     Agreement.

     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 Borrower, or between
     Lender and any Grantor, shall constitute a waiver of any of Lender's
     rights or of any obligations of Borrower or of any Grantor 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 in subsequent instances where
     such consent is required, and in all cases such consent may be granted or
     withheld in the sole discretion of Lender.
<PAGE>   7

06-22-2001                  BUSINESS LOAN AGREEMENT                       PAGE 7
LOAN NO 2789-34                   (CONTINUED)
================================================================================
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
JUNE 22, 2001.

BORROWER:

CALIFORNIA BEACH RESTAURANTS, INC.

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

LENDER:

U.S. BANK NATIONAL ASSOCIATION

BY: /s/ [SIGNATURE ILLEGIBLE]
    ---------------------------------
    AUTHORIZED OFFICER
================================================================================
<PAGE>   8
[USBANK LOGO]

                                PROMISSORY NOTE

                               [Table 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.

<Table>
<S>                                               <C>
BORROWER: CALIFORNIA BEACH RESTAURANTS, INC.      LENDER: U.S. BANK NATIONAL ASSOCIATION
          17383 SUNSET BOULEVARD, SUITE 140               15910 VENTURA BOULEVARD
          PACIFIC PALISADES, CA 90272                     ENCINO, CA 91438
</Table>
================================================================================
PRINCIPAL AMOUNT: $500,000.00                        DATE OF NOTE: JUNE 22, 2001

PROMISE TO PAY. CALIFORNIA BEACH RESTAURANTS, INC. ("Borrower") promises to pay
to U.S. Bank National Association ("Lender"), or order, in lawful money of the
United States of America, the principal amount of Five Hundred Thousand &
00/100 Dollars ($500,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each
advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding
principal plus all accrued unpaid interest on September 15, 2002. In addition,
Borrower will pay regular monthly payments of accrued unpaid interest beginning
July 6, 2001, and all subsequent interest payments are due on the same day of
each month after that. The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the annual interest rate over
a year of 360 days, multiplied by the outstanding principal balance, multiplied
by the actual number of days the principal balance is outstanding. Borrower
will pay Lender at Lender's address shown above or at such other place as
Lender may designate in writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is the prime rate (the
"Index"). The unpaid principal balance will bear interest at an annual rate
equal to the percentage point described below plus the prime rate announced by
the Lender. 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 time that
the prime rate changes. The interest rate to be applied to the unpaid principal
balance of this Note will be at a rate of 1,000 percentage point over the
Index. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.

PREPAYMENT. 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.

Except for the foregoing, 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.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) 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) Borrower is in
default under any other note, security agreement, lease agreement or lease
schedule, loan agreement or other agreement, whether now existing or hereafter
made, between Borrower and U.S. Bancorp or any direct or indirect subsidiary of
U.S. Bancorp. (g) 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. (h) Any guarantor dies or any of the
other events described in this default section occurs with respect to any
guarantor of this Note. (i) A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or performance
of the Indebtedness is impaired. (j) Lender in good faith deems itself insecure.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon Borrower's failure to pay
all amounts declared due pursuant to this section, including failure to pay
upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note to 6.000
percentage points over the Index. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. Borrower also
will pay any court costs, in addition to all other sums provided by law. This
Note has been delivered to Lender and accepted by Lender in the State of
California. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of Sacramento County, the State of
California. Lender and Borrower hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either Lender or Borrower
against the other. This Note 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 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 Note against any and
all such accounts.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested either orally or in writing by Borrower or by an
authorized person. 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. Borrower agrees to be liable for all sums either: (a) advanced in
accordance with the instructions of an authorized person or (b) credited to any
of Borrower's accounts with Lender. The unpaid principal balance owing on this
Note at any time may be evidenced by endorsements on this Note or by Lender's
internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (a) Borrower or any guarantor
is in default under the terms of this Note or any agreement that Borrower or
any guarantor has with Lender, including any agreement made in connection with
the signing of this Note; (b) Borrower or any guarantor ceases doing business
or is insolvent; (e) any guarantor seeks, claims or otherwise attempts to
limit, modify or revoke such guarantor's guarantee of this Note or any other
loan with Lender; (d) Borrower has applied funds provided pursuant to this Note
for purposes other than those authorized by Lender; or (e) Lender in good faith
deems itself insecure under this Note or any other agreement between Lender and
<PAGE>   9
06-22-2001                        PROMISSORY NOTE                        PAGE 2
LOAN NO 2789-34                    (CONTINUED)
===============================================================================

Borrower.

LATE CHARGE. If a payment is 15 days or more past due, borrower will be charged
a late charge of 5% of the delinquent payment.

PAYMENT BY AUTOMATIC DEDUCTION. Borrower hereby authorizes Lender to
automatically deduct the amount of all principal and/or interest payments on
this Note from Borrowers's account number 1-643-0112-0709 with Lender or such
other account as Borrower may designate in writing. If there are insufficient
funds in the account to pay the automatic deduction in full, Lender may allow
the account to become overdrawn, or Lender may reverse the automatic deduction.
Borrower will pay all fees on the account which result from the automatic
deductions, including any overdraft/NSF charges. If for any reason Lender does
not charge the account for a payment, or if an automatic payment is reversed,
the payment is still due according to this Note. Of the account is a Money
Market Account, the number of withdrawals from that account is limited as set
out in the account agreement. Lender may cancel the automatic deduction at any
time in its discretion.

TEMPORARY BULGE. THE PRINCIPAL AMOUNT OF THE NOTE WILL BE INCREASED FROM
$500,000.00 EFFECTIVE JANUARY 1, 2001 THROUGH APRIL 30, 2001, AT WHICH TIME THE
MAXIMUM PRINCIPAL AMOUNT OUTSTANDING UNDER THE NOTE SHALL REVERT BACK TO THE
PRINCIPAL AMOUNT OF $500,000.00, WITH A $450,000.00 SUB-LIMIT FOR LETTERS OF
CREDIT.

PRIOR NOTE. This Note is given in renewal and extension and not in novation of
the following described indebtedness: That certain Promissory Note dated June
16, 2000, in the amount of $500,000.00 executed by Borrower payable to Lender.
It is further agreed that all liens and security interest securing said
indebtedness are hereby renewed and extended to secure the Note and all
renewals, extensions and modifications thereof.

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

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

BORROWER:

CALIFORNIA BEACH RESTAURANTS, INC.

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

LENDER:

U.S. BANK NATIONAL ASSOCIATION

By: /s/ [Signature Illegible]
--------------------------------------------
    AUTHORIZED OFFICER

===============================================================================
<PAGE>   10
[USBANK LOGO]

                     DISBURSEMENT REQUEST AND AUTHORIZATION

<Table>
<S>          <C>          <C>           <C>         <C>     <C>         <C>         <C>     <C>
----------------------------------------------------------------------------------------------------------
Principal    Loan Date    Maturity      Loan No.    Call    Collateral    Account   Officer   Initials
500,000.00   06-22-2001   09-15-2002    2789-34                070      1705522447   R-B83  /s/[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.
----------------------------------------------------------------------------------------------------------

     BORROWER:  CALIFORNIA BEACH RESTAURANTS, INC.      LENDER:  U.S. BANK NATIONAL ASSOCIATION
                17383 SUNSET BOULEVARD, SUITE 140                15910 VENTURA BOULEVARD
                PACIFIC PALISADES, CA 90272                      ENCINO, CA 91436

==========================================================================================================
</Table>

LOAN TYPE. This is a Variable Rate (1.000% over prime rate), Revolving Line of
Credit Loan to a Corporation for $500,000.00 due on September 15, 2002. This is
a secured renewal of the following described indebtedness: This Note is given in
renewal and extension and not innovation of the following described
indebtedness: That certain Promissory Note dated June 16, 2000, in the amount of
$500,000.00 executed by Borrower payable to Lender. It is further agreed that
all liens and security interest securing said indebtedness are hereby renewed
and extended to secure the Note and all renewals, extensions and modifications
thereof.

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

     [ ]  PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR PERSONAL INVESTMENT.

     [X]  BUSINESS (INCLUDING REAL ESTATE INVESTMENT).

SPECIFIC PURPOSE. The specific purpose of this loan is: RENEWAL OF REVOLVING
LINE OF CREDIT FOR WORKING CAPITAL AND LETTERS OF CREDIT.

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 $500,000 as follows:

<Table>
          <S>                                          <C>
          UNDISBURSED FUNDS:                           $ 62,500.00
          AMOUNT PAID ON BORROWER'S ACCOUNT:
          $437,500.00 Payment on Loan #67/75 L/C       $437,500.00
                                                       -----------
          NOTE PRINCIPAL:                              $500,000.00
</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:          $1,300.00
               $1,300.00 LOAN FEES
                                                         ---------
          TOTAL CHARGES PAID IN CASH:                    $1,300.00
</Table>

PAYMENT BY AUTOMATIC DEDUCTION. Borrower hereby authorizes Lender to
automatically deduct the amount of all principal and/or interest payments on
this Note from Borrower's account number 1-643-0112-0709 with Lender or such
other account as Borrower may designate in writing. If there are insufficient
funds in the account to pay the automatic deduction in full, Lender may allow
the account to become overdrawn, or Lender may reverse the automatic deduction.
Borrower will pay all fees on the account which result from the automatic
deductions, including any overdraft/NSF charges. If for any reason Lender does
not charge the account for a payment, or if an automatic payment is reversed,
the payment is still due according to this Note. If the account is a Money
Market Account, the number of withdrawals from that account is limited as set
out in the account agreement. Lender may cancel the automatic deduction at any
time in its discretion.

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 JUNE 22, 2001.

BORROWER

CALIFORNIA BEACH RESTAURANTS, INC.

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

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

<PAGE>   11

                         AGREEMENT TO PROVIDE INSURANCE

<Table>
<S>         <C>         <C>          <C>         <C>     <C>         <C>        <C>       <C>
---------------------------------------------------------------------------------------------------------
Principal   Loan Date   Maturity     Loan No.    Call    Collateral   Account   Officer   Initials
700,000.00  06-22-2001  09-15-2002   2789-34                070      1705522447  R-B83    /s/ [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.

BORROWER:  CALIFORNIA BEACH RESTAURANTS, INC.          LENDER:  U.S. BANK NATIONAL ASSOCIATION
           17383 SUNSET BOULEVARD, SUITE 140                    15910 VENTURA BOULEVARD
           PACIFIC PALISADES, CA 90272                          ENCINO, CA 91436

GRANTOR:   CALIFORNIA BEACH RESTAURANTS, INC. AND SEA VIEW RESTAURANTS, INC.
           17383 SUNSET BOULEVARD, SUITE 140
           PACIFIC PALISADES, CA 90272
=========================================================================================================
</Table>

INSURANCE REQUIREMENTS. We, CALIFORNIA BEACH RESTAURANTS, INC. and SEA VIEW
RESTAURANTS, INC. ("Grantor), understand 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. ("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. We may obtain insurance from any insurance company we may
choose that is reasonably acceptable to Lender. We understand that credit may
not be denied solely because insurance was not purchased through Lender.

FAILURE TO PROVIDE INSURANCE. We agree to deliver to Lender, ten (10) days from
the date of this Agreement, evidence of the required insurance as provided
above, with an effective date of June 22, 2001, or earlier. We acknowledge and
agree that if we fail to provide any required insurance or fail to continue
such insurance in force, Lender may do so at our 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. WE ACKNOWLEDGE 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, OUR
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 THE REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.

AUTHORIZATION. For purposes of insurance coverage on the Collateral, we
authorize 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.

WE ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREE TO ITS TERMS. THIS AGREEMENT IS DATED JUNE 22, 2001.


GRANTOR:

X  /S/ ALAN REDHEAD                         X  /S/ ALAN REDHEAD
  ----------------------------------        ----------------------------------
  CALIFORNIA BEACH RESTAURANTS, INC.        SEA VIEW RESTAURANTS, INC.


                              FOR LENDER USE ONLY

                             INSURANCE VERIFICATION

DATE:  6-28-01                                              PHONE:  818-971-5355
AGENT NAME:  JANET DAVIS
INSURANCE COMPANY:  U.S.I. OF SO. CALIFORNIA INS. SERVICES, INC.
POLICY NUMBER:  DZX80760980
EFFECTIVE DATE:  6-1-01 TO 6-1-02
COMMENTS:______________________________________________________________________

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


<PAGE>   12
[US 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>
$700,000.00     06-22-2001    09-15-2002    2789-34               070      1705522447      R-B83   /s/ [ILLEGIBLE]
</Table>

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>
<S>                                                    <C>
BORROWER: CALIFORNIA BEACH RESTAURANTS, INC.           LENDER: U.S. BANK NATIONAL ASSOCIATION
          17383 SUNSET BOULEVARD, SUITE 140                    15910 VENTURA BOULEVARD
          PACIFIC PALISADES, CA 90272                          ENCINO, CA 91436

GRANTOR:  CALIFORNIA BEACH RESTAURANTS, INC. and SEA VIEW RESTAURANTS INC.
          17373 SUNSET BOULEVARD, SUITE 140
          PACIFIC PALISADES, CA 90272
================================================================================================
</Table>

THIS COMMERCIAL SECURITY AGREEMENT is entered into among CALIFORNIA BEACH
RESTAURANTS, INC. (referred to below as "Borrower"); CALIFORNIA BEACH
RESTAURANTS, INC. and SEA VIEW RESTAURANTS, INC. (referred to below as
"Grantor"); and U.S. Bank National Association (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 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.

     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 any 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 CALIFORNIA BEACH RESTAURANTS, INC. and
     SEA VIEW RESTAURANTS, INC. 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. In
     addition, the word "Indebtedness" includes all other obligations, debts
     and liabilities, plus interest thereon, of Borrower, or any one or more of
     them, to Lender, as well as all claims by Lender against Borrower, or any
     one or more of them, whether existing now or later, whether they are
     voluntary or involuntary, due or not due, direct or indirect, absolute or
     contingent, liquidated or unliquidated; whether Borrower may be liable
     individually or jointly with others; whether Borrower may be obligated as
     guarantor, surety, accommodation party or otherwise; whether recovery upon
     such indebtedness may be or hereafter may become barred by any statute of
     limitations; and whether such indebtedness may be or hereafter may become
     otherwise unenforceable.

     LENDER. The word "Lender" means U.S. Bank National Association, its
     successors and assigns.

     NOTE. The word "Note" means the Note dated June 22, 2001 in the principal
     amount of $600,000.00 from California Beach Restaurants, Inc. to Lender,
     together with a provision for a temporary bulge for  $700,000.00 from
     January 1, 2001 through April 30, 2001 and the Standby Letters of Credit
     or Commercial Letters of  Credit issued by Lender on Borrower's behalf
     either severally or in accordance with a Continuing Agreement, together
     with any and all renewals, modifications, extensions, substitutions,
     refinancings and 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.
<PAGE>   13
06-22-2001               COMMERCIAL SECURITY AGREEMENT                    PAGE 2
LOAN NO 2789-34                  (CONTINUED)
================================================================================

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

     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, an 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



<PAGE>   14

06-22-2001               COMMERCIAL SECURITY AGREEMENT                    PAGE 3
LOAN NO 2789-34                   (CONTINUED)

     (d) all other properties where Collateral is or may be located. Except in
     the ordinary course of its business, Grantor shall not remove the
     Collateral from its existing locations without the 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.

     TRANSACTION 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
     rights 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 Environmental 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 or
     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.



<PAGE>   15

06-22-2001               COMMERCIAL SECURITY AGREEMENT                 PAGE 4
LOAN NO 2789-34                   (CONTINUED)
================================================================================
     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
     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 rights 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 OF INDEBTEDNESS. Failure of Borrower to make any payment when due
     on the Indebtedness.

     OTHER DEFAULTS. Failure of Grantor 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 in any other note, security agreement,
     lease agreement or lease schedule, loan agreement or other agreement,
     whether now existing or hereafter made, between Grantor and U.S. Bancorp or
     any direct or indirect subsidiary of U.S. Bancorp.

     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 creditor 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 a 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 or Borrower's
     property, any assignment for the benefit of creditors, any type of
     creditor 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 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.

     INSECURITY. Lender, in good faith, deems itself insecure.

RIGHT AND REMEDIES ON 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>   16
06-22-2001               COMMERCIAL SECURITY AGREEMENT                    PAGE 5
LOAN NO 2789-34                  (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, choses 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 to 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 Sacramento County, the State of California. Lender, Grantor and
     Borrower hereby waive the right to any jury trial in any action,
     proceeding, or counterclaim brought by either Lender, Grantor or Borrower
     against the other. 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 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. Grantor and Borrower also
     shall pay all court 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.

     NOTICE. 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, address 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>   17
06-22-2001                   COMMERCIAL SECURITY AGREEMENT                PAGE 6
LOAN NO 2789-34                       (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.

ADDENDUM TO COMMERCIAL SECURITY AGREEMENT. An exhibit, titled "ADDENDUM TO
COMMERCIAL SECURITY AGREEMENT," is attached to this Agreement and by this
reference is made a part of this Agreement just as if all the provisions, terms
and conditions of the Exhibit had been fully set forth in this Agreement.

BORROWER AND EACH GRANTOR ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS
COMMERCIAL SECURITY AGREEMENT, AND BORROWER AND EACH GRANTOR AGREE TO ITS
TERMS. THIS AGREEMENT IS DATED JUNE 22, 2001.

BORROWER:

CALIFORNIA BEACH RESTAURANTS, INC.

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

GRANTOR:

X /s/ ALAN REDHEAD                           X /s/ ALAN REDHEAD
 -----------------------------------         ---------------------------------
 CALIFORNIA BEACH RESTAURANTS, INC.          SEA VIEW RESTAURANTS, INC.


<PAGE>   18
[US BANK LOGO]

                          COMMERCIAL PLEDGE AGREEMENT

<Table>
<Caption>
Principal    Loan Date    Maturity    Loan No.   Call   Collateral   Account    Officer    Initials
<S>          <C>          <C>         <C>        <C>    <C>         <C>         <C>      <C>
700,000.00   06-22-2001   09-15-2002  2789-34              070      1105622447   R-B83   /s/[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.
</Table>

<Table>
<S>                                             <C>
BORROWER:  CALIFORNIA BEACH RESTAURANTS, INC.   LENDER:  U.S. Bank National
           17383 SUNSET BOULEVARD, SUITE 140             Association
           PACIFIC PALISADES, CA 90272                   15910 Ventura Boulevard
                                                         Encino, CA 91496

GRANTOR:   SEA VIEW RESTAURANTS, INC.
           17383 SUNSET BOULEVARD, SUITE 140
           PACIFIC PALISADES, CA 90272
</Table>
================================================================================

THIS COMMERCIAL PLEDGE AGREEMENT is entered into among CALIFORNIA BEACH
RESTAURANTS, INC. (referred to below as "Borrower"); SEA VIEW RESTAURANTS, INC.
(referred to below as "Grantor"); and U.S. Bank National Association (referred
to below as "Lender").

GRANT OF SECURITY INTEREST. 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.

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

      COLLATERAL. The word "Collateral" means the following specifically
      described property, which Grantor has delivered or agrees to deliver (or
      cause to be delivered) immediately to Lender, together with all income
      and Proceeds as described below:

            LICENSE AGREEMENT ENTERED INTO AS OF APRIL 21, 1992 BY AND BETWEEN
            SEA VIEW RESTAURANTS, INC. ("LICENSOR") AND MCA DEVELOPMENT VENTURE
            TWO ("LICENSEE").

      In addition, the word "Collateral" includes all property of Grantor, in
      the possession of Lender (or in the possession of a third party subject
      to the control of Lender), whether now or hereafter existing and whether
      tangible or intangible in character, including without limitation each of
      the following:

            (a)   All property to which Lender acquires title or documents of
            title.

            (b)   All property assigned to Lender.

            (c)   All promissory notes, bills of exchange, stock certificates,
            bonds, savings passbooks, time certificates of deposit, insurance
            policies, and all other instruments and evidence of an obligation.

            (d)   All records relating to any of the property described in this
            Collateral section, whether in the form of a writing, microfilm,
            microfiche, or 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. 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.

      INCOME AND PROCEEDS. The words "Income and Proceeds" mean all present and
      future income, proceeds, earnings, increases, and substitutions from or
      for the Collateral of every kind and nature, including without limitation
      all payments, interest, profits, distributions, benefits, rights,
      options, warrants, dividends, stock dividends, stock splits, stock
      rights, regulatory dividends, distributions, subscriptions, monies,
      claims for money due and to become due, proceeds of any insurance on the
      Collateral, shares of stock of different par value or no par value issued
      in substitution or exchange for shares included in the Collateral, and
      all other property Grantor is entitled to receive on account of such
      Collateral, including accounts, documents, instruments, chattel paper,
      and general intangibles.

      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 Borrower or Grantor is
      responsible under this Agreement or under any of the Related Documents. In
      addition, the word "Indebtedness" includes all other obligations, debts
      and liabilities, plus interest thereon, of Borrower, or any one or more of
      them, to Lender, as well as all claims by Lender against Borrower, or any
      one or more of them, whether existing now or later; whether they are
      voluntary or involuntary, due or not due, direct or indirect, absolute of
      contingent, liquidated or unliquidated; whether Borrower may be liable
      individually or jointly with others; whether Borrower may be obligated as
      guarantor, surety, accommodation party or otherwise; whether recovery upon
      such indebtedness may be or hereafter may become barred by any statute of
      limitations; and whether such indebtedness may be or hereafter may become
      otherwise unenforceable

      LENDER. The word "Lender" means U.S. Bank National Association, its
      successors and assigns.

      Note. The word "Note" means the Note dated June 22, 2001 in the principal
      amount of $500,000.00 from California Beach Restaurants, Inc., together
      with a provision for a temporary bulge for $700,000.00 from January 1,
      2001 through April 30, 2001, and the Standby Letters of Credit or
      Commercial Letters of Credit issued by Lender on Borrower's behalf either
      severally or in accordance with a Continuing Agreement, together with any
      and all renewals, modifications, extensions, substitutions, refinancings
      and consolidations thereof.

      OBLIGOR. The word "Obligor" means and includes without limitation any and
      all persons or entities obligated to pay money or to perform some other
      act under the Collateral.
<PAGE>   19
06-22-2001                   COMMERCIAL PLEDGE AGREEMENT                  PAGE 2
LOAN NO 2789-34                       (CONTINUED)
================================================================================

     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, agreement 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 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 to 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 or 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 protection of Borrower in connection with any
anti-deficiency laws, other laws limiting or discharging the Indebtedness of
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
any 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 Keough 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.

GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.
Grantor represents and warrants to Lender that:

     OWNERSHIP. Grantor is the lawful owner of the Collateral free and clear of
     all security interests, liens, encumbrances and claims of others except as
     disclosed to and accepted by Lender in writing prior to execution of this
     Agreement.

     RIGHT TO PLEDGE. Grantor has the full right, power and authority to enter
     into this Agreement and to pledge the Collateral.

     BINDING EFFECT. This Agreement is binding upon Grantor, as well as
     Grantor's heirs, successors, representatives and assigns, and is legally
     enforceable in accordance with its terms.

     NO FURTHER ASSIGNMENT. Grantor has not, and will not, sell, assign,
     transfer, encumber or otherwise dispose of any of Grantor's rights in the
     Collateral except as provided in this Agreement.

     NO DEFAULTS. There are no defaults existing under the Collateral, and
     there are no offsets or counterclaims to the same. Grantor will strictly
     and promptly perform each of the terms, conditions, covenants and
     agreements contained in the Collateral which are to be performed by
     Grantor, if any.

     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.

LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO COLLATERAL. Lender may hold the
Collateral until all the Indebtedness has been paid and satisfied and thereafter
may deliver the Collateral to any Grantor. Lender shall have the following
rights in addition to all other rights it may have by law:

     MAINTENANCE AND PROTECTION OF COLLATERAL. Lender may, but shall not be
     obligated to, take such steps as it deems necessary or desirable to
     protect, maintain, insure, store, or care for the Collateral, including
     payment of any liens or claims against the Collateral. Lender may charge
     any cost incurred in so doing to Grantor.





<PAGE>   20
06-22-2001                  COMMERCIAL PLEDGE AGREEMENT                   PAGE 3
LOAN NO 2789-34                     (CONTINUED)
================================================================================

     INCOME AND PROCEEDS FROM THE COLLATERAL. Lender may receive all Income and
     Proceeds and add it to the Collateral. Grantor agrees to deliver to Lender
     immediately upon receipt, in the exact form received and without
     commingling with other property, all Income and Proceeds from the
     Collateral which may be received by, paid, or delivered to Grantor or for
     Grantor's account, whether as an addition to, in discharge of, in
     substitution of, or in exchange for any of the Collateral.

     APPLICATION OF CASH. At Lender's option, Lender may apply any cash, whether
     included in the Collateral or received as Income and Proceeds or through
     liquidation, sale, or retirement, of the Collateral, to the satisfaction of
     the Indebtedness or such portion thereof as Lender shall choose whether or
     not matured.

     TRANSACTIONS WITH OTHERS. Lender may (a) extend time for payment or other
     performance, (b) grant a renewal or change in terms or conditions, or (c)
     compromise, compound or release any obligation, with any one or more
     Obligors, endorsers, or Guarantors of the Indebtedness as Lender deems
     advisable, without obtaining the prior written consent of Grantor, and no
     such act or failure to act shall affect Lender's rights against Grantor or
     the Collateral.

     ALL COLLATERAL SECURES INDEBTEDNESS. All Collateral shall be security for
     the Indebtedness, whether the Collateral is located at one or more offices
     or branches of Lender and whether or not the office or branch where the
     Indebtedness is created is aware of or relies upon the Collateral.

     COLLECTION OF COLLATERAL. Lender, at Lender's option may, but need not,
     collect directly from the Obligors on any of the Collateral all Income and
     Proceeds or other sums of money and other property due and to become due
     under the Collateral, and Grantor authorizes and directs the Obligors, if
     Lender exercises such option, to pay and deliver to Lender all Income and
     Proceeds and other sums of money and other property payable by the terms of
     the Collateral and to accept Lender's receipt for the payments.

     POWER OF ATTORNEY. Grantor irrevocably appoints Lender as Grantor's
     attorney-in-fact, with full power of substitution, (a) to demand, collect,
     receive, receipt for, sue and recover all Income and Proceeds and other
     sums of money and other property which may now or hereafter become due,
     owing or payable from the Obligors in accordance with the terms of the
     Collateral; (b) to execute, sign and endorse any and all instruments,
     receipts, checks, drafts and 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, execute and deliver
     Grantor's release and acquitance for Grantor; (d) to file any claim or
     claims or to take any action or institute or take part in any proceedings,
     either in Lender's own name or in the name of Grantor, or otherwise, which
     in the discretion of Lender may seem to be necessary or advisable; and (e)
     to execute in Grantor's name and to deliver to the Obligors on Grantor's
     behalf, at the time and in the manner specified by the Collateral, any
     necessary Instruments or documents.

     PERFECTION OF SECURITY INTEREST. Upon request of Lender, Grantor will
     deliver to Lender any and all of the documents evidencing or constituting
     the Collateral. When applicable law provides more than one method of
     perfection of Lender's security interest, Lender may choose the method(s)
     to be used. Upon request of Lender, Grantor will sign and deliver any
     writings necessary to perfect Lender's security interest. Grantor hereby
     appoints Lender as Grantor's irrevocable attorney-in-fact for the purpose
     of executing any documents necessary to perfect or to continue the security
     interest granted in this Agreement. 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.

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.

LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable care
in the physical preservation and custody of the Collateral in Lender's
possession, but shall have no other obligation to protect the Collateral or its
value. In particular, but without limitation. Lender shall have no
responsibility for (a) any depreciation in value of the Collateral or for the
collection or protection of any Income and Proceeds from the Collateral, (b)
preservation of rights against parties to the Collateral or against third
persons, (c) ascertaining any maturities, calls, conversions, exchange, offers,
tenders, or similar matters relating to any of the Collateral, or (d) informing
Grantor about any of the above, whether or not Lender has or is deemed to have
knowledge of such matters. Except as provided above, Lender shall have no
liability for depreciation or deterioration of the Collateral.

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 Borrower or Grantor 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 agreements between Lender and Borrower.

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

     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 Borrower or Grantor or
     by any governmental agency against the Collateral or any other collateral
     securing the Indebtedness. This includes a garnishment of any of Borrower
     or Grantor'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.

     INSECURITY. Lender, in good faith, deems itself insecure.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender may exercise any one or more of the
following rights and remedies:

     ACCELERATE INDEBTEDNESS. Declare all Indebtedness, including any prepayment
     penalty which Borrower would be required to pay, immediately due and
     payable, without notice of any kind to Borrower or Grantor.

     COLLECT THE COLLATERAL. Collect any of the Collateral and, at Lender's
     option and to the extent permitted by applicable law, retain possession of
     the Collateral while suing on the Indebtedness.

     SELL THE COLLATERAL. Sell the Collateral, at Lender's discretion, as a unit
     or in parcels, at one or more public or private sales. Unless the
     Collateral is perishable or threatens to decline speedily in value or is of
     a type customarily sold on a recognized market, Lender shall give or mail
     to Grantor, or any of them, notice at least ten (10) days in advance of the
     time and place of any public sale, or of the date after which any private
     sale may be





<PAGE>   21
06-22-2001               COMMERCIAL PLEDGE AGREEMENT                      PAGE 4
LOAN NO 2789-34                  (CONTINUED)
================================================================================

     made. Grantor agrees that any requirement of reasonable notice is satisfied
     if Lender mails notice by ordinary mail addressed to Grantor, or any of
     them, at the last address Grantor has given Lender in writing. If a public
     sale is held, there shall be sufficient compliance with all requirements of
     notice to the public by a single publication in any newspaper of general
     circulation in the county where the Collateral is located, setting forth
     the time and place of sale and a brief description of the property to be
     sold. Lender may be a purchaser at any public sale.

     REGISTER SECURITIES. Register any securities included in the Collateral in
     Lender's name and exercise any rights normally incident to the ownership of
     securities.

     SELF SECURITIES. Sell any securities included in the Collateral in a manner
     consistent with applicable federal and state securities laws,
     notwithstanding any other provision of this or any other agreement. If,
     because of restrictions under such laws, Lender is or believes it is unable
     to sell the securities in an open market transaction, Grantor agrees that
     Lender shall have no obligation to delay sale until the securities can be
     registered, and may make a private sale to one or more persons or to a
     restricted group of persons, even though such sale may result in a price
     that is less favorable than might be obtained in an open market
     transaction, and such a sale shall be considered commercially reasonable.
     If any securities held as Collateral are "restricted securities" as defined
     in the Rules of the Securities and Exchange Commission (such as Regulation
     D or Rule 144) or state securities departments under state "Blue Sky" laws,
     or if Borrower or Grantor is an affiliate of the issuer of the securities,
     Borrower and Grantor agree that neither Grantor nor any agent of Grantor
     will sell or dispose of any securities of such issuer without obtaining
     Lender's prior written consent.

     FORECLOSURE. Maintain a judicial suit for foreclosure and sale of the
     Collateral.

     TRANSFER TITLE. Effect transfer of title upon sale of all or part of the
     Collateral. For this purpose, Grantor irrevocably appoints Lender as its
     attorney-in-fact to execute endorsements, assignments and instruments in
     the name of Grantor and each of them (if more than one) as shall be
     necessary or reasonable.

     OTHER RIGHTS AND REMEDIES. Have and exercise any or all of the rights and
     remedies of a secured creditor under the provisions of the Uniform
     Commercial Code, at law, in equity, or otherwise.

     APPLICATION OF PROCEEDS. Apply any cash which is part of the Collateral, or
     which is received from the collection or sale of the Collateral, to
     reimbursement of any expenses, including any costs for registration of
     securities, commissions incurred in connection with a sale, attorney fees
     as provided below, and court costs, whether or not there is a lawsuit and
     including any fees on appeal, incurred by Lender in connection with the
     collection and sale of such Collateral and to the payment of the
     Indebtedness of Borrower to Lender, with any excess funds to be paid to
     Grantor as the interests of Grantor may appear. Borrower agrees, to the
     extent permitted by law, to pay any deficiency after application of the
     proceeds of the Collateral to the Indebtedness.

     CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether evidenced
     by this Agreement or by any other writing, shall be cumulative and may be
     exercised singularly or concurrently. Election by Lender to 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
     under this Agreement, after Grantor'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, Borrower and
     Grantor agree upon Lender's request to submit to the jurisdiction of the
     courts of Sacramento County, the State of California. Lender, Borrower and
     Grantor hereby waive the right to any jury trial in any action, proceeding,
     or counterclaim brought by either Lender, Borrower or Grantor against the
     other. This Agreement shall be governed by and construed in accordance with
     the laws of the State of California.

     ATTORNEYS' FEES; EXPENSES. Borrower and Grantor 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
     Borrower and Grantor 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. Borrower and Grantor also shall pay all
     court 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.

     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 Borrower or Grantor, notice to any Borrower or
     Grantor will constitute notice to all Borrower and Grantors. For notice
     purposes, Borrower and Grantor will keep Lender informed at all times of
     Borrower and Grantor's current address(es).

     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.

     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.

ADDENDUM TO COMMERCIAL PLEDGE AGREEMENT. An exhibit, titled "ADDENDUM TO
COMMERCIAL PLEDGE AGREEMENT," is attached to this Agreement and by this
reference is made a part of this Agreement just as if all the provisions, terms
and conditions of the Exhibit had been fully set
<PAGE>   22

06-22-2001                COMMERCIAL PLEDGE AGREEMENT                     PAGE 5
LOAN NO 2789-34                  (CONTINUED)
================================================================================
forth in this Agreement.

BORROWER AND GRANTOR ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS PLEDGE
AGREEMENT, AND BORROWER AND GRANTOR AGREE TO ITS TERMS. THIS AGREEMENT IS DATED
JUNE 22, 2001.

BORROWER:

CALIFORNIA BEACH RESTAURANTS, INC.

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

GRANTOR:

SEA VIEW RESTAURANTS, INC.

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

<PAGE>   23
                   ADDENDUM TO COMMERCIAL SECURITY AGREEMENT

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

<Table>
<S>                                               <C>
BORROWER: CALIFORNIA BEACH RESTAURANTS, INC.      LENDER: U.S. BANK NATIONAL ASSOCIATION
          17383 SUNSET BOULEVARD, SUITE 140               15910 VENTURA BOULEVARD
          PACIFIC PALISADES, CA 90272                     ENCINO, CA 91436
</Table>

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

This ADDENDUM TO COMMERCIAL SECURITY AGREEMENT is attached to and by this
reference is made a part of each Security Agreement, dated June 22, 2001, and
executed in connection with a loan or other financial accommodations between
U.S. Bank National Association and CALIFORNIA BEACH RESTAURANTS, INC.

Capitalized terms used in this Addendum and not defined herein but defined in
the Security Agreement shall have the meanings ascribed to such terms under the
Security Agreement.

For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Grantor and the Lender agree as follows with respect to the
Security Agreement, notwithstanding any language to the contrary contained in
the Security Agreement:

1. References in the Security Agreement to the term "Uniform Commercial Code"
shall be deemed to refer to Revised Article 9 of the Uniform Commercial Code,
as adopted in the State whose laws govern the Security Agreement, or, if
Revised Article 9 has not been so adopted, as promulgated by the National
Commissioners on Uniform State Laws.

2. Grantor agrees that Lender may file financing statements containing a
description of the Collateral broader than that set forth in the Security
Agreement. Grantor also agrees to execute and cooperate with Lender in
obtaining from third parties control agreements in form satisfactory to Lender
with respect to Collateral consisting of, or including, investment property,
deposit accounts, letter-of-credit rights, and electronic chattel paper. If any
Collateral is in the possession of a bailee, Grantor will join with Lender in
notifying the bailee of Lender's interest and in obtaining from the bailee an
acknowledgment that the bailee holds the Collateral for Lender's benefit.

3. Grantor represents that the information set forth in the Security Agreement
with respect to Grantor's name, location and organizational structure is
correct. Grantor will not change its name, its location, its jurisdiction of
organization, or its organizational structure without giving Lender at least
thirty (30) days' prior written notice and will periodically provide Lender
with evidence that no change has occurred.

4. To the extent that Grantor uses any amounts loaned to purchase Collateral,
Grantor's repayment of the loan amounts shall apply on a "first-in-first-out"
basis so that the portion of the loan amounts used to purchase a particular item
of Collateral shall be paid in the chronological order in which the Grantor
purchased the Collateral.

5. To the extent that Collateral includes chattel paper, at the time Grantor
creates any chattel paper, Grantor shall place a legend on the chattel paper
indicating that Lender has a security interest in the chattel paper.

6. Grantor will not license any Collateral.

7. Lender's rights described in the paragraph of the Security Agreement titled
"Grantor's Right to Possession and to Collect Accounts" apply to Collateral
consisting of accounts and/or any other rights to payment.

8. In addition to the events described in the "Events of Default" section of the
Security Agreement, it shall also constitute an Event of Default under the
Security Agreement. If Lender receives at any time following execution of the
Security Agreement any information indicating that Lender's security interest is
not prior to all other security interests or other interests in the Collateral,
except as otherwise agreed by Lender.

9. In addition to the Lender's rights and remedies as described in the section
of the Security Agreement headed "Sell the Collateral," if an Event of Default
occurs under the Security Agreement Lender may dispose of any of the Collateral
at public auction or private sale in its then present condition or following
such preparation and processing as Lender deems commercially reasonable. Lender
has no duty to prepare or process the Collateral prior to sale. Lender may
disclaim warranties of title, possession, quiet enjoyment and the like. Such
actions by Lender shall not affect the commercial reasonableness of the sale.
Further, Lender may comply with any applicable state or federal law requirements
in connection with a disposition of the Collateral and compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.

10. To the extent that the Collateral listed in the Security Agreement includes
general intangibles, it also includes without limitation all software and
payment intangibles; to the extent such Collateral includes accounts. It also
includes without limitation all health-care insurance receivables; In the event
such Collateral includes Inventory, chattel paper, accounts, equipment and
general intangibles, it also includes without limitation all of the property
described above in this paragraph plus all instruments, deposit accounts,
letter of credit rights, investment property, money, documents, as-extracted
collateral and fixtures. In any event, the Collateral listed in the Security
Agreement includes all supporting obligations as to any such Collateral and all
products of such collateral.

In the event of any direct conflict between the terms of the Security Agreement
and this Addendum, the terms of this Addendum shall control.

THIS ADDENDUM TO COMMERCIAL SECURITY AGREEMENT IS EXECUTED ON JUNE 22, 2001.

/s/ ALAN REDHEAD                        X
---------------------------------       -----------------------------

LENDER:

U.S. BANK NATIONAL ASSOCIATION

By: /s/ [Signature Illegible]
   ------------------------------
   Authorized Officer


<PAGE>   24
                    ADDENDUM TO COMMERCIAL PLEDGE AGREEMENT

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

<Table>
<S>                                               <C>
BORROWER: CALIFORNIA BEACH RESTAURANTS, INC.      LENDER:   U.S. BANK NATIONAL ASSOCIATION
          17383 SUNSET BOULEVARD, SUITE 140                 15910 VENTURA BOULEVARD
          PACIFIC PALISADES, CA 90272                       ENCINO, CA 91436
</Table>
                    =======================================

This ADDENDUM TO COMMERCIAL PLEDGE AGREEMENT is attached to and by this
reference is made a part of each Pledge Agreement, dated June 22, 2001, and
executed in connection with a loan or other financial accommodations between
U.S. Bank National Association and CALIFORNIA BEACH RESTAURANTS, INC.

Capitalized terms used in this Addendum and not defined herein but defined in
the Pledge Agreement shall have the meanings ascribed to such terms under the
Pledge Agreement.

For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Grantor and the Lender agree as follows with respect to the
Pledge Agreement, notwithstanding any language to the contrary contained in the
Pledge Agreement:

1. References in the Pledge Agreement to the term "Uniform Commercial Code"
shall be deemed to refer to Revised Article 9 of the Uniform Commercial Code,
as adopted in the state whose laws govern the Pledge Agreement or, if Revised
Article 9 has not been so adopted, as promulgated by the National Commissioners
on Uniform State Laws. Terms used in the Pledge Agreement not otherwise defined
in the Pledge Agreement will have the meanings given such terms under such
Uniform Commercial Code.

2. Grantor agrees that Lender may file financing statements containing a
description of the Collateral broader than that set forth in the Pledge
Agreement. Grantor also agrees to execute and cooperate with Lender in
obtaining from third parties control agreements in form satisfactory to Lender
with respect to Collateral consisting of, or including, investment property,
deposit accounts, letter-of-credit rights, and electronic chattel paper. If any
Collateral is in the possession of a bailee, Grantor will join with Lender in
notifying the bailee of Lender's interest and in obtaining from the bailee an
acknowledgment that the bailee holds the Collateral for Lender's benefit.

3. Grantor represents that the information set forth in the Pledge Agreement
with respect to Grantor's name, location and organizational structure is
correct. Grantor will not change its name, its location, its jurisdiction of
organization, or its organizational structure without giving Lender at least
thirty (30) days prior written notice and will periodically provide Lender with
evidence that no change has occurred.

4. The paragraph of the Pledge Agreement headed "Applicable Law" is modified by
adding onto the end of that paragraph the phrase "except to the extent that the
Uniform Commercial Code provides for the application of the laws of any other
state."

5. If more than one person is liable for the Indebtedness, Grantor irrevocably
waives, disclaims and relinquishes all claims against such other person which
Grantor 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.

THIS ADDENDUM TO COMMERCIAL PLEDGE AGREEMENT IS EXECUTED ON JUNE 22, 2001.


X   /s/ ALAN REDHEAD                    X
 --------------------------------        --------------------------------

LENDER:

U.S. Bank National Association

By: /s/ [Signature Illegible]
   ------------------------------
   Authorized Officer

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