<PAGE>

                                                                    EXHIBIT 10.7

                            INDEMNIFICATION AGREEMENT
                            -------------------------

     THIS INDEMNIFICATION AGREEMENT is made and entered into this 14/th/ day of
December, 2001 (this "Agreement"), by and between National Golf Properties,
Inc., a Maryland corporation (the "Company"), and James M. Stanich
("Indemnitee").

     WHEREAS, at the request of the Company, Indemnitee currently serves as a
director of the Company and may, therefore, be subjected to claims, suits or
proceedings arising as a result of his service; and

     WHEREAS, as an inducement to Indemnitee to continue to serve as such
director, the Company has agreed to indemnify and to advance expenses and costs
incurred by Indemnitee in connection with any such claims, suits or proceedings,
to the fullest extent permitted by law; and

     WHEREAS, each of the directors of the Company, including the Indemnitee,
has one or more previous agreements entitled "Indemnification Agreement" with
the Company or its predecessor (the "Prior Agreements"); and

     WHEREAS, the Company desires to replace and supersede the Prior Agreements
with a new form of indemnification agreement for all of the directors of the
Company; and

     WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing as a director of the Company.

     NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

     Section 1.  Definitions. For purposes of this Agreement:
                 -----------

     (a) "Change in Control" means a change in control of the Company occurring
after the Effective Date of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any
similar item on any similar schedule or form) promulgated under the Securities
Exchange Act of 1934 (the "Act"), whether or not the Company is then subject to
such reporting requirement; provided, however, that, without limitation, such a
Change in Control shall be deemed to have occurred if after the Effective Date
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company's then outstanding securities without
the prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person attaining such percentage
interest; (ii) there occurs a proxy contest, or the Company is a party to a
merger, consolidation, sale of assets, plan of liquidation or other
reorganization not approved by at least two-thirds of the members of the Board
of Directors then in office, as a consequence of which members of the Board of
Directors in office immediately prior to such transaction or event constitute
less than a majority of the Board of Directors thereafter; or (iii) during any
period of two consecutive years, other than as a result of an event described in
clause (a)(ii) of this Section 1, individuals who at

<PAGE>

the beginning of such period constituted the Board of Directors (including for
this purpose any new director whose election or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.

     (b) "Corporate Status" means the status of a person who is or was a
director, trustee, officer, partner, member, employee or agent of the Company or
of any other corporation, partnership, joint venture, trust, limited liability
company, employee benefit plan or other enterprise which such person is or was
serving at the request of the Company.

     (c) "Disinterested Director" means a director of the Company who is not and
was not a party to the Proceeding in respect of which indemnification is sought
by Indemnitee.

     (d) "Effective Date" means the date set forth in the first paragraph of
this Agreement.

     (e) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a Proceeding.

     (f) "Independent Counsel" means a law firm, or a member of a law firm,
selected by the board of directors as provided in Section 8(b), that is
experienced in matters of corporation law and neither presently is, nor in the
past five years has been, retained to represent: (i) the Company, any of its
direct or indirect subsidiaries or any of their respective tenants, or
Indemnitee in any matter material to any such party, or (ii) any other party to
the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.

     (g) "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative (including
on appeal).

     Section 2. Services by Indemnitee. Indemnitee agrees to serve as a director
                ----------------------
of the Company and may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obligation imposed by
operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position.

     Section 3. Indemnification - General. The Company shall indemnify, and
                -------------------------
advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) to the
fullest extent permitted by Maryland law in effect on the date hereof and as
amended from time to time; provided, however, that no change in Maryland law
                           --------  -------
shall have the effect of reducing the benefits available to Indemnitee hereunder
based on Maryland law as in effect on the date hereof. The Company shall
indemnify Indemnitee's spouse (whether by statute or at common law and without
regard to

                                       2

<PAGE>

the location of the governing jurisdiction) and children to the same extent and
subject to the same limitations applicable to Indemnitee hereunder for claims
arising out of the status of such person as a spouse or child of Indemnitee,
including claims seeking damages from marital property (including community
property) or property held by such Indemnitee and such spouse or child or
property transferred to such spouse or child, but such indemnity shall not
otherwise extend to protect the spouse or child against liabilities caused by
the spouse's or child's own acts or inactions. The rights of Indemnitee provided
in this Section 3 shall include, but shall not be limited to, the rights set
forth in the other sections of this Agreement.

     Section 4. Proceedings Other Than Proceedings by or in the Right of the
                ------------------------------------------------------------
Company. Indemnitee shall be entitled to the rights of indemnification provided
-------
in this Section 4 if, by reason of his Corporate Status, he is, was or is
threatened to be made a party to any threatened, pending, or completed
Proceeding, other than a Proceeding by or in the right of the Company. Pursuant
to this Section 4, Indemnitee shall be indemnified against all Expenses,
judgments, awards, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with a Proceeding by
reason of his Corporate Status unless it is established that (i) the act or
omission of the Indemnitee was material to the matter giving rise to the
Proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty, (ii) the Indemnitee actually received an improper
personal benefit in money, property or services, or (iii) in the case of any
criminal Proceeding, the Indemnitee had reasonable cause to believe or should
have believed that his conduct was unlawful.

     Section 5. Proceedings by or in the Right of the Company. Indemnitee shall
                ---------------------------------------------
be entitled to the rights of indemnification provided in this Section 5 if, by
reason of his Corporate Status, he is, was or is threatened to be made a party
to any threatened, pending or completed Proceeding brought by or in the right of
the Company to procure a judgment in its favor. Pursuant to this Section 5,
Indemnitee shall be indemnified against all amounts paid in settlement and all
Expenses actually and reasonably incurred by him or on his behalf in connection
with such Proceeding unless it is established that (i) the act or omission of
the Indemnitee was material to the matter giving rise to such a Proceeding and
(a) was committed in bad faith or (b) was the result of active and deliberate
dishonesty or (ii) the Indemnitee actually received an improper personal benefit
in money, property or services.

     Section 6. Indemnification for Expenses of a Party Who is Wholly or Partly
                ---------------------------------------------------------------
Successful. Notwithstanding any other provision of this Agreement, to the extent
----------
that Indemnitee is, by reason of his Corporate Status, made a party to and is
successful, on the merits or otherwise, in the defense of any Proceeding, he
shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee under this Section 6 against all Expenses
actually and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Section and
without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter. Nothing in this Section 6
shall be construed to limit any indemnification or advancement of Expenses to
which Indemnitee is otherwise entitled pursuant to this Agreement or otherwise.

                                       3

<PAGE>

     Section 7. Advancement of Expenses. The Company shall advance all
                -----------------------
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding to which Indemnitee is, or is threatened to be, made a party,
within ten days after the receipt by the Company of a statement or statements
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and, to
the extent required by Maryland law, shall include or be preceded or accompanied
by a written affirmation by the Indemnitee of the Indemnitee's good faith belief
that the standard of conduct necessary for indemnification by the Company as
authorized by law and by this Agreement has been met and a written undertaking
by or on behalf of Indemnitee to repay any Expenses advanced if it shall
ultimately be determined that such standard of conduct has not been met. The
undertaking required by this Section 7 shall be an unlimited general obligation
of Indemnitee and shall be accepted without reference to the Indemnitee's
financial ability to repay such advanced Expenses.

     Section 8. Procedure for Determination of Entitlement to Indemnification.
                -------------------------------------------------------------

     (a) To obtain indemnification under this Agreement, Indemnitee shall submit
to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.

     (b) Upon written request by Indemnitee for indemnification pursuant to the
first sentence of Section 8(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto shall be made
promptly, in the specific case: (i) if a Change in Control shall have occurred,
by, at the option of Indemnitee, the Board of Directors by a majority vote of a
quorum of Disinterested Directors or by Independent Counsel in a written opinion
to the Board of Directors, a copy of which shall be delivered to Indemnitee; or
(ii) if a Change of Control shall not have occurred, (A) by the Board of
Directors by a majority vote of a quorum consisting of Disinterested Directors,
or (B) if a quorum of the Board of Directors consisting of Disinterested
Directors is not obtainable or, even if obtainable, such quorum of Disinterested
Directors so directs, by Independent Counsel in a written opinion to the Board
of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so
directed by a majority of the members of the Board of Directors, by the
stockholders of the Company; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten days
after such determination. Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Expenses (including reasonable attorneys' fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

                                       4

<PAGE>

     Section 9.  Presumptions and Effect of Certain Proceedings.
                 ----------------------------------------------

     (a) In making a determination with respect to entitlement to
indemnification under this Agreement, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 8(a) of this Agreement, and the Company shall have
the burden of proof to overcome that presumption in connection with the making
of any determination contrary to that presumption.

     (b) The termination of any Proceeding by judgment, order, settlement
(whether with or without court approval), conviction, a plea of nolo contendere
                                                                ---------------
or its equivalent, or an entry of an order of probation prior to judgment, does
not create a presumption that the Indemnitee did not meet the requisite standard
of conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law or this Agreement.

     Section 10. Remedies of Indemnitee.
                 ----------------------

     (a) If (i) a determination is made pursuant to Section 8 of this Agreement
that Indemnitee is not entitled to indemnification under this Agreement, (ii)
advancement of Expenses is not timely made pursuant to Section 7 of this
Agreement, (iii) no determination of entitlement to indemnification shall have
been made pursuant to Section 8(b) of this Agreement within thirty (30) days
(except that if such determination was to be made by the stockholders of the
Company, then within ninety (90) days) after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 6 of this Agreement within ten days after receipt by the
Company of a written request therefor, or (v) payment of indemnification is not
made within ten days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Maryland, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
commercial Arbitration Rules of the American Arbitration Association. Indemnitee
shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 10(a); provided,
                                                                  --------
however, that the foregoing clause shall not apply in respect of a proceeding
brought by Indemnitee to enforce his rights under Section 6 of this Agreement.

     (b) In any judicial proceeding or arbitration commenced pursuant to this
Section 10 the Company shall have the burden of proving that Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be.

     (c) If a determination shall have been made pursuant to Section 8(b) of
this Agreement that Indemnitee is entitled to indemnification, the Company shall
be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 10, absent a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification.

                                       5

<PAGE>

     (d) In the event that Indemnitee, pursuant to this Section 10, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all Expenses actually and reasonably incurred by him in such
judicial adjudication or arbitration, regardless of whether Indemnitee is
successful in whole or in part therein.

     Section 11. Defense of the Underlying Proceeding.
                 ------------------------------------

     (a) Notice by Indemnitee. Indemnitee agrees to notify the Company promptly
         --------------------
upon being served with or receiving any summons, citation, subpoena, complaint,
indictment, information, notice, request or other document relating to any
Proceeding which may result in the right to indemnification or the advancement
of Expenses hereunder; provided, however, that the failure to give any such
                       --------  -------
notice shall not disqualify Indemnitee from the right, or otherwise affect in
any manner any right of Indemnitee, to indemnification or the advancements of
Expenses under this Agreement unless the Company's ability to defend in such
Proceeding or to obtain proceeds under any insurance policy is materially and
adversely prejudiced thereby, and then only to the extent the Company is thereby
actually prejudiced.

     (b) Defense by Company. Subject to the provisions of the last sentence of
         ------------------
this Section 11(b) and of Section 11(c) below, the Company shall have the right
to defend Indemnitee in any Proceeding which may give rise to indemnification
hereunder; provided, however, that the Company shall notify Indemnitee of any
           --------  -------
such decision to defend within fifteen (15) calendar days following receipt of
notice of any such Proceeding under Section 11(a) above. The Company shall not,
without the prior written consent of Indemnitee, which shall not be unreasonably
withheld or delayed, consent to the entry of any judgment against Indemnitee or
enter into any settlement or compromise which (i) includes an admission of fault
of Indemnitee or (ii) does not include, as an unconditional term thereof, the
full release of Indemnitee from all liability in respect of such Proceeding,
which release shall be in form and substance reasonably satisfactory to
Indemnitee. This Section 11(b) shall not apply to a Proceeding brought by
Indemnitee under Section 10 above or Section 15 below.

     (c) Indemnitee's Right to Counsel. Notwithstanding the provisions of
         -----------------------------
Section 11(b) above, if in a Proceeding to which Indemnitee is a party by reason
of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based
upon an opinion of counsel, that he may have separate defenses or counterclaims
to assert with respect to any issue which may not be consistent with other
defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon
an opinion of counsel, that an actual or apparent conflict of interest or
potential conflict of interest exists between Indemnitee and the Company, or
(iii) if the Company fails to assume the defense of such Proceeding in a timely
manner, Indemnitee shall be entitled to be represented by separate legal counsel
of Indemnitee's choice at the expense of the Company. In addition, if the
Company fails to comply with any of its obligations under this Agreement or in
the event that the Company or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any Proceeding to deny or to
recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's
choice, at the expense of the Company, to represent Indemnitee in connection
with any such matter.

                                       6

<PAGE>

     Section 12. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
                 -----------------------------------------------------------

     (a) The rights of indemnification and advancement of Expenses as provided
by this Agreement shall be in addition to, and not deemed exclusive of, any
other rights to which Indemnitee may at any time be entitled under applicable
law, the charter or Bylaws of the Company, any agreement, a vote of stockholders
or a resolution of directors (or a committee of directors), or otherwise. No
amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal.

     (b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, employees, or
agents of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or
policies. The purchase and maintenance of such insurance shall not in any way
limit or affect the rights and obligations of the parties hereto, and the
execution and delivery of this Agreement shall not in any way be construed to
limit or affect the rights and obligations of the Company or the other parties
under any such insurance policy.

     (c) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of contribution or
recovery of Indemnitee, who shall take, at the request of the Company, all
reasonable actions necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.

     (d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

     Section 13. Successors. This Agreement shall be (a) binding upon all
                 ----------
successors and assigns of the Company (including any transferee of all or a
substantial portion of the business, stock and/or assets of the Company and any
direct or indirect successor by merger or consolidation or otherwise by
operation of law) and (b) binding on and shall inure to the benefit of the
heirs, personal representatives, executors and administrators of Indemnitee.
This Agreement shall continue for the benefit of Indemnitee and such heirs,
personal representatives, executors and administrators after Indemnitee has
ceased to have Corporate Status.

                                       7

<PAGE>

     Section 14. Severability. If any provision or provisions of this Agreement
                 ------------
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including, without limitation, each portion of any section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable that is not itself invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (b) to the fullest extent possible,
the provisions of this Agreement (including, without limitation, each portion of
any section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby.

     Section 15. Exception to Right of Indemnification or Advancement of
                 -------------------------------------------------------
Expenses. Notwithstanding any provision herein to the contrary:
--------

     (a) Except as provided in Section 10 of this Agreement, Indemnitee shall
not be entitled to indemnification or advancement of Expenses under this
Agreement with respect to any Proceeding brought by Indemnitee against the
Company, any entity controlled by the Company, any then current or former
director, officer or employee thereof, or any third party, unless the Board of
Directors has consented in writing to the initiation of such Proceeding.

     (b) Indemnitee shall not be entitled to indemnification or advancement of
Expenses under this Agreement if it has been finally adjudicated by a court of
competent jurisdiction that Indemnitee is liable to the Company for an
accounting of profits made from the purchase or sale by Indemnitee of securities
of the Company pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934, the rules and regulations promulgated thereunder and
amendments thereto or similar provisions of any federal, state or local
statutory law, or if Indemnitee agrees by way of settlement or otherwise to pay
any or all of such profits to the Company.

     Section 16. Identical Counterparts. This Agreement may be executed in one
                 ----------------------
or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.

     Section 17. Headings. The headings of the paragraphs of this Agreement are
                 --------
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

     Section 18. Modification and Waiver. No supplement, modification or
                 -----------------------
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

                                       8

<PAGE>

     Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the
                 --------------------
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder.

     Section 20. Notices. All notices, requests, demands and other
                 -------
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

     (a) If to Indemnitee, to: The address set forth on the signature page
hereto.

     (b) If to the Company to:

           National Golf Properties, Inc.
           2951 28th Street, Suite 3001
           Santa Monica, California 90405
           Attention: President

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

     Section 21. Governing Law. The parties agree that this Agreement shall be
                 -------------
governed by, and construed and enforced in accordance with, the laws of the
State of Maryland, which laws are applicable to contracts made and to be
performed in such state without giving effect to the principles of conflicts of
laws.

     Section 22. Miscellaneous. Use of the masculine pronoun shall be deemed to
                 -------------
include usage of the feminine pronoun where appropriate.

     Section 23. Prior Agreements. This Agreement replaces and supersedes any
                 ----------------
Prior Agreements to which the Indemnitee is a party, and such Prior Agreements
are hereby void and of no further force or effect.

                                       9

<PAGE>

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

ATTEST:                             NATIONAL GOLF PROPERTIES, INC.


/s/ Bonnie Matteren                 By:  /s/ David G. Price
-------------------------                -------------------------
Bonnie Matteren                          David G. Price
                                         Chairman


WITNESS:                            INDEMNITEE


/s/ Sylvia Adams                    /s/ James M. Stanich
-------------------------           ------------------------------------
Sylvia Adams                        JAMES M. STANICH

                                    Address:  2951 - 28th Street
                                              Santa Monica, California 90405

                                       10

<PAGE>

                            INDEMNIFICATION AGREEMENT
                            -------------------------

     THIS INDEMNIFICATION AGREEMENT is made and entered into this 14/th/ day of
December, 2001 (this "Agreement"), by and between National Golf Properties,
Inc., a Maryland corporation (the "Company"), and David G. Price ("Indemnitee").

     WHEREAS, at the request of the Company, Indemnitee currently serves as a
director of the Company and may, therefore, be subjected to claims, suits or
proceedings arising as a result of his service; and

     WHEREAS, as an inducement to Indemnitee to continue to serve as such
director, the Company has agreed to indemnify and to advance expenses and costs
incurred by Indemnitee in connection with any such claims, suits or proceedings,
to the fullest extent permitted by law; and

     WHEREAS, each of the directors of the Company, including the Indemnitee,
has one or more previous agreements entitled "Indemnification Agreement" with
the Company or its predecessor (the "Prior Agreements"); and

     WHEREAS, the Company desires to replace and supersede the Prior Agreements
with a new form of indemnification agreement for all of the directors of the
Company; and

     WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing as a director of the Company.

     NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

     Section 1. Definitions. For purposes of this Agreement:
                -----------

     a "Change in Control" means a change in control of the Company occurring
after the Effective Date of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any
similar item on any similar schedule or form) promulgated under the Securities
Exchange Act of 1934 (the "Act"), whether or not the Company is then subject to
such reporting requirement; provided, however, that, without limitation, such a
Change in Control shall be deemed to have occurred if after the Effective Date
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company's then outstanding securities without
the prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person attaining such percentage
interest; (ii) there occurs a proxy contest, or the Company is a party to a
merger, consolidation, sale of assets, plan of liquidation or other
reorganization not approved by at least two-thirds of the members of the Board
of Directors then in office, as a consequence of which members of the Board of
Directors in office immediately prior to such transaction or event constitute
less than a majority of the Board of Directors thereafter; or (iii) during any
period of two consecutive years, other than as a result of an event described in
clause (a)(ii) of this Section 1, individuals who at

<PAGE>

the beginning of such period constituted the Board of Directors (including for
this purpose any new director whose election or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.

     (b) "Corporate Status" means the status of a person who is or was a
director, trustee, officer, partner, member, employee or agent of the Company or
of any other corporation, partnership, joint venture, trust, limited liability
company, employee benefit plan or other enterprise which such person is or was
serving at the request of the Company.

     (c) "Disinterested Director" means a director of the Company who is not and
was not a party to the Proceeding in respect of which indemnification is sought
by Indemnitee.

     (d) "Effective Date" means the date set forth in the first paragraph of
this Agreement.

     (e) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a Proceeding.

     (f) "Independent Counsel" means a law firm, or a member of a law firm,
selected by the board of directors as provided in Section 8(b), that is
experienced in matters of corporation law and neither presently is, nor in the
past five years has been, retained to represent: (i) the Company, any of its
direct or indirect subsidiaries or any of their respective tenants, or
Indemnitee in any matter material to any such party, or (ii) any other party to
the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.

     (g) "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative (including
on appeal).

     Section 2. Services by Indemnitee. Indemnitee agrees to serve as a director
                ----------------------
of the Company and may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obligation imposed by
operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position.

     Section 3. Indemnification - General. The Company shall indemnify, and
                -------------------------
advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) to the
fullest extent permitted by Maryland law in effect on the date hereof and as
amended from time to time; provided, however, that no change in Maryland law
                           --------  -------
shall have the effect of reducing the benefits available to Indemnitee hereunder
based on Maryland law as in effect on the date hereof. The Company shall
indemnify Indemnitee's spouse (whether by statute or at common law and without
regard to

                                       2

<PAGE>

the location of the governing jurisdiction) and children to the same extent and
subject to the same limitations applicable to Indemnitee hereunder for claims
arising out of the status of such person as a spouse or child of Indemnitee,
including claims seeking damages from marital property (including community
property) or property held by such Indemnitee and such spouse or child or
property transferred to such spouse or child, but such indemnity shall not
otherwise extend to protect the spouse or child against liabilities caused by
the spouse's or child's own acts or inactions. The rights of Indemnitee provided
in this Section 3 shall include, but shall not be limited to, the rights set
forth in the other sections of this Agreement.

     Section 4. Proceedings Other Than Proceedings by or in the Right of the
                ------------------------------------------------------------
Company. Indemnitee shall be entitled to the rights of indemnification provided
-------
in this Section 4 if, by reason of his Corporate Status, he is, was or is
threatened to be made a party to any threatened, pending, or completed
Proceeding, other than a Proceeding by or in the right of the Company. Pursuant
to this Section 4, Indemnitee shall be indemnified against all Expenses,
judgments, awards, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with a Proceeding by
reason of his Corporate Status unless it is established that (i) the act or
omission of the Indemnitee was material to the matter giving rise to the
Proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty, (ii) the Indemnitee actually received an improper
personal benefit in money, property or services, or (iii) in the case of any
criminal Proceeding, the Indemnitee had reasonable cause to believe or should
have believed that his conduct was unlawful.

     Section 5. Proceedings by or in the Right of the Company. Indemnitee shall
                ---------------------------------------------
be entitled to the rights of indemnification provided in this Section 5 if, by
reason of his Corporate Status, he is, was or is threatened to be made a party
to any threatened, pending or completed Proceeding brought by or in the right of
the Company to procure a judgment in its favor. Pursuant to this Section 5,
Indemnitee shall be indemnified against all amounts paid in settlement and all
Expenses actually and reasonably incurred by him or on his behalf in connection
with such Proceeding unless it is established that (i) the act or omission of
the Indemnitee was material to the matter giving rise to such a Proceeding and
(a) was committed in bad faith or (b) was the result of active and deliberate
dishonesty or (ii) the Indemnitee actually received an improper personal benefit
in money, property or services.

     Section 6. Indemnification for Expenses of a Party Who is Wholly or Partly
                ---------------------------------------------------------------
Successful. Notwithstanding any other provision of this Agreement, to the extent
----------
that Indemnitee is, by reason of his Corporate Status, made a party to and is
successful, on the merits or otherwise, in the defense of any Proceeding, he
shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee under this Section 6 against all Expenses
actually and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Section and
without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter. Nothing in this Section 6
shall be construed to limit any indemnification or advancement of Expenses to
which Indemnitee is otherwise entitled pursuant to this Agreement or otherwise.

                                       3

<PAGE>

     Section 7. Advancement of Expenses. The Company shall advance all
                -----------------------
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding to which Indemnitee is, or is threatened to be, made a party,
within ten days after the receipt by the Company of a statement or statements
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and, to
the extent required by Maryland law, shall include or be preceded or accompanied
by a written affirmation by the Indemnitee of the Indemnitee's good faith belief
that the standard of conduct necessary for indemnification by the Company as
authorized by law and by this Agreement has been met and a written undertaking
by or on behalf of Indemnitee to repay any Expenses advanced if it shall
ultimately be determined that such standard of conduct has not been met. The
undertaking required by this Section 7 shall be an unlimited general obligation
of Indemnitee and shall be accepted without reference to the Indemnitee's
financial ability to repay such advanced Expenses.

     Section 8. Procedure for Determination of Entitlement to Indemnification.
                -------------------------------------------------------------

     (a) To obtain indemnification under this Agreement, Indemnitee shall submit
to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.

     (b) Upon written request by Indemnitee for indemnification pursuant to the
first sentence of Section 8(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto shall be made
promptly, in the specific case: (i) if a Change in Control shall have occurred,
by, at the option of Indemnitee, the Board of Directors by a majority vote of a
quorum of Disinterested Directors or by Independent Counsel in a written opinion
to the Board of Directors, a copy of which shall be delivered to Indemnitee; or
(ii) if a Change of Control shall not have occurred, (A) by the Board of
Directors by a majority vote of a quorum consisting of Disinterested Directors,
or (B) if a quorum of the Board of Directors consisting of Disinterested
Directors is not obtainable or, even if obtainable, such quorum of Disinterested
Directors so directs, by Independent Counsel in a written opinion to the Board
of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so
directed by a majority of the members of the Board of Directors, by the
stockholders of the Company; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten days
after such determination. Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Expenses (including reasonable attorneys' fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

                                       4

<PAGE>

     Section 9.  Presumptions and Effect of Certain Proceedings.
                 ----------------------------------------------

     (a) In making a determination with respect to entitlement to
indemnification under this Agreement, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 8(a) of this Agreement, and the Company shall have
the burden of proof to overcome that presumption in connection with the making
of any determination contrary to that presumption.

     (b) The termination of any Proceeding by judgment, order, settlement
(whether with or without court approval), conviction, a plea of nolo contendere
                                                                ---------------
or its equivalent, or an entry of an order of probation prior to judgment, does
not create a presumption that the Indemnitee did not meet the requisite standard
of conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law or this Agreement.

     Section 10. Remedies of Indemnitee.
                 ----------------------

     (a) If (i) a determination is made pursuant to Section 8 of this Agreement
that Indemnitee is not entitled to indemnification under this Agreement, (ii)
advancement of Expenses is not timely made pursuant to Section 7 of this
Agreement, (iii) no determination of entitlement to indemnification shall have
been made pursuant to Section 8(b) of this Agreement within thirty (30) days
(except that if such determination was to be made by the stockholders of the
Company, then within ninety (90) days) after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 6 of this Agreement within ten days after receipt by the
Company of a written request therefor, or (v) payment of indemnification is not
made within ten days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Maryland, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
commercial Arbitration Rules of the American Arbitration Association. Indemnitee
shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 10(a); provided,
                                                                  --------
however, that the foregoing clause shall not apply in respect of a proceeding
-------
brought by Indemnitee to enforce his rights under Section 6 of this Agreement.

     (b) In any judicial proceeding or arbitration commenced pursuant to this
Section 10 the Company shall have the burden of proving that Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be.

     (c) If a determination shall have been made pursuant to Section 8(b) of
this Agreement that Indemnitee is entitled to indemnification, the Company shall
be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 10, absent a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification.

                                       5

<PAGE>

     (d) In the event that Indemnitee, pursuant to this Section 10, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all Expenses actually and reasonably incurred by him in such
judicial adjudication or arbitration, regardless of whether Indemnitee is
successful in whole or in part therein.

     Section 11. Defense of the Underlying Proceeding.
                 ------------------------------------

     (a) Notice by Indemnitee. Indemnitee agrees to notify the Company promptly
         --------------------
upon being served with or receiving any summons, citation, subpoena, complaint,
indictment, information, notice, request or other document relating to any
Proceeding which may result in the right to indemnification or the advancement
of Expenses hereunder; provided, however, that the failure to give any such
                       --------  -------
notice shall not disqualify Indemnitee from the right, or otherwise affect in
any manner any right of Indemnitee, to indemnification or the advancements of
Expenses under this Agreement unless the Company's ability to defend in such
Proceeding or to obtain proceeds under any insurance policy is materially and
adversely prejudiced thereby, and then only to the extent the Company is thereby
actually prejudiced.

     (b) Defense by Company. Subject to the provisions of the last sentence of
         ------------------
this Section 11(b) and of Section 11(c) below, the Company shall have the right
to defend Indemnitee in any Proceeding which may give rise to indemnification
hereunder; provided, however, that the Company shall notify Indemnitee of any
           --------  -------
such decision to defend within fifteen (15) calendar days following receipt of
notice of any such Proceeding under Section 11(a) above. The Company shall not,
without the prior written consent of Indemnitee, which shall not be unreasonably
withheld or delayed, consent to the entry of any judgment against Indemnitee or
enter into any settlement or compromise which (i) includes an admission of fault
of Indemnitee or (ii) does not include, as an unconditional term thereof, the
full release of Indemnitee from all liability in respect of such Proceeding,
which release shall be in form and substance reasonably satisfactory to
Indemnitee. This Section 11(b) shall not apply to a Proceeding brought by
Indemnitee under Section 10 above or Section 15 below.

     (c) Indemnitee's Right to Counsel. Notwithstanding the provisions of
         -----------------------------
Section 11(b) above, if in a Proceeding to which Indemnitee is a party by reason
of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based
upon an opinion of counsel, that he may have separate defenses or counterclaims
to assert with respect to any issue which may not be consistent with other
defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon
an opinion of counsel, that an actual or apparent conflict of interest or
potential conflict of interest exists between Indemnitee and the Company, or
(iii) if the Company fails to assume the defense of such Proceeding in a timely
manner, Indemnitee shall be entitled to be represented by separate legal counsel
of Indemnitee's choice at the expense of the Company. In addition, if the
Company fails to comply with any of its obligations under this Agreement or in
the event that the Company or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any Proceeding to deny or to
recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's
choice, at the expense of the Company, to represent Indemnitee in connection
with any such matter.

                                        6

<PAGE>

     Section 12. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
                 -----------------------------------------------------------

     (a) The rights of indemnification and advancement of Expenses as provided
by this Agreement shall be in addition to, and not deemed exclusive of, any
other rights to which Indemnitee may at any time be entitled under applicable
law, the charter or Bylaws of the Company, any agreement, a vote of stockholders
or a resolution of directors (or a committee of directors), or otherwise. No
amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal.

     (b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, employees, or
agents of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or
policies. The purchase and maintenance of such insurance shall not in any way
limit or affect the rights and obligations of the parties hereto, and the
execution and delivery of this Agreement shall not in any way be construed to
limit or affect the rights and obligations of the Company or the other parties
under any such insurance policy.

     (c) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of contribution or
recovery of Indemnitee, who shall take, at the request of the Company, all
reasonable actions necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.

     (d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

     Section 13. Successors. This Agreement shall be (a) binding upon all
                 ----------
successors and assigns of the Company (including any transferee of all or a
substantial portion of the business, stock and/or assets of the Company and any
direct or indirect successor by merger or consolidation or otherwise by
operation of law) and (b) binding on and shall inure to the benefit of the
heirs, personal representatives, executors and administrators of Indemnitee.
This Agreement shall continue for the benefit of Indemnitee and such heirs,
personal representatives, executors and administrators after Indemnitee has
ceased to have Corporate Status.

                                       7

<PAGE>

     Section 14. Severability. If any provision or provisions of this Agreement
                 ------------
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including, without limitation, each portion of any section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable that is not itself invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (b) to the fullest extent possible,
the provisions of this Agreement (including, without limitation, each portion of
any section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby.

     Section 15. Exception to Right of Indemnification or Advancement of
                 -------------------------------------------------------
Expenses. Notwithstanding any provision herein to the contrary:
--------

     (a) Except as provided in Section 10 of this Agreement, Indemnitee shall
not be entitled to indemnification or advancement of Expenses under this
Agreement with respect to any Proceeding brought by Indemnitee against the
Company, any entity controlled by the Company, any then current or former
director, officer or employee thereof, or any third party, unless the Board of
Directors has consented in writing to the initiation of such Proceeding.

     (b) Indemnitee shall not be entitled to indemnification or advancement of
Expenses under this Agreement if it has been finally adjudicated by a court of
competent jurisdiction that Indemnitee is liable to the Company for an
accounting of profits made from the purchase or sale by Indemnitee of securities
of the Company pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934, the rules and regulations promulgated thereunder and
amendments thereto or similar provisions of any federal, state or local
statutory law, or if Indemnitee agrees by way of settlement or otherwise to pay
any or all of such profits to the Company.

     Section 16. Identical Counterparts. This Agreement may be executed in one
                 ----------------------
or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.

     Section 17. Headings. The headings of the paragraphs of this Agreement are
                 --------
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

     Section 18. Modification and Waiver. No supplement, modification or
                 -----------------------
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

                                       8

<PAGE>

     Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the
                 --------------------
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder.

     Section 20. Notices. All notices, requests, demands and other
                 -------
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

     (a) If to Indemnitee, to: The address set forth on the signature page
hereto.

     (b) If to the Company to:

            National Golf Properties, Inc.
            2951 28th Street, Suite 3001
            Santa Monica, California 90405
            Attention:  President

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

     Section 21. Governing Law. The parties agree that this Agreement shall be
                 -------------
governed by, and construed and enforced in accordance with, the laws of the
State of Maryland, which laws are applicable to contracts made and to be
performed in such state without giving effect to the principles of conflicts of
laws.

     Section 22. Miscellaneous. Use of the masculine pronoun shall be deemed to
                 -------------
include usage of the feminine pronoun where appropriate.

     Section 23. Prior Agreements. This Agreement replaces and supersedes any
                 ----------------
Prior Agreements to which the Indemnitee is a party, and such Prior Agreements
are hereby void and of no further force or effect.

                                       9

<PAGE>

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

ATTEST:                             NATIONAL GOLF PROPERTIES, INC.


/s/ Sylvia Adams                    By:  /s/ James M. Stanich
----------------------------             ----------------------------------
Sylvia Adams                             James M. Stanich
                                         President

WITNESS:                            INDEMNITEE


/s/ Sylvia Adams                    /s/ David G. Price
----------------------------        ---------------------------------------
Sylvia Adams                        DAVID G. PRICE

                                    Address:  2951 - 28/th/ Street
                                              Santa Monica, California 90405

                                       10

<PAGE>


                            INDEMNIFICATION AGREEMENT
                            -------------------------

         THIS INDEMNIFICATION AGREEMENT is made and entered into this 14/th/ day
of December, 2001 (this "Agreement"), by and between National Golf Properties,
Inc., a Maryland corporation (the "Company"), and Charles S. Paul
("Indemnitee").

         WHEREAS, at the request of the Company, Indemnitee currently serves as
a director of the Company and may, therefore, be subjected to claims, suits or
proceedings arising as a result of his service; and

         WHEREAS, as an inducement to Indemnitee to continue to serve as such
director, the Company has agreed to indemnify and to advance expenses and costs
incurred by Indemnitee in connection with any such claims, suits or proceedings,
to the fullest extent permitted by law; and

         WHEREAS, each of the directors of the Company, including the
Indemnitee, has one or more previous agreements entitled "Indemnification
Agreement" with the Company or its predecessor (the "Prior Agreements"); and

         WHEREAS, the Company desires to replace and supersede the Prior
Agreements with a new form of indemnification agreement for all of the directors
of the Company; and

         WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing as a director of the Company.

         NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

         Section 1. Definitions.  For purposes of this Agreement:
                    -----------

         (a)        "Change in Control" means a change in control of the Company
occurring after the Effective Date of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934 (the "Act"), whether or not the Company is
then subject to such reporting requirement; provided, however, that, without
limitation, such a Change in Control shall be deemed to have occurred if after
the Effective Date (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities without the prior approval of at least two-thirds of the
members of the Board of Directors in office immediately prior to such person
attaining such percentage interest; (ii) there occurs a proxy contest, or the
Company is a party to a merger, consolidation, sale of assets, plan of
liquidation or other reorganization not approved by at least two-thirds of the
members of the Board of Directors then in office, as a consequence of which
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iii) during any period of two consecutive years, other than as a
result of an event described in clause (a)(ii) of this Section 1, individuals
who at

<PAGE>

the beginning of such period constituted the Board of Directors (including for
this purpose any new director whose election or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.

         (b)   "Corporate Status" means the status of a person who is or was a
director, trustee, officer, partner, member, employee or agent of the Company or
of any other corporation, partnership, joint venture, trust, limited liability
company, employee benefit plan or other enterprise which such person is or was
serving at the request of the Company.

         (c)   "Disinterested Director" means a director of the Company who is
not and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.

         (d)   "Effective Date" means the date set forth in the first paragraph
of this Agreement.

         (e)   "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a Proceeding.

         (f)   "Independent Counsel" means a law firm, or a member of a law
firm, selected by the board of directors as provided in Section 8(b), that is
experienced in matters of corporation law and neither presently is, nor in the
past five years has been, retained to represent: (i) the Company, any of its
direct or indirect subsidiaries or any of their respective tenants, or
Indemnitee in any matter material to any such party, or (ii) any other party to
the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.

         (g)   "Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative (including
on appeal).

         Section 2.  Services by Indemnitee. Indemnitee agrees to serve as a
                     ----------------------
director of the Company and may at any time and for any reason resign from such
position (subject to any other contractual obligation or any obligation imposed
by operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position.

         Section 3.  Indemnification - General. The Company shall indemnify, and
                     -------------------------
advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) to the
fullest extent permitted by Maryland law in effect on the date hereof and as
amended from time to time; provided, however, that no change in Maryland law
                           --------  -------
shall have the effect of reducing the benefits available to Indemnitee hereunder
based on Maryland law as in effect on the date hereof. The Company shall
indemnify Indemnitee's spouse (whether by statute or at common law and without
regard to

                                       2

<PAGE>

the location of the governing jurisdiction) and children to the same extent and
subject to the same limitations applicable to Indemnitee hereunder for claims
arising out of the status of such person as a spouse or child of Indemnitee,
including claims seeking damages from marital property (including community
property) or property held by such Indemnitee and such spouse or child or
property transferred to such spouse or child, but such indemnity shall not
otherwise extend to protect the spouse or child against liabilities caused by
the spouse's or child's own acts or inactions. The rights of Indemnitee provided
in this Section 3 shall include, but shall not be limited to, the rights set
forth in the other sections of this Agreement.

         Section 4.  Proceedings Other Than Proceedings by or in the Right of
                     --------------------------------------------------------
the Company. Indemnitee shall be entitled to the rights of indemnification
-----------
provided in this Section 4 if, by reason of his Corporate Status, he is, was or
is threatened to be made a party to any threatened, pending, or completed
Proceeding, other than a Proceeding by or in the right of the Company. Pursuant
to this Section 4, Indemnitee shall be indemnified against all Expenses,
judgments, awards, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with a Proceeding by
reason of his Corporate Status unless it is established that (i) the act or
omission of the Indemnitee was material to the matter giving rise to the
Proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty, (ii) the Indemnitee actually received an improper
personal benefit in money, property or services, or (iii) in the case of any
criminal Proceeding, the Indemnitee had reasonable cause to believe or should
have believed that his conduct was unlawful.

         Section 5.  Proceedings by or in the Right of the Company. Indemnitee
                     ---------------------------------------------
shall be entitled to the rights of indemnification provided in this Section 5
if, by reason of his Corporate Status, he is, was or is threatened to be made a
party to any threatened, pending or completed Proceeding brought by or in the
right of the Company to procure a judgment in its favor. Pursuant to this
Section 5, Indemnitee shall be indemnified against all amounts paid in
settlement and all Expenses actually and reasonably incurred by him or on his
behalf in connection with such Proceeding unless it is established that (i) the
act or omission of the Indemnitee was material to the matter giving rise to such
a Proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty or (ii) the Indemnitee actually received an improper
personal benefit in money, property or services.

         Section 6.  Indemnification for Expenses of a Party Who is Wholly or
                     --------------------------------------------------------
Partly Successful. Notwithstanding any other provision of this Agreement, to the
-----------------
extent that Indemnitee is, by reason of his Corporate Status, made a party to
and is successful, on the merits or otherwise, in the defense of any Proceeding,
he shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee under this Section 6 against all Expenses
actually and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Section and
without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter. Nothing in this Section 6
shall be construed to limit any indemnification or advancement of Expenses to
which Indemnitee is otherwise entitled pursuant to this Agreement or otherwise.

                                       3

<PAGE>

         Section 7.  Advancement of Expenses. The Company shall advance all
                     -----------------------
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding to which Indemnitee is, or is threatened to be, made a party,
within ten days after the receipt by the Company of a statement or statements
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and, to
the extent required by Maryland law, shall include or be preceded or accompanied
by a written affirmation by the Indemnitee of the Indemnitee's good faith belief
that the standard of conduct necessary for indemnification by the Company as
authorized by law and by this Agreement has been met and a written undertaking
by or on behalf of Indemnitee to repay any Expenses advanced if it shall
ultimately be determined that such standard of conduct has not been met. The
undertaking required by this Section 7 shall be an unlimited general obligation
of Indemnitee and shall be accepted without reference to the Indemnitee's
financial ability to repay such advanced Expenses.

         Section 8.  Procedure for Determination of Entitlement to
                     ---------------------------------------------
Indemnification.
---------------

         (a)        To obtain indemnification under this Agreement, Indemnitee
shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee and
is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.

         (b)        Upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 8(a) hereof, a determination, if
required by applicable law, with respect to Indemnitee's entitlement thereto
shall be made promptly, in the specific case: (i) if a Change in Control shall
have occurred, by, at the option of Indemnitee, the Board of Directors by a
majority vote of a quorum of Disinterested Directors or by Independent Counsel
in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred,
(A) by the Board of Directors by a majority vote of a quorum consisting of
Disinterested Directors, or (B) if a quorum of the Board of Directors consisting
of Disinterested Directors is not obtainable or, even if obtainable, such quorum
of Disinterested Directors so directs, by Independent Counsel in a written
opinion to the Board of Directors, a copy of which shall be delivered to
Indemnitee, or (C) if so directed by a majority of the members of the Board of
Directors, by the stockholders of the Company; and, if it is so determined that
Indemnitee is entitled to indemnification, payment to Indemnitee shall be made
within ten days after such determination. Indemnitee shall cooperate with the
person, persons or entity making such determination with respect to Indemnitee's
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Expenses (including reasonable attorneys' fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

                                       4

<PAGE>

         Section 9.  Presumptions and Effect of Certain Proceedings.
                     ----------------------------------------------

         (a)      In making a determination with respect to entitlement to
indemnification under this Agreement, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 8(a) of this Agreement, and the Company shall have
the burden of proof to overcome that presumption in connection with the making
of any determination contrary to that presumption.

         (b)      The termination of any Proceeding by judgment, order,
settlement (whether with or without court approval), conviction, a plea of nolo
                                                                           ----
contendere or its equivalent, or an entry of an order of probation prior to
----------
judgment, does not create a presumption that the Indemnitee did not meet the
requisite standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law or this
Agreement.

         Section 10. Remedies of Indemnitee.
                     ----------------------

         (a)      If (i) a determination is made pursuant to Section 8 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7
of this Agreement, (iii) no determination of entitlement to indemnification
shall have been made pursuant to Section 8(b) of this Agreement within thirty
(30) days (except that if such determination was to be made by the stockholders
of the Company, then within ninety (90) days) after receipt by the Company of
the request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 6 of this Agreement within ten days after receipt by the
Company of a written request therefor, or (v) payment of indemnification is not
made within ten days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Maryland, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
commercial Arbitration Rules of the American Arbitration Association. Indemnitee
shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 10(a); provided,
                                                                  --------
however, that the foregoing clause shall not apply in respect of a proceeding
-------
brought by Indemnitee to enforce his rights under Section 6 of this Agreement.

         (b)      In any judicial proceeding or arbitration commenced pursuant
to this Section 10 the Company shall have the burden of proving that Indemnitee
is not entitled to indemnification or advancement of Expenses, as the case may
be.

         (c)      If a determination shall have been made pursuant to Section
8(b) of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 10, absent a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in connection with the
request for indemnification.

                                       5

<PAGE>

         (d)      In the event that Indemnitee, pursuant to this Section 10,
seeks a judicial adjudication of or an award in arbitration to enforce his
rights under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all Expenses actually and reasonably incurred by him in
such judicial adjudication or arbitration, regardless of whether Indemnitee is
successful in whole or in part therein.

         Section 11. Defense of the Underlying Proceeding.
                     ------------------------------------

         (a)      Notice by Indemnitee. Indemnitee agrees to notify the Company
                  --------------------
promptly upon being served with or receiving any summons, citation, subpoena,
complaint, indictment, information, notice, request or other document relating
to any Proceeding which may result in the right to indemnification or the
advancement of Expenses hereunder; provided, however, that the failure to give
                                   --------  -------
any such notice shall not disqualify Indemnitee from the right, or otherwise
affect in any manner any right of Indemnitee, to indemnification or the
advancements of Expenses under this Agreement unless the Company's ability to
defend in such Proceeding or to obtain proceeds under any insurance policy is
materially and adversely prejudiced thereby, and then only to the extent the
Company is thereby actually prejudiced.

         (b)      Defense by Company. Subject to the provisions of the last
                  ------------------
sentence of this Section 11(b) and of Section 11(c) below, the Company shall
have the right to defend Indemnitee in any Proceeding which may give rise to
indemnification hereunder; provided, however, that the Company shall notify
                           --------  -------
Indemnitee of any such decision to defend within fifteen (15) calendar days
following receipt of notice of any such Proceeding under Section 11(a) above.
The Company shall not, without the prior written consent of Indemnitee, which
shall not be unreasonably withheld or delayed, consent to the entry of any
judgment against Indemnitee or enter into any settlement or compromise which (i)
includes an admission of fault of Indemnitee or (ii) does not include, as an
unconditional term thereof, the full release of Indemnitee from all liability in
respect of such Proceeding, which release shall be in form and substance
reasonably satisfactory to Indemnitee. This Section 11(b) shall not apply to a
Proceeding brought by Indemnitee under Section 10 above or Section 15 below.

         (c)      Indemnitee's Right to Counsel. Notwithstanding the provisions
                  -----------------------------
of Section 11(b) above, if in a Proceeding to which Indemnitee is a party by
reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes,
based upon an opinion of counsel, that he may have separate defenses or
counterclaims to assert with respect to any issue which may not be consistent
with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes,
based upon an opinion of counsel, that an actual or apparent conflict of
interest or potential conflict of interest exists between Indemnitee and the
Company, or (iii) if the Company fails to assume the defense of such Proceeding
in a timely manner, Indemnitee shall be entitled to be represented by separate
legal counsel of Indemnitee's choice at the expense of the Company. In addition,
if the Company fails to comply with any of its obligations under this Agreement
or in the event that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any Proceeding to deny or to
recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's
choice, at the expense of the Company, to represent Indemnitee in connection
with any such matter.

                                       6

<PAGE>

         Section 12. Non-Exclusivity; Survival of Rights; Insurance;
                     -----------------------------------------------
Subrogation.
-----------

         (a)      The rights of indemnification and advancement of Expenses as
provided by this Agreement shall be in addition to, and not deemed exclusive of,
any other rights to which Indemnitee may at any time be entitled under
applicable law, the charter or Bylaws of the Company, any agreement, a vote of
stockholders or a resolution of directors (or a committee of directors), or
otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal.

         (b)      To the extent that the Company maintains an insurance policy
or policies providing liability insurance for directors, officers, employees, or
agents of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or
policies. The purchase and maintenance of such insurance shall not in any way
limit or affect the rights and obligations of the parties hereto, and the
execution and delivery of this Agreement shall not in any way be construed to
limit or affect the rights and obligations of the Company or the other parties
under any such insurance policy.

         (c)      In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
contribution or recovery of Indemnitee, who shall take, at the request of the
Company, all reasonable actions necessary to secure such rights, including the
execution of such documents as are necessary to enable the Company to bring suit
to enforce such rights.

         (d)      The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

         Section 13. Successors. This Agreement shall be (a) binding upon all
                     ----------
successors and assigns of the Company (including any transferee of all or a
substantial portion of the business, stock and/or assets of the Company and any
direct or indirect successor by merger or consolidation or otherwise by
operation of law) and (b) binding on and shall inure to the benefit of the
heirs, personal representatives, executors and administrators of Indemnitee.
This Agreement shall continue for the benefit of Indemnitee and such heirs,
personal representatives, executors and administrators after Indemnitee has
ceased to have Corporate Status.

                                       7

<PAGE>

         Section 14.  Severability. If any provision or provisions of this
                      ------------
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of any
section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (b) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.

         Section 15.  Exception to Right of Indemnification or Advancement of
                      -------------------------------------------------------
Expenses.  Notwithstanding any provision herein to the contrary:
--------

         (a)        Except as provided in Section 10 of this Agreement,
Indemnitee shall not be entitled to indemnification or advancement of Expenses
under this Agreement with respect to any Proceeding brought by Indemnitee
against the Company, any entity controlled by the Company, any then current or
former director, officer or employee thereof, or any third party, unless the
Board of Directors has consented in writing to the initiation of such
Proceeding.

         (b)        Indemnitee shall not be entitled to indemnification or
advancement of Expenses under this Agreement if it has been finally adjudicated
by a court of competent jurisdiction that Indemnitee is liable to the Company
for an accounting of profits made from the purchase or sale by Indemnitee of
securities of the Company pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, the rules and regulations promulgated
thereunder and amendments thereto or similar provisions of any federal, state or
local statutory law, or if Indemnitee agrees by way of settlement or otherwise
to pay any or all of such profits to the Company.

         Section 16.  Identical Counterparts. This Agreement may be executed in
                      ----------------------
one or more counterparts, each of which shall for all purposes be deemed to be
an original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.

         Section 17.  Headings.  The headings of the paragraphs of this
                      --------
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.

         Section 18.  Modification and Waiver. No supplement, modification or
                      -----------------------
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

                                       8

<PAGE>

         Section 19.  Notice by Indemnitee. Indemnitee agrees promptly to notify
                      --------------------
the Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder.

         Section 20.  Notices. All notices, requests, demands and other
                      -------
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

         (a)        If to Indemnitee, to: The address set forth on the signature
page hereto.

         (b)        If to the Company to:

                        National Golf Properties, Inc.
                        2951 28th Street, Suite 3001
                        Santa Monica, California 90405
                        Attention:  President

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

         Section 21.  Governing Law. The parties agree that this Agreement shall
                      -------------
be governed by, and construed and enforced in accordance with, the laws of the
State of Maryland, which laws are applicable to contracts made and to be
performed in such state without giving effect to the principles of conflicts of
laws.

         Section 22.  Miscellaneous. Use of the masculine pronoun shall be
                      -------------
deemed to include usage of the feminine pronoun where appropriate.

         Section 23.  Prior Agreements. This Agreement replaces and supersedes
                      ----------------
any Prior Agreements to which the Indemnitee is a party, and such Prior
Agreements are hereby void and of no further force or effect.

                                       9

<PAGE>

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

ATTEST:                             NATIONAL GOLF PROPERTIES, INC.


/s/ Sylvia Adams

Sylvia Adams                        By:/s/ James M. Stanich
-----------------                   ---------------------------
                                        James M. Stanich
                                        President

WITNESS:                            INDEMNITEE


                                    /s/ Charles S. Paul
_________________                   ---------------------------
                                    CHARLES S. PAUL


                                    Address: 1024 North Orange Drive
                                             Hollywood, California 90038

                                       10

<PAGE>

                           INDEMNIFICATION AGREEMENT
                           -------------------------

         THIS INDEMNIFICATION AGREEMENT is made and entered into this 14th day
of December, 2001 (this "Agreement"), by and between National Golf Properties,
Inc., a Maryland corporation (the "Company"), and Bruce Karatz ("Indemnitee").

         WHEREAS, at the request of the Company, Indemnitee currently serves as
a director of the Company and may, therefore, be subjected to claims, suits or
proceedings arising as a result of his service; and

         WHEREAS, as an inducement to Indemnitee to continue to serve as such
director, the Company has agreed to indemnify and to advance expenses and costs
incurred by Indemnitee in connection with any such claims, suits or proceedings,
to the fullest extent permitted by law; and

         WHEREAS, each of the directors of the Company, including the
Indemnitee, has one or more previous agreements entitled "Indemnification
Agreement" with the Company or its predecessor (the "Prior Agreements"); and

         WHEREAS, the Company desires to replace and supersede the Prior
Agreements with a new form of indemnification agreement for all of the directors
of the Company; and

         WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing as a director of the Company.

         NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

         Section 1. Definitions.  For purposes of this Agreement:
                    -----------

         (a)        "Change in Control" means a change in control of the Company
occurring after the Effective Date of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934 (the "Act"), whether or not the Company is
then subject to such reporting requirement; provided, however, that, without
limitation, such a Change in Control shall be deemed to have occurred if after
the Effective Date (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities without the prior approval of at least two-thirds of the
members of the Board of Directors in office immediately prior to such person
attaining such percentage interest; (ii) there occurs a proxy contest, or the
Company is a party to a merger, consolidation, sale of assets, plan of
liquidation or other reorganization not approved by at least two-thirds of the
members of the Board of Directors then in office, as a consequence of which
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iii) during any period of two consecutive years, other than as a
result of an event described in clause (a)(ii) of this Section 1, individuals
who at

<PAGE>

the beginning of such period constituted the Board of Directors (including
for this purpose any new director whose election or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.

         (b)        "Corporate Status" means the status of a person who is or
was a director, trustee, officer, partner, member, employee or agent of the
Company or of any other corporation, partnership, joint venture, trust, limited
liability company, employee benefit plan or other enterprise which such person
is or was serving at the request of the Company.

         (c)        "Disinterested Director" means a director of the Company who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.

         (d)        "Effective Date" means the date set forth in the first
paragraph of this Agreement.

         (e)        "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a Proceeding.

         (f)        "Independent Counsel" means a law firm, or a member of a law
firm, selected by the board of directors as provided in Section 8(b), that is
experienced in matters of corporation law and neither presently is, nor in the
past five years has been, retained to represent: (i) the Company, any of its
direct or indirect subsidiaries or any of their respective tenants, or
Indemnitee in any matter material to any such party, or (ii) any other party to
the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.

         (g)        "Proceeding" includes any action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative hearing or
any other proceeding, whether civil, criminal, administrative or investigative
(including on appeal).

         Section 2. Services by Indemnitee. Indemnitee agrees to serve as a
                    ----------------------
director of the Company and may at any time and for any reason resign from such
position (subject to any other contractual obligation or any obligation imposed
by operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position.

         Section 3. Indemnification - General. The Company shall indemnify, and
                    -------------------------
advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) to the
fullest extent permitted by Maryland law in effect on the date hereof and as
amended from time to time; provided, however, that no change in Maryland law
                           --------  -------
shall have the effect of reducing the benefits available to Indemnitee hereunder
based on Maryland law as in effect on the date hereof. The Company shall
indemnify Indemnitee's spouse (whether by statute or at common law and without
regard to

                                       2

<PAGE>

the location of the governing jurisdiction) and children to the same extent and
subject to the same limitations applicable to Indemnitee hereunder for claims
arising out of the status of such person as a spouse or child of Indemnitee,
including claims seeking damages from marital property (including community
property) or property held by such Indemnitee and such spouse or child or
property transferred to such spouse or child, but such indemnity shall not
otherwise extend to protect the spouse or child against liabilities caused by
the spouse's or child's own acts or inactions. The rights of Indemnitee provided
in this Section 3 shall include, but shall not be limited to, the rights set
forth in the other sections of this Agreement.

         Section 4. Proceedings Other Than Proceedings by or in the Right of the
                    ------------------------------------------------------------
Company. Indemnitee shall be entitled to the rights of indemnification provided
-------
in this Section 4 if, by reason of his Corporate Status, he is, was or is
threatened to be made a party to any threatened, pending, or completed
Proceeding, other than a Proceeding by or in the right of the Company. Pursuant
to this Section 4, Indemnitee shall be indemnified against all Expenses,
judgments, awards, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with a Proceeding by
reason of his Corporate Status unless it is established that (i) the act or
omission of the Indemnitee was material to the matter giving rise to the
Proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty, (ii) the Indemnitee actually received an improper
personal benefit in money, property or services, or (iii) in the case of any
criminal Proceeding, the Indemnitee had reasonable cause to believe or should
have believed that his conduct was unlawful.

         Section 5. Proceedings by or in the Right of the Company. Indemnitee
                    ---------------------------------------------
shall be entitled to the rights of indemnification provided in this Section 5
if, by reason of his Corporate Status, he is, was or is threatened to be made a
party to any threatened, pending or completed Proceeding brought by or in the
right of the Company to procure a judgment in its favor. Pursuant to this
Section 5, Indemnitee shall be indemnified against all amounts paid in
settlement and all Expenses actually and reasonably incurred by him or on his
behalf in connection with such Proceeding unless it is established that (i) the
act or omission of the Indemnitee was material to the matter giving rise to such
a Proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty or (ii) the Indemnitee actually received an improper
personal benefit in money, property or services.

         Section 6. Indemnification for Expenses of a Party Who is Wholly or
                    --------------------------------------------------------
Partly Successful. Notwithstanding any other provision of this Agreement, to the
-----------------
extent that Indemnitee is, by reason of his Corporate Status, made a party to
and is successful, on the merits or otherwise, in the defense of any Proceeding,
he shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee under this Section 6 against all Expenses
actually and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Section and
without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter. Nothing in this Section 6
shall be construed to limit any indemnification or advancement of Expenses to
which Indemnitee is otherwise entitled pursuant to this Agreement or otherwise.

                                       3

<PAGE>

         Section 7.  Advancement of Expenses. The Company shall advance all
                     -----------------------
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding to which Indemnitee is, or is threatened to be, made a party,
within ten days after the receipt by the Company of a statement or statements
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and, to
the extent required by Maryland law, shall include or be preceded or accompanied
by a written affirmation by the Indemnitee of the Indemnitee's good faith belief
that the standard of conduct necessary for indemnification by the Company as
authorized by law and by this Agreement has been met and a written undertaking
by or on behalf of Indemnitee to repay any Expenses advanced if it shall
ultimately be determined that such standard of conduct has not been met. The
undertaking required by this Section 7 shall be an unlimited general obligation
of Indemnitee and shall be accepted without reference to the Indemnitee's
financial ability to repay such advanced Expenses.

         Section 8.  Procedure for Determination of Entitlement to
                     ---------------------------------------------
Indemnification.
---------------

         (a)       To obtain indemnification under this Agreement, Indemnitee
shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee and
is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.

         (b)       Upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 8(a) hereof, a determination, if
required by applicable law, with respect to Indemnitee's entitlement thereto
shall be made promptly, in the specific case: (i) if a Change in Control shall
have occurred, by, at the option of Indemnitee, the Board of Directors by a
majority vote of a quorum of Disinterested Directors or by Independent Counsel
in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred,
(A) by the Board of Directors by a majority vote of a quorum consisting of
Disinterested Directors, or (B) if a quorum of the Board of Directors consisting
of Disinterested Directors is not obtainable or, even if obtainable, such quorum
of Disinterested Directors so directs, by Independent Counsel in a written
opinion to the Board of Directors, a copy of which shall be delivered to
Indemnitee, or (C) if so directed by a majority of the members of the Board of
Directors, by the stockholders of the Company; and, if it is so determined that
Indemnitee is entitled to indemnification, payment to Indemnitee shall be made
within ten days after such determination. Indemnitee shall cooperate with the
person, persons or entity making such determination with respect to Indemnitee's
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Expenses (including reasonable attorneys' fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

                                       4

<PAGE>

         Section 9.  Presumptions and Effect of Certain Proceedings.
                     ----------------------------------------------

         (a)       In making a determination with respect to entitlement to
indemnification under this Agreement, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 8(a) of this Agreement, and the Company shall have
the burden of proof to overcome that presumption in connection with the making
of any determination contrary to that presumption.

         (b)       The termination of any Proceeding by judgment, order,
settlement (whether with or without court approval), conviction, a plea of nolo
                                                                           ----
contendere or its equivalent, or an entry of an order of probation prior to
----------
judgment, does not create a presumption that the Indemnitee did not meet the
requisite standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law or this
Agreement.

         Section 10. Remedies of Indemnitee.
                     ----------------------

         (a)       If (i) a determination is made pursuant to Section 8 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7
of this Agreement, (iii) no determination of entitlement to indemnification
shall have been made pursuant to Section 8(b) of this Agreement within thirty
(30) days (except that if such determination was to be made by the stockholders
of the Company, then within ninety (90) days) after receipt by the Company of
the request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 6 of this Agreement within ten days after receipt by the
Company of a written request therefor, or (v) payment of indemnification is not
made within ten days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Maryland, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
commercial Arbitration Rules of the American Arbitration Association. Indemnitee
shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 10(a); provided,
however, that the foregoing clause shall not apply in respect of a proceeding
brought by Indemnitee to enforce his rights under Section 6 of this Agreement.

         (b)       In any judicial proceeding or arbitration commenced pursuant
to this Section 10 the Company shall have the burden of proving that Indemnitee
is not entitled to indemnification or advancement of Expenses, as the case may
be.

         (c)       If a determination shall have been made pursuant to Section
8(b) of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 10, absent a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in connection with the
request for indemnification.

                                       5

<PAGE>

         (d)       In the event that Indemnitee, pursuant to this Section 10,
seeks a judicial adjudication of or an award in arbitration to enforce his
rights under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all Expenses actually and reasonably incurred by him in
such judicial adjudication or arbitration, regardless of whether Indemnitee is
successful in whole or in part therein.

         Section 11. Defense of the Underlying Proceeding.
                     ------------------------------------

         (a)       Notice by Indemnitee. Indemnitee agrees to notify the Company
                   --------------------
promptly upon being served with or receiving any summons, citation, subpoena,
complaint, indictment, information, notice, request or other document relating
to any Proceeding which may result in the right to indemnification or the
advancement of Expenses hereunder; provided, however, that the failure to give
                                   --------  -------
any such notice shall not disqualify Indemnitee from the right, or otherwise
affect in any manner any right of Indemnitee, to indemnification or the
advancements of Expenses under this Agreement unless the Company's ability to
defend in such Proceeding or to obtain proceeds under any insurance policy is
materially and adversely prejudiced thereby, and then only to the extent the
Company is thereby actually prejudiced.

         (b)       Defense by Company. Subject to the provisions of the last
                   ------------------
sentence of this Section 11(b) and of Section 11(c) below, the Company shall
have the right to defend Indemnitee in any Proceeding which may give rise to
indemnification hereunder; provided, however, that the Company shall notify
                           --------  -------
Indemnitee of any such decision to defend within fifteen (15) calendar days
following receipt of notice of any such Proceeding under Section 11(a) above.
The Company shall not, without the prior written consent of Indemnitee, which
shall not be unreasonably withheld or delayed, consent to the entry of any
judgment against Indemnitee or enter into any settlement or compromise which (i)
includes an admission of fault of Indemnitee or (ii) does not include, as an
unconditional term thereof, the full release of Indemnitee from all liability in
respect of such Proceeding, which release shall be in form and substance
reasonably satisfactory to Indemnitee. This Section 11(b) shall not apply to a
Proceeding brought by Indemnitee under Section 10 above or Section 15 below.

         (c)       Indemnitee's Right to Counsel. Notwithstanding the provisions
                   -----------------------------
of Section 11(b) above, if in a Proceeding to which Indemnitee is a party by
reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes,
based upon an opinion of counsel, that he may have separate defenses or
counterclaims to assert with respect to any issue which may not be consistent
with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes,
based upon an opinion of counsel, that an actual or apparent conflict of
interest or potential conflict of interest exists between Indemnitee and the
Company, or (iii) if the Company fails to assume the defense of such Proceeding
in a timely manner, Indemnitee shall be entitled to be represented by separate
legal counsel of Indemnitee's choice at the expense of the Company. In addition,
if the Company fails to comply with any of its obligations under this Agreement
or in the event that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any Proceeding to deny or to
recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's
choice, at the expense of the Company, to represent Indemnitee in connection
with any such matter.

                                       6

<PAGE>

         Section 12. Non-Exclusivity; Survival of Rights; Insurance;
                     -----------------------------------------------
Subrogation.
-----------

         (a)       The rights of indemnification and advancement of Expenses as
provided by this Agreement shall be in addition to, and not deemed exclusive of,
any other rights to which Indemnitee may at any time be entitled under
applicable law, the charter or Bylaws of the Company, any agreement, a vote of
stockholders or a resolution of directors (or a committee of directors), or
otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal.

         (b)       To the extent that the Company maintains an insurance policy
or policies providing liability insurance for directors, officers, employees, or
agents of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or
policies. The purchase and maintenance of such insurance shall not in any way
limit or affect the rights and obligations of the parties hereto, and the
execution and delivery of this Agreement shall not in any way be construed to
limit or affect the rights and obligations of the Company or the other parties
under any such insurance policy.

         (c)       In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
contribution or recovery of Indemnitee, who shall take, at the request of the
Company, all reasonable actions necessary to secure such rights, including the
execution of such documents as are necessary to enable the Company to bring suit
to enforce such rights.

         (d)       The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

         Section 13. Successors. This Agreement shall be (a) binding upon all
                     ----------
successors and assigns of the Company (including any transferee of all or a
substantial portion of the business, stock and/or assets of the Company and any
direct or indirect successor by merger or consolidation or otherwise by
operation of law) and (b) binding on and shall inure to the benefit of the
heirs, personal representatives, executors and administrators of Indemnitee.
This Agreement shall continue for the benefit of Indemnitee and such heirs,
personal representatives, executors and administrators after Indemnitee has
ceased to have Corporate Status.

                                       7

<PAGE>

      Section 14.   Severability. If any provision or provisions of this
                    ------------
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of any
section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (b) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.

      Section 15.   Exception to Right of Indemnification or Advancement of
                    --------------------------------------------------------
                    Expenses.
                    --------
 Notwithstanding any provision herein to the contrary:

      (a)           Except as provided in Section 10 of this Agreement,
Indemnitee shall not be entitled to indemnification or advancement of Expenses
under this Agreement with respect to any Proceeding brought by Indemnitee
against the Company, any entity controlled by the Company, any then current or
former director, officer or employee thereof, or any third party, unless the
Board of Directors has consented in writing to the initiation of such
Proceeding.

      (b)            Indemnitee shall not be entitled to indemnification or
advancement of Expenses under this Agreement if it has been finally adjudicated
by a court of competent jurisdiction that Indemnitee is liable to the Company
for an accounting of profits made from the purchase or sale by Indemnitee of
securities of the Company pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, the rules and regulations promulgated
thereunder and amendments thereto or similar provisions of any federal, state or
local statutory law, or if Indemnitee agrees by way of settlement or otherwise
to pay any or all of such profits to the Company.

      Section 16.   Identical Counterparts. This Agreement may be executed in
                    ----------------------
one or more counterparts, each of which shall for all purposes be deemed to be
an original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.

      Section 17.   Headings.  The headings of the paragraphs of this Agreement
                    --------
are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.

      Section 18.   Modification and Waiver. No supplement, modification or
                    -----------------------
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

                                       8

<PAGE>

      Section 19.   Notice by Indemnitee. Indemnitee agrees promptly to notify
                    --------------------
the Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder.

      Section 20.   Notices. All notices, requests, demands and other
                    -------
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

      (a)           If to Indemnitee, to:  The address set forth on the
                    signature page hereto.

      (b)           If to the Company to:

                           National Golf Properties, Inc.
                           2951 28th Street, Suite 3001
                           Santa Monica, California 90405
                           Attention:  President

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

      Section 21.   Governing Law. The parties agree that this Agreement shall
                    -------------
be governed by, and construed and enforced in accordance with, the laws of the
State of Maryland, which laws are applicable to contracts made and to be
performed in such state without giving effect to the principles of conflicts of
laws.

      Section 22.   Miscellaneous.  Use of the masculine pronoun shall be deemed
                    -------------
to include usage of the feminine pronoun where appropriate.

      Section 23.   Prior Agreements.  This Agreement replaces and supersedes
                    ----------------
any Prior Agreements to which the Indemnitee is a party,and such Prior
Agreements are hereby void and of no further force or effect.

                                       9

<PAGE>

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

ATTEST:                             NATIONAL GOLF PROPERTIES, INC.


/s/ Sylvia Adams                     By: /s/ James M. Stanich
-----------------                        --------------------
                                         James M. Stanich
                                         President

WITNESS:                            INDEMNITEE

/s/ Victoria Sullins                /s/ Bruce Karatz
--------------------                -------------------------------
                                        BRUCE KARATZ

                                    Address:   10990 Wilshire Boulevard
                                               Los Angeles, California 90024

                                       10

<PAGE>


                            INDEMNIFICATION AGREEMENT
                            -------------------------

         THIS INDEMNIFICATION AGREEMENT is made and entered into this 14/th/ day
of December, 2001 (this "Agreement"), by and between National Golf Properties,
Inc., a Maryland corporation (the "Company"), and John C. Cushman, III
("Indemnitee").

         WHEREAS, at the request of the Company, Indemnitee currently serves as
a director of the Company and may, therefore, be subjected to claims, suits or
proceedings arising as a result of his service; and

         WHEREAS, as an inducement to Indemnitee to continue to serve as such
director, the Company has agreed to indemnify and to advance expenses and costs
incurred by Indemnitee in connection with any such claims, suits or proceedings,
to the fullest extent permitted by law; and

         WHEREAS, each of the directors of the Company, including the
Indemnitee, has one or more previous agreements entitled "Indemnification
Agreement" with the Company or its predecessor (the "Prior Agreements"); and

         WHEREAS, the Company desires to replace and supersede the Prior
Agreements with a new form of indemnification agreement for all of the directors
of the Company; and

         WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing as a director of the Company.

         NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

         Section 1.  Definitions.  For purposes of this Agreement:
                     -----------

         (a)         "Change in Control" means a change in control of the
Company occurring after the Effective Date of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934 (the "Act"), whether or not the Company is
then subject to such reporting requirement; provided, however, that, without
limitation, such a Change in Control shall be deemed to have occurred if after
the Effective Date (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities without the prior approval of at least two-thirds of the
members of the Board of Directors in office immediately prior to such person
attaining such percentage interest; (ii) there occurs a proxy contest, or the
Company is a party to a merger, consolidation, sale of assets, plan of
liquidation or other reorganization not approved by at least two-thirds of the
members of the Board of Directors then in office, as a consequence of which
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iii) during any period of two consecutive years, other than as a
result of an event described in clause (a)(ii) of this Section 1, individuals
who at

<PAGE>

the beginning of such period constituted the Board of Directors (including
for this purpose any new director whose election or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.

         (b)         "Corporate Status" means the status of a person who is or
was a director, trustee, officer, partner, member, employee or agent of the
Company or of any other corporation, partnership, joint venture, trust, limited
liability company, employee benefit plan or other enterprise which such person
is or was serving at the request of the Company.

         (c)         "Disinterested Director" means a director of the Company
who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.

         (d)         "Effective Date" means the date set forth in the first
paragraph of this Agreement.

         (e)         "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a Proceeding.

         (f)         "Independent Counsel" means a law firm, or a member of a
law firm, selected by the board of directors as provided in Section 8(b), that
is experienced in matters of corporation law and neither presently is, nor in
the past five years has been, retained to represent: (i) the Company, any of its
direct or indirect subsidiaries or any of their respective tenants, or
Indemnitee in any matter material to any such party, or (ii) any other party to
the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.

         (g)         "Proceeding" includes any action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative hearing or
any other proceeding, whether civil, criminal, administrative or investigative
(including on appeal).

         Section 2.    Services by Indemnitee. Indemnitee agrees to serve as a
                       ----------------------
director of the Company and may at any time and for any reason resign from such
position (subject to any other contractual obligation or any obligation imposed
by operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position.

         Section 3.    Indemnification - General. The Company shall indemnify,
                       -------------------------
and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) to
the fullest extent permitted by Maryland law in effect on the date hereof and as
amended from time to time; provided, however, that no change in Maryland law
                           --------  -------
shall have the effect of reducing the benefits available to Indemnitee hereunder
based on Maryland law as in effect on the date hereof. The Company shall
indemnify Indemnitee's spouse (whether by statute or at common law and without
regard to

                                       2

<PAGE>

the location of the governing jurisdiction) and children to the same extent and
subject to the same limitations applicable to Indemnitee hereunder for claims
arising out of the status of such person as a spouse or child of Indemnitee,
including claims seeking damages from marital property (including community
property) or property held by such Indemnitee and such spouse or child or
property transferred to such spouse or child, but such indemnity shall not
otherwise extend to protect the spouse or child against liabilities caused by
the spouse's or child's own acts or inactions. The rights of Indemnitee provided
in this Section 3 shall include, but shall not be limited to, the rights set
forth in the other sections of this Agreement.

         Section 4.  Proceedings Other Than Proceedings by or in the Right of
                     --------------------------------------------------------
the Company. Indemnitee shall be entitled to the rights of indemnification
-----------
provided in this Section 4 if, by reason of his Corporate Status, he is, was or
is threatened to be made a party to any threatened, pending, or completed
Proceeding, other than a Proceeding by or in the right of the Company. Pursuant
to this Section 4, Indemnitee shall be indemnified against all Expenses,
judgments, awards, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with a Proceeding by
reason of his Corporate Status unless it is established that (i) the act or
omission of the Indemnitee was material to the matter giving rise to the
Proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty, (ii) the Indemnitee actually received an improper
personal benefit in money, property or services, or (iii) in the case of any
criminal Proceeding, the Indemnitee had reasonable cause to believe or should
have believed that his conduct was unlawful.

         Section 5.  Proceedings by or in the Right of the Company. Indemnitee
                     ---------------------------------------------
shall be entitled to the rights of indemnification provided in this Section 5
if, by reason of his Corporate Status, he is, was or is threatened to be made a
party to any threatened, pending or completed Proceeding brought by or in the
right of the Company to procure a judgment in its favor. Pursuant to this
Section 5, Indemnitee shall be indemnified against all amounts paid in
settlement and all Expenses actually and reasonably incurred by him or on his
behalf in connection with such Proceeding unless it is established that (i) the
act or omission of the Indemnitee was material to the matter giving rise to such
a Proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty or (ii) the Indemnitee actually received an improper
personal benefit in money, property or services.

         Section 6.  Indemnification for Expenses of a Party Who is Wholly or
                     --------------------------------------------------------
Partly Successful. Notwithstanding any other provision of this Agreement, to the
-----------------
extent that Indemnitee is, by reason of his Corporate Status, made a party to
and is successful, on the merits or otherwise, in the defense of any Proceeding,
he shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee under this Section 6 against all Expenses
actually and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Section and
without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter. Nothing in this Section 6
shall be construed to limit any indemnification or advancement of Expenses to
which Indemnitee is otherwise entitled pursuant to this Agreement or otherwise.

                                       3

<PAGE>

         Section 7.  Advancement of Expenses. The Company shall advance all
                     -----------------------
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding to which Indemnitee is, or is threatened to be, made a party,
within ten days after the receipt by the Company of a statement or statements
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and, to
the extent required by Maryland law, shall include or be preceded or accompanied
by a written affirmation by the Indemnitee of the Indemnitee's good faith belief
that the standard of conduct necessary for indemnification by the Company as
authorized by law and by this Agreement has been met and a written undertaking
by or on behalf of Indemnitee to repay any Expenses advanced if it shall
ultimately be determined that such standard of conduct has not been met. The
undertaking required by this Section 7 shall be an unlimited general obligation
of Indemnitee and shall be accepted without reference to the Indemnitee's
financial ability to repay such advanced Expenses.

         Section 8.  Procedure for Determination of Entitlement to
                     ---------------------------------------------
Indemnification.
---------------

         (a)       To obtain indemnification under this Agreement, Indemnitee
shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee and
is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.

         (b)       Upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 8(a) hereof, a determination, if
required by applicable law, with respect to Indemnitee's entitlement thereto
shall be made promptly, in the specific case: (i) if a Change in Control shall
have occurred, by, at the option of Indemnitee, the Board of Directors by a
majority vote of a quorum of Disinterested Directors or by Independent Counsel
in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred,
(A) by the Board of Directors by a majority vote of a quorum consisting of
Disinterested Directors, or (B) if a quorum of the Board of Directors consisting
of Disinterested Directors is not obtainable or, even if obtainable, such quorum
of Disinterested Directors so directs, by Independent Counsel in a written
opinion to the Board of Directors, a copy of which shall be delivered to
Indemnitee, or (C) if so directed by a majority of the members of the Board of
Directors, by the stockholders of the Company; and, if it is so determined that
Indemnitee is entitled to indemnification, payment to Indemnitee shall be made
within ten days after such determination. Indemnitee shall cooperate with the
person, persons or entity making such determination with respect to Indemnitee's
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Expenses (including reasonable attorneys' fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

                                       4

<PAGE>

         Section 9.  Presumptions and Effect of Certain Proceedings.
                     ----------------------------------------------

         (a)       In making a determination with respect to entitlement to
indemnification under this Agreement, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 8(a) of this Agreement, and the Company shall have
the burden of proof to overcome that presumption in connection with the making
of any determination contrary to that presumption.

         (b)       The termination of any Proceeding by judgment, order,
settlement (whether with or without court approval), conviction, a plea of nolo
                                                                           ----
contendere or its equivalent, or an entry of an order of probation prior to
----------
judgment, does not create a presumption that the Indemnitee did not meet the
requisite standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law or this
Agreement.

         Section 10. Remedies of Indemnitee.
                     ----------------------

         (a)       If (i) a determination is made pursuant to Section 8 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7
of this Agreement, (iii) no determination of entitlement to indemnification
shall have been made pursuant to Section 8(b) of this Agreement within thirty
(30) days (except that if such determination was to be made by the stockholders
of the Company, then within ninety (90) days) after receipt by the Company of
the request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 6 of this Agreement within ten days after receipt by the
Company of a written request therefor, or (v) payment of indemnification is not
made within ten days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Maryland, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
commercial Arbitration Rules of the American Arbitration Association. Indemnitee
shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 10(a); provided,
                                                                  --------
however, that the foregoing clause shall not apply in respect of a proceeding
-------
brought by Indemnitee to enforce his rights under Section 6 of this Agreement.

         (b)       In any judicial proceeding or arbitration commenced pursuant
to this Section 10 the Company shall have the burden of proving that Indemnitee
is not entitled to indemnification or advancement of Expenses, as the case may
be.

         (c)       If a determination shall have been made pursuant to Section
8(b) of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 10, absent a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in connection with the
request for indemnification.

                                       5

<PAGE>

         (d)       In the event that Indemnitee, pursuant to this Section 10,
seeks a judicial adjudication of or an award in arbitration to enforce his
rights under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all Expenses actually and reasonably incurred by him in
such judicial adjudication or arbitration, regardless of whether Indemnitee is
successful in whole or in part therein.

         Section 11. Defense of the Underlying Proceeding.
                     ------------------------------------

         (a)       Notice by Indemnitee. Indemnitee agrees to notify the Company
                   --------------------
promptly upon being served with or receiving any summons, citation, subpoena,
complaint, indictment, information, notice, request or other document relating
to any Proceeding which may result in the right to indemnification or the
advancement of Expenses hereunder; provided, however, that the failure to give
                                   --------  -------
any such notice shall not disqualify Indemnitee from the right, or otherwise
affect in any manner any right of Indemnitee, to indemnification or the
advancements of Expenses under this Agreement unless the Company's ability to
defend in such Proceeding or to obtain proceeds under any insurance policy is
materially and adversely prejudiced thereby, and then only to the extent the
Company is thereby actually prejudiced.

         (b)       Defense by Company. Subject to the provisions of the last
                   ------------------
sentence of this Section 11(b) and of Section 11(c) below, the Company shall
have the right to defend Indemnitee in any Proceeding which may give rise to
indemnification hereunder; provided, however, that the Company shall notify
                           --------  -------
Indemnitee of any such decision to defend within fifteen (15) calendar days
following receipt of notice of any such Proceeding under Section 11(a) above.
The Company shall not, without the prior written consent of Indemnitee, which
shall not be unreasonably withheld or delayed, consent to the entry of any
judgment against Indemnitee or enter into any settlement or compromise which (i)
includes an admission of fault of Indemnitee or (ii) does not include, as an
unconditional term thereof, the full release of Indemnitee from all liability in
respect of such Proceeding, which release shall be in form and substance
reasonably satisfactory to Indemnitee. This Section 11(b) shall not apply to a
Proceeding brought by Indemnitee under Section 10 above or Section 15 below.

         (c)       Indemnitee's Right to Counsel. Notwithstanding the provisions
                   -----------------------------
of Section 11(b) above, if in a Proceeding to which Indemnitee is a party by
reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes,
based upon an opinion of counsel, that he may have separate defenses or
counterclaims to assert with respect to any issue which may not be consistent
with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes,
based upon an opinion of counsel, that an actual or apparent conflict of
interest or potential conflict of interest exists between Indemnitee and the
Company, or (iii) if the Company fails to assume the defense of such Proceeding
in a timely manner, Indemnitee shall be entitled to be represented by separate
legal counsel of Indemnitee's choice at the expense of the Company. In addition,
if the Company fails to comply with any of its obligations under this Agreement
or in the event that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any Proceeding to deny or to
recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's
choice, at the expense of the Company, to represent Indemnitee in connection
with any such matter.

                                       6

<PAGE>

         Section 12. Non-Exclusivity; Survival of Rights; Insurance;
                     -----------------------------------------------
Subrogation.
-----------

         (a)       The rights of indemnification and advancement of Expenses as
provided by this Agreement shall be in addition to, and not deemed exclusive of,
any other rights to which Indemnitee may at any time be entitled under
applicable law, the charter or Bylaws of the Company, any agreement, a vote of
stockholders or a resolution of directors (or a committee of directors), or
otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal.

         (b)       To the extent that the Company maintains an insurance policy
or policies providing liability insurance for directors, officers, employees, or
agents of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or
policies. The purchase and maintenance of such insurance shall not in any way
limit or affect the rights and obligations of the parties hereto, and the
execution and delivery of this Agreement shall not in any way be construed to
limit or affect the rights and obligations of the Company or the other parties
under any such insurance policy.

         (c)       In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
contribution or recovery of Indemnitee, who shall take, at the request of the
Company, all reasonable actions necessary to secure such rights, including the
execution of such documents as are necessary to enable the Company to bring suit
to enforce such rights.

         (d)       The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

         Section 13. Successors. This Agreement shall be (a) binding upon all
                     ----------
successors and assigns of the Company (including any transferee of all or a
substantial portion of the business, stock and/or assets of the Company and any
direct or indirect successor by merger or consolidation or otherwise by
operation of law) and (b) binding on and shall inure to the benefit of the
heirs, personal representatives, executors and administrators of Indemnitee.
This Agreement shall continue for the benefit of Indemnitee and such heirs,
personal representatives, executors and administrators after Indemnitee has
ceased to have Corporate Status.

                                       7

<PAGE>

         Section 14.  Severability. If any provision or provisions of this
                      ------------
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of any
section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (b) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.

         Section 15.  Exception to Right of Indemnification or Advancement of
                      -------------------------------------------------------
Expenses. Notwithstanding any provision herein to the contrary:
--------

         (a)        Except as provided in Section 10 of this Agreement,
Indemnitee shall not be entitled to indemnification or advancement of Expenses
under this Agreement with respect to any Proceeding brought by Indemnitee
against the Company, any entity controlled by the Company, any then current or
former director, officer or employee thereof, or any third party, unless the
Board of Directors has consented in writing to the initiation of such
Proceeding.

         (b)        Indemnitee shall not be entitled to indemnification or
advancement of Expenses under this Agreement if it has been finally adjudicated
by a court of competent jurisdiction that Indemnitee is liable to the Company
for an accounting of profits made from the purchase or sale by Indemnitee of
securities of the Company pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, the rules and regulations promulgated
thereunder and amendments thereto or similar provisions of any federal, state or
local statutory law, or if Indemnitee agrees by way of settlement or otherwise
to pay any or all of such profits to the Company.

         Section 16.  Identical Counterparts. This Agreement may be executed in
                      ----------------------
one or more counterparts, each of which shall for all purposes be deemed to be
an original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.

         Section 17.  Headings. The headings of the paragraphs of this Agreement
                      --------
are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.

         Section 18.  Modification and Waiver. No supplement, modification or
                      -----------------------
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

                                       8

<PAGE>

         Section 19.  Notice by Indemnitee. Indemnitee agrees promptly to notify
                      --------------------
the Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder.

         Section 20.  Notices. All notices, requests, demands and other
                      -------
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

         (a) If to Indemnitee, to: The address set forth on the signature page
hereto.

         (b) If to the Company to:

                   National Golf Properties, Inc.
                   2951 28th Street, Suite 3001
                   Santa Monica, California 90405
                   Attention:  President

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

         Section 21.  Governing Law. The parties agree that this Agreement shall
                      -------------
be governed by, and construed and enforced in accordance with, the laws of the
State of Maryland, which laws are applicable to contracts made and to be
performed in such state without giving effect to the principles of conflicts of
laws.

         Section 22.  Miscellaneous. Use of the masculine pronoun shall be
                      -------------
deemed to include usage of the feminine pronoun where appropriate.

         Section 23.  Prior Agreements. This Agreement replaces and supersedes
                      ----------------
any Prior Agreements to which the Indemnitee is a party, and such Prior
Agreements are hereby void and of no further force or effect.

                                       9

<PAGE>

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

ATTEST:                         NATIONAL GOLF PROPERTIES, INC.


/s/ SYLVIA ADAMS                /s/ JAMES M. STANICH

Sylvia Adams                    James M. Stanich
--------------------            --------------------------
                                James M. Stanich
                                President


WITNESS:                        INDEMNITEE


                                /s/ John C. Cushman
____________________            ------------------------------------
                                JOHN C. CUSHMAN, III


                                Address: 601 South Figueroa Street, 47/th/ Floor
                                         Los Angeles, California 90017

                                       10