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                                                                    EXHIBIT 10.2


                                OPTION AGREEMENT


         OPTION AGREEMENT, dated as of April 12, 1997, by and between THE ARNOLD
PALMER GOLF COMPANY, a Tennessee corporation, with offices at 6201 Mountain View
Road, Ooltewah, Tennessee 37363 ("APGC"), and NANCY LOPEZ ENTERPRISES, INC., an
Ohio corporation, c/o International Management, Inc., One Erieview Plaza, Suite
1300, Cleveland, Ohio 44114 ("Enterprises"):


                                   WITNESSETH:


         WHEREAS, Enterprises and APGC are entering into a licensing agreement
(the "Licensing Agreement") simultaneously herewith which Licensing Agreement
provides for the use by APGC of the name, likeness and endorsement of Nancy
Lopez ("Lopez") in connection with the advertisement and promotion of certain of
APGC's Products (as defined therein). All terms used but not defined herein
shall have the meanings ascribed to them in the Licensing Agreement;

         WHEREAS, as part of the remuneration to be paid to Enterprises pursuant
to the Licensing Agreement, Enterprises will be granted options to purchase
Shares (as defined herein) on the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, Enterprises and APGC hereby
agree as follows:

         SECTION 1. Definitions.

         For purposes of this Agreement, the following capitalized terms shall
have the respective meanings indicated below.

         "Additional Shares" shall mean all Shares (including treasury Shares,
but excluding Shares issued or sold pursuant to employee benefit plans and
Shares issued upon exercise of options) issued or sold (or, deemed to be issued
or sold) by APGC after the date hereof, whether or not subsequently reacquired
or retired by APGC.

         "Affiliate" shall mean any Person which, directly or indirectly,
controls, is controlled by or is under common control with the relevant Person
and, if such Person is an individual, any member of the immediate family
(including parents, spouse and children) of such individual and any trust whose
principal beneficiary is such individual, or one or more members of such
immediate family or any Person who is controlled by any such member or trust.
For the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person, shall mean a member of the board of directors, a
partner or an officer of such Person, or any other Person having, directly or
indirectly, the power


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to direct or cause the direction of the management and policies of such Person,
through the ownership (of record, as trustee, by voting agreement or by proxy)
of voting securities or similar equity interests, by contract or otherwise. Any
Person owning or controlling directly or indirectly 10% or more of the voting
securities or similar equity interests of another Person shall be deemed to be
an Affiliate of such person.

         "Business Day" shall mean any other than a Saturday or a Sunday or a
day on which commercial banking institutions in the City of New York are
authorized by law or other governmental action to be closed. Any reference to
"days" (unless Business Days are specified) shall mean calendar days.

         "Convertible Securities" shall mean any evidence of indebtedness,
shares of stock (other than Shares) or other securities directly or indirectly
convertible into or exchangeable for Additional Shares.

         "Current Market Price" shall mean on any date specified herein, the
average daily Market Price during the period of the most recent 20 days, ending
on such date, on which the national securities exchanges were open for trading,
except that if no Shares are then listed or admitted to trading on any national
securities exchange or quoted in the over-the-counter market, the Current Market
Price shall be the Market Price on such date.

         "Exercise Date" means the date on which an Option first becomes
exercisable.

         "Fifth Year Option" shall mean the right of Enterprises to purchase, at
Enterprises' election, in accordance with the terms of this Agreement, a number
of Shares up to the Fifth Year Option Number, upon payment of the Aggregate
Option Share Price for the number of Shares so purchased, subject to adjustment
as provided herein.

         "Fifth Year Option Number" shall mean 40,000 Shares, as such number may
be adjusted as provided herein.

         "First Year Option" shall mean the right of Enterprises to purchase, at
Enterprises' election, in accordance with the terms of this Agreement, a number
of Shares up to the First Year Option Number, upon payment of the Aggregate
Option Share Price for the number of Shares so purchased, subject to adjustment
as provided herein.

         "First Year Option Number" shall mean 40,000 Shares, as such number may
be adjusted as provided herein.

         "Fourth Year Option" shall mean the right of Enterprises to purchase,
at Enterprises' election, in accordance with the terms of this Agreement, a
number of Shares up to the Fourth Year Option Number, upon payment of the
Aggregate Option Share Price for the number of Shares so purchased, subject to
adjustment as provided herein.





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         "Fourth Year Option Number" shall mean 40,000 Shares, as such number
may be adjusted as provided herein.

         "Market Price" shall mean on any date specified herein, the amount per
share of the Shares, equal to (a) the last sale price of such Shares, regular
way, on such date or, if no such sale takes place on such date, the average of
the closing bid and asked prices thereof on such date, in each case as
officially reported on the principal national securities exchange on which such
Shares is then listed or admitted to trading, or (b) if such Shares are not then
listed or admitted to trading on any national securities exchange but it
designated as a national market system security by the NASD, the last trading
price of the Shares on such date, or (c) if there shall have been not trading on
such date or if the Shares are not so designated, the average of the closing bid
and asked prices of the Shares on such date as shown by the NASD automated
quotation system, or (d) if such Shares are not then listed or admitted to
trading on any national exchange or quoted in the over-the-counter market, the
higher of (x) the book value thereof as determined by any firm of independent
public accountants of recognized standing selected by the Board of Directors of
APGC as of the last day of any month ending with 60 days preceding the date as
of which the determination is to be made or (y) the fair value thereof
determined in good faith by the Board of Directors of APGC as of a date which is
within 180 days of the date as of which the determination is to be made.

         "NASD" shall mean The National Association of Securities Dealers, Inc.

         "Option" and "Options" shall mean one or more of the First Year Option,
the Second Year Option, the Third Year Option, the Fourth Year Option and the
Fifth Year Option.

         "Option Share Price" shall be, on a per Share basis, the Market Price
on the date hereof. The Option Share Price shall be adjusted and readjusted from
time to time as provided herein and, as so adjusted or readjusted, shall remain
in effect until a further adjustment or readjustment thereof is required hereby.
In the event of a Share dividend, Share split, or combination of Shares which
results in a proportionate increase or decrease in the number of Shares, the
Option Share Price then in effect shall be decreased (in the case of a
proportionate increase in Shares outstanding) or increased (in the case of a
proportionate decrease in Shares outstanding) in the same proportion. In the
event of a recapitalization, reorganization, consolidation, merger or similar
transaction where Shares consisting of common stock of APGC are changed into or
exchanged for a different number of Shares of common stock or different capital
stock or other securities, the Option Share Price then in effect shall apply to
so much of the different common stock, capital stock or other securities as are
received with respect to each Share of common stock so changed or exchanged.
Enterprises shall be given prompt written notice of any such event, which notice
shall include in reasonable detail the calculation of any adjustments to the
Option Share Price.

         "Other Options" shall mean rights or options (other than the Options)
to subscribe for, purchase or otherwise acquire either Additional Shares or
Convertible Securities.

         "Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).




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         "Second Year Option" shall mean the right of Enterprises to purchase,
at Enterprises' election, in accordance with the terms of this Agreement, a
number of Shares up to the Second Year Option Number, upon payment of the
Aggregate Option Share Price for the number of Shares so purchased, subject to
adjustment as provided herein.

         "Second Year Option Number" shall mean 40,000 Shares, as such number
may be adjusted as provided herein.

         "Shares" shall mean the shares of the common stock of APGC, $.50 par
value per share, outstanding at any time and any stock or other securities into
which such common stock may hereafter be changed or for which such common stock
may be exchanged after giving effect to the terms of such change or exchange (by
way of reorganization, recapitalization, merger, consolidation or otherwise) and
all other stock of any class or classes (however designated) of APGC the holders
of which have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.

         "Third Year Option" shall mean the right of Enterprises to purchase, at
Enterprises' election, in accordance with the terms of this Agreement, a number
of Shares up to the Third Year Option Number, upon payment of the Aggregate
Option Share Price for the number of Shares so purchased, subject to adjustment
as provided herein.

         "Third Year Option Number" shall mean 40,000 Shares, as such number may
be adjusted as provided herein.

         SECTION 2. Option to Purchase Shares.

         2.1 Grant of Option.

                  2.1.1 Grant of First Year Option. APGC hereby grants to
Enterprises the First Year Option, which is immediately exercisable. The First
Year Option may be exercised in full or in any number of partial exercises in
denominations of at least 500 shares at any time at or prior to the tenth
anniversary hereof.

                  2.1.2 Grant of Second Year Option. APGC hereby grants to
Enterprises the Second Year Option, which is exercisable upon the first
anniversary hereof. The Second Year Option may be exercised in full or in any
number of partial exercises at any time on or after the Exercise Date for such
Option and at or prior to the tenth anniversary of the Exercise Date for such
Option.

                  2.1.3 Grant of Third Year Option. APGC hereby grants to
Enterprises the Third Year Option, which is exercisable upon the second
anniversary hereof. The Third Year Option may be exercised in full or in any
number of partial exercises in denominations of at least 500 shares at any time
on or after the Exercise Date for such Option and at or prior to the tenth
anniversary of the Exercise Date for such Option.



                  

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                  2.1.4 Grant of Fourth Year Option. APGC hereby grants to
Enterprises the Fourth Year Option, which is exercisable upon the third
anniversary hereof. The Fourth Year Option may be exercised in full or in any
number of partial exercises in denominations of at least 500 shares at any time
on or after the Exercise Date for such Option and at or prior to the tenth
anniversary of the Exercise Date for such Option.

                  2.1.5 Grant of Fifth Year Option. APGC hereby grants to
Enterprises the Fifth Year Option, which is exercisable upon the fourth
anniversary hereof. The Fifth Year Option may be exercised in full or in any
number of partial exercises in denominations of at least 500 shares at any time
on or after the Exercise Date for such Option and at or prior to the tenth
anniversary of the Exercise Date for such Option.

         2.2 Exercise of Option. An Option may be exercised in whole or in part
by Enterprises by serving written notice (the "Option Notice") upon APGC
specifying the number of Shares then to be purchased. An Option shall be
exercisable at a purchase price equal to the product of the number of Shares to
be purchased multiplied by the Option Share Price then in effect. The closing
for each such purchase shall be held at the offices of APGC on a day not later
than 30 Business Days after the date of the Option Notice. At the closing, APGC
shall deliver to Enterprises, against payment of the purchase price specified in
this Section 2.2, certificates for the Shares purchased, free and clear of all
pledges, options, claims, liens, security interests and encumbrances of any
kind, other than the requirements of federal and state securities laws
respecting limitations on the subsequent transfer thereof and with all requisite
stock transfer tax stamps attached or provided for. Notwithstanding the
foregoing, if the Licensing Agreement is terminated solely due to a default by
Enterprises thereunder, no Option having an Exercise Date after the effective
date of such termination shall become exercisable, having an Exercise Date after
the effective date of such termination, and all such Options shall immediately
lapse on the termination date. In no event shall the termination (for any
reason) or expiration of the Licensing Agreement affect any Options having an
Exercise Date prior to or on the effective date of such termination or
expiration or affect any Options having an Exercise Date after the effective
date of such termination or expiration except as expressly provided herein.

         SECTION 3. Adjustment of Shares Issuable Upon Exercise.

         3.1 General; Option Share Price. The number of Shares which Enterprises
shall be entitled to receive upon each exercise hereof shall be determined by
multiplying the number of Shares which would otherwise (but for the provisions
of this Section) be issuable upon such exercise, as designated by Enterprises,
by the fraction of which (a) the numerator is the Option Share Price in effect
on the date hereof and (b) the denominator is the Option Share Price in effect
on the date of such exercise.

         3.2 Adjustment of Option Share Price.

                  3.2.1 Issuance of Additional Shares. In case APGC at any time
or from time to time after the date hereof shall issue or sell Additional Shares
(including Additional Shares deemed to be issued pursuant hereto, but excluding
Shares issued pursuant to the conversion of [name of Stock]




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outstanding as of the date hereof) without consideration or for a consideration
per Share less than the greater of the Current Market Price and two times the
Option Share Price in effect immediately prior to such issue or sale, then, and
in each such case, subject to Section 3.7, such Option Share Price shall be
reduced, concurrently with such issue or sale, to a price (calculated to the
nearest .001 of a cent) determined by multiplying such Option Share Price by a
fraction

                           (a) the numerator of which shall be (i) the number of
Shares outstanding immediately prior to such issue or sale plus (ii) the number
of Shares which the aggregate consideration received by APGC for the total
number of such Additional Shares so issued or sold would purchase at the greater
of such Current Market Price and two times such Option Share Price, and

                           (b) the denominator of which shall be the number of
Shares outstanding immediately after such issue or sale, provided that, for the
purposes of this subsection, (x) immediately after any Additional Shares are
deemed to have been issued pursuant to Section 3.3 or 3.4, such Additional
Shares shall be deemed to be outstanding and (y) treasury Shares or Shares owned
by APGC shall not be deemed to be outstanding.

                  3.2.2 Extraordinary Dividends and Distributions. In case APGC
at any time or from time to time after the date hereof shall declare, order, pay
or make a dividend or other distribution (including, without limitation, any
distribution of other or additional stock or other securities or property or
Other Options by way of dividend or spin-off, reclassification, recapitalization
or similar corporate rearrangement) on the Shares, other than (a) a dividend
payable in Additional Shares or (b) a regular periodic cash dividend at a rate
not in excess of 110% of the rate of the last regular periodic cash dividend
theretofore paid, then, and in each such case, subject to Section 3.7, the
Option Share Price in effect immediately prior to the close of business on the
record date affixed for the determination of holders of any class of securities
entitled to receive such dividend or distribution shall be reduced, effective as
of the close of business on such record date, to a price (calculated to the
nearest .001 of a cent) determined by multiplying such Option Share Price by a
fraction

                           (x) the numerator of which shall be the Current
Market Price in effect on such record date or, if the Shares trade on an
ex-dividend basis, on the date prior to the commencement of ex-dividend trading,
less the amount of such dividend or distribution (as determined in good faith by
the Board of Directors of APGC) applicable to one Share, and

                           (y) the denominator of which shall be such Current
Market Price, 

provided that, in the event that the amount of such dividend as so determined is
equal to or greater than 50% of such Current Market Price or in the event that
such fraction is less than 1/2, in lieu of the foregoing adjustment, adequate
provision shall be made so that Enterprises shall receive a pro rata share of
such dividend based upon the maximum number of shares at the time issuable to
Enterprises (determined without regard to whether the Option is exercisable at
such time).





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         3.3 Treatment of Other Options and Convertible Securities. In case APGC
at any time or from time to time after the date hereof shall issue, sell, grant
or assume, or shall fix a record date for the determination of holders of any
class of securities entitled to received, any Other Options or Convertible
Securities, then, and in each such case, the maximum number of Additional Shares
issuable upon the exercise of such Other Options or, in the case of Convertible
Securities and Other Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares issued as of the
time of such issue, sale, grant or assumption or, in case such a record date
shall have been fixed, as of the close of business on such record date (or, if
the Shares trade on an ex-dividend basis, on the date prior to the commencement
of ex-dividend trading).

         3.4 Treatment of Share Dividends, Share Splits, etc.. In case APGC at
any time or from time to time after the date hereof shall declare or pay any
dividend on the Shares payable in Shares, or shall effect a subdivision of the
outstanding Shares into a greater number of Shares (by reclassification or
otherwise than by payment of a dividend in Shares), then, and in each such case,
Additional Shares shall be deemed to have been issued (a) in the case of any
such dividend, immediately after the close of business on the record date for
the determination of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
on the day immediately prior to the day upon which such corporate action becomes
effective.

         3.5 Computation of Consideration. For the purposes of this Section,

                  (a) the consideration for the issue or sale of any Additional
Shares shall, irrespective of the accounting treatment of such consideration,

                           (i) insofar as it consists of cash, be computed at
the net amount of cash received by APGC, without deducting any expenses paid or
incurred by APGC or any commissions or compensations paid or concessions or
discounts allowed to underwriters, dealers or others performing similar services
in connection with such issue or sale,

                           (ii) insofar as it consists of property (including
securities) other than cash, be computed at the fair value thereof at the time
of such issue or sale, as determined in good faith by the Board of Directors of
APGC, and

                           (iii) in case Additional Shares are issued or sold
together with other stock or securities or other assets of APGC for a
consideration which covers both, be the portion of such consideration so
received, computed as provided in clauses (i) and (ii) above, allocable to such
Additional Shares, all as determined in good faith by the Board of Directors of
APGC;

                  (b) Additional Shares deemed to have been issued pursuant to
Section 3.3, relating to Other Options and Convertible Securities, shall be
deemed to have been issued for a consideration per share determined by dividing

                           (i) the total amount, if any, received and receivable
by APGC as consideration for the issue, sale, grant or assumption of the Other
Options or Convertible Securities




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in question, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration to protect
against dilution) payable to APGC upon the exercise in full of such Other
Options or the conversion or exchange of such Convertible Securities or, in the
case of Other Options for Convertible Securities, the exercise of such Other
Options for Convertible Securities and the conversion or exchange of such
Convertible Securities, in each case computing such consideration as provided in
the foregoing subdivision (a),

by

                           (ii) the maximum number of Shares (as set forth in
the instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such number to protect against dilution)
issuable upon the exercise of such Other Options or the conversion or exchange
of such Convertible Securities; and

                  (c) Additional Shares deemed to have been issued pursuant to
Section 3.4, relating to stock dividends, stock splits, etc., shall be deemed to
have been issue for no consideration.

         3.6 Adjustments for Combinations, etc.. In case the outstanding Shares
shall be combined or consolidated, by reclassification, reverse stock split or
otherwise, into a lesser number of Shares, the Option Share Price in effect
immediately prior to such combination or consolidation shall, concurrently with
the effectiveness of such combination or consolidation, be proportionately
increased.

         3.7 Minimum Adjustment of Option Share Price. If the amount of any
adjustment of the Option Share Price required pursuant to this Section would be
less than one percent (1%) of the Option Share Price in effect at the time such
adjustment is otherwise so required to be made, such amount shall be carried
forward and adjustment with respect thereto made at the time of and together
with any subsequent adjustment which, together with such amount and any other
amount or amounts so carried forward, shall aggregate at least one percent (1%)
of such Option Share Price. If the amount of any adjustment of the Option Share
Price required pursuant to this Section, together with any subsequent
adjustments, does not aggregate at least one percent (1%) of such Option Share
Price, no adjustment shall be made.

         SECTION 4. Consolidation, Merger, etc..

         4.1 Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc.. In case APGC after the date hereof (a) shall consolidate
with or merge into any other Person and shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) shall permit any other
Person to consolidate with or merge into APGC and APGC shall be the continuing
or surviving Person but, in connection with such consolidation or merger, the
Shares shall be changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (c) shall transfer all or
substantially all of its properties or assets to any other Person, or (d) shall
effect a capital reorganization or reclassification of the Shares (other than a
capital reorganization or reclassification resulting in the issue of Additional
Shares for which adjustment in the Option Share




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Price is provided herein), then, and in the case of each such transaction,
proper provision shall be made so that, upon the basis and the terms and in the
manner provided in this Option, Enterprises, upon the exercise hereof at any
time after the consummation of such transaction, shall be entitled to receive
(at the aggregate Option Share Price in effect at the time of such consummation
for all Shares issuable upon such exercise immediately prior to such
consummation), in lieu of the Shares issuable upon such exercise prior to such
consummation, the highest amount of securities, cash or other property to which
such holder would actually have been entitled as a shareholder upon such
consummation if such holder had exercised the rights represented by this Option
immediately prior thereto (determined without regard to whether the Option is
exercisable at such time).

         4.2 Assumption of Obligations. Notwithstanding anything contained in
the Option to the contrary, APGC will not effect any of the transactions
described in subdivision (a) through (d) of Section 4.1 unless, prior to the
consummation thereof, each Person (other than APGC) which may be required to
deliver any stock securities, cash or property upon the exercise of this Option
as provided herein shall assume, by written instrument delivered to, and
reasonably satisfactory to, the holder of this Option, (a) the obligations of
APGC under this Option (and if APGC shall survive the consummation of such
transaction, such assumption shall be in addition to, and shall not release APGC
from, any continuing obligations of APGC under this Option), and (b) the
obligation to deliver to such holder such shares of stock securities, cash or
property as, in accordance with the foregoing provisions of this Section 4, such
holder may be entitled to receive, and such Person shall have similarly
delivered to such holder an opinion of counsel for such Person, which counsel
shall be reasonably satisfactory to such holder, stating that this Option shall
thereafter continue in full force and effect and the terms hereof (including,
without limitation, all of the provisions of this Section 4) shall be applicable
to the stock, securities, cash or property which such Person may be required to
deliver upon any exercise of this Option or the exercise of any rights pursuant
hereto.

         SECTION 5. Representations and Warranties.

         (a) APGC Representations. APGC represents and warrants to Enterprises
as follows:

                  (i) Organization and Qualification. APGC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Tennessee.

                  (ii) Authority Relative to this Agreement. APGC has the
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated thereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate actions and no other
proceedings on the part of APGC or its stockholders are necessary to authorize
this Agreement and the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by APGC, and (assuming this Agreement is
the valid and binding obligation of Enterprises) constitutes a valid and binding
agreement of APGC, enforceable against APGC in accordance with its terms, except
that (A) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereafter in effect
relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms




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of equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.

                  (iii) No Violation. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby and
thereby will not (A) constitute a breach or violation of or default under the
Charter or the By-laws of APGC or (B) violate, conflict with, or result in a
breach of any provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation or
imposition of any lien, security interest, charge or encumbrance upon any of the
properties or assets of APGC under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement
or other instrument or obligation to which APGC is a party or to which APGC or
any of its properties or assets maybe subject, other than, in the case of clause
(B), such events that would not, either individually or in the aggregate,
prevent or delay the consummation of the transactions contemplated hereby. The
(A) execution, delivery and performance of this Agreement by APGC will not
require the consent or approval of any other party, and (B) the execution,
delivery and performance by APGC of this Agreement and the consummation of the
transactions contemplated hereby will not constitute a breach or violation of or
default under any law, rule or regulation or any judgment, decree, order,
governmental permit or license to which APGC is subject. To the knowledge of
APGC, no challenges to the validity or effectiveness of this Agreement, or any
other agreement or instrument necessary to consummate the transactions
contemplated hereby, have been made by any governmental authority or other
person.

                  (iv) Ownership of Shares. Upon payment of the Option Share
Price, Enterprises will acquire, good, valid and marketable title to the Shares
received, free and clear of any lien, charge, encumbrance, security interest,
claim or right of others of whatever nature other than the requirements of the
federal and state securities laws respecting limitations on the subsequent
transfer thereof.

         (b) Enterprises Representations. Enterprises represents and warrants to
APGC as follows:

                  (i) Organization and Qualification. Enterprises is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio.

                  (ii) Authority Relative to this Agreement. Enterprises has the
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated thereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate actions and no other
proceedings on the part of Enterprises or its stockholders are necessary to
authorize this Agreement and the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Enterprises, and
(assuming this Agreement is the valid and binding obligation of Enterprises)
constitutes a valid and binding agreement of Enterprises, enforceable against
Enterprises in accordance with its terms, except that (A) such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium and other
similar laws now or hereafter in




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effect relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.

                  (iii) No Violation. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby and
thereby will not (A) constitute a breach or violation of or default under the
Certificate of Incorporation or the Regulations of Enterprises or (13) violate,
conflict with, or result in a breach of any provisions of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation or imposition of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Enterprises under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Enterprises is a party or to which Enterprises or any of its
properties or assets may be subject, other than, in the case of clause (13),
such events that would not, either individually or in the aggregate, prevent or
delay the consummation of the transactions contemplated hereby. The (A)
execution, delivery and performance of this Agreement by Enterprises will not
require the consent or approval of any other party, and (B) the execution,
delivery and performance by Enterprises of this Agreement and the consummation
of the transactions contemplated hereby will not constitute a breach or
violation of or default under any law, rule or regulation or any judgment,
decree, order, governmental permit or license to which Enterprises is subject.
To the knowledge of Enterprises, no challenges to the validity or effectiveness
of this Agreement, or any other agreement or instrument necessary to consummate
the transactions contemplated hereby, have been made by any governmental
authority or other person.

                  (iv) Investment Intent. Enterprises is acquiring the Options,
and upon exercise of the Options, the Shares for investment for its own account
and not with a view to the resale or distribution thereof.

         SECTION 6. Reservation of Shares, etc..

         APGC will at all times reserve and keep available, solely for issuance
and delivery upon exercise of the Option the number of Shares from time to time
issuable upon full exercise of the Options. All Shares issuable upon exercise of
the Options at any time shall be duly authorized and, when issued upon such
exercise, shall be validly issued and fully paid and non-assessable with no
liability on the part of Enterprises.

         SECTION 7. No Dilution or Impairment.

         APGC will not, by amendment of its charter or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Option, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of this Option against dilution or other impairment.
Without limiting the generality of the foregoing, APGC (a) will not




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permit the par value of any Shares receivable upon the exercise of this Option
to exceed the amount payable therefor upon such exercise, (b) will take all such
action as may be necessary or appropriate in order that APGC may validly and
legally issue fully paid and non-assessable Shares on the exercise of the
Options from time to time, (c) will not take any action which results in any
adjustment of the Option Share Price if the total number of Shares issuable
after the action upon full exercise of the Option would exceed the total number
of Shares then authorized by APGC's Charter and available for the purpose of
issue upon such exercise, and (d) will not authorize any additional Shares of
capital stock of any class which is preferred as to dividends or as to the
distribution of assets upon voluntary or involuntary dissolution, liquidation or
winding-up, unless the rights of the holders thereof shall be limited to a fixed
sum or percentage of par value or a sum determined by reference to a formula
based on a published index of interest rates, an interest rate publicly
announced by a financial institution or a similar indicator of interest rates in
respect of participation in dividends and to a fixed sum or percentage of par
value in any such distribution of assets. In case any event shall occur as to
which any of the provisions of this Option are not strictly applicable but the
failure to make any adjustment would not fairly protect the purchase rights
represented by this Option in accordance with the essential intent and
principles contained herein, then, in each such case, APGC shall, at its sole
cost and expense, appoint a firm of independent certified public accountants of
recognized national standing (which may be the regular auditors of APGC), which
shall give their opinion upon the adjustment, if any, on a basis consistent with
the essential intent and principles established herein, necessary to preserve,
without dilution, the purchase rights represented by this Option. Upon receipt
of such opinion, APGC will promptly mail a copy thereof to the holder of this
Option and shall make the adjustments described therein.

         SECTION 8. Registration Upon Issuance of Shares.

         If any Shares required to be reserved for purposes of exercise of this
Option require registration with or approval of any governmental authority under
any federal or state law (including, but not limited to, the Securities Act of
1933) before such Shares may be issued upon exercise, APGC will, at its expense
and as expeditiously as possible, cause such Shares to be duly registered or
approved, as the case may be. Without limiting the foregoing, the Shares
issuable upon exercise of this Option (or upon conversion of any capital stock
of APGC issued upon such exercise) shall be duly registered under the Securities
Act of 1933 and all applicable "blue sky" laws. At any such time as Shares are
listed on any national securities exchange, APGC will, at its expense, obtain
promptly and maintain the approval for listing on each such exchange, upon
official notice of issuance, the Shares issuable upon exercise of the then
outstanding portion of the Option and maintain the listing of such Shares after
their issuance; and APGC will also list on such national securities exchange,
will register under the Securities Exchange Act of 1934 and will maintain such
listing of, any other securities that at any time are issuable upon exercise of
the Option, if and at the time that any securities of the same class shall be
listed on such national securities exchange by APGC.

         SECTION 9. Specific Performance; Remedies.

         The parties acknowledge and agree that irreparable damage will result
to Enterprises in the event that this Agreement is not specifically enforced.
Therefore, the rights to, or obligations of,




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<PAGE>   13



purchase and sale of the Shares hereunder shall be enforceable in a court of
equity, or other tribunal with jurisdiction, by a decree of specific performance
and appropriate injunctive relief may be applied for and granted in connection
therewith. Such remedies and all other remedies provided for in this Agreement
or available at law or in equity shall, however, be cumulative and not exclusive
and shall be in addition to any other remedies which either party may have under
this Agreement or otherwise.

         SECTION 10. Severability.

         If any provisions of this Agreement shall, for any reason, be adjudged
by any court of competent jurisdiction to be invalid or unenforceable, such
judgment shall not affect, impair or invalidate the remainder of this Agreement
but shall be confined in its operation to the provision of this Agreement
directly involved in the controversy in which such judgment shall have been
rendered.

         SECTION 11. Notices.

         All notices, requests, demands and other communications hereunder must
be in writing and shall be deemed to have been duly given if mailed by first
class, registered mail, return receipt required, postage and registry fees
prepaid, and addressed as follows:

         If to APGC:           The Arnold Palmer Golf Company
                               6201 Mountain View Road
                               Ooltewah, Tennessee 37363

         If to Enterprises:    Nancy Lopez Enterprises, Inc.
                               c/o International Management, Inc.
                               One Erieview Plaza, Suite 1300,
                               Cleveland, Ohio 44114

Either party by notice in writing mailed to the other party may change the name
and address to which notices, requests, demands and other communications shall
be mailed.

         SECTION 12. Governing Law.

         This Agreement shall be governed by and construed in accordance with
the laws of the State of Tennessee without regard to any conflict of law
principles that might require the application of the laws of another
jurisdiction.

         SECTION 13. Arbitration.

         The parties agree to submit to arbitration any dispute related to this
Agreement and agree that the arbitration process shall be the exclusive means
for resolving disputes which the parties cannot resolve. Any arbitration
hereunder shall be conducted under the Dispute Resolution Rules of the American
Arbitration Association ("AAA") as modified herein. Arbitration proceedings
shall take


             

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place in Cleveland, Ohio, before a single arbitrator who shall be a lawyer. All
arbitration proceedings shall be confidential. Neither party shall disclose any
information about the evidence produced by the other party in the arbitration
proceedings, except in the course of judicial, regulatory, or arbitration
proceeding, or as may be demanded by government authority. Before making any
disclosure permitted by the preceding sentence, a party shall give the other
party reasonable advance written notice of the intended disclosure and an
opportunity to prevent disclosure. In connection with any arbitration provisions
hereunder, each party shall have the right to take the deposition of one
individual and any expert witness retained by the other party. Additional
discovery may be had only where the arbitrator so orders, upon a showing of
substantial need. Only evidence that is directly relevant to the issues may be
obtained in discovery. Each party bears the burden of persuasion of any claim or
counterclaim raised by that party. The arbitration provisions of this Agreement
shall not prevent any party from obtaining injunctive relief from a court of
competent jurisdiction to enforce the obligations for which such party may
obtain provisional relief pending a decision on the merits by the arbitrator.
Each of the parties hereby consents to the jurisdiction of Ohio courts for such
purpose. The arbitrator shall have authority to award any remedy or relief that
a court of the State of Ohio could grant in conformity to applicable law, except
that the arbitrator shall have no authority to award attorneys' fees or punitive
damages. Any arbitration award shall be accompanied by a written statement
containing a summary of the issues in controversy, a description of the award,
and an explanation of the reasons for the award. The arbitrator's award shall be
final and judgment may be entered upon such award by any court. Any reference in
this clause to the Employer also refers to all subsidiary and affiliated
entities and all benefit plans, sponsors and trustees of benefit plans,
fiduciaries, administrators, officers and directors.

         SECTION 14. Amendments, etc..

         This Agreement may not be modified or amended, and no provision hereof
may be waived, except by an instrument in writing signed by the parties hereto.

         SECTION 15. Successors and Assigns.

         The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
transferees. No party hereto may assign their rights and obligations hereunder
without the prior written consent of the other party hereto; except that
Enterprises may, after providing APGC with written notice, transfer and assign
its rights under this Agreement (including but not limited to the Options
themselves) to Lopez, any other corporation wholly owned by Lopez or to one or
more trusts for Lopez's estate planning purposes.

         SECTION 16. Counterparts.

         This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.





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<PAGE>   15


         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

NANCY LOPEZ ENTERPRISES, INC.          THE ARNOLD PALMER GOLF COMPANY


By: /s/ Nancy Lopez                    By: /s/ George H. Nichols
    ----------------------------           ------------------------------------
    Name:  Nancy Lopez                     Name:  George H. Nichols
    Title:  President                      Title:  Chairman and Chief Executive 
                                                   Officer





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