<PAGE>   1
                                                                   Exhibit 10(m)

                                                         BUSINESS LOAN AGREEMENT


THIS AGREEMENT DATED AS OF JUNE 1, 2000, IS AMONG BANK OF AMERICA, N.A. (THE
"BANK"), ASHWORTH, INC. ("ASHWORTH"), ASHWORTH STORE I, INC. ("ASHWORTH STORE
1"), ASHWORTH STORE II, INC. ("ASHWORTH STORE II"), ASHWORTH INTERNATIONAL, INC.
("ASHWORTH INTERNATIONAL"), AND ASHWORTH U.K., LTD. ("ASHWORTH UK") ("ASHWORTH,
ASHWORTH STORE I, ASHWORTH STORE II, ASHWORTH INTERNATIONAL, AND ASHWORTH UK ARE
SOMETIMES REFERRED TO COLLECTIVELY AS THE "BORROWERS" AND INDIVIDUALLY AS THE
"BORROWER").


1.      FACILITY NO. 1 : LINE OF CREDIT AMOUNT AND TERMS

1.1     LINE OF CREDIT AMOUNT.

        (a) During the availability period described below, the Bank will
        provide a line of credit to the Borrowers. The amount of the line of
        credit (the "Facility No. 1 Commitment") is Twenty Five Million and
        00/100 Dollars ($25,000,000.00).

        (b) This is a revolving line of credit providing for cash advances and
        letters of credit. During the availability period, the Borrowers may
        repay principal amounts and reborrow them.

        (c) The Borrowers agree not to permit the outstanding principal balance
        of advances under the line of credit plus the outstanding amounts of any
        letters of credit, including amounts drawn on letters of credit and not
        yet reimbursed, to exceed the Facility No. 1 Commitment.


1.2     AVAILABILITY PERIOD. The line of credit is available between the date of
this Agreement and May 1, 2002, or such earlier date as the availability may
terminate as provided in this Agreement (the "Facility No. 1 Expiration Date").


1.3     INTEREST RATE.

        (a) Unless the Borrowers elect an optional interest rate as described
        below, the interest rate is the Bank's Prime Rate minus 0.5 percentage
        points.

        (b) The Prime Rate is the rate of interest publicly announced from time
        to time by the Bank as its Prime Rate. The Prime Rate is set by the Bank
        based on various factors, including the Bank's costs and desired return,
        general economic conditions and other factors, and is used as a
        reference point for pricing some loans. The Bank may price loans to its
        customers at, above, or below the Prime Rate. Any change in the Prime
        Rate shall take effect at the opening of business on the day specified
        in the public announcement of a change in the Bank's Prime Rate.


1.4     REPAYMENT TERMS.

        (a)The Borrowers will pay interest on June 1, 2000, and then monthly
        thereafter until payment in full of any principal outstanding under this
        line of credit.

        (b) The Borrowers will repay in full all principal and any unpaid
        interest or other charges outstanding under this line of credit no later
        than the Facility No. 1 Expiration Date. Any interest period for an
        optional interest rate (as described below) shall expire no later than
        the Facility No. 1 Expiration Date.

1.5     OPTIONAL INTEREST RATES. Instead of the interest rate based on the
Bank's Prime Rate, the Borrowers may elect the optional interest rates listed
below during interest periods agreed to by the Bank and the Borrowers. The
optional interest rates shall be subject to the terms and conditions described
later in this Agreement. Any principal amount bearing interest at an

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optional rate under this Agreement is referred to as a "Portion." The following
optional interest rates are available:

        (a)    the IBOR Rate plus 1.625 percentage points.


1.6     LETTERS OF CREDIT.

        (a)    This line of credit may be used for financing:

               (i) commercial letters of credit with a maximum maturity of 365
               days but not to extend more than 90 days beyond the Facility No.
               1 Expiration Date. Each commercial letter of credit will require
               drafts payable at sight or up to 60 days after sight.

               (ii) standby letters of credit with a maximum maturity of 365
               days but not to extend more than 90 days beyond the Facility No.
               1 Expiration Date.

               (iii) The amount of all letters of credit outstanding at any one
               time (including amounts drawn on letters of credit and not yet
               reimbursed) may not exceed Twenty Five Million and 00/100 Dollars
               ($25,000,000.00).

               (iv) The following letters of credit are outstanding from the
               Bank for the account of Ashworth:

<TABLE>
<CAPTION>
     Letter of Credit Number            Amount
     -----------------------            ------
     <S>                            <C>
            1036534                 $   116,004.60
            1036848                 $   791,519.43
            1039233                 $   326,659.22
            1039368                 $   140,534.21
            1040650                 $    60,839.95
            1044509                 $ 1,142,670.05
            1079754                 $ 1,099,840.10
            1079845                 $   137,448.80
            1080800                 $   179,953.08
            1083017                 $   384,337.40
            1082492                 $   139,901.20
            1083016                 $    10,012.10
            1085486                 $   104,160.00
            1085487                 $    13,755.00
            1085587                 $    33,694.40
            1088230                 $     1,578.00
            1088231                 $       705.60
            1088244                 $    30,450.00
            1088245                 $    64,258.50
            1088266                 $     4,243.74
            1088267                 $    12,549.60
            1088268                 $    23,028.60
            1088335                 $    75,180.00
            1089059                 $    31,922.40
            1089060                 $ 1,881,802.55
            1089155                 $    31,080.00
            1089500                 $   265,650.00
            1089642                 $    18,900.00
</TABLE>


As of the date of this Agreement, these letters of credit shall be deemed to be
outstanding under this Agreement, and shall be subject to all the terms and
conditions stated in this Agreement.

        (b)    Each Borrower agrees:

               (i) any sum drawn under a letter of credit may, at the option of
               the Bank, be added to the principal amount outstanding under this
               Agreement. The amount will bear interest and be due as described
               elsewhere in this Agreement.

               (ii) if there is a default under this Agreement, to immediately
               prepay and make the Bank whole for any outstanding letters of
               credit.


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               (iii) the issuance of any letter of credit and any amendment to a
               letter of credit is subject to the Bank's written approval and
               must be in form and content satisfactory to the Bank and in favor
               of a beneficiary acceptable to the Bank.

               (iv) to sign the Bank's form Application and Agreement for
               Commercial Letter of Credit or Application and Agreement for
               Standby Letter of Credit.

               (v) to pay (A) issuance fees for standby letters of credit equal
               to 1.625% of the face amount, and (B) issuance fees for
               commercial letters of credit and other fees for processing
               standby and commercial letters of credit equal to the fees
               advised by the Bank to the Borrowers from time to time.

               (vi) to allow the Bank to automatically charge its checking
               account for applicable fees, discounts, and other charges.


2.      FACILITY NO. 2 : LINE OF CREDIT AMOUNT AND TERMS

2.1     FOREIGN EXCHANGE FACILITY.

        (a) Between the date of this Agreement and November 1, 2002, the Bank at
        its discretion may enter into spot and forward foreign exchange
        contracts with Ashworth. The foreign exchange contract limit will be
        Five Million and 00/100 U.S. Dollars (U.S. $5,000,000.00), and the
        settlement limit will be Two Million and 00/100 U.S. Dollars (U.S.
        $2,000,000.00). The "foreign exchange contract limit" is the maximum
        limit on the net difference between the total foreign exchange contracts
        outstanding less the total foreign exchange contracts for which the
        Borrowers have already compensated the Bank. The "settlement limit" is
        the maximum limit on the gross total amount of all sale and purchase
        contracts on which delivery is to be effected and settlement allowed on
        any one banking day.

        (b) The Bank shall not be obligated to permit Ashworth to enter into any
        foreign exchange contracts which would exceed the settlement limit.
        However, if the Bank decides, in its discretion, to waive the settlement
        limit for foreign exchange contracts which will settle on any particular
        banking day, the Bank shall not be required to make any U.S. Dollar or
        foreign currency settlement payment to the Borrowers until the Bank
        receives evidence satisfactory to it that the Borrowers have paid the
        Bank at least 2 banking days prior to the settlement date all of
        Ashworth's U.S. Dollar and foreign currency settlement payments. The
        Bank shall not be liable for interest or other damages caused by any
        such failure to pay or deliver or any such delay in payment or delivery.

        (c) The Borrowers will pay the Bank on demand the Bank's then standard
        foreign exchange contract fees for each contract.

        (d) Foreign exchange contracts will be in form and substance
        satisfactory to the Bank.

        (e) No foreign exchange contracts will mature later than 180 days after
        the Facility No. 1 Expiration Date, and in addition no foreign exchange
        contract shall have a tenor longer than 360 days.

        (f) The Borrowers understand the risks of, and are financially able to
        bear any losses resulting from, Ashworth entering into foreign exchange
        contracts. The Bank shall not be liable for any loss suffered by the
        Borrowers as a result of the Ashworth's foreign exchange trading.
        Ashworth will enter into each foreign exchange contract in reliance only
        upon Ashworth's own judgment. Ashworth acknowledges that in entering
        into foreign exchange contracts with the Borrowers, the Bank is not
        acting as a fiduciary. The Borrowers understand that neither the Bank
        nor Ashworth has any obligation to enter into any particular foreign
        exchange contract with the other.

        (g) On the date of this Agreement and at the time of each request by
        Ashworth for a foreign exchange contract, each Borrower represents and
        warrants that it has assets of greater than Ten Million Dollars
        ($10,000,000).

        (h) Ashworth hereby requests the Bank to rely upon and execute
        Ashworth's telephonic instructions regarding foreign exchange contracts,
        and the Borrowers agree that the Bank shall incur no liability for its
        acts or omissions which result from interruption of communications,
        misunderstood communications or instructions from unauthorized persons,
        unless caused by the willful misconduct of the Bank or its officers or
        employees. The Borrowers agree to protect the Bank and hold it harmless
        from any and all loss, damage, claim, expense (including the reasonable
        fees of outside counsel and the allocated costs of staff counsel) or
        inconvenience, however arising, which the Bank suffers or incurs or
        might suffer or incur, based on or arising out of said acts or
        omissions.

        (i) Ashworth agrees to promptly review all confirmations sent to
        Ashworth by the Bank. Ashworth understands that these confirmations are
        not legal contracts but only evidence of the valid and binding oral
        contract which Ashworth have already entered into with the Bank.
        Ashworth agrees to promptly execute and return to the Bank confirmations

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<PAGE>   4

        which accurately reflect the terms of a foreign exchange contract, and
        immediately contact the Bank if Ashworth believes a confirmation is not
        accurate. In the event of a conflict, inconsistency or ambiguity between
        the provisions of this Agreement and the provisions of a confirmation,
        the provisions of this Agreement will prevail.

        (j) The Borrowers agree that the Bank may electronically record all
        telephonic conversations with Ashworth relating to foreign exchange
        contracts and that such tape recordings may be submitted in evidence to
        any court or in any other proceedings relating to such contracts. The
        Borrowers agree that in the event of a conflict, inconsistency or
        ambiguity between the terms of a foreign exchange contract as reflected
        in a tape recording and the terms stated on a confirmation, the terms
        reflected in the tape recording shall control.

        (k) Any sum owed to the Bank under a foreign exchange contract may, at
        the option of the Bank, be added to the principal amount outstanding
        under this Agreement. The amount will bear interest and be due as
        described elsewhere in this Agreement. Ashworth hereby authorizes the
        Bank to debit the Ashworth's accounts with the Bank for payments due
        from Ashworth to the Bank with respect to any foreign exchange contract.

        (l) In addition to any other rights or remedies which the Bank may have
        under this Agreement or otherwise, upon the occurrence of an event of
        default under this Agreement, or if Ashworth's aggregate realized or
        unrealized mark-to-market losses on foreign exchange contracts exceed
        $750,000.00 (the "Revaluation Limit"), the Bank may:

               (i) Suspend performance of its obligations to Ashworth under any
               foreign exchange contract;

               (ii) Declare all foreign exchange contracts, interest and any
               other amounts which are payable by the Borrowers to the Bank
               immediately due and payable; and

               (iii) Without notice to the Borrowers, close out any or all
               foreign exchange contracts or positions of Ashworth with the
               Bank.

        The Bank shall not be under any obligation to exercise any such rights
        or remedies or to exercise them at a time or in a manner beneficial to
        the Borrowers. The Borrowers shall be liable for any amounts owing to
        the Bank after exercise of any such rights and remedies.

        (m) Ashworth and the Bank are also parties to a Foreign Exchange Master
        Agreement dated December 9, 1996 (as amended, modified or renewed, the
        "FEMA"). All foreign exchange transactions entered into between Ashworth
        and the Bank shall be subject to the provisions of this Agreement and
        the FEMA. In the event of any conflict or inconsistency between the
        provisions of this Agreement and the provisions of the FEMA, the
        provisions of the FEMA shall control. The occurrence of an Event of
        Default under the FEMA shall also constitute a default under this
        Agreement.


3.      OPTIONAL INTEREST RATES

3.1     OPTIONAL RATES. Each optional interest rate is a rate per year. Interest
will be paid on the last day of each interest period, and, if the interest
period is longer than 30 days, then on the first day of each month during the
interest period. At the end of any interest period, the interest rate will
revert to the rate based on the Prime Rate, unless the Borrowers have designated
another optional interest rate for the Portion. No Portion will be converted to
a different interest rate during the applicable interest period. Upon the
occurrence of an event of default under this Agreement, the Bank may terminate
the availability of optional interest rates for interest periods commencing
after the default occurs.


3.2     IBOR RATE. The election of IBOR Rates shall be subject to the following
terms and requirements:

        (a) The interest period during which the IBOR Rate will be in effect
        will be no shorter than 30 days and no longer than one year. The last
        day of the interest period will be determined by the Bank using the
        practices of the offshore dollar inter-bank market.

        (b) Each IBOR Rate Portion will be for an amount not less than Five
        Hundred Thousand Dollars ($500,000).

        (c) The Borrowers may not elect an IBOR Rate with respect to any
        principal amount which is scheduled to be repaid before the last day of
        the applicable interest period.

        (d) The "IBOR Rate" means the interest rate determined by the following
        formula, rounded upward to the nearest 1/100 of one percent. (All
        amounts in the calculation will be determined by the Bank as of the
        first day of the interest period.)

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<PAGE>   5

                           IBOR Rate =        IBOR Base Rate
                                       ---------------------------
                                       (1.00 - Reserve Percentage)

        Where,

               (i) "IBOR Base Rate" means the interest rate at which the Bank's
               Grand Cayman Branch, Grand Cayman, British West Indies, would
               offer U.S. dollar deposits for the applicable interest period to
               other major banks in the offshore dollar inter-bank market.

               (ii) "Reserve Percentage" means the total of the maximum reserve
               percentages for determining the reserves to be maintained by
               member banks of the Federal Reserve System for Eurocurrency
               Liabilities, as defined in Federal Reserve Board Regulation D,
               rounded upward to the nearest 1/100 of one percent. The
               percentage will be expressed as a decimal, and will include, but
               not be limited to, marginal, emergency, supplemental, special,
               and other reserve percentages.

        (e) Each prepayment of an IBOR Rate Portion, whether voluntary, by
        reason of acceleration or otherwise, will be accompanied by the amount
        of accrued interest on the amount prepaid, and a prepayment fee as
        described below. A "prepayment" is a payment of an amount on a date
        earlier than the scheduled payment date for such amount as required by
        this Agreement.

        (f) The prepayment fee shall be in an amount sufficient to compensate
        the Bank for any loss, cost or expense incurred by it as a result of the
        prepayment, including any loss of anticipated profits and any loss or
        expense arising from the liquidation or reemployment of funds obtained
        by it to maintain such Portion or from fees payable to terminate the
        deposits from which such funds were obtained. The Borrowers shall also
        pay any customary administrative fees charged by the Bank in connection
        with the foregoing. For purposes of this paragraph, the Bank shall be
        deemed to have funded each Portion by a matching deposit or other
        borrowing in the applicable interbank market, whether or not such
        Portion was in fact so funded.

        (g) The Bank will have no obligation to accept an election for an IBOR
        Rate Portion if any of the following described events has occurred and
        is continuing:

               (i) Dollar deposits in the principal amount, and for periods
               equal to the interest period, of an IBOR Rate Portion are not
               available in the offshore dollar inter-bank market; or

               (ii) the IBOR Rate does not accurately reflect the cost of an
               IBOR Rate Portion.


4.      FEES AND EXPENSES

4.1     FEES.

        (a) UNUSED COMMITMENT FEE. The Borrowers agree to pay a fee on any
        difference between the Facility No. 1 Commitment and the amount of
        credit the Borrowers actually use, determined by the weighted average
        credit outstanding during the specified period. The fee will be
        calculated at .175% per year. The calculation of credit outstanding
        shall include the undrawn amount of letters of credit.

        This fee is due on June 30, 2000, and quarterly in arrears thereafter
        until May 1, 2002.

(b)     WAIVER FEE. If the Bank, at its discretion, agrees to waive or amend any
terms of this Agreement, the Borrowers will, at the Bank's option, pay the Bank
a fee for each waiver or amendment in an amount advised by the Bank at the time
the Borrowers request the waiver or amendment. Nothing in this paragraph shall
imply that the Bank is obligated to agree to any waiver or amendment requested
by the Borrowers. The Bank may impose additional requirements as a condition to
any waiver or amendment.

4.2     EXPENSES. The Borrowers agree to immediately repay the Bank for expenses
that include, but are not limited to, filing, recording and search fees,
appraisal fees, title report fees and documentation fees.


4.3     REIMBURSEMENT COSTS.

        (a) The Borrowers agree to reimburse the Bank for any expenses it incurs
        in the preparation of this Agreement and any agreement or instrument
        required by this Agreement. Expenses include, but are not limited to,
        reasonable

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<PAGE>   6

        attorneys' fees, including any allocated costs of the Bank's in-house
        counsel.

5.      DISBURSEMENTS, PAYMENTS AND COSTS

5.1     REQUESTS FOR CREDIT; EQUAL ACCESS BY ALL BORROWERS. Any Borrower (or a
person or persons authorized by any one of the Borrowers), acting alone, can
borrow up to the full amount of credit provided under this Agreement. Each
Borrower will be liable for all extensions of credit made under this Agreement
to any other Borrower. Each request for an extension of credit will be made in
writing in a manner acceptable to the Bank, or by another means acceptable to
the Bank.


5.2     DISBURSEMENTS AND PAYMENTS. Each disbursement by the Bank and each
payment by the Borrowers will be:

        (a) made at the Bank's branch (or other location) selected by the Bank
        from time to time;

        (b) made for the account of the Bank's branch selected by the Bank from
        time to time;

        (c) made in immediately available funds, or such other type of funds
        selected by the Bank;

        (d) evidenced by records kept by the Bank. In addition, the Bank may, at
        its discretion, require the Borrowers to sign one or more promissory
        notes.


5.3     TELEPHONE AND TELEFAX AUTHORIZATION.

(a)     The Bank may honor telephone or telefax instructions for advances or
        repayments or for the designation of optional interest rates and telefax
        requests for the issuance of letters of credit given, or purported to be
        given, by any one of the individuals authorized to sign loan agreements
        on behalf of each Borrower, or any other individual designated by any
        one of such authorized signers.

(b)     Advances will be deposited in and repayments will be withdrawn from the
        Ashworth's account number 14503-50974, or such other accounts with the
        Bank as designated in writing by the Borrowers.

(c)     The Borrowers will indemnify and hold the Bank harmless from all
        liability, loss, and costs in connection with any act resulting from
        telephone or telefax instructions the Bank reasonably believes are made
        by any individual authorized by the Borrowers to give such instructions.
        This paragraph will survive this Agreement's termination, and will
        benefit the Bank and its officers, employees, and agents.

5.4     DIRECT DEBIT (PRE-BILLING).

(a)     The Borrowers agree that the Bank will debit Ashworth's account number
        14503-50974, or such other of the Borrowers' accounts with the Bank as
        designated in writing by the Borrowers (the "Designated Account") on the
        date each payment of principal and interest and any fees from the
        Borrowers becomes due (the "Due Date"). If the Due Date is not a banking
        day, the Designated Account will be debited on the next banking day.

(b)     Approximately 10 days prior to each Due Date, the Bank will mail to the
        Borrowers a statement of the amounts that will be due on that Due Date
        (the "Billed Amount"). The calculation will be made on the assumption
        that no new extensions of credit or payments will be made between the
        date of the billing statement and the Due Date, and that there will be
        no changes in the applicable interest rate.

(c)     The Bank will debit the Designated Account for the Billed Amount,
        regardless of the actual amount due on that date (the "Accrued Amount").
        If the Billed Amount debited to the Designated Account differs from the
        Accrued Amount, the discrepancy will be treated as follows:

               (i) If the Billed Amount is less than the Accrued Amount, the
               Billed Amount for the following Due Date will be increased by the
               amount of the discrepancy. The Borrowers will not be in default
               by reason of any such discrepancy.

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<PAGE>   7

               (ii) If the Billed Amount is more than the Accrued Amount, the
               Billed Amount for the following Due Date will be decreased by the
               amount of the discrepancy.

               Regardless of any such discrepancy, interest will continue to
               accrue based on the actual amount of principal outstanding
               without compounding. The Bank will not pay the Borrowers interest
               on any overpayment.

(d)     The Borrowers will maintain sufficient funds in the Designated Account
to cover each debit. If there are insufficient funds in the Designated Account
on the date the Bank enters any debit authorized by this Agreement, the debit
will be reversed.

5.5     BANKING DAYS. Unless otherwise provided in this Agreement, a banking day
is a day other than a Saturday or a Sunday on which the Bank is open for
business in California. For amounts bearing interest at an offshore rate (if
any), a banking day is a day other than a Saturday or a Sunday on which the Bank
is open for business in California and dealing in offshore dollars. All payments
and disbursements which would be due on a day which is not a banking day will be
due on the next banking day. All payments received on a day which is not a
banking day will be applied to the credit on the next banking day.


5.6     TAXES.

(a)     If any payments to the Bank under this Agreement are made from outside
        the United States, the Borrowers will not deduct any foreign taxes from
        any payments they make to the Bank. If any such taxes are imposed on any
        payments made by the Borrowers (including payments under this
        paragraph), the Borrowers will pay the taxes and will also pay to the
        Bank, at the time interest is paid, any additional amount which the Bank
        specifies as necessary to preserve the after-tax yield the Bank would
        have received if such taxes had not been imposed. The Borrowers will
        confirm that they have paid the taxes by giving the Bank official tax
        receipts (or notarized copies) within 30 days after the due date.

(b)     Payments made by the Borrowers to the Bank will be made without
        deduction of United States withholding or similar taxes. If any Borrower
        is required to pay U.S. withholding taxes, the Borrowers will pay such
        taxes in addition to the amounts due to the Bank under this Agreement.
        If the Borrowers fail to make such tax payments when due, each Borrower
        indemnifies the Bank against any liability for such taxes, as well as
        for any related interest, expenses, additions to tax, or penalties
        asserted against or suffered by the Bank with respect to such taxes.

5.7     ADDITIONAL COSTS. The Borrowers will pay the Bank, on demand, for the
Bank's costs or losses arising from any statute or regulation, or any request or
requirement of a regulatory agency which is applicable to all national banks or
a class of all national banks. The costs and losses will be allocated to the
loan in a manner determined by the Bank, using any reasonable method. The costs
include the following:

(a)     any reserve or deposit requirements; and

(b)     any capital requirements relating to the Bank's assets and commitments
        for credit.

5.8     INTEREST CALCULATION. Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 360-day year and
the actual number of days elapsed. This results in more interest or a higher fee
than if a 365-day year is used. Installments of principal which are not paid
when due under this Agreement shall continue to bear interest until paid.

5.9     DEFAULT RATE. Upon the occurrence of any default under this Agreement,
principal amounts outstanding under this Agreement will at the option of the
Bank bear interest at a rate which is 2 percentage point(s) higher than the rate
of interest otherwise provided under this Agreement. This will not constitute a
waiver of any default.

5.10    INTEREST COMPOUNDING. At the Bank's sole option in each instance, any
interest, fees or costs which are not paid when due under this Agreement shall
bear interest from the due date at the Bank's Prime Rate plus 1 percentage
points. This may result in compounding of interest.

6.      CONDITIONS

The Bank must receive the following items, in form and content acceptable to the
Bank, before it is required to extend any credit to the Borrowers under this
Agreement:

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<PAGE>   8


6.1     AUTHORIZATIONS. Evidence that the execution, delivery and performance by
each Borrower of this Agreement and any instrument or agreement required under
this Agreement have been duly authorized.

6.2     GOVERNING DOCUMENTS. A copy of each Borrower's articles of
incorporation.

6.3     OTHER ITEMS. Any other items that the Bank reasonably requires.

7.      REPRESENTATIONS AND WARRANTIES

When the Borrowers sign this Agreement, and until the Bank is repaid in full,
each Borrower makes the following representations and warranties. Each request
for an extension of credit constitutes a renewed representation:

7.1     ORGANIZATION OF BORROWERS. Each Borrower is a corporation duly formed
and existing under the laws of the state where organized.

7.2     AUTHORIZATION. This Agreement, and any instrument or agreement required
hereunder, are within each Borrower's powers, have been duly authorized, and do
not conflict with any of its organizational papers.

7.3     ENFORCEABLE AGREEMENT. This Agreement is a legal, valid and binding
agreement of each Borrower, enforceable against each Borrower in accordance with
its terms, and any instrument or agreement required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable.

7.4     GOOD STANDING. In each state in which each Borrower does business, it is
properly licensed, in good standing, and, where required, in compliance with
fictitious name statutes.

7.5     NO CONFLICTS. This Agreement does not conflict with any law, agreement,
or obligation by which any Borrower is bound.

7.6     FINANCIAL INFORMATION. All financial and other information that has been
or will be supplied to the Bank is:

(a)     sufficiently complete to give the Bank accurate knowledge of the
        Borrowers' (and any guarantor's) financial condition, including all
        material contingent liabilities.

(b)     in compliance with all government regulations that apply.

7.7     LAWSUITS. There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrowers or any one of them which, if lost, would impair
the Borrowers' or any Borrower's financial condition or ability to repay the
loan, except as have been disclosed in writing to the Bank.

7.8     PERMITS, FRANCHISES. Each Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade name
rights, patent rights and fictitious name rights necessary to enable it to
conduct the business in which it is now engaged.

7.9     OTHER OBLIGATIONS. No Borrower is in default on any obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.

7.10    INCOME TAX MATTERS. No Borrower has any knowledge of any pending
assessments or adjustments of its income tax for any year.

7.11    NO TAX AVOIDANCE PLAN. The Borrowers' obtaining of credit from the Bank
under this Agreement does not have as a principal purpose the avoidance of U.S.
withholding taxes.

7.12    NO EVENT OF DEFAULT. There is no event which is, or with notice or lapse
of time or both would be, a default under this Agreement.

7.13    INSURANCE. The Borrowers have obtained, and maintained in effect, the
insurance coverage required in the "Covenants" section of this Agreement.

                                                                             -8-
<PAGE>   9

7.14    LOCATION OF BORROWERS. Each Borrower's place of business (or, if any
Borrower has more than one place of business, its chief executive office) is
located at the address listed under the Borrowers' signature on this Agreement.

8.      COVENANTS

The Borrowers agree, so long as credit is available under this Agreement and
until the Bank is repaid in full:

8.1     USE OF PROCEEDS. To use the proceeds of Facility No. 1 only for general
corporate purposes, working capital and for the issuance of commercial and
standby letters of credit; and to use the proceeds of Facility No. 2 only for
the hedging of foreign exchange contracts risk.

8.2     FINANCIAL INFORMATION. To provide the following financial information
and statements in form and content acceptable to the Bank, and such additional
information as requested by the Bank from time to time:

(a)     Within 90 days of Ashworth's fiscal year end, the Borrowers' annual
        financial statements. These financial statements must be audited (with
        an unqualified opinion) by a Certified Public Accountant acceptable to
        the Bank. The statements shall be prepared on a consolidated basis.

(b)     Within 45 days of the period's end, the Borrowers' quarterly financial
        statements. These financial statements may be Borrower prepared. The
        statements shall be prepared on a consolidated basis.

(c)     Within 90 days of Ashworth's fiscal year end, the Borrowers' annual
        projections on a consolidated basis.

(d)     Within the period(s) provided in (a) and (b) above, a compliance
        certificate signed by Ashworth's Chief Financial Officer or a designated
        officer of Ashworth setting forth (i) the information and computations
        (in sufficient detail) to establish that each Borrower is in compliance
        with all financial covenants at the end of the period covered by the
        financial statements then being furnished and (ii) whether there existed
        as of the date of such financial statements and whether there exists as
        of the date of the certificate, any default under this Agreement and, if
        any such default exists, specifying the nature thereof and the action
        the Borrowers are taking and propose to take with respect thereto.

(e)     Copies of each Borrower's Form 10-K Annual Report, Form 10-Q Quarterly
        Report and Form 8-K Current Report within 15 days after the date of
        filing with the Securities and Exchange Commission.

8.3     QUICK RATIO. With respect to the Borrowers, on a consolidated basis, to
maintain a ratio of quick assets to current liabilities of at least 1.20:1.00.

"Quick assets" means cash, short-term cash investments in non-affiliated
entities, net trade receivables and marketable securities not classified as
long-term investments. "Current liabilities" shall include (a) all obligations
classified as current liabilities under generally accepted accounting
principles, plus (b) all principal amounts outstanding under revolving lines of
credit, whether classified as current or long-term, which are not already
included under (a) above, plus (c) all outstandings under letters of credit.

8.4     TANGIBLE NET WORTH. With respect to the Borrowers, on a consolidated
basis, to maintain tangible net worth equal to at least the sum of the
following:

(a)     Sixty Two Million Five Hundred Thousand Dollars ($62,500,000); plus

(b)     the sum of 50% of net income after income taxes (without subtracting
        losses) earned in each quarterly accounting period commencing after
        January 31, 2000; plus

(c)     the net proceeds from any equity securities issued after the date of
        this Agreement; plus

(d)     any increase in stockholders' equity resulting from the conversion of
        debt securities to equity securities after the date of this Agreement.

"Tangible net worth" means the gross book value of the Borrowers' assets
(excluding goodwill, patents, trademarks, trade names, organization expense,
unamortized debt discount and expense, capitalized or deferred research and
development costs, deferred marketing expenses, deferred receivables, and other
like intangibles) less total liabilities, including but not limited to accrued
and deferred income taxes, and any reserves against assets.

                                                                             -9-
<PAGE>   10

8.5     LIMITATION ON LOSSES. With respect to the Borrowers, on a consolidated
basis, not to incur a net loss before taxes and extraordinary items in any 2
consecutive quarterly accounting periods after the quarterly accounting period
ending January 31, 2000.

8.6     OTHER DEBTS. Not to have outstanding or incur any direct or contingent
liabilities or lease obligations (other than those to the Bank), or become
liable for the liabilities of others, without the Bank's written consent. This
does not prohibit:

(a)     Acquiring goods, supplies, or merchandise on normal trade credit.

(b)     Endorsing negotiable instruments received in the usual course of
        business.

(c)     Obtaining surety bonds in the usual course of business.

(d)     Liabilities, and leases in existence on the date of this Agreement
        disclosed in writing to the Bank.

(e)     Additional debts and lease obligations for the acquisition of fixed or
        capital assets, which do not exceed a total principal amount of Three
        Million Dollars ($3,000,000) outstanding at any one time.

(f)     Additional debts and lease obligations of Borrowers for business
        purposes which, together with the debts permitted under subparagraph
        (e), above, do not exceed a total principal amount of Three Million
        Dollars ($3,000,000) outstanding at any one time.

8.7     OTHER LIENS. Not to create, assume, or allow any security interest or
lien (including judicial liens) on property any Borrower now or later owns,
except:

(a)     Deeds of trust and security agreements in favor of the Bank.

(b)     Liens for taxes not yet due.

(c)     Liens outstanding on the date of this Agreement disclosed in writing to
        the Bank.

(d)     Additional purchase money security interests in equipment or other
        personal property fixed assets acquired by the Borrowers or any one of
        them after the date of this Agreement, if the total principal amount of
        debts secured by such liens does not exceed Three Million Dollars
        ($3,000,000) at any one time.

(e)     Additional liens against the property of the Borrowers or any one of
        them which secure the refinance of the Borrowers' real estate loan up to
        a total principal amount not exceeding Five Million Dollars ($5,000,000)
        in the aggregate.

8.8     CAPITAL EXPENDITURES. With respect to all Borrowers on an aggregate
basis, not to spend (including the total amount of any capital leases) more than
Four Million Five Hundred Thousand Dollars ($4,500,000) in any single fiscal
year to acquire fixed assets.

8.9     DIVIDENDS. Not to declare or pay any dividends on any of the Borrowers'
shares except dividends payable in capital stock of the Borrowers, and not to
purchase, redeem or otherwise acquire for value any of the Borrowers' shares, or
create any sinking fund in relation thereto, for an amount in excess of Ten
Million Two Hundred Thousand Dollars ($10,200,000) in the aggregate, on a
combined basis for all Borrowers, during the term of this Agreement.

8.10    LOANS TO OFFICERS OR AFFILIATES. Not to make any loans, advances or
other extensions of credit (including extensions of credit in the nature of
accounts receivable or notes receivable arising from the sale or lease of goods
or services) to any Borrower's executives, officers, directors or shareholders
(or any relatives of any of the foregoing), or to any affiliated entities for an
amount in excess of an aggregate of Eight Hundred Fifty Thousand Dollars
($850,000) in the aggregate during the term of this Agreement.

8.11    PAYDOWN PERIOD. To reduce the amount of advances outstanding under
Facility No. 1 to zero for a period of at least 30 consecutive days during each
fiscal year of Ashworth. For the purposes of this paragraph, "advances" does not
include undrawn amounts of outstanding letters of credit.

8.12    NOTICES TO BANK. To promptly notify the Bank in writing of:

(a)     any lawsuit over Five Hundred Thousand Dollars ($500,000) against any
        one or more of the Borrowers (or any guarantor).


                                                                            -10-
<PAGE>   11

(b)     any substantial dispute between any Borrower (or any guarantor) and any
        government authority.

(c)     any event of default under this Agreement, or any event which, with
        notice or lapse of time or both, would constitute an event of default.

(d)     any material adverse change in any Borrower's (or any guarantor's)
        business condition (financial or otherwise), operations, properties or
        prospects, or ability to repay the credit.

(e)     any change in any Borrower's name, legal structure, place of business,
        or chief executive office if such Borrower has more than one place of
        business.

(f)     any actual contingent liabilities of the Borrower (or any guarantor),
        and any such contingent liabilities which are reasonably foreseeable,
        where such liabilities are in excess of Five Hundred Thousand and 00/100
        Dollars ($500,000) in the aggregate.

8.13    BOOKS AND RECORDS. To maintain adequate books and records.

8.14    AUDITS. To allow the Bank and its agents to inspect the Borrowers'
properties and examine, audit, and make copies of books and records at any
reasonable time. If any of the Borrowers' properties, books or records are in
the possession of a third party, the Borrowers authorize that third party to
permit the Bank or its agents to have access to perform inspections or audits
and to respond to the Bank's requests for information concerning such
properties, books and records.

8.15    COMPLIANCE WITH LAWS. To comply with the laws (including any fictitious
name statute), regulations, and orders of any government body with authority
over each Borrower's business.

8.16    PRESERVATION OF RIGHTS. To maintain and preserve all rights, privileges,
and franchises each Borrower now has.

8.17    MAINTENANCE OF PROPERTIES. To make any repairs, renewals, or
replacements to keep each Borrower's properties in good working condition.

8.18    COOPERATION. To take any action reasonably requested by the Bank to
carry out the intent of this Agreement.

8.19    GENERAL BUSINESS INSURANCE. To maintain insurance as is usual for the
business the Borrowers are in.

8.20    ADDITIONAL NEGATIVE COVENANTS. Not to, without the Bank's written
consent:

(a)     engage in any business activities substantially different from the
        Borrowers' or any Borrower's present business.

(b)     liquidate or dissolve the Borrowers' or any Borrower's business.

(c)     enter into any consolidation, merger, or other combination, or become a
        partner in a partnership, a member of a joint venture, or a member of a
        limited liability company.

(d)     sell, assign, lease, transfer or otherwise dispose of any assets for
        less than fair market value, or enter into any agreement to do so.

(e)     sell, assign, lease, transfer or otherwise dispose of all or a
        substantial part of the Borrowers' or any Borrower's business or the
        Borrowers' or any Borrower's assets except in the ordinary course of the
        business.

(f)     enter into any sale and leaseback agreement covering the Borrowers' or
        any Borrower's fixed assets.

(g)     acquire or purchase a business or its assets.

8.21    BANK AS PRINCIPAL DEPOSITORY. To maintain the Bank as the Borrowers'
principal depository bank, including for the maintenance of business, cash
management, operating and administrative deposit accounts.

8.22    ERISA PLANS. Promptly during each year, to pay contributions adequate to
meet at least the minimum funding standards under ERISA with respect to each and
every Plan; file each annual report required to be filed pursuant to ERISA in
connection with each Plan for each year; and notify the Bank within ten (10)
days of the occurrence of any Reportable Event that

                                                                            -11-
<PAGE>   12

might constitute grounds for termination of any capital Plan by the Pension
Benefit Guaranty Corporation or for the appointment by the appropriate United
States District Court of a trustee to administer any Plan. "ERISA" means the
Employee Retirement Income Security Act of 1974, as amended from time to time.
Capitalized terms in this paragraph shall have the meanings defined within
ERISA.

9.      HAZARDOUS WASTE INDEMNIFICATION

The Borrowers will indemnify and hold harmless the Bank from any loss or
liability directly or indirectly arising out of the use, generation,
manufacture, production, storage, release, threatened release, discharge,
disposal or presence of a hazardous substance. This indemnity will apply whether
the hazardous substance is on, under or about the Borrowers' or any Borrower's
property or operations or property leased to the Borrowers or any Borrower. The
indemnity includes but is not limited to attorneys' fees (including the
reasonable estimate of the allocated cost of in-house counsel and staff). The
indemnity extends to the Bank, its parent, subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys and assigns.
"Hazardous substances" means any substance, material or waste that is or becomes
designated or regulated as "toxic," "hazardous," "pollutant," or "contaminant"
or a similar designation or regulation under any federal, state or local law
(whether under common law, statute, regulation or otherwise) or judicial or
administrative interpretation of such, including without limitation petroleum or
natural gas. This indemnity will survive repayment of the Borrowers' obligations
to the Bank.

10.     DEFAULT

If any of the following events occurs, the Bank may do one or more of the
following: declare the Borrowers in default, stop making any additional credit
available to the Borrowers, and require the Borrowers to repay their entire debt
immediately and without prior notice. If an event of default occurs under the
paragraph entitled "Bankruptcy," below, with respect to any Borrower, then the
entire debt outstanding under this Agreement will automatically be due
immediately.

10.1    FAILURE TO PAY. Any Borrower fails to make a payment under this
Agreement when due.

10.2    FALSE INFORMATION. Any Borrower (or any guarantor) has given the Bank
false or misleading information or representations.

10.3    BANKRUPTCY. Any Borrower (or any guarantor) files a bankruptcy petition,
a bankruptcy petition is filed against any Borrower (or any guarantor) or any
Borrower (or any guarantor) makes a general assignment for the benefit of
creditors.

10.4    RECEIVERS. A receiver or similar official is appointed for any
Borrower's (or any guarantor's) business, or the business is terminated.

10.5    LAWSUITS. Any lawsuit or lawsuits are filed on behalf of one or more
trade creditors against any one or more of the Borrowers (or any guarantor) in
an aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) or more in
excess of any insurance coverage.

10.6    JUDGMENTS. Any judgments or arbitration awards are entered against any
one or more of the Borrowers (or any guarantor), or any one or more of the
Borrowers (or any guarantor) enters into any settlement agreements with respect
to any litigation or arbitration, in an aggregate amount of Two Hundred Fifty
Thousand Dollars ($250,000) or more in excess of any insurance coverage.

10.7    GOVERNMENT ACTION. Any government authority takes action that the Bank
believes materially adversely affects any Borrower's (or any guarantor's)
financial condition or ability to repay.

10.8    MATERIAL ADVERSE CHANGE. A material adverse change occurs, or is
reasonably likely to occur, in any Borrower's (or any guarantor's) business
condition (financial or otherwise), operations, properties or prospects, or
ability to repay the credit.

10.9    CROSS-DEFAULT. Any default occurs under any agreement in connection with
any credit any Borrower (or any guarantor) or any related entity or affiliate of
any Borrower has obtained from anyone else or which any Borrower (or any
guarantor) or any such related entity or affiliate has guaranteed in the amount
of One Hundred Thousand Dollars ($100,000) or more in the aggregate.

10.10   DEFAULT UNDER RELATED DOCUMENTS. Any guaranty, subordination agreement,
security agreement, deed of trust, or other document required by this Agreement
is violated or no longer in effect.

                                                                            -12-
<PAGE>   13

10.11   OTHER BANK AGREEMENTS. Any Borrower (or any guarantor) or any of the
Borrowers' related entities or affiliates fails to meet the conditions of, or
fails to perform any obligation under any other agreement any Borrower (or any
guarantor) or any of the Borrowers' related entities or affiliates has with the
Bank or any affiliate of the Bank.

10.12   OTHER BREACH UNDER AGREEMENT. Any Borrower fails to meet the conditions
of, or fails to perform any obligation under, any term of this Agreement not
specifically referred to in this Article. This includes any failure or
anticipated failure by any Borrower to comply with any financial covenants set
forth in this Agreement, whether such failure is evidenced by financial
statements delivered to the Bank or is otherwise known to any Borrower or the
Bank.

11.     ENFORCING THIS AGREEMENT; MISCELLANEOUS

11.1    GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently applied.

11.2    CALIFORNIA LAW. This Agreement is governed by California law.

11.3    SUCCESSORS AND ASSIGNS. This Agreement is binding on the Borrowers' and
the Bank's successors and assignees. The Borrowers agree that they may not
assign this Agreement without the Bank's prior consent. The Bank may sell
participations in or assign this loan, and may exchange financial information
about the Borrowers with actual or potential participants or assignees. If a
participation is sold or the loan is assigned, the purchaser will have the right
of set-off against the Borrowers.

11.4    ARBITRATION.

(a)     This paragraph concerns the resolution of any controversies or claims
        between the Borrower and the Bank, whether arising in contract, tort or
        by statute, including but not limited to controversies or claims that
        arise out of or relate to: (i) this Agreement (including any renewals,
        extensions or modifications); or (ii) any document related to this
        Agreement (collectively a "Claim").

(b)     At the request of the Borrower or the Bank, any Claim shall be resolved
        by arbitration in accordance with the Federal Arbitration Act (Title 9,
        U. S. Code) (the "Act"). The Act will apply even though this Agreement
        provides that it is governed by the law of a specified state.

(c)     Arbitration proceedings will be determined in accordance with the Act,
        the rules and procedures for the arbitration of financial services
        disputes of J.A.M.S./Endispute or any successor thereof ("J.A.M.S."),
        and the terms of this paragraph. In the event of any inconsistency, the
        terms of this paragraph shall control.

(d)     The arbitration shall be administered by J.A.M.S. and conducted in any
        U. S. state where real or tangible personal property collateral for this
        credit is located or if there is no such collateral, in . All Claims
        shall be determined by one arbitrator; however, if Claims exceed Five
        Million Dollars ($5,000,000), upon the request of any party, the Claims
        shall be decided by three arbitrators. All arbitration hearings shall
        commence within ninety (90) days of the demand for arbitration and close
        within ninety (90) days of commencement and the award of the
        arbitrator(s) shall be issued within thirty (30) days of the close of
        the hearing. However, the arbitrator(s), upon a showing of good cause,
        may extend the commencement of the hearing for up to an additional sixty
        (60) days. The arbitrator(s) shall provide a concise written statement
        of reasons for the award. The arbitration award may be submitted to any
        court having jurisdiction to be confirmed and enforced.

(e)     The arbitrator(s) will have the authority to decide whether any Claim is
        barred by the statute of limitations and, if so, to dismiss the
        arbitration on that basis. For purposes of the application of the
        statute of limitations, the service on J.A.M.S. under applicable
        J.A.M.S. rules of a notice of Claim is the equivalent of the filing of a
        lawsuit. Any dispute concerning this arbitration provision or whether a
        Claim is arbitrable shall be determined by the arbitrator(s). The
        arbitrator(s) shall have the power to award legal fees pursuant to the
        terms of this Agreement.

(f)     This paragraph does not limit the right of the Borrower or the Bank to:
        (i) exercise self-help remedies, such as but not limited to, setoff;
        (ii) initiate judicial or nonjudicial foreclosure against any real or
        personal property collateral; (iii) exercise any judicial or power of
        sale rights, or (iv) act in a court of law to obtain an interim remedy,
        such as but not limited to, injunctive relief, writ of possession or
        appointment of a receiver, or additional or supplementary remedies.

(g)     The filing of a court action is not intended to constitute a waiver of
        the right of the Borrower or the Bank, including the suing party,
        thereafter to require submittal of the Claim to arbitration.

                                                                            -13-
<PAGE>   14


11.5    SEVERABILITY; WAIVERS. If any part of this Agreement is not enforceable,
the rest of the Agreement may be enforced. The Bank retains all rights, even if
it makes a loan after default. If the Bank waives a default, it may enforce a
later default. Any consent or waiver under this Agreement must be in writing.

11.6    ADMINISTRATION COSTS. The Borrowers shall pay the Bank for all
reasonable costs incurred by the Bank in connection with administering this
Agreement.


11.7    ATTORNEYS' FEES. The Borrowers shall reimburse the Bank for any
reasonable costs and attorneys' fees incurred by the Bank in connection with the
enforcement or preservation of any rights or remedies under this Agreement and
any other documents executed in connection with this Agreement, and in
connection with any amendment, waiver, "workout" or restructuring under this
Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing
party is entitled to recover costs and reasonable attorneys' fees incurred in
connection with the lawsuit or arbitration proceeding, as determined by the
court or arbitrator. In the event that any case is commenced by or against any
of the Borrowers under the Bankruptcy Code (Title 11, United States Code) or any
similar or successor statute, the Bank is entitled to recover costs and
reasonable attorneys' fees incurred by the Bank related to the preservation,
protection, or enforcement of any rights of the Bank in such a case. As used in
this paragraph, "attorneys' fees" includes the allocated costs of the Bank's
in-house counsel.

11.8    JOINT AND SEVERAL LIABILITY.

        (a)    Each Borrower agrees that it is jointly and severally liable to
               the Bank for the payment of all obligations arising under this
               Agreement, and that such liability is independent of the
               obligations of the other Borrower(s). The Bank may bring an
               action against any Borrower, whether an action is brought against
               the other Borrower(s).

        (b)    Each Borrower agrees that any release which may be given by the
               Bank to the other Borrower(s) or any guarantor will not release
               such Borrower from its obligations under this Agreement.

        (c)    Each Borrower waives any right to assert against the Bank any
               defense, setoff, counterclaim, or claims which such Borrower may
               have against the other Borrower(s) or any other party liable to
               the Bank for the obligations of the Borrowers under this
               Agreement.

        (d)    Each Borrower agrees that it is solely responsible for keeping
               itself informed as to the financial condition of the other
               Borrower(s) and of all circumstances which bear upon the risk of
               nonpayment. Each Borrower waives any right it may have to require
               the Bank to disclose to such Borrower any information which the
               Bank may now or hereafter acquire concerning the financial
               condition of the other Borrower(s).

        (e)    Each Borrower waives all rights to notices of default or
               nonperformance by any other Borrower under this Agreement. Each
               Borrower further waives all rights to notices of the existence or
               the creation of new indebtedness by any other Borrower.

        (f)    The Borrowers represent and warrant to the Bank that each will
               derive benefit, directly and indirectly, from the collective
               administration and availability of credit under this Agreement.
               The Borrowers agree that the Bank will not be required to inquire
               as to the disposition by any Borrower of funds disbursed in
               accordance with the terms of this Agreement.

        (g)    Until all obligations of the Borrowers to the Bank under this
               Agreement have been paid in full, each Borrower waives any right
               of subrogation, reimbursement, indemnification and contribution
               (contractual, statutory or otherwise), including without
               limitation, any claim or right of subrogation under the
               Bankruptcy Code (Title 11, United States Code) or any successor
               statute, which such Borrower may now or hereafter have against
               any other Borrower with respect to the indebtedness incurred
               under this Agreement. Each Borrower waives any right to enforce
               any remedy which the Bank now has or may hereafter have against
               any other Borrower, and waives any benefit of, and any right to
               participate in, any security now or hereafter held by the Bank.


11.9    ONE AGREEMENT. This Agreement and any related security or other
agreements required by this Agreement, collectively:

(a)     represent the sum of the understandings and agreements between the Bank
        and the Borrowers concerning this credit;

(b)     replace any prior oral or written agreements between the Bank and the
        Borrowers concerning this credit; and

(c)     are intended by the Bank and the Borrowers as the final, complete and
        exclusive statement of the terms agreed to by them.

                                                                            -14-
<PAGE>   15

In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.

11.10   INDEMNIFICATION. Each Borrower will indemnify and hold the Bank harmless
from any loss, liability, damages, judgments, and costs of any kind relating to
or arising directly or indirectly out of (a) this Agreement or any document
required hereunder, (b) any credit extended or committed by the Bank to the
Borrowers hereunder, and (c) any litigation or proceeding related to or arising
out of this Agreement, any such document, or any such credit. This indemnity
includes but is not limited to attorneys' fees (including the allocated cost of
in-house counsel). This indemnity extends to the Bank, its parent, subsidiaries
and all of their directors, officers, employees, agents, successors, attorneys,
and assigns. This indemnity will survive repayment of the Borrowers' obligations
to the Bank. All sums due to the Bank hereunder shall be obligations of the
Borrowers, due and payable immediately without demand.

11.11   NOTICES. All notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, or by overnight courier,
to the addresses on the signature page of this Agreement, or sent by facsimile
to the fax numbers listed on the signature page, or to such other addresses as
the Bank and the Borrowers may specify from time to time in writing. Notices
sent by first class mail shall be deemed delivered on the earlier of actual
receipt or on the fourth business day after deposit in the U.S. mail.

11.12   HEADINGS. Article and paragraph headings are for reference only and
shall not affect the interpretation or meaning of any provisions of this
Agreement.

11.13   COUNTERPARTS. This Agreement may be executed in as many counterparts as
necessary or convenient, and by the different parties on separate counterparts
each of which, when so executed, shall be deemed an original but all such
counterparts shall constitute but one and the same agreement.

11.14   PRIOR AGREEMENT SUPERSEDED. This Agreement supersedes Facility No. 1 and
Facility No. 2 of the Business Loan Agreement entered into as of May 29, 1998
between the Bank and the Borrowers, and any credit outstanding thereunder shall
be deemed to be outstanding under this Agreement.


                                                                            -15-
<PAGE>   16

This Agreement is executed as of the date stated at the top of the first page.


BANK OF AMERICA, N.A.                              Ashworth, Inc.


X     /s/ Susan J. Pepping                      X   /s/ Terence W. Tsang
      --------------------------------              ----------------------------
By:     Susan J. Pepping, Vice                  By:
        President


Address for Notices:                            Address for Notices:
San Diego Commercial Banking Office #02704
450 B Street, Suite 100                         2791 Loker Ave, West
San Diego, CA 92101                             Carlsbad, CA 92008

                                                   Ashworth Store I, Inc.

                                                X   /s/ Terence W. Tsang
                                                    ----------------------------
                                                By:


                                                Address for Notices:

                                                2791 Loker Ave, West
                                                Carlsbad, CA 92008

                                                   Ashworth Store II, Inc.

                                                X   /s/ Terence W. Tsang
                                                    ----------------------------
                                                By:


                                                Address for Notices:

                                                2791 Loker Ave, West
                                                Carlsbad, CA 92008

                                                   Ashworth International, Inc.

                                                X   /s/ Terence W. Tsang
                                                    ----------------------------
                                                By:


                                                Address for Notices:

                                                2791 Loker Ave, West
                                                Carlsbad, CA 92008

                                                   Ashworth U.K., Ltd.

                                                X   /s/ Terence W. Tsang
                                                    ----------------------------
                                                By:


                                                Address for Notices:

                                                2791 Loker Ave, West
                                                Carlsbad, CA 92008


                                                                            -16-