Document:

<PAGE>

                                PROMISSORY NOTE

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
  PRINCIPAL      LOAN DATE      MATURITY       LOAN NO      CALL      COLLATERAL      ACCOUNT      OFFICER     INITIALS
 <S>             <C>           <C>              <C>         <C>       <C>             <C>          <C>         <C>
 $400,000.00     08-09-2000    10-20-2003       56328                     19                         125
-------------------------------------------------------------------------------------------------------------------------
   References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
   particular loan or item.
-------------------------------------------------------------------------------------------------------------------------

 BORROWER:  FOTOBALL USA, INC.                               LENDER:  U.S. BANK NATIONAL ASSOCIATION
            6740 COBRA WAY                                            CORPORATE LENDING - KEARNY MESA
            SAN DIEGO, CA 92123                                       9005 COMPLEX DRIVE
                                                                      SAN DIEGO, CA 92123
=========================================================================================================================

PRINCIPAL AMOUNT: $400,000.00                 INTEREST RATE: 9.500%                   DATE OF NOTE: AUGUST 9, 2000

</TABLE>

PROMISE TO PAY. FOTOBALL USA, INC. ("BORROWER") PROMISES TO PAY TO U.S. BANK
NATIONAL ASSOCIATION ("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED STATES
OF AMERICA, THE PRINCIPAL AMOUNT OF FOUR HUNDRED THOUSAND & 00/100 DOLLARS
($400,000.00) OR SO MUCH AS MAY BE OUTSTANDING, TOGETHER WITH INTEREST AT THE
RATE OF 9.500% PER ANNUM ON THE UNPAID OUTSTANDING PRINCIPAL BALANCE OF EACH
ADVANCE. INTEREST SHALL BE CALCULATED FROM THE DATE OF EACH ADVANCE UNTIL
REPAYMENT OF EACH ADVANCE.

PAYMENT. BORROWER WILL PAY THIS LOAN IN ACCORDANCE WITH THE FOLLOWING PAYMENT
SCHEDULE:

     2 CONSECUTIVE MONTHLY INTEREST PAYMENTS ON THE TWENTIETH OF EACH MONTH,
     BEGINNING SEPTEMBER 20, 2000. FOLLOWED BY 36 CONSECUTIVE MONTHLY PAYMENTS
     BEGINNING NOVEMBER 20, 2000 IN A MONTHLY PAYMENT AMOUNT NECESSARY TO FULLY
     AMORTIZE THE LOAN BALANCE OWING ON OCTOBER 20, 2000. A FINAL PAYMENT IS DUE
     OCTOBER 20, 2003 FOR ALL REMAINING UNPAID PRINCIPAL AND ACCRUED INTEREST.

Interest on this Note is computed on a 365/365 simple interest basis; that is,
by applying the ratio of the annual interest rate over the number of days in a
year, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will be
applied first to accrued unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs and late charges.

PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and
other prepaid finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary or as a
result of default), except as otherwise required by law. In any event, even upon
full prepayment of this Note, Borrower understands that Lender is entitled to a
MINIMUM INTEREST CHARGE OF $100.00. Other than Borrower's obligation to pay
any minimum interest charge, Borrower may pay without penalty all or a portion
of the amount owed earlier than it is due. Early payments will not, unless
agreed to by Lender in writing, relieve Borrower of Borrower's obligation to
continue to make payments of accrued unpaid interest. Rather, they will reduce
the principal balance due.

LATE CHARGE. If a payment is 10 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT OR $5.00, WHICHEVER IS GREATER.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with Lender.
(g) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A material
adverse change occurs in Borrower's financial condition.

If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within fifteen (15) days; or (b) if
the cure requires more than fifteen (15) days, immediately initiates steps which
Lender deems in Lender's sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon Borrower's failure to pay
all amounts declared due pursuant to this section, including failure to pay upon
final maturity, Lender, at its option, may also, if permitted under applicable
law, do one or both of the following: (a) increase the interest rate on this
Note 5.000 percentage points, and (b) add any unpaid accrued interest to
principal and such sum will bear interest therefrom until paid at the rate
provided in this Note (including any increased rate). Lender may hire or pay
someone else to help collect this Note if Borrower does not pay. Borrower also
will pay Lender that amount. This includes, subject to any limits under
applicable law, Lender's attorneys' fees and Lender's legal expenses whether or
not there is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection services.
Borrower also will pay any court costs, in addition to all other sums provided
by law. THIS NOTE HAS BEEN DELIVERED TO LENDER AND ACCEPTED BY LENDER IN THE
STATE OF CALIFORNIA. IF THERE IS A LAWSUIT, BORROWER AGREES UPON LENDER'S
REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF SAN DIEGO COUNTY, THE
STATE OF CALIFORNIA. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA.

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

LINE OF CREDIT. This Note evidences a straight line of credit. Once the total
amount of principal has been advanced, Borrower is not entitled to further loan
advances. Advances under this Note may be requested either orally or in writing
by Borrower or as provided in this paragraph. Lender may, but need not, require
that all oral requests be confirmed in writing. All communications,
instructions, or directions by telephone or otherwise to Lender are to be
directed to Lender's office shown above. The following party or parties are
authorized as provided in this paragraph to request advances under the line of
credit until Lender receives from Borrower at Lender's address shown above
written notice of revocation of their authority: MICHAEL FAVISH, PRESIDENT/CEO.
UNADVANCED FUNDS ARE AVAILABLE UNTIL OCTOBER 20, 2000. Borrower agrees to be
liable for all sums either: (a) advanced in accordance with the instructions of
an authorized person or (b) credited to any of Borrower's accounts with Lender.
The unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender's internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under this
Note if: (a) Borrower or any guarantor is in default under the terms of this
Note or any agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (b) Borrower or
any guarantor ceases doing business or is insolvent; (c) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor's
guarantee of this Note or any other loan with Lender; (d) Borrower has applied
funds provided pursuant to this Note for purposes other than those authorized by
Lender; or (e) Lender in good faith deems itself insecure under this Note or any
other agreement between Lender and Borrower.

COLLATERAL. This note is secured by UCC-1 dated December 20, 1995, filed January
8, 1996 as file #9601060381, all of which also secures note dated December 20,
1995 in the amount of $1,000,000.00 with a subsequent Change in Terms Agreement
dated April 6, 2000 increasing the loan amount to $4,000,000.00.

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

<PAGE>

08-09-2000                        PROMISSORY NOTE                        PAGE 2
LOAN NO 56328                       (CONTINUED)

================================================================================
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF
A COMPLETED COPY OF THE NOTE.

BORROWER:

FOTOBALL USA, INC.

BY: /S/ MICHAEL FAVISH
    -----------------------------
    MICHAEL FAVISH, PRESIDENT/CEO

================================================================================
Fixed Rate. Line of Credit. LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.29a(C)
                            Concentrex 2000 All rights reserved.
                            [CA-D20 E3.29 56328.LN C4.OVL]

<PAGE>

                            BUSINESS LOAN AGREEMENT

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
  PRINCIPAL      LOAN DATE      MATURITY       LOAN NO      CALL      COLLATERAL      ACCOUNT      OFFICER     INITIALS
 <S>             <C>           <C>              <C>         <C>       <C>             <C>          <C>         <C>
 $400,000.00     08-09-2000    10-20-2003       56328                     19                         125
-------------------------------------------------------------------------------------------------------------------------
   References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
   particular loan or item.
-------------------------------------------------------------------------------------------------------------------------

 BORROWER:  FOTOBALL USA, INC.                               LENDER:  U.S. BANK NATIONAL ASSOCIATION
            6740 COBRA WAY                                            CORPORATE LENDING - KEARNY MESA
            SAN DIEGO, CA 92123                                       9005 COMPLEX DRIVE
                                                                      SAN DIEGO, CA 92123
=========================================================================================================================
</TABLE>

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

TERM. This Agreement shall be effective as of AUGUST 9, 2000, and shall continue
thereafter until all Indebtedness of Borrower to Lender has been performed in
full and the parties terminate this Agreement in writing.

DEFINITIONS. The following words shall have the folllowing meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.

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

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

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

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

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

    EVENT OF DEFAULT. The words "Event of Default" mean and include without
    limitation any of the Events of Default set forth below in the section
    titled "EVENTS OF DEFAULT."

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

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

    INDEBTEDNESS. The word "Indebtedness" means and includes the Note dated
    August 9, 2000 in the principal amount of $400,000.00 and Note dated
    December 20, 1995 in the principal amount of $1,000,000.00 with a subsequent
    Change in Terms Agreement dated April 6, 2000 increasing the principal
    amount to $4,000,000.00 from Grantor to Lender, together with all renewals
    of, extensions of, modifications of, refinancings of, consolidations of and
    substitutions for the note or credit agreement.

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

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

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

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

    RELATED DOCUMENTS. The words "Related Documents" mean and include without
    limitation all promissory notes, credit agreements, loan agreements,
    environmental agreements, guaranties, security agreements, mortgages, deeds
    of trust, and all other instruments, agreements and documents, whether now
    or hereafter existing, executed in connection with the Indebtedness.

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

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

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

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

    LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory to
    Lender the following documents for the Loan: (a) the Note, (b) Security
    Agreements granting to Lender security interests in the Collateral, (c)
    Financing Statements perfecting Lender's Security Interests; (d) evidence of
    insurance as required below; and (e) any other documents required under this
    Agreement or by Lender or its counsel.

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

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

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

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

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

    ORGANIZATION. Borrower is a corporation which is duly organized, validly
    existing, and in good standing under the laws of the State of Delaware and
    is validly existing and in good standing in all states in which Borrower is
    doing business except for states in which failure to be validly existing
    and in good standing would not have a material adverse affect on the
    Borrower's business. Borrower has the full power and authority to own its
    properties and to transact the businesses in which it is presently engaged
    or presently proposes to engage. Borrower also is duly qualified as a

<PAGE>

08-09-2000                    BUSINESS LOAN AGREEMENT                    PAGE 2
LOAN NO 56328                       (CONTINUED)

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

    foreign corporation and is in good standing in all states in which the
    failure to so qualify would have a material adverse effect on its businesses
    or financial condition.

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

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

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

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

    HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous substance,"
    "disposal," "release," and "threatened release," as used in this Agreement,
    shall have the same meanings as set forth in the "CERCLA," "SARA," the
    Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
    Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
    Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety
    Code, Section 25100, et seq., or other applicable state or Federal laws,
    rules or regulations adopted pursuant to any of the foregoing. Except as
    disclosed to and acknowledged by Lender in writing, Borrower represents and
    warrants that: (a) During the period of Borrower's ownership of the
    properties, there has been no use, generation, manufacture, storage,
    treatment, disposal, release or threatened release of any hazardous waste or
    substance by any person on, under, about or from any of the properties. (b)
    Borrower has no knowledge of, or reason to believe that there has been (i)
    any use, generation, manufacture, storage, treatment, disposal, release, or
    threatened release of any hazardous waste or substance on, under, about or
    from the properties by any prior owners or occupants of any of the
    properties, or (ii) any actual or threatened litigation or claims of any
    kind by any person relating to such matters. (c) Neither Borrower nor any
    tenant, contractor, agent or other authorized user of any of the properties
    shall use, generate, manufacture, store, treat, dispose of, or release any
    hazardous waste or substance on, under, about or from any of the properties;
    and any such activity shall be conducted in compliance with all applicable
    federal, state, and local laws, regulations, and ordinances, including
    without limitation those laws, regulations and ordinances described above.
    Borrower authorizes Lender and its agents to enter upon the properties to
    make such inspections and tests as Lender may deem appropriate to determine
    compliance of the properties with this section of the Agreement. Any
    inspections or tests made by Lender shall be at Borrower's expense and for
    Lender's purposes only and shall not be construed to create any
    responsibility or liability on the part of Lender to Borrower or to any
    other person. The representations and warranties contained herein are based
    on Borrower's due diligence in investigating the properties for hazardous
    waste and hazardous substances. Borrower hereby (a) releases and waives any
    future claims against Lender for indemnity or contribution in the event
    Borrower becomes liable for cleanup or other costs under any such laws, and
    (b) agrees to indemnify and hold harmless Lender against any and all claims,
    losses, liabilities, damages, penalties, and expenses which Lender may
    directly or indirectly sustain or suffer resulting from a breach of this
    section of the Agreement or as a consequence of any use, generation,
    manufacture, storage, disposal, release or threatened release of a hazardous
    waste or substance on the properties. The provisions of this section of the
    Agreement, including the obligation to indemnify, shall survive the payment
    of the Indebtedness and the termination or expiration of this Agreement and
    shall not be affected by Lender's acquisition of any interest in any of the
    properties, whether by foreclosure or otherwise.

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

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

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

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

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

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

    INVESTMENT COMPANY ACT. Borrower is not an "investment company" or a company
    "controlled" by an "investment company", within the meaning of the
    Investment Company Act of 1940, as amended.

    PUBLIC UTILITY HOLDING COMPANY ACT. Borrower is not a "holding company", or
    a "subsidiary company" of a "holding company", or an "affiliate" of a
    "holding company" or of a "subsidiary company" of a "holding company",
    within the meaning of the Public Utility Holding Company Act of 1935, as
    amended.

    REGULATIONS G, T AND U. Borrower is not engaged principally, or as one of
    its important activities, in the business of extending credit for the
    purpose of purchasing or carrying margin stock (within the meaning of
    Regulations G, T and U of the Board of Governors of the Federal Reserve
    System).

    LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business, or
    Borrower's Chief executive office, if Borrower has more than one place of
    business, is located at 6740 COBRA WAY, SAN DIEGO, CA 92123. Unless Borrower
    has designated otherwise in writing this location is also the office or
    offices where Borrower keeps its records concerning the Collateral.

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

    CLAIMS AND DEFENSES. There are no defenses or counterclaims, offsets or
    other adverse claims, demands or actions of any kind, personal or otherwise,
    that Borrower, Grantor, or any Guarantor could assert with respect to the
    Note, Loan, Indebtedness, this Agreement, or the Related Documents.

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

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

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

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

<PAGE>

08-09-2000                    BUSINESS LOAN AGREEMENT                    PAGE 3
LOAN NO 56328                       (CONTINUED)

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

    INSURANCE. Maintain fire and other risk insurance, public liability
    insurance, and such other insurance as Lender may require with respect to
    Borrower's properties and operations, in form, amounts, coverages and with
    insurance companies reasonably acceptable to Lender. Borrower, upon request
    of Lender, will deliver to Lender from time to time the policies or
    certificates of insurance in form satisfactory to Lender, including
    stipulations that coverages will not be cancelled or diminished without at
    least ten (10) days' prior written notice to Lender. Each insurance policy
    also shall include an endorsement providing that coverage in favor of Lender
    will not be impaired in any way by any act, omission or default of Borrower
    or any other person. In connection with all policies covering assets in
    which Lender holds or is offered a security interest for the Loans, Borrower
    will provide Lender with such loss payable or other endorsements as Lender
    may require.

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

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

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

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

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

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

    ENVIRONMENTAL STUDIES. Promptly conduct and complete, at Borrower's expense,
    all such investigations, studies, samplings and testings as may be requested
    by Lender or any governmental authority relative to any substance defined as
    toxic or a hazardous substance under any applicable federal, state or local
    law, rule, regulation, order or directive, or any waste or by-product
    thereof, at or affecting any property or any facility owned, leased or used
    by Borrower.

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

    COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide Lender
    at least annually and at the time of each disbursement of Loan proceeds with
    a certificate executed by Borrower's chief financial officer, or other
    officer or person acceptable to Lender, certifying that the representations
    and warranties set forth in this Agreement are true and correct as of the
    date of the certificate and further certifying that, as of the date of the
    certificate, no Event of Default exists under this Agreement.

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

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

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

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

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

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

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

LOAN AGREEMENT COVENANT & CONDITIONS ADDENDUM. The Loan Agreement Covenant &
Conditions Addendum attached as Exhibit "A" to this agreement is incorporated by
reference herein in full.

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

<PAGE>

08-09-2000                    BUSINESS LOAN AGREEMENT                    PAGE 4
LOAN NO 56328                       (CONTINUED)

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

permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

    DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due on
    the Loans.

    OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
    perform when due any other term, obligation, covenant or condition contained
    in this Agreement or in any of the Related Documents, or failure of Borrower
    to comply with or to perform any other term, obligation, covenant or
    condition contained in any other agreement between Lender and Borrower.

    DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
    under any loan, extension of credit, security agreement, purchase or sales
    agreement, or any other agreement, in favor of any other creditor or person
    that may materially affect any of Borrower's property or Borrower's or any
    Grantor's ability to repay the Loans or perform their respective obligations
    under this Agreement or any of the Related Documents.

    FALSE STATEMENTS. Any warranty, representation or statement made or
    furnished to Lender by or on behalf of Borrower or any Grantor under this
    Agreement or the Related Documents is false or misleading in any material
    respect at the time made or furnished, or becomes false or misleading at any
    time thereafter.

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

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

    CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
    forfeiture proceedings, whether by judicial proceeding, self-help,
    repossession or any other method, by any creditor of Borrower, any creditor
    of any Grantor against any collateral securing the Indebtedness, or by any
    governmental agency. This includes a garnishment, attachment, or levy on or
    of any of Borrower's deposit accounts with Lender. However, this Event of
    Default shall not apply if there is a good faith dispute by Borrower or
    Grantor, as the case may be, as to the validity or reasonableness of the
    claim which is the basis of the creditor or forfeiture proceeding, and if
    Borrower or Grantor gives Lender written notice of the creditor or
    forfeiture proceeding and furnishes reserves or a surety bond for the
    creditor or forfeiture proceeding satisfactory to Lender.

    EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
    to any Guarantor of any of the indebtedness, or any Guarantor dies or
    becomes incompetent, or revokes or disputes the validity of, or liability
    under, any Guaranty of the Indebtedness. Lender, at its option, may, but
    shall not be required to, permit the Guarantor's estate to assume
    unconditionally the obligations arising under the guaranty in a manner
    satisfactory to Lender, and, in doing so, cure the Event of Default.

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

    ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
    condition, or Lender reasonably believes the prospect of payment or
    performance of the Indebtedness is impaired.

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

    RIGHT TO CURE. If any default, other than a Default on Indebtedness, is
    curable and if Borrower or Grantor, as the case may be, has not been given a
    notice of a similar default within the preceding twelve (12) months, it may
    be cured (and no Event of Default will have occurred) if Borrower or
    Grantor, as the case may be, after receiving written notice from Lender
    demanding cure of such default: (a) cures the default within fiteen (15)
    days; or (b) if the cure requires more than fifteen (15) days, immediately
    initiates steps which Lender deems in Lender's sole discretion to be
    sufficient to cure the default and thereafter continues and completes all
    reasonable and necessary steps sufficient to produce compliance as soon as
    reasonably practical.

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

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

    AMENDMENTS. This Agreement, together with any Related Documents, constitutes
    the entire understanding and agreement of the parties as to the matters set
    forth in this Agreement. No alteration of or amendment to this Agreement
    shall be effective unless given in writing and signed by the party or
    parties sought to be charged or bound by the alteration or amendment.

    APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND ACCEPTED BY
    LENDER IN THE STATE OF CALIFORNIA. IF THERE IS A LAWSUIT, BORROWER AGREES
    UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF SAN
    DIEGO COUNTY, THE STATE OF CALIFORNIA. THIS AGREEMENT SHALL BE GOVERNED BY
    AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

    CAPTION HEADINGS. Caption headings in this Agreement are for convenience
    purposes only and are not to be used to interpret or define the provisions
    of this Agreement.

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

    BORROWER INFORMATION. Borrower consents to the release of information on or
    about Borrower by Lender in accordance with any court order, law or
    regulation and in response to credit inquiries concerning Borrower.

    NON-LIABILITY OF LENDER. The relationship between Borrower and Lender is a
    debtor and creditor relationship and not fiduciary in nature, nor is the
    relationship to be construed as creating any partnership or joint venture
    between Lender and Borrower. Borrower is exercising its own judgment with
    respect to Borrower's business. All information supplied to Lender is for
    Lender's protection only and no other party is entitled to rely on such
    information. There is no duty for Lender to review, inspect, supervise, or
    inform Borrower of any matter with respect to Borrower's business. Lender
    and Borrower intend that Lender may reasonably rely on all information
    supplied by Borrower to Lender, together with all representations and
    warranties given by Borrower to Lender, without investigation or
    confirmation by Lender and that any investigation or failure to investigate
    will not diminish Lender's right to so rely.

    NOTICE OF LENDER'S BREACH. Borrower must notify Lender in writing of any
    breach of this Agreement or the Related Documents by Lender and any other
    claim, cause of action or offset against Lender within thirty (30) days
    after the occurrence of such breach or after the accrual of such claim,
    cause of action or offset. Borrower waives any claim, cause of action or
    offset for which notice is not given in accordance with this paragraph.
    Lender is entitled to rely on any failure to give such notice.

    BORROWER INDEMNIFICATION. Borrower shall indemnify and hold Lender harmless
    from and against all claims, costs, expenses, losses, damages, and
    liabilities of any kind, including but not limited to attorneys' fees and
    expenses, arising out of any matter relating directly or indirectly to the
    Indebtedness, whether resulting from internal disputes of the Borrower,
    disputes between Borrower and any Guarantor, or whether involving any third
    parties, or out of any other matter whatsoever related to this Agreement or
    the Related Documents, but excluding any claim or liability which arises as
    a direct result of Lender's gross negligence or willful misconduct. This
    indemnity shall survive full repayment and satisfaction of the Indebtedness
    and termination of this Agreement.

    COUNTERPARTS. This Agreement may be executed in multiple counterparts, each
    of which, when so executed, shall be deemed an original, but all such
    counterparts, taken together, shall constitute one and the same Agreement.

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

<PAGE>

08-09-2000                    BUSINESS LOAN AGREEMENT                    PAGE 5
LOAN NO 56328                       (CONTINUED)

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    pursuant to this Agreement. Lender may pay someone else to help collect the
    Loans and to enforce this Agreement, and Borrower will pay that amount. This
    includes, subject to any limits under applicable law, Lender's attorneys'
    fees and Lender's legal expenses, whether or not there is a lawsuit,
    including attorneys' fees for bankruptcy proceedings (including efforts to
    modify or vacate any automatic stay or injunction), appeals, and any
    anticipated post-judgment collection services. Borrower also will pay any
    court costs, in addition to all other sums provided by law.

    NOTICES. All notices required to be given under this Agreement shall be
    given in writing, may be sent by telefacsimile (unless otherwise required by
    law), and shall be effective when actually delivered or when deposited with
    a nationally recognized overnight courier or deposited in the United States
    mail, first class, postage prepaid, addressed to the party to whom the
    notice is to be given at the address shown above. Any party may change its
    address for notices under this Agreement by giving formal written notice to
    the other parties, specifying that the purpose of the notice is to change
    the party's address. To the extent permitted by applicable law, if there is
    more than one Borrower, notice to any Borrower will constitute notice to all
    Borrowers. For notice purposes, Borrower will keep Lender informed at all
    times of Borrower's current address(es).

    SEVERABILITY. If a court of competent jurisdiction finds any provision of
    this Agreement to be invalid or unenforceable as to any person or
    circumstance, such finding shall not render that provision invalid or
    unenforceable as to any other persons or circumstances. If feasible, any
    such offending provision shall be deemed to be modified to be within the
    limits of enforceability or validity; however, if the offending provision
    cannot be so modified, it shall be stricken and all other provisions of this
    Agreement in all other respects shall remain valid and enforceable.

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

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

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

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

    WAIVER. Lender shall not be deemed to have waived any rights under this
    Agreement unless such waiver is given in writing and signed by Lender. No
    delay or omission on the part of Lender in exercising any right shall
    operate as a waiver of such right or any other right. A waiver by Lender of
    a provision of this Agreement shall not prejudice or constitute a waiver of
    Lender's right otherwise to demand strict compliance with that provision or
    any other provision of this Agreement. No prior waiver by Lender, nor any
    course of dealing between Lender and Borrower, or between Lender and any
    Grantor, shall constitute a waiver of any of Lender's rights or of any
    obligations of Borrower or of any Grantor as to any future transactions.
    Whenever the consent of Lender is required under this Agreement, the
    granting of such consent by Lender in any instance shall not constitute
    continuing consent in subsequent instances where such consent is required,
    and in all cases such consent may be granted or withheld in the sole
    discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
AUGUST 9, 2000.

BORROWER:

FOTOBALL USA, INC.

BY: /S/ MICHAEL FAVISH
    -----------------------------
    MICHAEL FAVISH, PRESIDENT/CEO

LENDER:

U.S. BANK NATIONAL ASSOCIATION

BY: /S/ DARLA CLARK
    -----------------------------
    AUTHORIZED OFFICER

================================================================================
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.29(C) Concentrex 2000 All rights
reserved. [CA-C40 E3.29 F3.29 56328.LN C4.OVL]<PAGE>

                     DISBURSEMENT REQUEST AND AUTHORIZATION

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
   PRINCIPAL        LOAN DATE        MATURITY       LOAN NO       CALL      COLLATERAL      ACCOUNT         OFFICER      INITIAL
<S>                 <C>              <C>            <C>           <C>       <C>             <C>             <C>          <C>
 $1,500,000.00      12-19-2000                       56788                       019                          501
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
--------------------------------------------------------------------------------
BORROWER:  FOTOBALL USA, INC.       LENDER:  U.S. BANK NATIONAL ASSOCIATION
           6740 COBRA WAY                    CORPORATE LENDING - KEARNY MESA
           SAN DIEGO, CA 92123               9005 COMPLEX DRIVE
                                             SAN DIEGO, CA 92123
================================================================================

LOAN TYPE. This is a Variable Rate (at Wall Street Journal Prime Rate as
published in the Money Rates section. When a range of rates is shown, the higher
rate will be used, making an initial rate of 9.500%), Generic Payment Stream
Loan to a Corporation for $1,500,000.00.

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

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

     [X] BUSINESS (INCLUDING REAL ESTATE INVESTMENT).

SPECIFIC PURPOSE. The specific purpose of this loan is: NEW TERM LOAN TO ASSIST
WITH THE FINANCING OF A LICENSING AGREEMENT WITH RAWLINGS SPORTING GOODS.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $1,500,000.00 as follows:

          AMOUNT PAID TO OTHERS ON BORROWER'S BEHALF:          $1,500,000.00
          $1,500,000.00 UNDISBURSED
                                                               -------------
          NOTE PRINCIPAL:                                      $1,500,000.00

CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:

          PREPAID FINANCE CHARGES PAID IN CASH:                      $750.00
              $750.00 DOCUMENTATION FEE
                                                               -------------
          TOTAL CHARGES PAID IN CASH:                                $750.00

LOAN ADVANCE AGREEMENT CONDITION. UNDISBURSED FUNDS TO BE DISBURSED PER LOAN
ADVANCE AGREEMENT.

FINANCIAL STATEMENT CERTIFICATION. The undersigned, on behalf of the above
entities, for the purpose of procuring and establishing credit from time to time
with U.S. Bank and to induce U.S. Bank to permit the undersigned to become
indebted to U.S. Bank on notes, endorsements, guarantees, overdrafts or
otherwise, furnish all current and future statements as being a true statement
of the financial condition of the undersigned and agrees to notify U.S. Bank
immediately of the extent and character of any material change in said financial
condition. If any of the representations in all current and future statements,
prove to be untrue, or if the undersigned fails to notify U.S. Bank of any
material change as above agreed, then and in such case, at U.S. Bank option, all
of the obligations of the undersigned to U.S. Bank, or held by U.S. Bank shall
immediately become due and payable, without demand or notice.

The undersigned does further agree that any spaces in all current and future
statements under "Liabilities" or "Contingent Liabilities", which have been or
may be left blank, shall be construed by U.S. Bank, the same as though the word
"none" were written in each of such spaces.

All current and future statements shall also be construed by U.S. Bank to be a
continuing statement of the condition of the undersigned, and a new and original
statement of all assets and liabilities upon each and every transaction in and
by which the undersigned hereafter becomes indebted to U.S. Bank, until the
undersigned advises in writing to the contrary.

FINANCIAL CONDITION. BY SIGNING THE AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED DECEMBER 19, 2000.

BORROWER:

FOTOBALL USA, INC.

BY:  /s/ Michael Favish
    -----------------------------
    MICHAEL FAVISH, PRESIDENT/CEO

================================================================================
Variable Rate. Generic.        LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.29a
                               (C) Concentrex 2000 All rights reserved.
                               [CA-I20 E3.29 F3.29 56788LOC.LN C1.OVL]

<PAGE>

                                PROMISSORY NOTE

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
   PRINCIPAL        LOAN DATE        MATURITY       LOAN NO       CALL      COLLATERAL      ACCOUNT         OFFICER      INITIAL
<S>                 <C>              <C>            <C>           <C>       <C>             <C>             <C>          <C>
 $1,500,000.00      12-19-2000                       56788                       019                          501
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
--------------------------------------------------------------------------------
BORROWER:  FOTOBALL USA, INC.       LENDER:  U.S. BANK NATIONAL ASSOCIATION
           6740 COBRA WAY                    CORPORATE LENDING - KEARNY MESA
           SAN DIEGO, CA 92123               9005 COMPLEX DRIVE
                                             SAN DIEGO, CA 92123
================================================================================

<TABLE>
<S>                                <C>                      <C>
PRINCIPAL AMOUNT: $1,500,000.00    INITIAL RATE: 9.500%     DATE OF NOTE: DECEMBER 19, 2000
</TABLE>

PROMISE TO PAY. FOTOBALL USA, INC. ("BORROWER") PROMISES TO PAY TO U.S. BANK
NATIONAL ASSOCIATION ("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED STATES
OF AMERICA, THE PRINCIPAL AMOUNT OF ONE MILLION FIVE HUNDRED THOUSAND & 00/100
DOLLARS ($1,500,000.00), TOGETHER WITH INTEREST ON THE UNPAID PRINCIPAL BALANCE
FROM DECEMBER 19, 2000, UNTIL PAID IN FULL.

PAYMENT. SUBJECT TO ANY PAYMENT CHANGES RESULTING FROM CHANGES IN THE INDEX,
BORROWER WILL PAY THIS LOAN IN ACCORDANCE WITH THE FOLLOWING PAYMENT SCHEDULE:

     3 CONSECUTIVE MONTHLY INTEREST PAYMENTS ON THE THIRTIETH OF EACH MONTH,
     BEGINNING JANUARY 30, 2001. FOLLOWED BY 36 CONSECUTIVE MONTHLY PAYMENTS
     BEGINNING APRIL 30, 2001 IN A MONTHLY PAYMENT AMOUNT NECESSARY TO FULLY
     AMORTIZE THE LOAN BALANCE OWING ON MARCH 30, 2001. A FINAL PAYMENT IS DUE
     MARCH 30, 2004 FOR ALL REMAINING UNPAID PRINCIPAL AND ACCRUED INTEREST.

Interest on this Note is computed on a 365/365 simple interest basis; that is,
by applying the ratio of the annual interest rate over the number of days in a
year, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will be
applied first to accrued unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs and late charges.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the Wall Street
Journal Prime Rate as published in the Money Rates section. When a range of
rates is shown, the higher rate will be used (the "Index"). The Index is not
necessarily the lowest rate charged by Lender on its loans. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute
index after notice to Borrower. Lender will tell Borrower the current Index rate
upon Borrower's request. Borrower understands that Lender may make loans based
on other rates as well. The interest rate change will not occur more than each
time that Prime Rate changes as shown in the Money Rates section of the Wall
Street Journal. THE INDEX CURRENTLY IS 9.500% PER ANNUM. THE INTEREST RATE TO BE
APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS NOTE WILL BE AT A RATE EQUAL TO
THE INDEX, RESULTING IN A CURRENT RATE OF 9.500% PER ANNUM.
NOTICE: Under no circumstances will the interest rate on this Note be more than
the maximum rate allowed by applicable law. Whenever increases occur in the
interest rate, Lender, at its option, may do one or more of the following: (a)
increase Borrower's payments to ensure Borrower's loan will pay off by its
original final maturity date, (b) increase Borrower's payments to cover accruing
interest, (c) increase the number of Borrower's payments, and (d) continue
Borrower's payments at the same amount and increase Borrower's final payment.

PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and
other prepaid finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary or as a
result of default), except as otherwise required by law. In any event, even upon
full prepayment of this Note, Borrower understands that Lender is entitled to a
MINIMUM INTEREST CHARGE OF $100.00. Other than Borrower's obligation to pay any
minimum interest charge, Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payments will not, unless agreed
to by Lender in writing, relieve Borrower of Borrower's obligation to continue
to make payments under the payment schedule. Rather, they will reduce the
principal balance due and may result in Borrower making fewer payments.

LATE CHARGE. If a payment is 10 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT OF $5.00, WHICHEVER IS GREATER.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documennts. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with Lender.
(g) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A material
adverse change occurs in Borrower's financial condition.

If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within fifteen (15) days; or (b) if
the cure requires more than fifteen (15) days, immediately initiates steps which
Lender deems in Lender's sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon Borrower's failure to pay
all amounts declared due pursuant to this section, including failure to pay upon
final maturity, Lender, at its option, may also, if permitted under applicable
law, do one or both of the following: (a) increase the variable interest rate on
this Note to 5.000 percentage points over the Index, and (b) add any unpaid
accrued interest to principal and such sum will bear interest therefrom until
paid at the rate provided in this Note (including any increased rate). Lender
may hire or pay someone else to help collect this Note if Borrower does not pay.
Borrower also will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender's attorneys' fees and Lender's legal expenses
whether or not there is a lawsuit, including attorneys' fees and legal expenses
for bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction), appeals, and any anticipated post-judgment collection
services. Borrower also will pay any court costs, in addition to all other sums
provided by law. THIS NOTE HAS BEEN DELIVERED TO LENDER AND ACCEPTED BY LENDER
IN THE STATE OF CALIFORNIA. IF THERE IS A LAWSUIT, BORROWER AGREES UPON LENDER'S
REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF SAN DIEGO COUNTY, THE
STATE OF CALIFORNIA. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA.

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

COLLATERAL. This Note is secured by UCC-1 dated December 20, 1995, filed January
8, 1996 as file #9601060381, all of which also secures Note dated December 20,
1995 in the amount of $1,000,000.00, modified to $4,000,000.00.

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

<PAGE>

12-19-2000                      PROMISSORY NOTE                         PAGE 2
LOAN NO 56788                     (CONTINUED)

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

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

BORROWER:

FOTOBALL USA, INC.

BY:  /s/ Michael Favish
    -----------------------------
    MICHAEL FAVISH, PRESIDENT/CEO

================================================================================
Variable Rate. Generic.        LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.29a
                               (C) Concentrex 2000 All rights reserved.
                               [CA-D20 E3.29 F3.29 56788LOC.LN C1.OVL]

<PAGE>

                            BUSINESS LOAN AGREEMENT
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
   PRINCIPAL        LOAN DATE        MATURITY       LOAN NO       CALL      COLLATERAL      ACCOUNT         OFFICER      INITIAL
<S>                 <C>              <C>            <C>           <C>       <C>             <C>             <C>          <C>
 $1,500,000.00      12-19-2000                       56788                       019                          501
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
--------------------------------------------------------------------------------
BORROWER:  FOTOBALL USA, INC.       LENDER:  U.S. BANK NATIONAL ASSOCIATION
           6740 COBRA WAY                    CORPORATE LENDING - KEARNY MESA
           SAN DIEGO, CA 92123               9005 COMPLEX DRIVE
                                             SAN DIEGO, CA 92123
================================================================================

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

TERM. This Agreement shall be effective as of DECEMBER 19, 2000, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

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

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

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

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

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

     EVENT OF DEFAULT. The words "Event of Default" mean and include without
     limitation any of the Events of Default set forth below in the section
     titled "EVENTS OF DEFAULT."

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

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

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

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

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

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

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

     RELATED DOCUMENTS. The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Indebtedness.

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

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

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

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

     LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory to
     Lender the following documents for the Loan: (a) the Note, (b) Security
     Agreements granting to Lender security interests in the Collateral, (c)
     Financing Statements perfecting Lender's Security Interests; (d) evidence
     of insurance as required below; and (e) any other documents required under
     this Agreement or by Lender or its counsel.

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

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

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

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

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

     ORGANIZATION. Borrower is a corporation which is duly organized, validly
     existing, and in good standing under the laws of the State of Delaware

<PAGE>

12-19-2000                  BUSINESS LOAN AGREEMENT                     PAGE 2
LOAN NO 56788                     (CONTINUED)

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

     and is validly existing and in good standing in all states in which
     Borrower is doing business except for states in which failure to be validly
     existing and in good standing would not have a material adverse effect on
     the Borrower's business. Borrower has the full power and authority to own
     its properties and to transact the businesses in which it is presently
     engaged or presently proposes to engage. Borrower also is duly qualified as
     a foreign corporation and is in good standing in all states in which the
     failure to so qualify would have a material adverse effect on its
     businesses or financial condition.

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

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

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

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

     HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous substance,"
     "disposal," "release," and "threatened release," as used in this Agreement,
     shall have the same meanings as set forth in the "CERCLA," "SARA," the
     Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
     the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
     seq., Chapters 6.5 through 7.7 of Division 20 of the California Health and
     Safety Code, Section 25100, et seq., or other applicable state or Federal
     laws, rules, or regulations adopted pursuant to any of the foregoing.
     Except as disclosed to and acknowledged by Lender in writing, Borrower
     represents and warrants that: (a) During the period of Borrower's ownership
     of the properties, there has been no use, generation, manufacture, storage,
     treatment, disposal, release or threatened release of any hazardous waste
     or substance by any person on, under, about or from any of the properties.
     (b) Borrower has no knowledge of, or reason to believe that there has been
     (i) any use, generation, manufacture, storage, treatment, disposal,
     release, or threatened release of any hazardous waste or substance on,
     under, about or from the properties by any prior owners or occupants of any
     of the properties, or (ii) any actual or threatened litigation or claims of
     any kind by any person relating to such matters. (c) Neither Borrower nor
     any tenant, contractor, agent or other authorized user of any of the
     properties shall use, generate, manufacture, store, treat, dispose of, or
     release any hazardous waste or substance on, under, about or from any of
     the properties; and any such activity shall be conducted in compliance with
     all applicable federal, state, and local laws, regulations, and ordinances,
     including without limitation those laws, regulations and ordinances
     described above. Borrower authorizes Lender and its agents to enter upon
     the properties to make such inspections and tests as Lender may deem
     appropriate to determine compliance of the properties with this section of
     the Agreement. Any inspections or tests made by Lender shall be at
     Borrower's expense and for Lender's purposes only and shall not be
     construed to create any responsibility or liability on the part of Lender
     to Borrower or to any other person. The representations and warranties
     contained herein are based on Borrower's due diligence in investigating the
     properties for hazardous waste and hazardous substances. Borrower hereby
     (a) releases and waives any future claims against Lender for indemnity or
     contribution in the event Borrower becomes liable for cleanup or other
     costs under any such laws, and (b) agrees to indemnify and hold harmless
     Lender against any and all claims, losses, liabilities, damages, penalties,
     and expenses which Lender may directly or indirectly sustain or suffer
     resulting from a breach of this section of the Agreement or as a
     consequence of any use, generation, manufacture, storage, disposal, release
     or threatened release of a hazardous waste or substance on the properties.
     The provisions of this section of the Agreement, including the obligation
     to indemnify, shall survive the payment of the Indebtedness and the
     termination or expiration of this Agreement and shall not be affected by
     Lender's acquisition of any interest in any of the properties, whether by
     foreclosure or otherwise.

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

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

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

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

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

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

     INVESTMENT COMPANY ACT. Borrower is not an "investment company" or a
     company "controlled" by an "investment company", within the meaning of the
     Investment Company Act of 1940, as amended.

     PUBLIC UTILITY HOLDING COMPANY ACT. Borrower is not a "holding company", or
     a "subsidiary company" or a "holding company", or an "affiliate" of a
     "holding company" or of a "subsidiary company" of a "holding company",
     within the meaning of the Public Utility Holding Company Act of 1935, as
     amended.

     REGULATIONS G, T AND U. Borrower is not engaged principally, or as one of
     its important activities, in the business of extending credit for the
     purpose of purchasing or carrying margin stock (within the meaning of
     Regulations G, T and U of the Board of Governors of the Federal Reserve
     System).

     LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business,
     or Borrower's Chief executive office, if Borrower has more than one place
     of business, is located at 6740 COBRA WAY, SAN DIEGO, CA 92123. Unless
     Borrower has designated otherwise in writing this location is also the
     office or offices where Borrower keeps its records concerning the
     Collateral.

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

     CLAIMS AND DEFENSES. There are no defenses or counterclaims, offsets or
     other adverse claims, demands or actions of any kind, personal or
     otherwise, that Borrower, Grantor, or any Guarantor could assert with
     respect to the Note, Loan, Indebtedness, this Agreement, or the Related
     Documents.

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

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

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

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

<PAGE>

12-19-2000                  BUSINESS LOAN AGREEMENT                     PAGE 3
LOAN NO 56788                     (CONTINUED)

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

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

     INSURANCE. Maintain fire and other risk insurance, public liability
     insurance, and such other insurance as Lender may require with respect to
     Borrower's properties and operations, in form, amounts, coverages and with
     insurance companies reasonably acceptable to Lender. Borrower, upon request
     of Lender, will deliver to Lender from time to time the policies or
     certificates of insurance in form satisfactory to Lender, including
     stipulations that coverages will not be cancelled or diminished without at
     least ten (10) days' prior written notice to Lender. Each insurance policy
     also shall include an endorsement providing that coverage in favor of
     Lender will not be impaired in any way by any act, omission or default of
     Borrower or any other person. In connection with all policies covering
     assets in which Lender holds or is offered a security interest for the
     Loans, Borrower will provide Lender with such loss payable or other
     endorsements as Lender may require.

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

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

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

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

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

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

     ENVIRONMENTAL STUDIES. Promptly conduct and complete, at Borrower's
     expense, all such investigations, studies, samplings and testings as may be
     requested by Lender or any governmental authority relative to any substance
     defined as toxic or a hazardous substance under any applicable federal,
     state, or local law, rule, regulation, order or directive, or any waste or
     by-product thereof, at or affecting any property or any facility owned,
     leased or used by Borrower.

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

     COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide Lender
     at least annually and at the time of each disbursement of Loan proceeds
     with a certificate executed by Borrower's chief financial officer, or other
     officer or person acceptable to Lender, certifying that the representations
     and warranties set forth in this Agreement are true and correct as of the
     date of the certificate and further certifying that, as of the date of the
     certificate, no Event of Default exists under this Agreement.

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

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

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

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

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

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

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

LOAN AGREEMENT COVENANT & CONDITIONS ADDENDUM. The Loan Agreement Covenant &
Conditions Addendum attached as Exhibit "A" to this agreement is incorporated by
reference herein in full.

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

<PAGE>

12-19-2000                  BUSINESS LOAN AGREEMENT                     PAGE 4
LOAN NO 56788                     (CONTINUED)

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

permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

     DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due
     on the Loans.

     OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
     perform when due any other term, obligation, covenant or condition
     contained in this Agreement or in any of the Related Documents, or failure
     of Borrower to comply with or to perform any other term, obligation,
     covenant or condition contained in any other agreement between Lender and
     Borrower.

     DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
     under any loan, extension of credit, security agreement, purchase or sales
     agreement, or any other agreement, in favor of any other creditor or person
     that may materially affect any of Borrower's property or Borrower's or any
     Grantor's ability to repay the Loans or perform their respective
     obligations under this Agreement or any of the Related Documents.

     FALSE STATEMENTS. Any warranty, representation or statement made or
     furnished to Lender by or on behalf of Borrower or any Grantor under this
     Agreement or the Related Documents is false or misleading in any material
     respect at the time made or furnished, or becomes false or misleading at
     any time thereafter.

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

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

     CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower, any creditor
     of any Grantor against any collateral securing the Indebtedness, or by any
     governmental agency. This includes a garnishment, attachment, or levy on or
     of any of Borrower's deposit accounts with Lender. However, this Event of
     Default shall not apply if there is a good faith dispute by Borrower or
     Grantor, as the case may be, as to the validity or reasonableness of the
     claim which is the basis of the creditor or forfeiture proceeding, and if
     Borrower or Grantor gives Lender written notice of the creditor or
     forfeiture proceeding and furnishes reserves or a surety bond for the
     creditor or forfeiture proceeding satisfactory to Lender.

     EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
     to any Guarantor of any of the Indebtedness or any Guarantor dies or
     becomes incompetent, or revokes or disputes the validity of, or liability
     under, any Guaranty of the Indebtedness. Lender, at its option, may, but
     shall not be required to, permit the Guarantor's estate to assume
     unconditionally the obligations arising under the guaranty in a manner
     satisfactory to Lender, and, in doing so, cure the Event of Default.

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

     ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
     condition, or Lender reasonably believes the prospect of payment or
     performance of the Indebtedenss is impaired.

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

     RIGHT TO CURE. If any default, other than a Default on Indebtedness, is
     curable and if Borrower or Grantor, as the case may be, has not been given
     a notice of a similar default within the preceding twelve (12) months, it
     may be cured (and no Event of Default will have occurred) if Borrower or
     Grantor, as the case may be, after receiving written notice from Lender
     demanding cure of such default: (a) cures the default within fifteen (15)
     days; or (b) if the cure requires more than fifteen (15) days, immediately
     initiates steps which Lender deems in Lender's sole discretion to be
     sufficient to cure the default and thereafter continues and completes all
     reasonable and necessary steps sufficient to produce compliance as soon as
     reasonably practical.

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

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

     AMENDMENTS. This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to the
     matters set forth in this Agreement. No alteration of or amendment to this
     Agreement shall be effective unless given in writing and signed by the
     party or parties sought to be charged or bound by the alteration or
     amendment.

     APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND ACCEPTED
     BY LENDER IN THE STATE OF CALIFORNIA. IF THERE IS A LAWSUIT, BORROWER
     AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS
     OF SAN DIEGO COUNTY, THE STATE OF CALIFORNIA. THIS AGREEMENT SHALL BE
     GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
     CALIFORNIA.

     CAPTION HEADINGS. Caption headings in this Agreement are for convenience
     purposes only and are not to be used to interpret or define the
     provisions of this Agreement.

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

     BORROWER INFORMATION. Borrower consents to the release of information on or
     about Borrower by Lender in accordance with any court order, law or
     regulation and in response to credit inquiries concerning Borrower.

     NON-LIABILITY OF LENDER. The relationship between Borrower and Lender is a
     debtor and creditor relationship and not fiduciary in nature, nor is the
     relationship to be construed as creating any partnership or joint venture
     between Lender and Borrower. Borrower is exercising its own judgement with
     respect to Borrower's business. All information supplied to Lender is for
     Lender's protection only and no other party is entitled to rely on such
     information. There is no duty for Lender to review, inspect, supervise, or
     inform Borrower of any matter with respect to Borrower's business. Lender
     and Borrower intend that Lender may reasonably rely on all information
     supplied by Borrower to Lender, together with all representations and
     warranties given by Borrower to Lender, without investigation or
     confirmation by Lender and that any investigation or failure to investigate
     will not diminish Lender's right to so rely.

     NOTICE OF LENDER'S BREACH. Borrower must notify Lender in writing of any
     breach of this Agreement or the Related Documents by Lender and any other
     claim, cause of action or offset against Lender within thirty (30) days
     after the occurrence of such breach or after the accrual of such claim,
     cause of action or offset. Borrower waives any claim, cause of action or
     offset for which notice is not given in accordance with this paragraph.
     Lender is entitled to rely on any failure to give such notice.

     BORROWER INDEMNIFICATION. Borrower shall indemnify and hold Lender harmless
     from and against all claims, costs, expenses, losses, damages, and
     liabilities of any kind, including but not limited to attorneys' fees and
     expenses, arising out of any matter relating directly or indirectly to the
     Indebtedness, whether resulting from internal disputes of the Borrower,
     disputes between Borrower and any Guarantor, or whether involving any third
     parties, or out of any other matter whatsoever related to this Agreement or
     the Related Documents, but excluding any claim or liability which arises as
     a direct result of Lender's gross negligence or willful misconduct. This
     indemnity shall survive full repayment and satisfaction of the
     Indebtedness and termination of this Agreement.

     COUNTERPARTS. This Agreement may be executed in multiple counterparts, each
     of which, when so executed, shall be deemed an original, but all such
     counterparts, taken together, shall constitute one and the same Agreement.

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

<PAGE>

12-19-2000                  BUSINESS LOAN AGREEMENT                     PAGE 5
LOAN NO 56788                     (CONTINUED)

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

     amount. This includes, subject to any limits under applicable law, Lender's
     attorneys' fees and Lender's legal expenses, whether or not there is a
     lawsuit, including attorneys' fees for bankruptcy proceedings (including
     efforts to modify or vacate any automatic stay or injunction), appeals, and
     any anticipated post-judgment collection services. Borrower also will pay
     any court costs, in addition to all other sums provided by law.

     NOTICES. All notices required to be given under this Agreement shall be
     given in writing, may be sent by telefacsimile (unless otherwise required
     by law), and shall be effective when actually delivered or when deposited
     with a nationally recognized overnight courier or deposited in the United
     States mail, first class, postage prepaid, addressed to the party to whom
     the notice is to be given at the address shown above. Any party may change
     its address or notices under this Agreement by giving formal written notice
     to the other parties, specifying that the purpose of the notice is to
     change the party's address. To the extent permitted by applicable law, if
     there is more than one Borrower, notice to any Borrower will constitute
     notice to all Borrowers. For notice purposes, Borrower will keep Lender
     informed at all times of Borrower's current address(es).

     SEVERABILITY. If a court of competent jurisdiction finds any provision of
     this Agreement to be invalid or unenforceable as to any person or
     circumstance, such finding shall not render that provision invalid or
     unenforceable as to any other persons or circumstances. If feasible, any
     such offending provision shall be deemed to be modified to be within the
     limits of enforceability of validity; however, if the offending provision
     cannot be so modified, it shall be stricken and all other provisions of
     this Agreement in all other respects shall remain valid and enforceable.

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

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

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

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

     WAIVER. Lender shall not be deemed to have waived any rights under this
     Agreement unless such waiver is given in writing and signed by Lender. No
     delay or omission on the part of Lender in exercising any right shall
     operate as a waiver of such right or any other right. A waiver by Lender of
     a provision of this Agreement shall not prejudice or constitute a waiver of
     Lender's right otherwise to demand strict compliance with that provision or
     any other provision of this Agreement. No prior waiver by Lender, nor any
     course of dealing between Lender and Borrower, or between Lender and any
     Grantor, shall constitute a waiver of any of Lender's rights or of any
     obligations of Borrower or of any Grantor as to any future transactions.
     Whenever the consent of Lender is required under this Agreement, the
     granting of such consent by Lender in any instance shall not constitute
     continuing consent in subsequent instances where such consent is required,
     and in all cases such consent may be granted or withheld in the sole
     discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
DECEMBER 19, 2000.

BORROWER:

FOTOBALL USA, INC.

BY:  /s/ Michael Favish
    -----------------------------
    MICHAEL FAVISH, PRESIDENT/CEO

LENDER:

U.S. BANK NATIONAL ASSOCIATION

BY:  /s/ Darla Clark
    -----------------------------
    AUTHORIZED OFFICER

================================================================================
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.29a (C) Concentrex 2000 All rights
reserved. [CA-C40 E3.29 F3.29 56788LOC.LN C1.OVL]

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