Document:

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                                                                   EXHIBIT 10.29

                                 LOAN AGREEMENT

     THIS LOAN AGREEMENT (as amended, restated, replaced, supplemented or
otherwise modified from time to time, this "AGREEMENT") is executed on
September 7, 2001 (the "EFFECTIVE DATE"), by and between OLD HILL PARTNERS
INC., a Delaware corporation ("LENDER"), and MALIBU ENTERTAINMENT WORLDWIDE,
INC., a Georgia corporation ("BORROWER").

     In addition to the capitalized terms introduced and defined elsewhere in
this Agreement (which capitalized terms shall have the meanings ascribed to
them), other capitalized terms used herein shall have the respective meanings
ascribed thereto as set forth in Article I hereof.

                                   RECITALS:

     A.   Borrower may, in its sole discretion, request Lender to loan funds to
Borrower from time to time.

     B.   Lender is willing to make such loans to Borrower in an aggregate
principal amount of up to $3,500,000 on the terms and conditions hereinafter
set forth.

                                   AGREEMENT:

     NOW, THEREFORE, in consideration of the covenants, agreements,
representations and warranties set forth in this Agreement, the parties hereto
hereby covenant, agree, represent and warrant as follows:

     I.   DEFINITIONS; PRINCIPLES OF CONSTRUCTION

          SECTION 1.1 DEFINITIONS. For all purposes of this Agreement, except
as otherwise expressly required or unless the context clearly indicates a
contrary intent:

          "ADVANCE" shall mean each advance of the Loan.

          "ADVANCE REQUEST" shall have the meaning set forth in Section 3.1.1.

          "AFFILIATE" shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or executive officer of such Person.

          "APPLICABLE INTEREST RATE" shall mean a rate equal to eighteen
percent (18%) per annum, compounded annually.

          "BANKRUPTCY CODE" shall mean Title 11 of the United States Code, as
amended.

          "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
any other day on which national banks in New York, New York are not open for
business.

          "CLOSING DATE" shall mean the date hereof.

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          "CODE" shall mean the Internal Revenue Code of 1986, as amended, and
as it may be further amended from time to time, any successor statutes thereto,
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.

          "DEBT" shall mean the outstanding principal amount set forth in, and
evidenced by, the Note together with all interest accrued and unpaid thereon and
all other sums due to Lender in respect of the Loan under the Note, this
Agreement, or any other Loan Documents.

          "DEFAULT" shall have the meaning set forth in Section 7.1.1.

          "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

          "EVENT OF DEFAULT" shall have the meaning set forth in Section 7.1.1.

          "FINANCING PERIOD" shall have the meaning set forth in Section 2.1.

          "FISCAL YEAR" shall mean each twelve-month period commencing on
January 1 and ending on December 31 during the term of the Loan.

          "FOOTHILL LOAN AGREEMENT"  shall have the meaning set forth in Section
7.1.1(i).

          "GAAP" shall mean generally accepted accounting principles in the
United States of America, consistently applied.

          "GOVERNMENTAL AUTHORITY" shall mean any court, body, board, agency,
commission, office or authority of any nature whatsoever for any governmental or
regulatory unit (federal, state, county, district, municipal, city or otherwise)
whether now or hereafter in existence.

          "INITIAL ADVANCE DATE" shall mean the date on which Lender shall make
the first Advance to Borrower under this Agreement.

          "LOAN" shall mean, in the aggregate, the Advances made by Lender to
Borrower, as set forth in, and evidenced by, the Note and the other Loan
Documents.

          "LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note
and any other document executed and/or delivered by Borrower in connection with
the Loan.

          "MATERIAL ADVERSE CHANGE" shall mean a material adverse change in any
of the following (i) the condition (financial or otherwise), business,
performance, operations or properties of Borrower and its Subsidiaries, taken as
a whole, (ii) the legality or validity of any of the Loan Documents, or (iii)
Borrower's ability to pay the Debt in accordance with the terms hereof and
otherwise substantially comply with the material terms of this Agreement.

          "MATURITY DATE" shall mean the date on which the final payment of
principal of the Note becomes due and payable as therein provided, whether at
the Stated Maturity, upon the occurrence of the contingency described in Section
2.4(d) of this Agreement, by declaration of acceleration, or otherwise.

          "MAXIMUM LOAN AMOUNT" shall have the meaning set forth in Section 2.1.

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     "NOTE" shall mean that certain Promissory Note dated as of the date hereof
and in substantially the form attached hereto as Exhibit "A", made by Borrower
in favor of Lender, executed by Borrower, and payable by Borrower to Lender as
specified therein, in the original principal sum of up to $3,500,000 as the same
may be increased, amended, restated, replaced, supplemented or otherwise
modified from time to time, and all notes issued upon transfer, division or
combination of, or in substitution for, the Note.

     "OBLIGATIONS" shall mean any and all debt, liabilities and obligations of
Borrower to Lender in connection with the Loan, including, without limiting the
generality of the foregoing, the Debt.

     "OFFICER'S CERTIFICATE" shall mean a certificate delivered to Lender by
Borrower which is signed by any authorized senior officer of Borrower.

     "PARK" shall mean a SpeedZone(R) amusement park developed by Borrower or
one of its Subsidiaries.

     "PERMITTED PURPOSES" shall have the meaning set forth in Section 2.3.

     "PERSON" shall mean any individual, corporation, partnership, limited
liability company, joint venture, estate, trust, unincorporated association, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

     "STATED MATURITY" shall mean August 21, 2003; provided, however, that
Borrower may extend the Stated Maturity for one (1) additional year to
August 21, 2004 upon (a) delivery of written notice of such extension to Lender
on or before June 21, 2003, and (b) payment to Lender of an extension fee (the
"EXTENSION FEE") equal to one percent (1%) of the then-current outstanding
principal balance of the Loan as of the date of such extension notice (described
in the immediately preceding clause (a)), which Extension Fee may, at the
election of Borrower in its sole discretion, be paid with the proceeds of an
Advance in the amount of such Extension Fee if (i) at the time such Extension
Fee becomes payable, Advances equal to the Maximum Loan Amount have not been
made, and (ii) there remain sufficient funds available under this Agreement from
which an Advance to pay the Extension Fee may be made. In such event, Borrower
shall be entitled to request and receive an Advance to pay the Extension Fee
notwithstanding the fact that the Financing Period has expired.

     "SUBSIDIARIES" shall mean any corporation, limited liability company,
partnership or other entity whose outstanding equity interests are owned 50% or
more by Borrower, by Borrower and one or more Subsidiaries or by one or more
Subsidiaries or which is otherwise controlled directly or indirectly by Borrower
to the extent necessary to require consolidation of its annual statements with
those of Borrower for financial reporting purposes in accordance with GAAP.

     SECTION 1.2 PRINCIPLES OF CONSTRUCTION. All references to sections,
schedules and exhibits are to sections, schedules and exhibits in or to this
Agreement unless otherwise specified. Unless otherwise specified, the words
"hereof", "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not any particular
provision of this Agreement. Unless otherwise specified, all

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meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.

     II.  GENERAL TERMS

          SECTION 2.1 ADVANCES. From and including the Closing Date until the
date which is twelve (12) months following the Closing Date (the "FINANCING
PERIOD"), subject to and upon the terms and conditions set forth herein. Lender
shall make one or more Advances to Borrower pursuant to this Agreement;
provided, however, that in no event will Lender make Advances totaling in
excess of $3,500,000 (the "MAXIMUM LOAN AMOUNT") to Borrower hereunder.

          SECTION 2.2 THE NOTE. The Loan shall be evidenced by the Note of
Borrower. The Loan shall bear interest and shall be subject to repayment as
provided in the Note and in Section 2.4 hereof. The holder of the Note shall be
entitled to the benefits of this Agreement.

          SECTION 2.3 USE OF PROCEEDS. The Loan will be funded by Lender to
Borrower for use by Borrower for the following purposes (collectively, the
"PERMITTED PURPOSES"):

          (a)  development of one or more Parks; and

          (b)  payment of the Extension Fee in accordance with the terms of this
               Agreement.

Borrower shall use the proceeds of the Loan solely for the Permitted Purposes.

          SECTION 2.4 LOAN REPAYMENT. The Loan shall bear interest at the
Applicable Interest Rate. The unpaid principal indebtedness of the Loan and all
accrued and unpaid interest thereon shall become due and payable as follows:

          (a)  On the first day of the calendar month immediately following the
               calendar month in which the Initial Advance Date occurs, Borrower
               shall pay all interest accrued on the Loan since the Initial
               Advance Date.

          (b)  Thereafter, on the first day of each succeeding calendar month
               (each, an "INTEREST PAYMENT DATE"), Borrower shall pay all
               accrued and unpaid interest on the Loan on such Interest Payment
               Date.

          (c)  Borrower shall repay the entire outstanding principal
               indebtedness of the Loan in full on the Maturity Date of the
               Loan, together with (a) all accrued and unpaid interest thereon
               up to (but excluding) the date of repayment, and (b) a fee (the
               "EXIT FEE") in an amount equal to three percent (3%) of the total
               amount of Advances made by Lender to Borrower under the terms of
               this Agreement, less the aggregate amount of any Prepayment Fees
               previously paid by Borrower to Lender.

          (d)  Any provision in this Agreement or the Note to the contrary
               notwithstanding, in the event that the loan made to Borrower and
               certain of its Subsidiaries pursuant to and evidenced by the
               Foothill Loan

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         Agreement (the "FOOTHILL LOAN") shall be paid in full, Borrower shall,
         at the same time that the Foothill Loan is paid, repay the entire
         outstanding principal indebtedness of the Loan together with (a) all
         accrued and unpaid interest thereon up to (but excluding) the date of
         repayment, and (b) a fee (the "EXIT FEE") in an amount equal to three
         percent (3%) of the total amount of Advances made by Lender to Borrower
         under the terms of this Agreement, less the aggregate amount of any
         Prepayment Fees previously paid by Borrower to Lender.

Borrower may, at its option and upon sixty (60) days' prior notice to Lender,
prepay the Loan in whole or in part. If the Borrower prepays the Loan in whole,
the Borrower shall also pay the Exit Fee at the time of prepayment. If the
Borrower prepays the Loan in part, then such prepayment shall be accompanied by
a fee (the "PREPAYMENT FEE") in an amount equal to three percent (3%) of the
principal amount being repaid. Any Exit Fee payable by Borrower shall be
reduced dollar for dollar by the amount of all Prepayment Fees previously paid
by Borrower to Lender. Any prepayment made by Borrower and applied to reduce
the principal amount of the Loan shall permanently reduce the Maximum Loan
Amount dollar for dollar by the amount of such prepayment, and any principal
amount repaid may not be reborrowed by Borrower.

     SECTION 2.5 RECOURSE. The Obligations are full recourse obligations of
Borrower.

     SECTION 2.6 PAYMENTS AND COMPUTATIONS.

     2.6.1 MAKING OF PAYMENTS. Each payment by Borrower hereunder or under the
Note shall be made in immediately available funds by 11:00 a.m., New York, New
York time, on the date such payment is due, to Lender by deposit to a bank
account specified by Lender from time to time in writing. Whenever any payment
hereunder or under the Note shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the first Business Day thereafter.

     2.6.2 COMPUTATIONS. Interest payable hereunder or under the Note shall be
computed on the basis of the actual number of days elapsed based upon a 360-day
year.

     SECTION 2.7 SECURITY. The payment of the Note and all Advances made under
the terms of this Agreement shall be secured by a mortgage or a deed of trust
(the "MORTGAGE") which shall grant Lender a lien on and security interest with
respect to the interest owned and held by Borrower or by Borrower's Subsidiary
in each of the real properties (the "MORTGAGED PROPERTIES") more particularly
described in Exhibit "B" attached hereto and incorporated herein by reference,
subject, however, to the following terms and conditions:

     2.7.1 FORM OF MORTGAGE. Within ten (10) Business Days following the
Effective Date of this Agreement, Lender and Borrower shall negotiate and agree
on the basic form of Mortgage to be used to encumber the Mortgaged Properties
which are owned in fee by Borrower or Borrower's Subsidiaries, with such basic
form of Mortgage to be modified as necessary and appropriate (a) to encumber
the Mortgaged Properties in which Borrower or Borrower's Subsidiary owns a
leasehold interest, and (b) to comply with the respective laws of the state in
which such Mortgaged Properties are located.

     2.7.2 EXISTENCE OF PRIOR LIEN. It is expressly understood and agreed that
the interest of Borrower or Borrower's Subsidiary, as the case may be, in each
of the Mortgaged

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Properties is or will be encumbered by a valid first and prior lien and prior
security interest securing payment of a current-existing and outstanding loan
evidenced by the Foothill Loan Agreement (each a "FIRST LIEN", and
collectively, the "FIRST LIENS"). It is further understood and agreed that the
liens on and security interests with respect to the Mortgaged Properties and
securing the Note and all Advances made under the terms of this Agreement shall
be inferior and subordinate in all respects to the First Liens.

     2.7.3 CONSENTS. Lender and Borrower acknowledge, understand and agree (a)
that with respect to all of the Mortgaged Properties, no Mortgage may be placed
on a Mortgaged Property without the prior written consent of then-current owner
and holder of the First Lien on such Mortgaged Property (the "FIRST
LIENHOLDER"), and (b) that with respect to those Mortgaged Properties wherein
Borrower or Borrower's Subsidiary holds a leasehold interest as lessee, no
Mortgage may be placed on such Mortgaged Property without the prior written
consent of the lessor of the Mortgaged Property (the "LESSOR"). With respect to
those Mortgaged Properties where only the consent of the First Lienholder is
required to place a Mortgage on a Mortgaged Property, Borrower shall exert
reasonable commercial efforts, or shall cause Borrower's Subsidiary to exert
reasonable commercial efforts, (i) to obtain the written consent of the First
Lienholder, and (ii) to deliver to Lender a duly executed Mortgage in
recordable form within forty-five (45) days following the Effective Date of
this Agreement. With respect to those Mortgaged Properties where the consent of
both the First Lienholder and the Lessor are required to place a Mortgage on a
Mortgaged Property, Borrower shall exert reasonable commercial efforts, or
shall cause Borrower's Subsidiary to exert reasonable commercial efforts, (i)
to obtain the written consent of the First Lienholder and the written consent
of the Lessor, and (ii) to deliver to Lender a duly executed Mortgage in
recordable form within ninety (90) days following the Effective Date of this
Agreement.

     2.7.4 IF CONSENTS CANNOT BE OBTAINED. In the event that Borrower or
Borrower's Subsidiary, as the case may be, exerts reasonable commercial efforts
to obtain the First Lienholder consents and the Lessor consents as contemplated
by Section 2.7.3 or by this Section 2.7.4 but is unable to obtain one or more of
such First Lienholder consents or Lessor consents, it is expressly understood
and agreed that the failure to obtain a First Lienholder consent or a Lessor
consent shall not under any circumstances constitute a Default or an Event of
Default under this Agreement, nor shall Borrower be deemed to be in breach of
this Agreement as a result thereof. In the event that the required Lessor
consent and/or First Lienholder consent cannot be obtained by Borrower or
Borrower's Subsidiary, as the case may be, with respect to a Mortgaged Property,
then no Mortgage shall be placed on such Mortgaged Property, and Borrower shall
notify Lender accordingly. If a Mortgage cannot be placed on at least the
following Mortgaged Properties: the Dallas SpeedZone, the Puente Hills
SpeedZone, any new Park and at least three of the remaining five Mortgaged
Properties, then Borrower or Borrower's Subsidiary, as the case may be, shall
exert reasonable commercial efforts to obtain and deliver to Lender a Mortgage
on one or more of the alternate properties (collectively, the "ALTERNATE
PROPERTIES" and individually, each an "ALTERNATE PROPERTY") more particularly
described in Exhibit C attached hereto and incorporated herein by reference,
which one or more Alternate Properties shall be designated by Lender. If
Borrower or Borrower's Subsidiary, as the case may be, cannot obtain any
required First Lienholder consent and/or Lessor consent within ninety (90) days
following the date on which Lender designates the one or more Alternate
Properties with respect to which a Mortgage is to be pursued, then no Mortgage
shall be placed on such Alternate Properties, and Borrower shall notify Lender
accordingly. Lender may then designate one or more remaining Alternate
Properties with respect to which Borrower or Borrower's Subsidiary, as the case
may be, shall exert reasonable commercial efforts to obtain a Mortgage, and the
same procedures and requirements as set forth above shall apply. In the

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event Borrower is unable to obtain a Mortgage on the designated Alternate
Properties, Borrower will use commercially reasonable efforts to provide such
alternate collateral with reasonably comparable value that is acceptable to
Lender in its sole discretion.

     2.7.5 FURTHER ASSURANCES. In the event that a Mortgage is placed on a
Mortgaged Property or an Alternate Property, Borrower or Borrower's Subsidiary,
as the case may be, shall execute any and all additional instruments, documents,
certificates, financing statements or other agreements as Lender shall
reasonably request and that shall be necessary or appropriate to evidence,
perfect or maintain the lien and/or security interest of Lender with respect to
such Mortgaged Property or Alternate Property.

     SECTION 2.8 CONSTRUCTION NEW PARK OR PARKS.

     2.8.1 CONSTRUCTION FINANCING. Borrower or one of Borrower's Subsidiaries
intends to acquire vacant land (the "DEVELOPMENT TRACT") for the construction of
a new Park, and that at or about the time that such Development Tract is
acquired, Borrower or its Subsidiary will seek to obtain a loan to be used in
connection with the development and construction or such Park (the "CONSTRUCTION
FINANCING"), which Construction Financing will be secured by a first lien on
the land on which the Park will be developed and built. Lender shall have the
right to approve the terms and conditions of such Construction Financing. If the
secured lender or lenders providing the Construction Financing will permit its
security for such Construction Financing (including the Development Tract) to
be encumbered by a lien that is inferior to the lien securing the Construction
Financing, then Borrower shall execute and record, or cause to be executed and
recorded, the documents that are necessary to grant such lien to Lender,
including but not limited to an inter-creditor agreement; provided, however,
that Borrower shall have no liability to Lender if the lender or lenders
providing the Construction Financing will not permit any lien on the security
for such Construction Financing other than the lien securing the Construction
Financing. Notwithstanding the foregoing, in the event Borrower acquires the
Development Tract prior to closing on its Construction Financing, Borrower will
grant Lender a first lien on the Development Tract and in connection with
Lender's approval of such Construction Financing. Lender will agree to
subordinate its lien on the Development Tract to the Construction Financing in
accordance with the foregoing.

     2.8.2 PAYMENT AND PERFORMANCE BOND REQUIREMENT. In connection with any
construction contract that Borrower enters into for the development and
improvement of the Development Tract, Borrower shall require the general
contractor to provide an appropriate payment and performance bond covering such
contractors, subcontractors and materialmen and their work.

     III. CONDITIONS PRECEDENT

     SECTION 3.1 CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's willingness to
make each Advance hereunder shall be conditioned upon the fulfillment by
Borrower or waiver by Lender of the following conditions precedent no later than
the Advance Funding Date.

     3.1.1 ADVANCE REQUEST. Borrower shall have delivered to Lender a written
request for the Advance (such request, the "ADVANCE REQUEST"). The Advance
Request shall indicate the proposed amount of the Advance requested by Borrower,
the Permitted Purpose for which the Advance shall be used, and the date on which
Borrower requests Lender to make the Advance (the "ADVANCE FUNDING DATE").
Borrower shall deliver the Advance Request to Lender

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no later than ten (10) Business Days prior to the Advance Funding Date to which
such Advance Request relates. Borrower may make one or more Advance Requests
under this Agreement provided, however, that (a) an Advance Request shall be
not be made more often than once during any calendar month, (b) the minimum
amount of any Advance Request shall be $500,000, (c) the amount of any Advance
Request in excess of $500,000 shall be in multiples of $100,000, and (d) in no
event shall the amount of any one Advance Request or the aggregate total of all
Advance Requests submitted by Borrower to Lender ever exceed the Maximum Loan
Amount.

     3.1.2 COMMITMENT FEE. On the Effective Date, Borrower shall pay to Lender
in cash a fee (the "COMMITMENT FEE") in the amount of $175,000.

     3.1.3 REPRESENTATIONS AND WARRANTIES: COMPLIANCE WITH CONDITIONS. The
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date and the respective effective dates of each Advance
Request and Advance with the same effect as if made on and as of such date, and
no Default or Event of Default shall have occurred and be continuing; and
Borrower shall be in compliance in all material respects with all terms and
conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed and no Material Adverse Change shall have
occurred.

     3.1.4 AGREEMENT AND NOTE. Lender shall have received an original of this
Agreement and the Note relating thereto, in each case duly executed and
delivered on behalf of Borrower.

     3.1.5 FINANCIAL STATEMENTS. Lender shall have received a certified copy of
the Borrower's financial statements for such periods as Lender may reasonably
request.

     3.1.6 CERTIFICATES AND LEGAL MATTERS. Lender shall have received such
certificates and documentation relating to the Advance (including, without
limitation, all corporate and other proceedings) as Lender shall reasonably
require. The certificates, agreements and other documents referred to in this
Section 3.1 shall be delivered to Lender in form and substance reasonably
satisfactory to Lender, and all legal matters in connection with the Advance
shall be reasonably satisfactory in form and substance to Lender.

     3.1.7 EXPENSES. Borrower shall have paid all reasonable out-of-pocket
expenses of the transactions to be consummated on the date of the Advance,
including, without limitation, all reasonable attorneys' fees, appraisal fees,
accounting fees, consultant fees, and other expenses of Lender.

     3.1.8 AMENDMENTS TO LOAN DOCUMENTS. Borrower shall execute such amendments
to the Loan Documents as may be reasonably requested by Lender and as may be
required as a result of Lender's making an Advance, and such amendments shall
be in form and substance satisfactory to Lender.

     3.1.9 NO INJUNCTION. On the Advance Funding Date, no law or regulation
shall have been adopted, no order, judgment or decree of any Governmental
Authority shall have been issued and no litigation shall be pending or
threatened which, in the good faith judgment of Lender, would result in a
Material Adverse Change or would enjoin, prohibit or restrain the making or
repayment of the Advance or the Loan, or the consummation of the transactions
contemplated by this Agreement or the other Loan Documents.

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          3.1.10 RECORDATION OF MORTGAGES. Borrower shall have obtained the
Mortgages on the Mortgaged Properties and/or the Alternate Properties in
accordance with the requirements of Section 2.7, and such Mortgages shall have
been duly recorded or a lien on the alternate collateral as described in Section
2.7.4 shall have been duly filed or recorded.

          3.1.11 PAYMENT AND PERFORMANCE BOND. Borrower shall have obtained the
payment and performance bond required by Section 2.8.2, and such payment and
performance bond shall be in full force and effect.

          3.1.12 ACCEPTANCE OF BORROWINGS. The acceptance by Borrower of the
proceeds of an Advance shall constitute a representation and warranty by
Borrower to Lender that all of the conditions to be satisfied under this Section
3.1 in connection with the making of the Advance have been satisfied by Borrower
or waived in writing by Lender.

     IV.  REPRESENTATIONS AND WARRANTIES

          SECTION 4.1 BORROWER REPRESENTATIONS. Borrower represents and warrants
as follows as of the Closing Date:

          4.1.1 PROCEEDINGS. Borrower has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement and the
other Loan Documents. This Agreement and such other Loan Documents have been
duly executed and delivered by or on behalf of Borrower and constitute legal,
valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization and similar laws affecting rights of creditors
generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

          4.1.2 NO CONFLICTS. The execution, delivery and performance of this
Agreement and the other Loan Documents by Borrower will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of Borrower or any Subsidiary
pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement,
partnership agreement, operating agreement or other agreement or instrument to
which Borrower or any Subsidiary is a party or by which any of Borrower's or any
Subsidiary's property or assets is subject, nor will such action result in any
violation of the provisions of any statute or any order, rule or regulation of
any Governmental Authority having jurisdiction over Borrower, any Subsidiary or
any of their respective properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any Governmental
Authority required for the execution, delivery and performance by Borrower of
this Agreement or any other Loan Documents has been obtained and is in full
force and effect.

          4.1.3 FULL AND ACCURATE DISCLOSURE. No statement of fact made by
Borrower (i) in this Agreement or in any of the other Loan Documents, or (ii)
in any written materials relating to the business, operations or condition
(financial or otherwise) of Borrower or any Subsidiary that have been supplied
by or on behalf of Borrower or any Subsidiary to Lender in connection with the
Loan (other than financial projections made in good faith and based on
reasonable assumptions, in respect of which no representation is made) contains
(or, in the case of such written material, at the time supplied contained) any
untrue statement of a material

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fact or omits (or omitted, as the case may be) to sate any material fact
necessary to make the statements contained herein or therein not misleading.

     4.1.4 NO PLAN ASSETS. Borrower is not an "employee benefit plan" (as
defined in Section 3(3) of ERISA), subject to Title 1 of ERISA, and none of the
assets of Borrower constitutes or will constitute "plan assets" of one or more
such employee benefit plans within the meaning of 29 C.F.R. Section 2510.3-101.
In addition, (i) Borrower is not a "governmental plan" within the meaning of
Section 3(32) of ERISA and (ii) transactions by or with Borrower are not
subject to state statutes regulating investments of, and fiduciary obligations
with respect to, governmental plans.

     4.1.5 FINANCIAL INFORMATION. All financial data, including, without
limitation, any statements of cash flow and income and operating expense, that
have been delivered to Lender in respect of Borrower, (a) are true, complete and
correct in all material respects, (b) accurately present the financial condition
of Borrower as of the date of such reports, and (c) have been prepared in
accordance with GAAP consistently applied throughout the periods covered, except
as disclosed therein. Borrower does not have any material contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments that are known
to Borrower and that are reasonably likely to result in a Material Adverse
Change. Since the date of such financial statements, there has been no
materially adverse change in the financial condition, operations or business of
Borrower from that set forth in such financial statements.

     4.1.6 ENFORCEABILITY. The Loan Documents are not subject to any right of
rescission, set-off, counterclaim or defense by Borrower, including the defense
of usury, nor would the operation of any of the terms of the Loan Documents, or
the exercise of any right thereunder, render the Loan Documents unenforceable
except to the extent such unenforceability may be the result of bankruptcy,
insolvency, reorganization or similar laws affecting rights of creditors
generally or general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law), and Borrower has not asserted any
right of rescission, set-off, counterclaim or defense with respect thereto.

     4.1.7 DEFAULT. No Default or Event of Default shall have occurred.

     4.1.8 SURVIVAL OF REPRESENTATIONS. Borrower agrees that all of the
representations and warranties of Borrower set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents shall survive for
so long as any Obligations remain owing to Lender by Borrower under this
Agreement, the Note or any other Loan Document. All representations,
warranties, covenants and agreements made by Borrower in this Agreement or in
the other Loan Documents shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore made by Lender or on its behalf.

     SECTION 4.2 LENDER REPRESENTATIONS. Lender represents and warrants as
follows as of the Closing Date:

     4.2.1 PROCEEDINGS. Lender has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement. This
Agreement has been duly executed and delivered by or on behalf of Lender and
constitutes a legal, valid and binding obligation of Lender enforceable against
Lender in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization and similar laws affecting rights of creditors

                                       10
<PAGE>

generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

     4.2.2 NO CONFLICTS. The execution, delivery and performance of this
Agreement by Lender will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, change or encumbrance upon any of the
property or assets of Lender or any of its Affiliates pursuant to the terms of
any indenture, mortgage, deed of trust, loan agreement, partnership agreement,
operating agreement  or other agreement or instrument to which Lender or any or
its Affiliates is a party or by which any of Lender's or any of its Affiliates'
property or assets is subject, nor will such action result in any violation of
the provisions of any statute or any order, rule or regulation of any
Governmental Authority having jurisdiction over Lender, any of its Affiliates
or any of their respective properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any Governmental
Authority required for the execution, delivery and performance by Lender of
this Agreement has been obtained and is in full force and effect.

     4.2.3 SURVIVAL OF REPRESENTATIONS. Lender agrees that all of the
representations and warranties of Lender set forth in Section 4.2 and elsewhere
in this Agreement shall survive for so long as any Obligations remain owing to
Lender by Borrower under this Agreement, the Note or any other Loan Document.
All representations, warranties, covenants and agreements made by Lender in
this Agreement shall be deemed to have been relied upon by Borrower
notwithstanding any investigation heretofore or hereafter made by Borrower or
on its behalf.

     V. AFFIRMATIVE COVENANTS

     SECTION 5.1 BORROWER COVENANTS. From the date hereof and until payment and
performance in full of all Obligations of Borrower under the Loan Documents.
Borrower hereby covenants and agrees with Lender that:

     5.1.1 EXISTENCE: COMPLIANCE WITH LAW. Borrower shall (i) do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its own and each of its Subsidiaries' existence and material rights, licenses,
permits and franchises, and (ii) comply with all laws applicable to it and each
of its Subsidiaries. Borrower shall at all times maintain, preserve and protect
all franchises and trade names and preserve all the remainder of its property
used or useful in, and material to, the conduct of its business, and from time
to time make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto.

     5.1.2 LITIGATION. Borrower shall give prompt written notice to Lender of
any litigation or governmental proceedings pending or threatened against
Borrower or any Subsidiary that might result in a Material Adverse Change.

     5.1.3 NOTICE OF MATERIAL ADVERSE CHANGES AND DEFAULTS. Borrower shall
promptly advise Lender in writing of any Material Adverse Change, Default or
Event of Default of which Borrower has knowledge.

     5.1.4 COOPERATION IN LEGAL PROCEEDINGS. Borrower shall cooperate fully
with Lender with respect to any proceedings before any court, board or other
Governmental Authority which may in any way affect the rights of Lender
hereunder or any rights obtained by

                                       11

<PAGE>
Lender under any of the other Loan Documents and, in connection therewith,
permit Lender, at its election, to participate in any such proceedings.

          5.1.5  FURTHER ASSURANCES. Borrower shall, at Borrower's sole cost and
expense:

          (a)  furnish to Lender each and every document, certificate, agreement
     and instrument required to be furnished by Borrower pursuant to the terms
     of this Agreement or the other Loan Documents or reasonably requested by
     Lender in connection therewith: and

          (b)  do and execute, as appropriate, all and such further lawful and
     reasonable acts, conveyances and assurances for the better and more
     effective carrying out of the intents and purposes of this Agreement and
     the other Loan Documents as Lender shall reasonably require from time to
     time.

          5.1.6  FINANCIAL REPORTING.

          (a) Borrower shall furnish to Lender annually, within 120 days
     following the end of each Fiscal Year, Borrower's financial statements
     (consisting of a balance sheet, profit and loss statement, and statement of
     cash flow) for each such Fiscal Year, certified by the chief financial
     officer of Borrower, to have been prepared in accordance with GAAP,
     together with a certificate of such officer, addressed to Lender, stating
     that, to such officer's knowledge, no Event of Default is in existence;
     provided, however, that Borrower shall be deemed to have fully satisfied
     the foregoing requirement in all respects if Borrower provides to Lender a
     copy of any Form 10-K that Borrower files with the Securities and Exchange
     Commission (the "S.E.C.") within five (5) Business Days following the date
     on which such Form 10-K is filed with the S.E.C.

          (b) Borrower shall also deliver to Lender a copy of any Form 10-Q that
     Borrower files with the S.E.C. within five (5) Business Days following the
     date on which such Form 10-Q is filed with the S.E.C.

          (c) Borrower shall also deliver to Lender, at Lender's expense, all
     other information, including financial reports, that Lender may reasonably
     request relating to the financial condition of Borrower and its
     Subsidiaries.

          5.1.7  ESTOPPEL STATEMENTS. Within five (5) days after any request by
     Lender, Borrower shall furnish Lender with an Officer's Certificate setting
     forth (a) the amount of the original principal amount of the Note, (b) the
     unpaid principal amount of the Note, (c) the Applicable Interest Rate of
     the Note, (d) the date any installments of interest and principal were last
     paid, (e) a description of offsets or defenses to the payment of the Debt,
     if any, and (f) assurances that the Note, this Agreement and the other Loan
     Documents are valid, legal and binding obligations of Borrower and have not
     been modified or, if modified, giving the particulars of such modification.

          5.1.8  LOAN PROCEEDS. Borrower shall use the proceeds of the Loan only
     for the Permitted Purposes set forth in Section 2.3 hereof.

                                       12
<PAGE>

     5.1.9 OFFICE OF BORROWER. As long as the Debt remains outstanding, Borrower
shall maintain an office or agency (which may be the principal executive offices
of Borrower) where the Note may be presented for payment as provided in the Note
and this Agreement.

     VI. NEGATIVE COVENANTS

     SECTION 6.1 BORROWER'S NEGATIVE COVENANTS. From the date hereof until
payment and performance in full of all Obligations of Borrower under the Loan
Documents, Borrower covenants and agrees with Lender that it will not do,
directly or indirectly, any of the following without Lender's prior written
consent:

     6.1.1 DISSOLUTION. Borrower shall not dissolve, terminate or liquidate.

     6.1.2 PRINCIPAL PLACE OF BUSINESS. Borrower shall not change its principal
place of business set forth in Section 8.7 without first giving Lender thirty
(30) days' prior written notice.

     6.1.3 RELEASE OF CLAIMS. Borrower shall not cancel or otherwise forgive or
release any claim or debt owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower's business.

     6.1.4 AMENDMENTS TO ARTICLES OF INCORPORATION. Borrower shall not make any
amendment to its Articles of Incorporation that adversely impacts the ability of
Lender to enforce its rights under this Agreement, or adversely impacts Lender's
rights with respect to those certain warrants to be issued to Lender by Borrower
as described in Amendment Number Fifteen to Consolidated, Amended and Restated
Loan Agreement of even date herewith and executed by Borrower and certain of its
Subsidiaries and by Foothill Capital Corporation.

     6.1.5 DIVIDENDS. Borrower shall not declare or pay any dividends on, or
make any other distributions in respect of, any shares of capital stock of
Borrower, except that Borrower may declare and make "payment in kind" dividends
or other distributions to the holders of its preferred stock, and may otherwise
declare and make any dividends or distributions, whether in cash or otherwise,
as may be required by the terms and conditions of such preferred stock.

     VII. DEFAULTS

     SECTION 7.1 EVENT OF DEFAULT

     7.1.1 Each of the following events shall constitute an event of default
hereunder (an "EVENT OF DEFAULT") (and "DEFAULT" means the occurrence or
existence of any condition or event which with the giving of notice, or the
passage of time, or both, could become an Event of Default):

          (a) Any principal of or interest on the Debt, or any other
     Obligation, is not paid within five (5) Business Days of the date such
     principal and/or interest payment on the Debt or other Obligation is due.

          (b) Any representation or warranty made by Borrower herein or in any
     other Loan Document, or in any report, certificate, financial statement or
     other instrument, agreement or document furnished by or on behalf of
     Borrower to Lender, shall have

                                       13
<PAGE>

been false or misleading in any material respect as of the date the
representation or warranty was made; provided, however, if such false or
misleading representation or warranty was not intentional or grossly negligent
and is capable of being cured within thirty (30) days, the same shall be an
Event of Default hereunder only if the same is not cured within a reasonable
time not to exceed thirty (30) days after notice from Lender.

     (c)  Borrower shall make an assignment for the benefit of creditors.

     (d)  A receiver, liquidator or trustee shall be appointed for Borrower, or
Borrower shall be adjudicated a bankrupt or insolvent, or any petition for
bankruptcy, reorganization or arrangement pursuant to the Bankruptcy Code or any
other federal bankruptcy law, or any similar federal or state law, shall be
filed by or against, consented to or acquiesced in by Borrower, or any
proceeding for the dissolution or liquidation of Borrower shall be instituted;
provided, however, that if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Borrower, then the same shall
be an Event of Default hereunder only if the same is not discharged, stayed or
dismissed within sixty (60) days after the date of such appointment or
adjudication, the date such petition is first filed or the date such proceeding
is instituted, as the case may be.

     (e)  Borrower shall attempt to assign its rights under this Agreement or
any of the other Loan Documents or any interest herein or therein in
contravention of the Loan Documents.

     (f)  Borrower shall breach any of its covenants contained in Section 5.1
and Section 6.1 hereof.

     (g)  Borrower shall continue to be in Default under any of the other
terms, covenants or conditions of this Agreement not specified in this Section
7.1.1, for ten (10) Business Days after notice to Borrower from Lender, in the
case of any Default which can be cured by the payment of a sum of money, or for
thirty (30) days after notice to Borrower from Lender in the case of any other
Default; provided, however, that if such non-monetary Default is capable of
being cured but cannot reasonably be cured within such 30-day period and
provided further that Borrower shall have commenced to cure such Default within
such 30-day period and thereafter diligently and expeditiously proceeds to cure
the same, such 30-day period shall be extended for such time as is reasonably
necessary for Borrower in the exercise of due diligence to cure such Default,
such additional period not to exceed sixty (60) days.

     (h)  There shall be default under any of the other Loan Documents beyond
any applicable cure periods contained in such documents, or any other such
event shall occur or condition shall exist, if the effect of such event or
condition is to accelerate the maturity of any portion of the Debt or to permit
Lender to accelerate the maturity of all or any portion of the Debt.

     (i)  Any final non-appealable judgment is rendered against Borrower and/or
any Subsidiary in excess of $250,000 which is not covered or indemnified by
insurance or for which Borrower has not established a reserve, and Borrower
fails to satisfy such judgment within the earlier of (a) ten (10) days after
the date such judgment is rendered, or (b) the date the judgment creditor
commences the process to execute and recover on said judgment.

                                       14
<PAGE>

          (j)  There shall be a default under that certain Consolidated,
     Amended, and Restated Loan and Security Agreement dated as of August 22,
     1996, by and between Foothill Capital Corporation as lender and Borrower
     and certain subsidiaries of Borrower as borrowers (as amended, extended and
     modified, the "FOOTHILL LOAN AGREEMENT") beyond and applicable cure period
     contained in such Foothill Loan Agreement, which default shall have
     resulted in the indebtedness under the Foothill Loan Agreement becoming or
     being declared due and payable prior to the date on which it would
     otherwise have become due and payable, without such indebtedness having
     been discharged, or such acceleration having been rescinded or annulled,
     within a period of ten (10) Business Days after notice shall have been
     given to Borrower by Lender specifying such default and requiring Borrower
     to cause such indebtedness to be discharged or cause such acceleration to
     be rescinded or annulled.

          (k)  If within forty-five (45) days following the Effective Date there
     has not been completed a transaction or series of transactions entered into
     by or on behalf of Borrower or any of its Affiliates and resulting in the
     acquisition or repurchase of all the Series BB Preferred Stock issued by
     Borrower and owned and held by Partnership Acquisition Trust V, a Delaware
     business trust, or any of its Affiliates (including but not limited to
     Nomura Asset Capital Corporation).

          (l)  If Borrower obtains the required consent or consents with respect
     to a Mortgaged Property as set forth in Section 2.7.3 but thereafter fails
     to deliver to Lender a duly-executed Mortgage; provided, however, that
     nothing contained in this Section 7.1.1(l) shall in any manner alter the
     provisions of Section 2.7.4 that relieve Borrower of all liability to
     deliver a Mortgage to Lender in the event that Borrower cannot obtain the
     required consent or consents with respect to a Mortgaged Property.

          7.1.2 Upon the occurrence of an Event of Default (other than an Event
of Default described in subsections (c), (d) or (e) above) and at any time
thereafter, Lender may, in addition to any other rights or remedies available to
it pursuant to this Agreement and the other Loan Documents or at law or in
equity, take such action, without notice or demand, as Lender deems advisable to
protect and enforce its rights against Borrower, including, without limitation,
declaring the Debt to be immediately due and payable, and Lender may enforce or
avail itself of any or all rights or remedies provided in the Loan Documents
against Borrower, including, without limitation, all rights or remedies
available at law or in equity; and upon any Event of Default described in
subsections (c), (d) or (e) above, the Debt and all other obligations of
Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower
hereby expressly waives any such notice or demand, notwithstanding anything
contained herein or in any other Loan Document to the contrary.

          SECTION 7.2 REMEDIES. Upon the occurrence of an Event of Default, all
or any one or more of the rights, powers, privileges and other remedies
available to Lender against Borrower under this Agreement or any of the other
Loan Documents executed and delivery by, or applicable to, Borrower or at law or
in equity may be exercised by Lender at any time and from time to time, whether
or not all or any of the Debt shall be declared due and payable, and whether or
not Lender shall have commenced any proceeding or action for the enforcement of
its rights and remedies under any of the Loan Documents. Any such actions taken
by Lender shall be cumulative and concurrent and may be pursued independently,
singly, successively, together or otherwise, at such time and in such order as
Lender may determine in its sole

                                       15

<PAGE>

discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.

     SECTION 7.3 REMEDIES CUMULATIVE. The rights, powers and remedies of Lender
under this Agreement shall be cumulative and not exclusive of any other right,
power or remedy which Lender may have against Borrower pursuant to this
Agreement or the other Loan Documents, or existing at law or in equity or
otherwise. Lender's rights, powers and remedies may be pursued singly,
concurrently or otherwise, at such time and in such order as Lender
may determine in Lender's sole discretion. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may
be deemed expedient. A waiver of any one or more Defaults or Events of Default
with respect to Borrower shall not be construed to be a waiver of any
subsequent Default or Event of Default by Borrower or to impair any remedy,
right or power consequent thereon. Any and all amounts collected or retained by
Lender while an Event of Default has occurred and is continuing may be applied
by Lender to payment of the Debt in any order or priority that Lender in its
sole discretion may elect.

     VIII. MISCELLANEOUS

     SECTION 8.1 TRANSFER, DIVISION AND COMBINATION.

     8.1.1 TRANSFER. Lender may assign the Note and this Loan in whole or in
part at any time.

     8.1.2 DIVISION AND COMBINATION. The Note may be divided or combined with
other Notes upon presentation thereof at the office of Borrower, together with
a written notice specifying the names and denominations in which new Notes are
to be issued, signed by Lender. Subject to compliance with Section 8.1.1, as to
any transfer which may be involved in such division or combination, Borrower
shall execute and deliver a new Note or Notes in exchange for the Note or Notes
to be divided or combined in accordance with such notice.

     8.1.3 EXPENSES. Borrower shall prepare, issue and deliver at Lender's
expense (such expense including but not limited to any transfer taxes required
to be paid) the new Note or Notes under this Section 8.1.

     8.1.4 MAINTENANCE OF BOOKS. Borrower agrees to maintain, at its office,
books for the registration or transfer of the Notes.

     SECTION 8.2 SURVIVAL. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the
execution and delivery to Lender of the Note, and shall continue in full force
and effect so long as all or any of the Debt is outstanding and unpaid or any
other Obligations or other amounts remain owing under the Loan Documents unless
a longer period is expressly set forth herein or in the other Loan Documents.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and permitted assigns, if
any, of such party. All covenants, promises and agreements in this Agreement,
by or on behalf of Borrower, shall inure to the benefit of the legal
representatives, successors and assignees of Lender.

                                       16

<PAGE>

     SECTION 8.3 LENDER'S DISCRETION. Whenever pursuant to this Agreement,
Lender exercises any right given to it to approve or disapprove any document or
action, or any arrangement or term is to be satisfactory to Lender, the
decision of Lender to approve or disapprove such document or action or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the reasonable
discretion of Lender.

     SECTION 8.4 GOVERNING LAW.

     8.4.1 THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF DELAWARE, AND MADE BY
LENDER AND ACCEPTED BY BORROWER IN THE STATE OF DELAWARE, AND THE PROCEEDS OF
THE NOTE DELIVERED PURSUANT HERETO WERE OR ARE TO BE DISBURSED FROM THE STATE OF
DELAWARE, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW
OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS
AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE.

     8.4.2 ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF WILMINGTON, COUNTY OF
NEW CASTLE, DELAWARE, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY AGREE THAT ITS AUTHORIZED AGENT FOR PURPOSES OF THIS AGREEMENT SHALL BE
ANY OFFICER OF BORROWER LOCATED AT BORROWER'S ADDRESS SET FORTH IN SECTION 8.7
HEREOF, AND THAT SERVICE OF PROCESS UPON ANY SUCH OFFICER AND WRITTEN NOTICE OF
SUCH SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN
SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN
ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF TEXAS. BORROWER (i) SHALL
GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (ii) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN DALLAS, TEXAS (WHICH SUBSTITUTE AGENT AND
OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS),
AND (iii) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT
CEASES TO HAVE AN OFFICE IN DALLAS, TEXAS OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR.

                                       17
<PAGE>

          SECTION 8.5  MODIFICATION; WAIVER IN WRITING. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, or of the Note, or of any other Loan Document, nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in a writing signed by Lender and Borrower, and then any such waiver or
consent shall be effective only in the specific instance, and for the purpose,
for which given. Except as otherwise expressly provided herein, no notice to, or
demand on Borrower, shall entitle Borrower to any other or future notice or
demand in the same, similar or other circumstances.

          SECTION 8.6  DELAY NOT A WAIVER. Neither any failure nor any delay on
the part of Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under the Note or under any other Loan Document, or any other
instrument given as security therefor, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or privilege.
In particular, and not by way of limitation, by accepting payment after the due
date of any amount payable under this Agreement, the Note or any other Loan
Document, Lender shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Agreement, the Note
or the other Loan Documents, or to declare a default for failure to effect
prompt payment of any such other amount.

          SECTION 8.7  NOTICES. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing (including by facsimile) and shall be effective for all purposes if
hand delivered or sent by (a) certified or registered United States mail,
postage prepaid, or (b) expedited prepaid delivery service, either commercial or
United States Postal Service, with receipt of delivery, or (c) facsimile (with
acknowledged transmission), addressed as follows:

          If to Borrower:   Malibu Entertainment Worldwide, Inc.
                            717 North Harwood, Suite 1650
                            Dallas, Texas 75201
                            Attn: R. Scott Wheeler, CFO
                            Facsimile: (214) 210-8702

                            With a copy to:
                            Michael A. Krywucki, Esquire
                            Munsch Hardt Kopf & Harr, P.C.
                            1445 Ross Avenue, Suite 4000
                            Dallas, Texas 75202
                            Facsimile: (214) 855-7584

          If to Lender:     Old Hill Partners Inc.
                            22 Thorndal Circle
                            Darien, Connecticut 06820
                            Attn: Jeff Saye
                            Facsimile: (203) 656-3008

                            With a copy to:
                            Richard P. Eckman, Esquire
                            Pepper Hamilton, LLP
                            1201 Market Street, Suite 1600

                                       18

<PAGE>

                            Wilmington, Delaware 19801
                            Facsimile: (302) 656-8865

or at such other address and person as shall be designated from time to time by
any party hereto, as the case may be, in a written notice to the other party
hereto in the manner provided for in this Section 8.7. A notice shall be deemed
to have been given: in the case of hand delivery, at the time of delivery; in
the case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day; in the case of expedited prepaid delivery, upon the
first attempted delivery on a Business Day; or in the case of facsimile, upon
acknowledged transmission (if a copy thereof is also sent by another method
authorized hereunder) on a Business Day.

          SECTION 8.8  TRIAL BY JURY. BORROWER AND LENDER HEREBY AGREE NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT
TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THIS AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT, OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER
OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND BY
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EITHER PARTY IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION 8.8 IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER AND LENDER.

          SECTION 8.9  HEADINGS. The Article and/or Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

          SECTION 8.10  SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

          SECTION 8.11  PREFERENCES. Lender shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by Borrower
to any portion of the obligations of Borrower hereunder. To the extent Borrower
makes a payment or payments to Lender, which payment or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by Lender.

          SECTION 8.12  WAIVER OF NOTICE. Borrower shall not been entitled to
any notices of any nature whatsoever from Lender except with respect to matters
for which this Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Lender to Borrower and except with respect
to matters for which Borrower is not, pursuant to applicable law, permitted to
waive the giving of notice. To the fullest extent permitted by applicable law,
Borrower hereby expressly waives the right to receive any notice from Lender
with respect to

                                       19

<PAGE>

any matter for which this Agreement or the other Loan Documents do not
specifically and expressly provide for the giving of notice by Lender to
Borrower.

     SECTION 8.13 REMEDIES OF BORROWER. In the event that a claim or
adjudication is made that Lender or any agent of Lender has acted unreasonably
or unreasonably delayed acting in any case where, by law or under this Agreement
or the other Loan Documents, Lender or such agent, as the case may be, has an
obligation to act reasonably or promptly, Borrower agrees that neither Lender
nor its agents shall be liable for any monetary damages, and Borrower's sole
remedies shall be limited to commencing an action seeking injunctive relief or
declaratory judgment. The parties hereto agree that any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an action
seeking declaratory judgment.

     SECTION 8.14 EXHIBITS AND SCHEDULES INCORPORATED. Any exhibits and
schedules annexed hereto are hereby incorporated herein as a part of this
Agreement with the same effect as if set forth in the body hereof.

     SECTION 8.15 OFFSETS, COUNTERCLAIMS AND DEFENSES. Any assignee of Lender's
interest in and to this Agreement, the Note and the other Loan Documents shall
take the same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower may otherwise have against any
assignor of such documents, and no such unrelated counterclaim or defense shall
be interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon such documents and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by Borrower.

     SECTION 8.16 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY BENEFICIARIES.

     8.16.1 Borrower and Lender intend that the relationships created hereunder
and under the other Loan Documents be solely that of borrower and lender.
Nothing herein or therein is intended to create a joint venture, partnership,
tenancy-in-common or joint tenancy relationship between Borrower and Lender nor
to grant Lender any interest in any collateral other than that of secured party
or Lender.

     8.16.2 Unless otherwise expressly provided, this Agreement and the other
Loan Documents are solely for the benefit of Lender and Borrower, and nothing
contained in this Agreement or the other Loan Documents shall be deemed to
confer upon anyone other than Lender and Borrower any right to insist upon or to
enforce the performance or observance of any of the obligations contained herein
or therein. All conditions to the willingness of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender and no
other Person shall have standing to require satisfaction of such conditions
in accordance with their terms or be entitled to assume that Lender will refuse
to make the Loan in the absence of strict compliance with any or all thereof and
no other Person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender's sold discretion, Lender deems it advisable or desirable
to do so.

     SECTION 8.17 WAIVER OF COUNTERCLAIM. Borrower hereby waives the right to
assert a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or its agents.

                                       20
<PAGE>

     SECTION 8.18 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE. In the event of
any conflict between the provisions of this Agreement and any of the other Loan
Documents, the provisions of this Agreement shall control. The parties hereto
acknowledge that they were represented by competent counsel in connection with
the negotiation, drafting and execution of the Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, Subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue
of the ownership by it or by any parent, subsidiary or Affiliate of Lender of
any equity interest any of them may acquire in Borrower, and Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Lender's exercise of any such rights or
remedies. Borrower acknowledges that Lender may engage in the business of real
estate, entertainment and amusement financings and other transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.

     SECTION 8.19 BROKERS AND FINANCIAL ADVISORS. Any financial advisor, broker,
underwriter, placement agent, agent or finder (collectively, the "AGENT")
engaged by either party to this Agreement in connection with the transactions
contemplated by this Agreement shall be paid by the party engaging such Agent in
accordance with the terms and conditions of a separate agreement by and between
the Agent and the party engaging the Agent. Borrower hereby agrees to indemnify
and hold Lender harmless from and against any and all claims, liabilities, costs
and expenses of any kind in any way relating to or arising from a claim by any
Person that such Person acted as an Agent on behalf of Borrower in connection
with the transactions contemplated herein. Lender hereby agrees to indemnify and
hold Borrower harmless from and against any and all claims, liabilities, costs
and expenses of any kind in any way relating to or arising from a claim by any
Person that such Person acted as an Agent on behalf of Lender in connection with
the transactions contemplated herein. The provisions of this Section 8.19 shall
survive the expiration and termination of this Agreement and the payment of the
Debt.

     SECTION 8.20 LOSS OR MUTILATION. Upon receipt by Borrower from Lender of
evidence reasonably satisfactory to Borrower of the ownership of and the loss,
theft, destruction or mutilation of the Note and indemnity reasonably
satisfactory to Borrower, and in case of mutilation upon surrender and
cancellation thereof, Borrower will execute and deliver in lieu thereof a new
Note of like tenor to Lender; provided, in the case of mutilation, no indemnity
shall be required if the Note in identifiable form is surrendered to Borrower
for cancellation.

     SECTION 8.21 PRIOR AGREEMENTS. THE LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

                                       21
<PAGE>

     SECTION 8.22 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
document. In making proof of this Agreement, it shall not be necessary to
account for more than one counterpart executed by the party against whom
enforcement is sought.

           [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

                                       22

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.

                                   BORROWER:

                                   MALIBU ENTERTAINMENT WORLDWIDE, INC.,
                                   a Georgia corporation

                                   By: ___________________________________
                                       Name: R. Scott Wheeler
                                       Title: Chief Financial Officer

                                   LENDER:

                                   OLD HILL PARTNERS INC.,
                                   a Delaware corporation

                                   By: /s/ Mark Samuel
                                       ___________________________________
                                       Name: Mark Samuel
                                       Title: Secretary

                                       23
<PAGE>

                                   EXHIBIT A
                                       TO
                                 LOAN AGREEMENT

                            FORM OF PROMISSORY NOTE
                                   (ATTACHED)

                                       24

<PAGE>

                                PROMISSORY NOTE

$3,500,000
September 7, 2001

     This Promissory Note (this "Note") is evidence of that certain loan made by
Holder to Maker contemporaneously herewith and is executed pursuant to, and is
subject to the terms and conditions of, that certain Loan Agreement of even date
herewith between Holder (as hereinafter defined) and the undersigned Maker (as
amended, supplemented or otherwise modified from time to time, the "Loan
Agreement"). All capitalized or defined terms used herein without a definition
shall have the meanings ascribed to such terms as set forth in the Loan
Agreement.

     FOR VALUE RECEIVED, Maker promises to pay to the order of OLD HILL
PARTNERS INC. (together with any subsequent holder of this Note, "Holder"), at
its offices located at 22 Thorndal Circle, Darien, Connecticut 06820, or at
such other address or to such account as Holder may from time to time designate
in  writing, the unpaid principal sum of all advances made by Holder to Maker
from time to time in an aggregate principal amount of up to Three Million Five
Hundred Thousand and No/100 United States Dollars ($3,500,000.00), together
with interest thereon, from the date of each of such advances, on the unpaid
principal balance at the rate and as otherwise herein provided. Unless
otherwise specified by Holder in writing, all payments on this Promissory Note
(this "Note") shall be made in lawful money of the United States of America and
in immediately available funds.

     Interest shall accrue on the unpaid principal balance of this Note at the
rate of eighteen percent (18%) per annum. Accrued but unpaid interest shall be
compounded annually. Interest on the unpaid principal balance of this Note
shall be computed on the actual number of days elapsed, based on a year of 360
days.

     The unpaid principal amount of this Note and all accrued and unpaid
interest thereon shall become due and payable as follows:

     a.   On the first day of the calendar month immediately following the
          calendar month in which the Initial Advance Date occurs, Maker shall
          pay all interest accrued on this Note sine the Initial Advance Date.

     b.   Thereafter, on the first day of each succeeding calendar month (each,
          an "Interest Payment Date"), Maker shall pay all then-accrued and
          unpaid interest on this Note on such Interest Payment Date.

     c.   Maker shall repay the entire outstanding principal amount of this Note
          in full on August 21, 2003 (the "Maturity Date"), together with (a)
          all accrued and unpaid interest thereon up to (but excluding) the date
          of repayment, and (b) a fee (the "Exit Fee") in an amount equal to
          three percent (3%) of the total amount of Advances made by Holder to
          Borrower under the terms of the Loan Agreement, less the amount of any
          Prepayment Fees (as hereinafter defined) previously paid by Maker to
          Holder; provided, however, that Maker may extend the Maturity Date for
          one additional year to August 21, 2004 upon (i) delivery of written
          notice of such extension to Holder on or before June 21, 2003, and
          (ii) payment to Holder of an

                                       25
<PAGE>

          extension fee (the "Extension Fee") equal to one percent (1%) of the
          then-current outstanding principal balance of this Note as of the date
          of such Extension Notice (described in the immediately preceding
          clause (i)), which Extension Fee may be added to the principal balance
          of the Note in lieu of payment on such date upon the election of Maker
          in its sole discretion; provided, however, that (A) the sum of all
          advances previously made to Maker under this Note is less than
          $3,500,000.00, and (B) there remains sufficient unadvanced funds
          hereunder from which an advance to pay the Extension Fee may be made.

     d.   Any provision in this Note or in the Loan Agreement to the contrary
          notwithstanding, in the event that the loan made to Maker and certain
          of its Subsidiaries pursuant to and evidenced by the Foothill Loan
          Agreement (the "Foothill Loan") shall be paid in full. Maker shall, at
          the same time that the Foothill Loan is paid, repay the entire
          outstanding principal indebtedness of this Note together with (a) all
          accrued and unpaid interest thereon up to (but excluding) the date of
          repayment, and (b) a fee (the "Exit Fee") in an amount equal to three
          percent (3%) of the total amount of Advances made by to Borrower under
          the terms of the Loan Agreement, less the aggregate amount of any
          Prepayment Fees previously paid by Maker to Holder.

     The payment of this Note is secured by and in accordance with the terms
and conditions of those certain Mortgages on certain Mortgaged Properties, all
as more particularly described in the Loan Agreement.

     Maker may, at its option and with sixty (60) days' prior notice to Holder,
prepay in whole or in part the outstanding principal balance of this Note. If
Maker prepays the outstanding principal balance in part, Maker shall pay a
prepayment fee (the "Prepayment Fee" and, collectively, the "Prepayment Fees")
equal to three percent (3%) of the outstanding principal amount being repaid.
If Maker prepays the outstanding principal balance in whole, Maker shall also
pay the Exit Fee at the time of prepayment; provided, however, that there shall
be deducted from the amount of such Exit Fee the amount of all Prepayment Fees
previously paid by Maker to Holder.

     Holder shall maintain an account or accounts evidencing the indebtedness
of Maker to Holder resulting from each advance made by Holder, including the
amount of principal and interest payable and paid to Holder from time to time
hereunder. The entries made in such account or accounts shall be prima facie
evidence of the existence and the amounts of the obligations recorded therein,
provided that any failure of Holder to maintain such account or accounts or any
error therein shall not in any manner affect the obligation of Maker to repay
the advances made by Holder to Maker in accordance with the terms of this Note.

     Maker shall use the proceeds of the loan evidenced by this Note solely for
Permitted Purposes as more particularly described in the Loan Agreement.

     If Maker fails to make any payment of principal, accrued and unpaid
interest or any other amount due hereunder on or before five (5) Business Days
after the respective due dates therefor, Maker shall also pay to Holder, in
addition to the amount due, all reasonable costs and expenses incurred by
Holder in collecting or enforcing, or attempting to collect or enforce, this
Note, including without limitation court costs and reasonable attorneys' fees
and expenses

                                       26
<PAGE>

(including reasonable attorneys' fees and expenses on any appeal by either
Maker or Holder and in any bankruptcy proceeding).

     With respect to the amounts due pursuant to this Note, Maker waives demand,
presentment for payment, protest, notice of dishonor, notice of nonpayment,
notice of acceleration, notice of the intent to accelerate, protest and
demand, notice of protest, protest suit against any party, diligence in
collection of this Note, and all other requirements necessary to enforce this
Note.

     In no event shall any payment or amount deemed to constitute interest due
or payable hereunder ever exceed the maximum rate of interest permitted by
applicable law (the "Maximum Amount"), and in the event such payment is
inadvertently made by Maker or inadvertently received by Holder, then such sum
shall be credited as a payment of principal or other amounts (other than
interest) outstanding hereunder, and, if in excess of the outstanding amount of
principal or other amounts outstanding hereunder, shall be immediately returned
to Maker upon such determination. It is the express intent hereof that Maker not
pay and Holder not receive, directly or indirectly, interest in excess of the
Maximum Amount.

          Holder shall not by any act, delay, omission, or otherwise be deemed
to have modified, amended, waived, extended, discharged, or terminated any of
its rights or remedies, and no modification, amendment, waiver, extension,
discharge, or termination of any kind shall be valid unless in writing and
signed by Holder. All rights and remedies of Holder under the terms of this Note
and applicable statutes or rules of law shall be cumulative, and may be
exercised successively or concurrently. Maker agrees that there are no defenses,
equities, or setoffs with respect to the obligations set forth herein, and to
the extent any such defenses, equities, or setoffs may exist, the same are
hereby expressly released, forgiven, waived, and forever discharged. The
obligations of Maker hereunder shall be binding upon and enforceable against
Maker and its successors and assigns and shall inure to the benefit of Holder
and its successors and assignees.

          Wherever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note is prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note.

          This Note was negotiated in Delaware, and made by Maker and accepted
by Holder in the State of Delaware, which State the parties agree has a
substantial relationship to the parties and to the underlying transaction
embodied hereby, and in all respects, including without limitation matters of
construction, validity, and performance, this Note and the obligations arising
hereunder shall be governed by, and construed in accordance with, the laws of
the State of Delaware and any applicable law of the United States of America. To
the fullest extent permitted by law, Maker hereby unconditionally and
irrevocably waives any claim to assert that the laws of any other jurisdiction
govern this Note.

          MAKER, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES TRIAL
BY JURY IN ANY ACTION OR PROCEEDING, INCLUDING WITHOUT LIMITATION ANY TORT
ACTION, BROUGHT WITH RESPECT TO THIS NOTE. HOLDER MAY FILE A COPY OF THIS
WAIVER WITH ANY COURT AS WRITTEN EVIDENCE OF MAKER'S KNOWING, VOLUNTARY, AND
BARGAINED-FOR AGREEMENT TO IRREVOCABLY WAIVE ITS RIGHTS TO TRIAL BY JURY, AND
ITS AGREEMENT THAT, TO THE FULLEST

                                       27
<PAGE>

EXTENT LAWFULLY PERMISSIBLE, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN MAKER
AND HOLDER SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY.

     Maker may not assign this Note or any of its rights or obligations
hereunder, nor delegate the same, without the prior written consent of Holder
(which consent may be given or withheld in the sole discretion of Holder).
Holder may assign this Note or any of its rights or obligations hereunder in
whole or in part, and/or delegate the same, without prior consent of or notice
to Maker.

     THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE MAKER AND THE HOLDER, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

            [THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.]

                                       28

<PAGE>

     IN WITNESS WHEREOF, Maker has caused this Note to be duly executed on its
behalf as of the day and year first above written.

                                     MALIBU ENTERTAINMENT WORLDWIDE, INC.,
                                     a Georgia corporation

                                     By: __________________________________
                                         Name: R. Scott Wheeler
                                         Title: Chief Financial Officer

                                       29

<PAGE>

                                   EXHIBIT B
                                       TO
                                 LOAN AGREEMENT

                          LIST OF MORTGAGED PROPERTIES
                                   (ATTACHED)

                                       30
<PAGE>

                      DESCRIPTION OF MORTGAGED PROPERTIES

<TABLE>
<CAPTION>
                                     NAME OF PROPERTY OWNER                 NATURE OF OWNERSHIP
LOCATION OF PROPERTY                      OR LESSEE                      INTEREST (FEE OR LEASEHOLD)
--------------------                 ----------------------              -------------------------------
<S>                                  <C>                                 <C>
Dallas SpeedZone                     Malibu Grand Prix                   Leasehold
11130 Malibu Drive                   Corporation,
Dallas County                        a Delaware corporation
Dallas, Texas 75229

Mountasia of North Cobb              Malibu Entertainment                Leasehold
175 Ernest Barrett Parkway           Worldwide, Inc.,
Cobb County                          a Georgia corporation
Marietta, Georgia 30066

Gwinnett MGP                         Malibu Entertainment                Leasehold
5400 Brook Hollow Parkway            Worldwide Inc.,
Gwinnett County                      a Georgia corporation
Norcross, Georgia 30071

Redwood City MGP                     Malibu Grand Prix                   Leasehold
320 Blomquist                        Corporation,
San Mateo County                     a Delaware corporation
Redwood City, California 92078

Puente Hills SpeedZone               Malibu Centers, Inc.,               Leasehold
17871 Castleton                      a Delaware corporation
Los Angeles County
City of Industry, California 91748

San Antonio Castle MGP               Malibu Entertainment                Leasehold
3330 Cherry Ridge Drive              Worldwide, Inc.,
Bexar County                         a Delaware corporation
San Antonio, Texas 78230

Tampa MGP                            Amusement Management                Fee (but will be the subject of
14320 North Nebraska                 Florida, Inc.,                      a sale and leaseback, at
Hillsborough County                  a Florida corporation               which time the interest of
Tampa, Florida 33613                                                     Borrower shall be a
                                                                         leasehold interest)

</TABLE>

                                       31

<PAGE>

                                   EXHIBIT C
                                       TO
                                 LOAN AGREEMENT

                          LIST OF ALTERNATE PROPERTIES
                                   (ATTACHED)

                                       32
<PAGE>

                      DESCRIPTION OF ALTERNATE PROPERTIES

<TABLE>
<CAPTION>
                                   NAME OF PROPERTY OWNER OR                     NATURE OF OWNERSHIP
LOCATION OF PROPERTY                        LESSEE                           INTEREST (FEE OR LEASEHOLD)
--------------------               -------------------------                 ---------------------------
<S>                                <C>                                       <C>
Austin MGP                         Mountasia-MEI California, L.P.,           Leasehold
7417 I-35 North                    a California limited partnership
Travis County
Austin, Texas 78752

Columbus MGP                       Dallas Castle MGPC, a Texas               Leasehold
1201 Schrock Road                  corporation
Franklin County
Columbus, Ohio 43229

Houston Castle MGP                 Malibu Grand Prix Corporation,            Leasehold
1105 West Loop North               a Delaware corporation
Harris County
Houston, Texas 77055

Kennesaw SpeedZone                 Malibu Entertainment                      Fee
3005 George Busbee Pkwy.           Worldwide, Inc., a Georgia
Cobb County                        corporation
Kennesaw, Georgia 30144

Mountasia of Henderson             Malibu Entertainment                      Leasehold
2050 Olympic Avenue                Worldwide, Inc., a Georgia
Clark County                       corporation
Henderson, Nevada 89014

Mountasia of Kingwood              Malibu Entertainment                      Fee
2600 Eastex Freeway                Worldwide, Inc., a Georgia
Montgomery County                  corporation
Kingwood, Texas 77339

Mountasia of Plano                 Malibu Entertainment                      Leasehold
2400 Premier Drive                 Worldwide, Inc., a Georgia
Collin County                      corporation
Plano, Texas 75075

Mountasia of Willowbrook           Malibu Centers, Inc., a                   Leasehold
17190 Tomball Parkway              Delaware corporation
Harris County
Houston, Texas 77064

Redondo Beach Castle MGP           Redondo Beach Castle MGPC,                Leasehold
2419 Marine Avenue                 Inc., a California corporation
Los Angeles County
Redondo Beach, California
90278
</TABLE>

                                       33<PAGE>

                                                                 EXHIBIT 10.29.1

                      MALIBU ENTERTAINMENT WORLDWIDE, INC.
                           SERIES CC PREFERRED STOCK
                            SHAREHOLDERS' AGREEMENT

     THIS SERIES CC PREFERRED STOCK SHAREHOLDERS' AGREEMENT, dated as of
September 7, 2001, (this "AGREEMENT"), is entered into by and among Malibu
Entertainment Worldwide, Inc., a Georgia corporation (the "COMPANY"), MEI
Holdings, L.P., a Delaware limited partnership ("MEIH"), Old Hill Partners,
Inc., a Delaware corporation ("OLD HILL"), and such other Persons that become
parties hereto after the date of this Agreement in accordance with the terms
and provisions contained herein (collectively, "HOLDERS").

                                    RECITALS

     MEIH owns all the outstanding shares of the Series CC Preferred Stock, no
par value per share (the "SERIES CC STOCK"), of Malibu Entertainment Worldwide,
Inc., a Georgia corporation (the "COMPANY").

     Upon the terms and subject to the conditions of the Warrant (defined
below), Old Hill has the right to acquire shares of Series CC Stock.

     It is in the best interests of MEIH and Old Hill to memorialize certain
aspects of the relationship of the parties, including restrictions with respect
to transferring the Series CC Stock, all as hereinafter set forth.

     In consideration of the mutual covenants and agreements contained herein,
the parties agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

     SECTION 1.1 Definitions. As used in this Agreement, the following terms
herein shall have the following meanings:

     "ACCEPTED SHARES" is defined in Section 2.9 of this Agreement.

     "AFFILIATE" means, with respect to any person, any entity controlling,
controlled by or under common control with such designated person. For the
purposes of this definition, "control" shall have the meaning specified as of
the date of this Agreement for that word in Rule 405 promulgated by the
Commission under the Securities Act.

     "AGREEMENT" is defined in the opening paragraph of this Agreement.

     "APPROVED SALE" is defined in Section 2.3 of this Agreement.

     "CASH EQUIVALENTS" means (a) immediately marketable, liquid and direct
obligations issued or unconditionally guaranteed by the United States federal
government or issued by any agency thereof and backed by the full faith and
credit of the United States of America, (b) immediately marketable,

<PAGE>

liquid and direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof and, at the time of acquisition, having the highest
rating obtainable from either Standard & Poor's Corporation or Moody's
Investors Service, Inc., or (c) freely tradable and immediately marketable
equity or debt securities listed for or admitted to trading on the New York
Stock Exchange, the American Stock Exchange or the National Association of
Securities Dealers Automated Quotation System, which in the case of any equity
security are of an issue of equity securities having an aggregate listed market
value as of the day of determination of at least $250,000,000, or in the case
of a debt security are of an issue of debt securities having an aggregate
listed market value as of the day of determination of at least $500,000,000.

     "COMMISSION" means the Securities and Exchange Commission and any
successor commission or agency having similar powers.

     "COMMON STOCK" means the common stock, no par value per share, of the
Company.

     "COMPANY" is defined in the Recitals of this Agreement.

     "DEMAND REGISTRATION" has the meaning specified in the Registration Rights
Agreement.

     "EMPLOYEE INCENTIVE SECURITIES" means Securities issued to employees or
directors of the Company and approved by the Company's Board of Directors.

     "EXERCISE PERIOD" is defined in Section 2.9 of this Agreement.

     "HOLDERS" is defined in the opening paragraph of this Agreement.

     "INCLUDABLE SHARES" has the meaning specified in Section 2.10 of this
Agreement.

     "MAJORITY SERIES CC HOLDERS" is defined in Section 2.3 of this Agreement.

     "MEIH" is defined in the opening paragraph of this Agreement.

     "MEIH PARTY" means MEIH and each person to whom MEIH transfers shares of
Series CC Stock.

     "NOTICE OF PURCHASE" is defined in Section 2.9 of this Agreement.

     "OFFER NOTICE" is defined in Section 2.2 of this Agreement.

     "OFFERED SECURITIES" is defined in Section 2.2 of this Agreement.

     "OFFERED SHARES" is defined in Section 2.9 of this Agreement.

     "OLD HILL" is defined in the opening paragraph of this Agreement.

     "OLD HILL PARTY" means Old Hill and each Person to whom Old Hill transfers
the Warrant and/or the shares of Series CC Stock underlying the Warrant.

     "PERMITTED OLD HILL TRANSFER" shall mean a Transfer of any Series CC
Securities to (a) all of the partners of Old Hill, as an "in kind" distribution
of partnership assets, (b) a wholly-owned

                                       2

<PAGE>

subsidiary of Old Hill, (c) Footbridge Limited Trust, Footbridge Capital LLC,
FLT Opportunity Fund, Inc., FLT Opportunity Fund LLC or Footbridge Capital II
LLC or (d) any other party specifically approved in writing by MEIH.

     "PERMITTED TRANSFER" shall mean a Transfer of any Series CC Securities to
any Permitted Transferee.

     "PERMITTED TRANSFEREE" means;

          (a) in the case of any Person that is a partnership, any Person that
is a direct or indirect, current or former limited or general partner of such
Person;

          (b) in the case of any Person that is a limited liability company, any
Person that is a direct or indirect, current or former member of such Person;

          (c) in the case of any Holder, any voting trust established in
compliance with all applicable laws; or

          (d) in the case of any Holder, any Affiliate of such Holder.

     "PERSON" means an individual, partnership, corporation, business trust,
limited liability company, joint stock company, trust, unincorporated
association, joint venture, or other entity of whatever nature.

     "PIGGYBACK REGISTRATION" has the meaning specified in the Registration
Rights Agreement.

     "PRO RATA AMOUNT" means, as of any date with respect to a specified Holder,
the percentage equal to (a) the number of shares of Series CC Securities held by
such Holder as of that date, which number shall assume the exercise of the
Warrant held by any such Holder, divided by (b) the number of shares of Series
CC Securities held on that date by all members of the specified group of Holders
(e.g., MEIH Parties or all Holders), which number shall assume the exercise of
the Warrant held by any such Holder.

     "PROPORTIONATE PERCENTAGE" is defined in Section 2.9 of this Agreement.

     "PROPOSAL" is defined in  Section 2.9 of this Agreement.

     "PROPOSED PURCHASER" is defined in Section 2.4 of this Agreement.

     "PURCHASERS" is defined in Section 2.2 of this Agreement.

     "REGISTRABLE SECURITIES" has the meaning specified in the Registration
Rights Agreement.

     "REGISTRATION RIGHTS AGREEMENT" is defined in Section 2.10 of this
Agreement.

     "RESTRICTED HOLDERS" is defined in Section 2.8 of this Agreement.

     "SECURITIES" means any debt or equity securities of the Company, whether
now or hereafter authorized or issued, and any instrument convertible into, or
exercisable or exchangeable for, any such

                                       3
<PAGE>

Securities or Security.

     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "SERIES CC OFFER" is defined in Section 2.2 of this Agreement.

     "SERIES CC SECURITIES" is defined in Section 2.1 of this Agreement.

     "SERIES CC STOCK" is defined in the Recitals of this Agreement.

     "SIGNIFICANT TRANSFER" is defined in Section 2.4 of this Agreement.

     "TAG-ALONG ACCEPTANCE NOTICE" is defined in Section 2.4 of this Agreement.

     "TAG-ALONG RIGHT" is defined in Section 2.4 of this Agreement.

     "TAG-ALONG SALE NOTICE" is defined in Section 2.4 of this Agreement.

     "TAG-ALONG SELLER" is defined in Section 2.4 of this Agreement.

     "THIRD PARTY" means a Person who is a prospective purchaser of Series CC
Stock in a bona fide arm's length transaction from a Holder where such purchaser
is not a Permitted Transferee of such Holder.

     "TRANSFER" means (a) any sale, assignment, transfer, negotiation, pledge,
hypothecation, other disposition and any even or transaction in which a lien is
created or (b) any other transaction, the effect of which is to transfer
substantially all the ownership, including indirect ownership, of the
Securities.

     "TRANSFEROR" is defined in Section 2.2 of this Agreement.

     "WARRANT" means the Warrant dated as of September 7, 2001, issued by the
Company and entitling Old Hill to purchase shares of Series CC Stock.

                                       4
<PAGE>

                                   ARTICLE 2
                            RESTRICTIONS ON TRANSFER

     SECTION 2.1  General Restrictions. Except for Permitted Old Hill Transfers,
Old Hill and each subsequent Old Hill Party and, except for Permitted Transfers,
MEIH and each subsequent MEIH Party agree not to Transfer (a) any interest in
the Warrant, (b) any interest in any shares of Series CC Stock or (c) any
interest in any Security issued pursuant to Section 3.1 of this Agreement or
upon conversion of the shares of Series CC Stock (collectively, (a), (b) and (c)
shall be referred to as the "SERIES CC SECURITIES") held by such Holder except
in a Transfer made in accordance with the provisions of this Agreement. Any such
Transfer sought to be made in violation of this Agreement shall be null and
void, and neither the Company nor any transfer agent shall give any effect in
the Company's stock records to such attempted Transfer. Notwithstanding any
provision in this Agreement, there shall be no requirement for an MEIH Party to
receive the consent of an Old Hill Party prior to a Transfer of Series CC
Securities and nothing in this Agreement shall be deemed to prohibit any such
Transfer.

     SECTION 2.2  Rights of First Refusal with Respect to Series CC Stock

          (a) If an Old Hill Party (a "TRANSFEROR") wishes to Transfer any
Series CC Securities except in a Transfer pursuant to Sections 2.3 or 2.4, the
Transferor shall do so only for cash, Cash Equivalents or a combination of both,
and shall first deliver written notice (an "OFFER NOTICE") to each MEIH Party
identifying the security proposed to be Transferred (the "OFFERED SECURITIES")
and the proposed transferee, and stating the price at which, and other material
terms on which, the Transferor wishes to Transfer the Offered Securities,
including the anticipated date of the proposed Transfer, which shall be a date
not earlier than thirty (30) days after the date the Offer Notice is delivered.

          (b) Delivery of an Offer Notice to each MEIH Party shall constitute an
offer by the Transferor to Transfer all of the Offered Securities in the
aggregate, but not less than all of the Offered Securities in the aggregate (the
"SERIES CC OFFER"), to the MEIH Parties pursuant to this Section 2.2, at the
price and on the other terms described in the Offer Notice.

          (c) Upon receipt of the Offer Notice, each MEIH Party shall have the
right to purchase the portion of the Offered Securities equal to such MEIH
Party's Pro Rata Amount of such Offered Securities, exercisable by written
notice delivered to the Transferor within fifteen (15) days after receipt of
the Offer Notice. The participating MEIH Parties also may allocate the right to
purchase the Offered Securities between or among them in any proportion they
choose, as reflected in a notice to the Transferor within such fifteen (15) day
period.

          (d) If the MEIH Parties shall not have exercised their rights to
purchase all of the Offered Securities in the aggregate during the period
specified in Section 2.2(c) above, then within three (3) days after the
expiration of the period specified in Section 2.2(c) above, the Transferor shall
notify each MEIH Party who agreed to purchase its Pro Rata Amount of the Offered
Securities of the portion of Offered Securities which remain available for
purchase. Each MEIH Party shall then have the right to purchase all of the
remaining Offered Securities or, if more than one MEIH Party wishes to purchase
all of the remaining Offered Securities, their Pro Rata Amount of the remaining
Offered Securities, with only the shares of Series CC Stock (or Common Stock, if
no shares of Series CC are then outstanding)

                                       5

<PAGE>

held by the MEIH Parties who wish to purchase the remaining Offered Securities
considered in computing the Pro Rata Amount. Such right shall be exercisable by
written notice delivered to the Transferor within five (5) days after receipt of
the notice specified in this Section 2.2(d).

          (e) If any of the MEIH Parties, either individually or in the
aggregate (collectively, the "PURCHASERS"), shall have exercised their rights to
purchase all of the Offered Securities, then within thirty (30) days after the
expiration of the five (5) day period specified in Section 2.2(d) above, the
Transferor shall Transfer the Offered Securities to the Purchasers, and the
Purchasers shall acquire the Offered Securities, at the price and on the other
terms described in the Offer Notice. The consummation of the Transfer shall take
place at 10:00 a.m. local time at the offices of the Company, on the date
specified for the proposed Transfer in the Offer Notice, or at such other
location or date on which the participants in the transaction agree in writing,
at which time the Purchasers shall deliver the appropriate consideration in the
form of cash or Cash Equivalents, and the Transferor shall deliver certificates
representing the shares of Series CC Stock to be sold, free and clear of any and
all liens, claims and encumbrances whatsoever (except those imposed by this
Agreement and securities laws generally), together with such other instruments
and documents of transfer as the Purchasers shall reasonably request.

          (f) If the MEIH Parties do not, either individually or in the
aggregate, accept the Series CC Offer in its entirety, then the Transferor may
Transfer the Offered Securities (subject to the provisions of this Agreement,
securities laws generally and to any other agreements binding on the Transferor)
to the transferee named in the Offer Notice at a price and on other terms not
more favorable to the transferee than those terms set forth in the Offer Notice,
at any time within the sixty (60) day period beginning on the date that the
Transferor shall have received final notice (or by expiration of the period
specified in Section 2.2(d) above) that the MEIH Parties shall not have elected
to purchase the Offered Securities in the aggregate. The provisions of this
Section 2.2 shall again apply to any Transfer of Offered Securities not
Transferred within such period or any Transfer of Offered Securities at a lower
price or on terms that are more favorable to the transferee than those terms set
forth in the Offer Notice.

          (g) Promptly after any sale pursuant to this Section 2.2, the
Transferor shall notify each MEIH Party of the consummation thereof and shall
furnish such evidence of the completion (including date of completion) of such
sale and of the terms thereof as each MEIH Party may reasonably request.

     SECTION 2.3  Drag-Along Rights

          (a) If MEIH Parties holding at least a majority of the then
outstanding shares of the Series CC Stock ("MAJORITY SERIES CC HOLDERS") approve
in writing the sale of all or a portion of their Series CC Stock to any Person
(other than transactions with an Affiliate of any Holder) (such a transaction
being an "APPROVED SALE"), upon request of the Majority Series CC Holders each
Old Hill Party will consent to, vote for, and raise no objections against, and
waive dissenters' and appraisal rights, if any, with respect to, the Approved
Sale, and if the Approved Sale is structured as a sale of stock, each such Old
Hill Party (i) will exercise the Warrant (unless such Warrant is terminated or
exercised) and (ii) will agree to sell and shall sell along with such Majority
Series CC Holders its Pro Rata Amount of Series CC Securities in the Approved
Sale (including any shares of Common Stock, if a conversion is requested
pursuant to Section 2.5 of this Agreement). Such MEIH Parties will negotiate the
terms of any Approved Sale and shall not assume any fiduciary duty to any Old
Hill Party

                                       6

<PAGE>

in relation thereto.

     (b) The obligations of each Old Hill Party with respect to an Approved
Sale are subject to the requirements that (i) each Old Hill Party receive an
amount of consideration in respect of each share of Series CC Stock held by it
that is the same form and amount of consideration received by any other holder
in respect of each share of Series CC Stock and if any holder of Series CC
Stock is given an option as to the form and amount of consideration to be
received, each Old Hill Party holding shares of Series CC Stock will be given
the same option and (ii) each Old Hill Party receive an amount of consideration
in respect of each share of Common Stock held by it that is the same form and
amount of consideration received by any other holder in respect of each share
of Common Stock and if any holder of Common Stock is given an option as to the
form and amount of consideration to be received, each Old Hill Party holding
shares of Common Stock will be given the same option.

     (c) Each Old Hill Party shall, in connection with a sale of its shares of
Series CC Stock or Common Stock pursuant to this Section 2.3, at the request of
the Majority Series CC Holders, execute and deliver such other instruments of
conveyance and transfer and take such other actions as may reasonably be
requested in order to consummate the Approved Sale as soon as reasonably
possible.

     SECTION 2.4 Tag-Along Rights.

     (a) Each MEIH Party agrees that in connection with the consummation of any
transaction or series of related transactions involving the transfer of shares
of Series CC Stock by such MEIH Party that constitute a "Significant Transfer"
(as hereinafter defined), each Old Hill Party will be offered an equal
opportunity (the "TAG-ALONG RIGHT") to participate in such transaction or
transactions based on its Pro Rata Amount of shares of Series CC Stock held by
all Holders participating in such transaction and, subject to paragraph (b)
below, on identical terms. As used herein, "SIGNIFICANT TRANSFER" means a
Transfer by an MEIH Party to any Person or Persons (including repurchases (but
not redemptions) by the Company) of all of the shares of Series CC Stock which
are beneficially owned by such MEIH Party other than (i) a Transfer pursuant to
an Approved Sale or (ii) a Permitted Transfer.

     (b) Prior to any Significant Transfer subject to these provisions, the
selling MEIH Party (the "TAG-ALONG SELLER") shall notify each Old Hill Party in
writing of the proposed sale. Such notice (the "TAG-ALONG SALE NOTICE") shall
set forth the number of shares of Series CC Stock subject to the proposed sale,
the proposed amount of consideration and terms and conditions of payment which
are part of the proposed sale and the name, address and phone number of the
Person proposing to purchase such shares (the "PROPOSED PURCHASER"). Each Old
Hill Party may exercise the Tag-Along Right by delivery of a written notice
(the "TAG-ALONG ACCEPTANCE NOTICE") to the Tag-Along Seller within fifteen (15)
days of the date the Company mailed or caused to be mailed the Tag-Along
Sale Notice. The Tag-Along Acceptance Notice shall state that such Old Hill
Party proposes to include its Pro Rata Amount (as determined in Section 2.4(a))
of Series CC Stock in the proposed sale. If no Tag-Along Acceptance Notice is
received during the fifteen (15) day period referred to above, the Tag-Along
Seller shall have the right during the subsequent sixty (60) day period to
effect the proposed sale of shares of Series CC Stock on terms and conditions
no more favorable than those stated in the Tag-Along Sale Notice. The
provisions of this Section 2.4 shall again apply to any Significant Transfer of
Series CC Stock not

                                       7

<PAGE>

Transferred within such period or any Transfer of Series CC Stock at a higher
price or on terms that are more favorable to the Tag-Along Seller than those
terms set forth in the Tag-Along Sale Notice.

     (c)  In the event that an Old Hill Party exercises its Tag-Along Rights
pursuant to this Section 2.4, such Old Hill Party shall, at the request of the
Tag-Along Seller and without further cost and expense to the Tag-Along Seller,
execute and deliver such other instruments of conveyance and transfer and take
such other actions as may reasonably be requested in order to consummate the
proposed sale of Series CC Stock by the Tag-Along Seller and such Old Hill
Party. Each Old Hill Party agrees that if it exercises its Tag-Along Rights it
will bear its pro rata share (based upon the number of shares sold by all
Holders participating in the transaction) of the costs and expenses of any sale
of shares pursuant to this Section 2.4 to the extent such costs are incurred
for the benefit of all selling shareholders and are not otherwise paid by the
acquiring party. Costs incurred by any Holder on its own behalf will not be
considered costs of the transaction hereunder.

     SECTION 2.5 Mandatory Conversion. In the event that one or more MEIH
Parties elect to convert all or any portion of the outstanding Series CC Stock
into Common Stock pursuant to the terms of the Company's Certificate of
Incorporation, and upon receipt of five (5) days prior notice from such MEIH
Parties of such election, each of the Old Hill Parties shall, on the date set
forth in such aforementioned notice, (i) exercise the Warrant (unless already
terminated or exercised) and (ii) convert, along with such MEIH Parties
electing to convert, the same percentage of its shares of Series CC Preferred
Stock into shares of Common Stock.

     SECTION 2.6 Mandatory Voting. In the event that a majority in interest of
the MEIH Parties elects to waive their right to vote with the holders of the
Common Stock on an as-converted basis, then each Old Hill Party shall waive its
right to vote with the holders of the Common Stock on an as-converted basis.

     SECTION 2.7 Voting Power. Old Hill and each subsequent Old Hill Party
hereby represent that they have been advised that, based on current outstanding
ownership and assuming exercise of the Warrant, they will not acquire
sufficient voting power to influence any votes made by the holders of all of
the Company's capital stock on an as-converted basis or any class votes made by
holders of Series CC Stock, including, without limitation, any consents
required from the holders of Series CC Stock pursuant to Section 2.10.2 of the
Certificate of Designations for the Series CC Stock, including, without
limitation, consenting to an amendment to the Series CC Certificate of
Designations.

     SECTION 2.8 Agreement to be Bound. Prior to the termination of this
Agreement, no Series CC Securities may be Transferred to any Third Party or
Permitted Transferee (the "RESTRICTED HOLDERS") by an Old Hill Party or an MEIH
Party unless such Restricted Holder, prior to such sale, transfer or other
disposition, agrees in writing, in form and substance satisfactory to MEIH, to
be bound by the terms hereof to the same extent and in the same manner as the
transferor of such Series CC Securities, a copy of which writing shall be
maintained on file with the secretary of the Company and shall include the
address of such Restricted Holder to which notices hereunder shall be sent.
Each such supplementary agreement shall become effective upon its execution by
MEIH or Old Hill and the Restricted Holder, and it shall not require the
signatures or the consent of any other party hereto. Upon such execution such
Restricted Holder shall be bound by all the restrictions placed on Old Hill
Parties or MEIH Parties, as the case may be, hereby, shall be subject to any
additional restrictions set forth in

                                       8
<PAGE>

such supplementary agreement and shall enjoy only such rights as are
specifically set forth in such supplementary agreement.

     SECTION 2.9   Pre-Emptive Rights.

          (a) Other than issuances of Employee Incentive Securities, the Company
shall not issue or sell any additional shares of Series CC Stock or any capital
stock ranking prior or superior to, or on parity with respect to dividends or
other distributions or upon liquidations, dissolution or winding up of the
Company (including securities convertible into, or options, warrants or other
rights to purchase Series CC Stock or such other capital stock) (collectively,
the "OFFERED SHARES") without first providing each Old Hill Party the right to
subscribe for its Proportionate Percentage (as defined below) of the Offered
Shares at a price and on such other terms which are at least as favorable as the
Company shall have offered or proposes to offer and which the Company shall have
specified in a notice delivered to each Old Hill Party (the "PROPOSAL"). The
Proposal by its terms shall remain open and irrevocable for a period of thirty
(30) days from the date it is delivered by the Company to each Old Hill Party
(the "EXERCISE PERIOD").

          "PROPORTIONATE PERCENTAGE" means, for any Old Hill Party, a percentage
of Offered Shares covered by the Proposal equal to such holder's percentage
ownership of the Company's issued and outstanding shares of Series CC Stock
(assuming the exercise of the Warrant).

          (b) Notice of each Old Hill Party's intention to accept the Proposal
shall be evidenced by a writing signed by such holder and delivered to the
Company prior to the end of the Exercise Period (the "NOTICE OF PURCHASE")
setting forth such holder's Proportionate Percentage of the Offered Shares which
such holder has elected to purchase (the "ACCEPTED SHARES").

          (c) In the event that all of the Old Hill Parties elect to purchase
all of the Offered Shares offered in the Proposal, the Company shall sell to
each such holder the number of Accepted Shares set forth in such holder's Notice
of Purchase.

          (d) In the event that one or more of the Old Hill Parties do not elect
to purchase all of the Offered Shares offered in the Proposal, the Company shall
sell to each holder that has so elected to purchase the number of Accepted
Shares, if any, set forth in such holder's Notice of Purchase. Any other Old
Hill Party may purchase any remaining shares offered in the Proposal not
purchased by the other Old Hill Parties pro rata based on their respective
Proportionate Percentages, or as they may otherwise agree.

          (e) No later than thirty (30) days after the expiration of the
Exercise Period, the Company shall deliver to each Old Hill Party who has
submitted a Notice of Purchase to the Company a notice indicating the number of
Offered Shares which the Company shall sell to such holder pursuant to this
Section 2.9 and the terms and conditions of such sale, which shall be in all
respects (including, without limitation, unit price, interest rates, dividend
rates and other material terms) the same as specified in the proposal. The sale
of such Offered Shares shall take place not later than 10 days after receipt of
such notice.

                                       9
<PAGE>

          Any such sale of Offered Shares that were not selected for purchase by
the Old Hill Parties as provided above shall take place not later than ninety
(90) days after the expiration of the Exercise Period. Such sale shall be upon
terms and conditions in all respects (including, without limitation, unit price
and interest rates) which are no less favorable to the Company than those set
forth in the Proposal. Any refused Offered Shares not purchased as contemplated
by the Proposal within the 90-day period specified above shall remain subject to
this Section 2.9.

     SECTION 2.10.  Subsequent Registration by Company of Common Stock

          (a) MEIH and the Company are parties to that certain Registration
Rights Agreement, dated as of July 20, 1999 (the "REGISTRATION RIGHTS
AGREEMENT"). Whenever an MEIH Party exercises its rights to a Demand
Registration, such MEIH Party shall, within five (5) days of exercising such
rights, give written notice of such exercise to each Old Hill Party at the
address of such holder appearing on the records of the Company, and the Company
shall offer to include under such registration any Registrable Securities held
by each Old Hill Party. The Registration Rights Agreement is hereby deemed
amended pursuant to Section 11(c) of the Registration Rights Agreement to the
extent necessary to include the Registrable Securities held by Old Hill as
Registrable Securities and to entitle each Old Hill Party to all of the rights
applicable to a Purchaser (as defined in the Registration Rights Agreement) and
a holder of Registrable Securities under the Registration Rights Agreement and
each Old Hill Party agrees to be bound by all of the obligations applicable to
such parties set forth in the Registration Rights Agreement; provided, however,
each Old Hill Party shall have no right to request or participate in any Demand
Registration or Piggyback Registration except to the extent permitted by this
Section 2.10. Whenever the Company proposes to file a registration statement
under the Securities Act for which MEIH will have the right to request a
Piggyback Registration, the Company shall provide each Old Hill Party with the
notice required to be given to holders of Registrable Securities pursuant to
Section 4(a) of the Registration Rights Agreement. To the extent, and only in
the event, that any MEIH Parties have requested the inclusion of Registrable
Securities in either a Demand Registration or a Piggyback Registration, each Old
Hill Party may request the inclusion of Registrable Securities in such
registrations, no more five (5) days after receipt of the notice provided for in
this Section 2.10(a). Such request shall be sent to the Company (and the Company
shall forward a copy of such request to each MEIH Party requesting inclusion in
such registration) and shall also include the facts with respect to such
proposed disposition and any information regarding such holder required to be
set forth in such registration statement. All filing fees, costs and other
expenses incurred in connection with any such filing under this Section 2.10 and
in complying with applicable securities and Blue Sky laws shall be for
the account of the Company.

          (b) Notwithstanding anything contained in this Section 2.10 to the
contrary, if the managing underwriter of any underwritten offering determines
that the number of securities requested to be included in a registration under
Section 2.10(a) hereof would materially and adversely affect such offering, the
Company shall give written notice to each Old Hill Party of such determination
and state the number of Registrable Securities that such managing underwriter
has determined can be included in such registration (collectively, the
"INCLUDABLE SHARES"). In the event that the number of Registrable Securities
requested by the Old Hill Parties and the MEIH Parties to be included in a
registration under Section 2.10(a) is greater than the number of Registrable
Securities that such managing underwriter has determined can be included in such
registration, the number of Registrable Securities shall be

                                       10

<PAGE>

reduced so that the number of Registrable Securities for each Old Hill Party
and for each MEIH Party is equal to such holder's percentage ownership of the
Company's issued and outstanding shares of Series CC Securities (assuming the
exercise of the Warrant) multiplied by the sum of all Registrable Securities
held by Old Hill Parties and MEIH Parties that are included in such
registration. The Company will furnish each Old Hill Party with copies of such
registration statements and of the prospectus included therein in such
quantities as may be reasonably necessary for the purpose of proposed
disposition. In the case of any registration initiated under this Section 2.10,
the Company shall have the right to designate the managing underwriter in any
underwritten offering. Underwriting fees, discounts, commissions, other
compensation and expense shall be proportionately borne by the Company, the MEIH
Parties and the Old Hill Parties on the basis of shares offered and sold by the
underwriters for their respective accounts.

                                   ARTICLE 3
                                 MISCELLANEOUS

     SECTION 3.1.   Dividends in Stock. If a stock dividend is paid on any share
of Series CC Stock held by any party to this Agreement, or if any shares of
Series CC Stock held by any party to this Agreement is exchanged for stock of a
different class or series, or for voting trust certificates evidencing any
beneficial interest in such stock, or if any other event (such as a stock split,
reclassification, or similar event) shall occur so that any Holders shall
receive additional or replacement Securities (whether of the same or a different
class or series), then such Securities of the same or a difference class or
series, or such voting trust certificates, as the case may be, shall thereupon
become subject to the provisions of this Agreement upon the same terms and
conditions as the Series CC Stock originally covered by this Agreement.

     SECTION 3.2    Legends.

          (a) The Warrant and each certificate evidencing any other Series CC
Securities that are issued to any Old Hill Party shall bear a legend in
substantially the following form:

     THE SECURITIES REPRESENTED BY THIS CERTIFICATED HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER STATE OR FOREIGN
     SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, OR TRANSFERRED EXCEPT IN
     COMPLIANCE THEREWITH. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
     ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE
     SERIES CC PREFERRED STOCK SHAREHOLDERS' AGREEMENT, DATED AS OF SEPTEMBER 7,
     2001, COPIES OF WHICH WILL BE FURNISHED BY THE COMPANY UPON REQUEST.

          (b) In addition to the legend required by Section 3.2(a), each such
certificate issued to any Holder or any subsequent transferee shall be stamped
or otherwise imprinted with any legend required pursuant to applicable state
corporation and securities laws. If any stock subject to this Agreement shall
cease to be subject to the restrictions on transfer set forth above or otherwise
required herein, the Company shall, upon written request of the Holder thereof,
issue to such Holder a new certificate evidencing such Series CC Securities
without the applicable legend required by Section

                                       11
<PAGE>

3.2(a) endorsed thereon.

     (c) The Company may decline to acknowledge or register a Transfer of any
Series CC Securities bearing any legend required hereunder (or may decline to
remove a legend under Section 3.2(b)), and may instruct any transfer agent for
its Securities to decline the same, unless the Company is reasonably satisfied
that the Series CC Securities being transferred have been registered or are
exempt from registration under applicable securities laws.

     SECTION 3.3 Headings. The headings in this Agreement are for convenience
of reference only and shall not control or affect the meaning or construction
of any provisions hereof.

     SECTION 3.4 Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, singular and plural as the identity
of that Person referred to requires.

     SECTION 3.5 Remedies. The parties acknowledge that the Series CC
Securities are unique chattels and possess a special, unique and extraordinary
character which would make it difficult to assess the monetary damage which any
party hereto would sustain in the event of a breach hereof by another party
hereto and that in the event of any such breach by any Holder or the Company,
the other parties would be irreparably harmed and could not be made whole by
monetary damages. The Company and each Holder accordingly agree (a) to waive
the defense in any action for specific performance that a remedy at law would
be adequate, and (b) that an aggrieved party hereunder shall be entitled to
compel specific performance of this Agreement, in addition to any other remedy
to which they may entitled at law or in equity.

     SECTION 3.6 Entire Agreement. This Agreement and the other documents and
agreements executed by the parties hereto on this date or referred to herein
together constitute the entire agreement and understanding of the parties
hereto in respect of the subject matter referred to herein and therein, and
there are no restrictions, promises, representations, warranties, covenants, or
undertakings with respect to the subject matter hereof, other than those
expressly set forth or referred to herein or therein. Except as otherwise
expressly set forth herein, this Agreement supersedes all prior agreements and
understandings between the parties hereto with respect to the subject matter
hereof.

     SECTION 3.7 Notices. All communications in connection with this Agreement
shall be in writing and shall be deemed properly given if hand delivered or
sent by telecopier (provided that such communication is confirmed by same-day
deposit in the United States mail first class postage prepaid) or overnight
courier with adequate evidence of delivery or sent by registered or certified
mail return receipt requested and, if to MEIH, addressed to MEIH at the address
for notices set forth below:

               MEI Holdings, L.P.
               Chase Tower
               2200 Ross Avenue, Suite 4200-W
               Dallas, Texas 75201
               Attn: William T. Cavanaugh, Jr.
               Facsimile: (214) 220-4948

          with a copy to:

                                       12

<PAGE>

          Munsch Hardt Kopf & Harr, P.C.
          4000 Fountain Place
          1445 Ross Avenue
          Dallas, Texas 75202-2790
          Attention: Michael A. Krywucki, Esq.

if to Old Hill, addressed to Old Hill at the address for notices set forth
below:

          Old Hill Partners, Inc.
          28 Thorndal Circle
          2nd Floor
          Darien, CT 06820

     with a copy to:

          Pepper Hamilton LLP
          Suite 1600
          1201 Market Street
          P.O. Box 1709
          Wilmington, DE 19899-1709
          Attn: Richard P. Eckman, Esquire

and if to the Company:

          Malibu Entertainment Worldwide, Inc.
          717 N. Harwood Street
          Suite 1650
          Dallas, Texas 75201
          Attn: Scott Wheeler

or such other addresses or Persons as the recipient shall have designated to
the sender by a written notice given in accordance with this Section. Any
notice called for hereunder shall be deemed given when received.

     SECTION 3.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia, without giving
effect to any choice of law or conflict of law provision or rule.

     SECTION 3.9 Severability. The invalidity or unenforceability of any
provisions hereof in any jurisdiction shall not affect the validity, legality
or enforceability of the remainder hereof in such jurisdiction or the validity,
legality or enforceability hereof, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.

     SECTION 3.10 Termination. This Agreement shall terminate and be of no
further force or

                                       13
<PAGE>

effect upon the written agreement of all of the Holders; provided, however, in
the event that no Old Hill Party is a holder of Series CC Securities, MEIH may
terminate this Agreement at any time.

     SECTION 3.11 Successors, Assigns and Transferees. All representations,
warranties, covenants and agreements of the parties contained in this Agreement
or made in writing in connection herewith, shall, except as otherwise provided
herein, be binding upon and inure to the benefit of their respective successors
and permitted assigns (including, in the case of Old Hill, any Old Hill
Parties). In addition, and whether or not any express assignment has been made,
the provisions of this Agreement which are for the benefit of the Holders are
also for the benefit of, and enforceable by, any subsequent holders of Series
CC Securities, except any subsequent holder who acquires any such Series CC
Securities after such Series CC Securities have been sold to the public
pursuant to an effective registration statement under the Securities Act or in
a sale under Rule 144 of the Commission.

     SECTION 3.12 Assurances. The Holders, by the signing hereof, hereby agree
to execute and deliver such other documents and agreements, including but not
limited to assignments, bills of sale, stock powers, or resolutions, as may be
reasonably necessary, desirable or convenient in order to effect the purposes
hereof.

     SECTION 3.13 Amendments; Waivers. Any provision hereof may be amended,
modified or supplemented upon the consent in writing by a majority in interest
of each of the MEIH Parties and the Old Hill Parties, and upon the
effectiveness of such amendment, modification or supplement, all of the Holders
will be deemed to be bound thereby.

     SECTION 3.14 Counterparts. This Assignment may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original,
but all of which together will constitute one and the same instrument. Each
such counterpart may be transmitted via facsimile transmission or other similar
electronic means and a counterpart so transmitted shall be deemed an original
signature for all purposes and have the same force and effect as a manually
signed original.

     SECTION 3.15 Construction and Representation. The parties understand and
acknowledge that they have each been represented by (or have had the
opportunity to be represented by) counsel in connection with the preparation,
execution and delivery of this Agreement. This Agreement shall not be construed
against any part for having drafted it.

                     [THE NEXT PAGE IS THE SIGNATURE PAGE]

                                       14
<PAGE>

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

HOLDERS:

MEIH:                             MEI HOLDINGS, L.P.,
                                  a Delaware limited partnership

                                  By: MEI GenPar, L.P.
                                      its general partner,

                                  By: HH GenPar Partners,
                                      its general partner,

                                  By: Hampstead, Associates, Inc.,
                                      a managing general partner,

                                  By: _____________________________________

                                  Name: ___________________________________

                                  Title: __________________________________

Old Hill:                         OLD HILL PARTNERS, INC.,
                                  a Delaware corporation

                                  By: ______________________________________
                                      Name: Mark Samuel
                                      Title: Secretary

Company:                          MALIBU ENTERTAINMENT WORLDWIDE, INC.,
                                  a Georgia corporation

                                  By: _____________________________________

                                  Name: ___________________________________

                                  Title: __________________________________

                    [Shareholders' Agreement Signature Page]

<PAGE>

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

HOLDERS:

MEIH:                             MEI HOLDINGS, L.P.,
                                  a Delaware limited partnership

                                  By: MEI GenPar, L.P.
                                      its general partner,

                                  By: HH GenPar Partners,
                                      its general partner,

                                  By: Hampstead Associates, Inc.,
                                      a managing general partner,

                                  By: _____________________________________

                                  Name: ___________________________________

                                  Title: __________________________________

Old Hill:                         OLD HILL PARTNERS, INC.,
                                  a Delaware corporation

                                  By: ______________________________________
                                  Name: Mark Samuel
                                  Title: Secretary

Company:                          MALIBU ENTERTAINMENT WORLDWIDE, INC.,
                                  a Georgia corporation

                                  By: _____________________________________

                                  Name: ___________________________________

                                  Title: __________________________________

                    [Shareholders' Agreement Signature Page]

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