Document:

<PAGE>   1
                                                                  EXHIBIT 10.27

                          Foothill Capital Corporation
                    11111 Santa Monica Boulevard, Suite 1500
                         Los Angeles, California 90025

                                  July 1, 2000

To each of the Persons
identified on Schedule I attached hereto
c/o Malibu Entertainment Worldwide, Inc.
717 North Harwood, Suite 1650
Dallas, Texas 75201

                           Re:      Foothill Capital Corporation;
                                    Malibu Entertainment Worldwide, Inc.
                                    and certain of its Affiliates

Ladies and Gentlemen:

                  Reference hereby is made to that certain Consolidated,
Amended, and Restated Loan and Security Agreement, dated as of May 31, 1996 (as
amended, restated, supplemented or otherwise modified prior to the date hereof,
the "Loan Agreement"), among Malibu Entertainment Worldwide, Inc., a Georgia
corporation ("Malibu"), certain of Malibu's Affiliates identified on the
signature pages thereof (such Affiliates, together with Malibu, each a
"Borrower" and collectively, jointly and severally, the "Borrowers"), and
Foothill Capital Corporation, a California corporation ("Lender"). Capitalized
terms used herein but not otherwise defined herein shall have the meaning
ascribed thereto in the Loan Agreement.

                  The Borrowers hereby acknowledge that a material Event of
Default has occurred and is continuing as a result of their failure to deliver
to Lender no later than June 30, 2000 the required mandatory prepayments of the
Obligations required by Section 2.12 of the Loan Agreement (such failure being
referred to herein as the "Designated Event of Default"). After careful
consideration of, among other things, the Borrowers' request for the Lender's
forbearance relative to the Designated Event of Default, Lender hereby agrees
that, anything in the Loan Agreement or the other Loan Documents to the
contrary notwithstanding and subject to the terms and conditions hereof, Lender
shall forbear from exercising any of its rights, remedies, or powers (including
its right to declare all of the Obligations immediately due and payable
pursuant to Section 9.1(a) of the Loan Agreement) solely with respect to the
Designated Event of Default for a period commencing on the date hereof and
ending on July 31, 2000.

                  Effective upon the satisfaction of the terms and conditions
set forth herein, Lender hereby further agrees that, anything contained in the
definition of "Required

<PAGE>   2

Amount" set forth in the Loan Agreement to the contrary notwithstanding, the
Borrowers may sell each Non-Core Property (as defined below) for cash
consideration less than that set forth in the definition of "Required Amount"
so long as (1) no Default or Event of Default shall have occurred or be
continuing or would result therefrom, (2) the terms and conditions of any sale
of a Non-Core Property (including, without limitation, the sale price thereof)
are acceptable to Lender, (3) Lender shall have given its prior written consent
to such sale, and (4) the Borrowers shall have caused the purchaser of each
Non-Core Property to wire transfer to Lender in immediately available funds all
net cash proceeds received by the Borrowers in consideration of such sale. As
used herein, "Non-Core Property" means all of the Borrowers' real and personal
property located in either (i) Miami, Florida, (ii) Kennesaw, Georgia, (iii)
Charlotte, North Carolina, (iv) Spartanburg, North Carolina, (v) Arlington,
[Texas] [Virginia], (vi) Columbus, Ohio, (vii) Tampa, Florida, or (viii)
Redwood City, California.

                  The effectiveness of this letter agreement shall be
conditioned upon Lender's receipt of a counterpart of this letter agreement
duly executed by the Borrowers.

                  Except as, and to the extent, set forth herein: (a) Lender
hereby reserves all remedies, powers, rights, and privileges that Lender may
have under the Loan Agreement or the other Loan Documents, at law (including
under the Code), in equity, or otherwise; and (b) all terms, conditions, and
provisions of the Loan Agreement and the other Loan Documents are and shall
remain in full force and effect and nothing herein shall operate as a consent
to or a waiver, amendment, or forbearance in respect of any other or further
matter (including any Event of Default other than the Designated Event of
Default) or any other right, power, or remedy of Lender under the Loan
Agreement and the other Loan Documents. No delay on the part of Lender in the
exercise of any remedy, power, right or privilege shall impair such remedy,
power, right, or privilege or be construed to be a waiver of any default, nor
shall any partial exercise of any such remedy, power, right or privilege
preclude further exercise thereof or of any other remedy, power, right or
privilege.

                  This letter agreement is a Loan Document.

                            [signature page follows]

                                       2
<PAGE>   3

                  This letter agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this letter agreement by
signing any such counterpart. Delivery of an executed counterpart of this
letter agreement by telefacsimile shall be equally as effective as delivery of
an original executed counterpart of this letter agreement. Any party delivering
an executed counterpart of this letter agreement by telefacsimile also shall
deliver an original executed counterpart of this letter agreement but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this letter agreement.

                                               Very truly yours,

                                               Foothill Capital Corporation

                                               By:
                                                  ------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------

Agreed and Acknowledged
as of the date first above written:

Malibu Entertainment Worldwide Inc.,
a Georgia corporation, and each of its
Affiliates identified on Schedule I
attached hereto

By:
   -----------------------------------
Name:
    ----------------------------------
Title: Responsible officer for each
       of the above referenced Persons

                                       3
<PAGE>   4

                                   SCHEDULE I

Mountasia Family Entertainment Centers, Inc., a Texas corporation
Mountasia Management Company, a Georgia corporation
Malibu Grand Prix Corporation, a Delaware corporation
Tucson MGPC, Inc., an Arizona corporation
Fresno MGPC, Inc., a California corporation
North Hollywood Castle MGPC, Inc., a California corporation
Puente Hills MGPC, Inc., a California corporation
Puente Hills Showboat MGPC, Inc., a California corporation
Redondo Reach Castle MGPC, Inc., a California corporation
Redwood City Castle MGPC, Inc., a California corporation
Redwood City MGPC, Inc., a California corporation
San Diego MGPC, Inc., a California corporation
Portland MGPC, Inc., an Oregon corporation
Austin MGPC, Inc., a Texas corporation
Dallas Castle MGPC, Inc., a Texas corporation
San Antonio Castle MGPC, Inc., a Texas corporation
San Antonio MGPC, Inc., a Texas corporation
Mountasia Development Company, a Georgia corporation
Malibu Grand Prix Design & Manufacturing, Inc., a California corporation
Malibu Grand Prix Financial Services, Inc., a California corporation
Off Track Management, Inc., a California corporation
MGP Special, Inc., a California corporation
Amusement Management Florida, Inc., a Florida corporation
Malibu Grand Prix Consulting, Inc., a California corporation
Mountasia - Mei International, Inc., a Georgia corporation
Mountasia - Mei Limited Company, Inc., a California corporation
Mountasia - Mei California, Inc., a California corporation
Mountasia - Mei International, Inc., a Georgia corporation, in its capacity as
general partner of Mountasia - Mei California Limited Partnership, a California
limited partnership

                                       4<PAGE>   1
                                                                  EXHIBIT 10.28

                          Foothill Capital Corporation
                    11111 Santa Monica Boulevard, Suite 1500
                         Los Angeles, California 90025

                                 July 26, 2000

To each of the Persons
identified on Schedule I attached hereto
c/o Malibu Entertainment Worldwide, Inc.
717 North Harwood, Suite 1650
Dallas, Texas 75201

                           Re:      Foothill Capital Corporation;
                                    Malibu Entertainment Worldwide, Inc.
                                    and certain of its Affiliates

Ladies and Gentlemen:

                  Reference hereby is made to that certain Consolidated,
Amended, and Restated Loan and Security Agreement, dated as of August 22, 1996
(as amended, restated, supplemented or otherwise modified prior to the date
hereof, the "Loan Agreement"), among Malibu Entertainment Worldwide, Inc., a
Georgia corporation ("Malibu"), certain of Malibu's Affiliates identified on
the signature pages thereof (such Affiliates, together with Malibu, each a
"Borrower" and collectively, jointly and severally, the "Borrowers"), and
Foothill Capital Corporation, a California corporation ("Lender"). Capitalized
terms used herein but not otherwise defined herein shall have the meaning
ascribed thereto in the Loan Agreement.

                  The Borrowers hereby acknowledge that a material Event of
Default has occurred and is continuing as a result of their failure to deliver
to Lender no later than June 30, 2000 the required mandatory prepayments of the
Obligations required by Section 2.12 of the Loan Agreement (such failure being
referred to herein as the "Designated Event of Default"). After careful
consideration of, among other things, the Borrowers' request for the Lender's
forbearance relative to the Designated Event of Default, Lender hereby agrees
that, anything in the Loan Agreement or the other Loan Documents to the
contrary notwithstanding and subject to the terms and conditions hereof, Lender
shall forbear from exercising any of its rights, remedies, or powers (including
its right to declare all of the Obligations immediately due and payable
pursuant to Section 9.1(a) of the Loan Agreement) solely with respect to the
Designated Event of Default for a period commencing on the date hereof and
ending on August 31, 2000 (the "Forbearance Period").

                  Effective upon the satisfaction of the terms and conditions
set forth herein and solely during the continuance of the Forbearance Period,
Lender hereby further agrees that,

<PAGE>   2

anything contained in the definition of "Required Amount" set forth in the Loan
Agreement to the contrary notwithstanding, the Borrowers may consummate the
sale of a Non-Core Property (as defined below) during the Forbearance Period
for cash consideration less than that set forth in the definition of "Required
Amount" so long as (1) no Default or Event of Default shall have occurred or be
continuing or would result therefrom, (2) the terms and conditions of any sale
of a Non-Core Property (including, without limitation, the sale price thereof)
are reasonably acceptable to Lender, (3) Lender shall have given its prior
written consent to such sale (which consent shall not be unreasonably withheld
or delayed), and (4) the Borrowers shall have caused the purchaser of each
Non-Core Property to wire transfer to Lender in immediately available funds all
net cash proceeds received by the Borrowers in consideration of such sale. As
used herein, "Non-Core Property" means all of the Borrowers' real and personal
property located in either (i) Miami, Florida, (ii) Kennesaw, Georgia, (iii)
Charlotte, North Carolina, (iv) Spartanburg, North Carolina, (v) Arlington,
Texas, (vi) Columbus, Ohio, (vii) Tampa, Florida, or (viii) Redwood City,
California.

                  The effectiveness of this letter agreement shall be
conditioned upon Lender's receipt of a counterpart of this letter agreement
duly executed by the Borrowers.

                  Except as, and to the extent, set forth herein: (a) Lender
hereby reserves all remedies, powers, rights, and privileges that Lender may
have under the Loan Agreement or the other Loan Documents, at law (including
under the Code), in equity, or otherwise; and (b) all terms, conditions, and
provisions of the Loan Agreement and the other Loan Documents are and shall
remain in full force and effect and nothing herein shall operate as a consent
to or a waiver, amendment, or forbearance in respect of any other or further
matter (including any Event of Default other than the Designated Event of
Default) or any other right, power, or remedy of Lender under the Loan
Agreement and the other Loan Documents. No delay on the part of Lender in the
exercise of any remedy, power, right or privilege shall impair such remedy,
power, right, or privilege or be construed to be a waiver of any default, nor
shall any partial exercise of any such remedy, power, right or privilege
preclude further exercise thereof or of any other remedy, power, right or
privilege.

                  This letter agreement is a Loan Document.

                            [signature page follows]

                                       2
<PAGE>   3

                  This letter agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this letter agreement by
signing any such counterpart. Delivery of an executed counterpart of this
letter agreement by telefacsimile shall be equally as effective as delivery of
an original executed counterpart of this letter agreement. Any party delivering
an executed counterpart of this letter agreement by telefacsimile also shall
deliver an original executed counterpart of this letter agreement but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this letter agreement.

                                                 Very truly yours,

                                                 Foothill Capital Corporation

                                                 By:
                                                    ----------------------------
                                                 Name:
                                                      --------------------------
                                                 Title:
                                                       -------------------------

Agreed and Acknowledged
as of the date first above written:

Malibu Entertainment Worldwide Inc.,
a Georgia corporation, and each of its
Affiliates identified on Schedule I
attached hereto

By:
   -----------------------------------
Name:
     ---------------------------------
Title:   Responsible officer for each
         of the above referenced Persons

                                       3
<PAGE>   4

                                   SCHEDULE I

Mountasia Family Entertainment Centers, Inc., a Texas corporation
Mountasia Management Company, a Georgia corporation
Malibu Grand Prix Corporation, a Delaware corporation
Tucson MGPC, Inc., an Arizona corporation
Fresno MGPC, Inc., a California corporation
North Hollywood Castle MGPC, Inc., a California corporation
Puente Hills MGPC, Inc., a California corporation
Puente Hills Showboat MGPC, Inc., a California corporation
Redondo Reach Castle MGPC, Inc., a California corporation
Redwood City Castle MGPC, Inc., a California corporation
Redwood City MGPC, Inc., a California corporation
San Diego MGPC, Inc., a California corporation
Portland MGPC, Inc., an Oregon corporation
Austin MGPC, Inc., a Texas corporation
Dallas Castle MGPC, Inc., a Texas corporation
San Antonio Castle MGPC, Inc., a Texas corporation
San Antonio MGPC, Inc., a Texas corporation
Mountasia Development Company, a Georgia corporation
Malibu Grand Prix Design & Manufacturing, Inc., a California corporation
Malibu Grand Prix Financial Services, Inc., a California corporation
Off Track Management, Inc., a California corporation
MGP Special, Inc., a California corporation
Amusement Management Florida, Inc., a Florida corporation
Malibu Grand Prix Consulting, Inc., a California corporation
Mountasia - Mei International, Inc., a Georgia corporation
Mountasia - Mei Limited Company, Inc., a California corporation
Mountasia - Mei California, Inc., a California corporation
Mountasia - Mei International, Inc., a Georgia corporation, in its capacity as
general partner of Mountasia - Mei California Limited Partnership, a California
limited partnership

                                       4

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