RENAISSANCE GOLF PRODUCTS INC, 10KSB40, 1997-04-15

RENAISSANCE GOLF PRODUCTS INC
10KSB40, 1997-04-15
SPORTING & ATHLETIC GOODS, NEC

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

----------------------

FORM 10-KSB

(MARK ONE)

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 1996

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ________ to _______

Commission File Number 1-12532

RENAISSANCE GOLF PRODUCTS, INC.
(Name of Small Business issuer in its charter)

DELAWARE 86-0664849
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

5812 MACHINE DRIVE,
HUNTINGTON BEACH, CALIFORNIA 92649
(Address of Principal Executive Office) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (714) 897-8213

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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED:
------------------- --------------------
NONE NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

COMMON STOCK -- $.001 PAR VALUE
(TITLE OF CLASS)

-------------------

Check whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No
--- ---
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-K contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-KSB. x
---

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Revenues of the registrant for the fiscal year ended December 31, 1996 were
$2,403,414.

The aggregate market value of the Common Stock held by non-affiliates of
the registrant on March 31, 1997 was approximately $3,443,780, based upon the
average of the bid and asked prices of the Common Stock, as reported by the
National Quotation Bureau Incorporated.

The number of shares of the Common Stock of the registrant outstanding as
of March 31, 1997 was 9,898,663.

Transitional Small Business Disclosure Format (check one):

Yes No x
--- ---

ii
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PART I

All statements, other than statements of historical fact, included in
this Form 10-KSB, including without limitation the statements under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business," are, or may be deemed to be, "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended (the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934 (the "Exchange Act"). Such forward-looking statements involve
assumptions, known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements of Renaissance Golf
Products, Inc. (the "Company") to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements contained in this Form 10-KSB. Such potential
risks and uncertainties include, without limitation, competitive pricing and
other pressures from other golf equipment manufacturers, economic conditions
generally and in the Company's primary markets, consumer spending patterns,
perceived quality and value of the Company's products, availability of
capital, cost of labor (foreign and domestic), cost of raw materials,
occupancy costs and other risk factors detailed herein and in other of the
Company's filings with the Securities and Exchange Commission. The
forward-looking statements are made as of the date of this Form 10-KSB and
the Company assumes no obligation to update the forward-looking statements or
to update the reasons actual results could differ from those projected in
such forward-looking statements. Therefore, readers are cautioned not to
place undue reliance on these forward-looking statements.

ITEM 1. BUSINESS

THE COMPANY

The Company designs, develops, assembles, and distributes high-quality
golf products and golf accessories in North and South America, Europe, the
Middle East, and Africa (the "Licensed Territory") utilizing the
Fila-Registered Trademark- trademark and logo under license from Fila Sport
S.p.A. of Biella, Italy ("Fila Sport"), a subsidiary of Fila Holding, S.p.A.
The Fila-Registered Trademark- brand name is recognized worldwide and is
associated with high-quality, high-performance products with a high-fashion
design concept. Fila Sport has cultivated this image for its athletic
footwear, active sportswear, and leisure and casual wear, and the Company
capitalizes on the worldwide identification with other products bearing the
Fila-Registered Trademark- trademark. The Company believes that the
technical and design specifications of its products support the high-quality,
high-performance, high-fashion concept fostered by Fila Sport.

The Company's products include golf clubs, bags, balls, gloves, headwear,
headcovers, travel covers, umbrellas, and towels. The Company offers full lines
of both men's and women's woods and irons. The Company also sells putters,
wedges, utility woods, and oversized woods. Golf club components are
manufactured by independent suppliers, primarily in the United States and the
Far East, and are assembled and distributed by the Company. Other golf products
are manufactured by suppliers and distributed by the Company. The Company's
products, distinguished by their appearance and quality of workmanship, command
premium prices but are competitive in price with other premium-quality golf
products. The Company has the exclusive right to market golf products bearing
the Fila-Registered Trademark- trademark in the Licensed Territory with the
exception of headwear and towels, which are marketed on a non-exclusive basis in
the Licensed Territory.

The Company was originally incorporated in Arizona in July 1990 and
commenced sales in January 1991. In September 1993, the Company was
reincorporated in Delaware. In November 1993, the Company completed an initial
public offering (the "Offering") of 1,400,000 shares of its Common Stock and
1,400,000 Class A Common Stock Purchase Warrants ("Class A Warrants"). See
"Description of Securities." The Company's Common Stock and Class A Warrants
were included on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") Small Cap market until November 1995 when the
Company failed to meet minimum requirements to remain on NASDAQ. Since November
1995, the Company's securities have been traded on the NASD OTC Electronic
Bulletin Board under the symbols "FGLF" and "FGLF-W," respectively.

In October 1996, the Company offered for sale in a private placement
(the "Financing") up to a maximum of 100 units at an issue price of $25,000
per unit (the "Units"), each Unit consisting of (i) a convertible
subordinated debenture due November 1, 2001 in the principal amount of
$12,500 bearing interest, payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year commencing on June 30, 1997, at the
rate of 10% per annum for the first 24 months and bearing interest thereafter
at the prime rate charged by the Company's bank plus four points (the
"Debenture"); and (ii) 62,500 shares of common stock, par value $.001 (the
"Unit Shares"), at a price of $.20 per share for a total of $12,500 for the
Unit Shares. The Debenture is convertible at any time from issuance prior to
maturity at the rate of $.50 per share and is redeemable by the Company at
any time after the closing price of the Company's common stock equals or
exceeds $1.50 per share for 20 consecutive trading days. No trading market is
expected to develop for the Debentures and the Unit Shares will not be freely
tradable unless subsequently registered with the SEC or an exemption from the
registration requirements of the Securities Act of 1933 is available.

In conjunction with the Financing, the Company appointed a new President
and the Board acted to fill two vacancies created by the resignations of
Michael B. Orr and J. Arthur Wright, and two other existing vacancies, by
electing John B. Hewlett, Kenneth W. Craig, Dennis L. Crockett, and Wade M.
Mitchell as directors to serve until the next annual meeting of the Company.

The Company's offices are located at 5812 Machine Drive, Huntington Beach,
California 92649 and its telephone number is (714) 897-8213.

BUSINESS STRATEGY

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In 1996, the Company was unable to fill orders because of a lack of
working capital. With the recent infusion of capital into the Company as a
result of the October 1996 Financing, the Company has been able to secure the
Fila License, repay debts, and reposition itself to manufacture its products
in 1997 through purchase order financing. The Company has also determined to
re-focus its business strategy and marketing efforts to place greater
emphasis on market niches which have been the most consistently productive
since the Company's inception and which are the most closely aligned with
Fila Sport's interests and marketing emphasis: high-fashion design and value.
The areas of renewed marketing emphasis and their intended order of attention
by the Company are as follows (i) golf bags and accessories generally; (ii)
ladies bags, clubs and accessories; (iii) men's clubs and accessories; and
(iv) junior's bags, clubs and accessories. Although the Company intends to
modify its marketing emphasis, it will continue with its general business
strategy of providing unique, innovative, quality products which utilize and
promote the Fila Sport image.

Management of the Company, based on its evaluation of various studies of
the golf industry, believes that golfers represent persons whose education and
mean annual income are above average, that the number of golfers and
golf-related spending is increasing, that a significant portion of the golfing
public has sufficient disposable income to be able to afford golf products such
as those sold by the Company, and that such individuals are attracted to quality
products and brands such as the products sold bearing the Fila-Registered
Trademark- trademark. Management of the Company also believes the women's golf
market is growing and that the Company, because of the high-fashion image
associated with the Fila-Registered Trademark- brand name and the design of the
Company's products, is uniquely positioned to capture a significant percentage
of the women's market.

The Company concentrates its business strategy on developing and
manufacturing innovative, technically-superior golf equipment and bags
identified as premium products by the Fila-Registered Trademark- trademark.
Some of the elements of this strategy include:

-PRODUCT INNOVATION. The Company designs and markets golf equipment
intended to appeal to both average and skilled golfers by approaching the
design function with a focus on (i) the fundamental objectives a particular
product is intended to perform; (ii) innovations that enable the equipment to
work for the golfer in better accomplishing the tasks for which the equipment
is intended; (iii) examination of successful equipment approaches from the
past and present; (iv) advances in materials and components that enhance the
product's performance; (v) consumer demand for product; and (vi) utilizing
distinct design criteria for men's and women's products.

-MANUFACTURING QUALITY. The Company believes that the best approach to
customer service is to deliver a superior product. The Company has experienced
minimal returns of its products because of its attention to the manufacture,
assembly, and shipment of its products. The Company maintains close working
relationships with its suppliers to achieve and maintain the quality of its
products by (I) carefully selecting suppliers with whom management has had
successful relationships in the past and working closely with new vendors on a
limited basis before committing to expanded relationships; (ii) involving the
suppliers in the product development process; (iii) periodically inspecting and
evaluating the manufacturing process on-site; (iv) developing specialized
techniques that help to ensure the efficient utilization of the high-quality raw
materials that are used to manufacture the Company's products; and (v)
performing extensive testing, inspection, and quality control checks during the
manufacturing and assembly process.

-UTILIZING AND PROMOTING THE FILA-Registered Trademark- IMAGE. Because
of the success of Fila Sport in developing a worldwide, premium brand
franchise in its athletic footwear, active sportswear, and leisure and casual
wear, the Company is able to have its products identified with a
high-quality, high-performance, high-fashion image. Identification with the
Fila Sport image has enabled the Company to command the premium prices that
management believes the quality of its products justifies. The Company is
working to enhance this image by advertising and promoting its products, and
sponsoring events. The Company believes that it has successfully extended
the Fila-Registered Trademark- brand name into the golf industry and that
Fila Sport and the Company continue to foster a closer working relationship
to the mutual advantage of both parties.

-PROTECTION OF PROPRIETARY RIGHTS. As the licensee of Fila Sport, the
Company aggressively seeks to protect the mutual interests of the Company and
Fila Sport in the value of the Fila-Registered Trademark- trademark. The
Company believes that its golf club designs, manufacturing processes, and trade
names represent valuable intellectual property rights. The Company will seek to
protect its proprietary interests in licenses, trademarks, trade secrets, trade
dress, patents (if any are obtained), and other intellectual property rights.

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PRODUCTS

The Company currently offers a variety of golf products including golf
clubs, bags, balls, gloves, headwear, headcovers, travel covers, umbrellas, and
towels. All golf products are distinguished by the Fila-Registered Trademark-
name and logo, unique styling, innovative design and high-quality workmanship.
The Fila-Registered Trademark- brand provides a name the industry associates
with fashion, high-quality, and active participation. The Company believes this
combination appeals to the quality conscious consumer, as well as the golf
enthusiast.

The Company has been successful in the past designing fresh and
innovative product which has created demand far exceeding the Company's
ability to deliver because of a lack of capital. With the recent capital
infusions the Company anticipates having the ability to meet demand for
product.

-GOLF BAGS. The Company believes its golf bags complement the current core
business and marketing efforts of Fila Sport and are a demand item strongly
associated with the fashion/function design concept of Fila Sport. The
Company's golf bags are technically innovative and fashion oriented. Golf bag
models feature full-length club dividers, fur lined tops, four to seven pocket
configurations, deluxe harnesses with padded slings, bottom assist handles,
hidden umbrella wells, towel clips, and matching rain hoods.

The Company will continue to design and manufacture a full line of
fashionable yet functional golf bags. The Company's bag line includes a
selection from light-weight golf bags to cart-size golf bags. The 1997 models
include the following:

LITE CARRY AND LITE STAND golf bags are offered in five color combinations
with a suggested retail price range of $115.00 to $125.00.

BIELLA SERIES golf bags for both men and ladies come in seven color
combinations. This series has historically been the Company's best
seller and is offered at a suggested retail price of $170.00.

BIELLA II SERIES 8 1/2" model features men's and ladies styles in
cordura and textured nylon fabric, solid core construction, with a
hidden valuables pouch. This bag is a modified version of the Biella
model with a hidden shoe pocket (a very popular feature of the Company's
Renaissance Series). The suggested retail price is $205.00.

RENAISSANCE SERIES bags have a very stylish design featuring a built-in
shoe pocket that keeps golf shoes separate from the clothing pocket. This
series is offered in five color combinations for men and five color
combinations for ladies with a suggested retail of $180.00.

M.D. SERIES is a men's bag in 720-D nylon fabric offering oversize pockets
to keep shoes and clothing separate. The Suggested retail price is $220.00.

-IRONS. Many of the Company's lines of golf clubs include innovations
and refinements developed by management and independent equipment designers,
from whom the Company obtains licenses. Irons, priced from $400 to $1,000 for
a set of eight clubs, include the following:

LATITUDE-Registered Trademark- IRONS. The Company developed this new iron
in 1994 using several patented design technologies including patented shank
proof hosel and forward face progression, progressive weight transfer,
patented dual skid sole design, computer designed "bull nose," extended
perimeter weighting, and frequency matched graphite shafts.

FO2 IRONS. The F02 irons are mid-size and constructed of investment cast
17-4 stainless steel. They feature a blended parallel cavity back placing
weight high in the toe and low in the heel. Additional features include:
radius sole, beveled leading edge, thin top line, "U" groove scorelines,
frequency matched 3.5 torque graphite shafts or frequency matched
Dynalite gold steel shafts, and cobalt finish. The Company believes the
design and weighting of this iron promotes easier, longer shots on long
irons and a close dispersion pattern on the short irons.

928 SERIES IRONS. The 928 men's and women's mid-size irons were introduced
in 1995 to satisfy consumer demand for a mid-priced club carrying a premium
brand name. The 928 series offers a 4-way roll sole which the Company
believes reduces the effect of "fat" shots experienced by the average
golfer and enhances shot making in uneven lies. The 928 series offers
high-toe and low-heel perimeter weighting and progressive offset.

MEDALLION SERIES (IRONS AND WOODS, 3 X 8). These irons are available in
investment cast 4-31 stainless steel, cavity back design with a medallion.
Three oversized models make up the irons and include: F-100, Lady Modello
and F-15. The woods are available in 17-4 stainless steel featuring mid-
size heads and perimeter weighting. Three mid-size wood models match the
model names for the irons as listed above.

-WOODS. Several models of woods, ranging in price from $200 to $700
for a set of three clubs, have been produced to complement the marketing of
sets of irons. The current models for 1997 include Latitude mid-size woods
(mens, ladies and seniors), 928 Series mid-size woods (mens and ladies,
right-hand only), Medallion Series mid-size woods (men's, ladies and
seniors), and F02 Series oversize woods (men's, ladies and seniors).

Other products include various utility wedges, putters, and accessories.
Accessories include travel covers, headcovers, umbrellas, golf gloves, caps,
visors, and straw golf hats. Through constant research and development and
market planning, the Company plans to continually develop new products and
enhance existing products.

MARKET SEGMENTS

-LADIES PRODUCTS. One of the Company's ongoing objectives is to
address the growing ladies market by offering distinct product lines designed
for them. The ladies lines are designed so that the graphics and coloration
of the clubs are coordinated in every respect, including the color of the
shafts, shaft designs, and paint fill on the club heads. Exclusive programs
for the ladies market include a full package of coordinated bag, headcovers,
and equipment in various color categories focusing on fashion and function.

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Market research has led the Company to believe that ladies want products that
are (i) manufactured with the same detail, playability, and consideration for
performance as men's products; (ii) value priced (ladies have more disposable
income available now than ever before and will not hesitate to pay for
quality product); and (iii) fashionable and attractive to ladies and readily
display the fact that the product was made for the lady golfer such as color
and product coordination to look good on the course.

The Company currently offers three club styles for the lady golfer.
The Modello and "928" models designed for the beginning, occasional or
recreational golfer, and the FO2 model is designed for the more advanced
golfer. Each of these models has been designed specifically for women.

The Company also offers a complete line of golf bags for the lady
golfer. Fashion and coloration are strong considerations in the design of
these bags.

-MENS PRODUCTS. The Company currently offers two styles of clubs
designed for men. The Company's, "928" is designed for the newer golfer
providing a quality product at a reasonable price. The 928 irons and metal
woods are offered in both steel and graphite shaft configurations. The F02
model is a mid-sized iron designed with the lower handicapper in mind. The
Company offers the F02 in a variety of flexes in both steel and graphite
shafts. The Company will continue to produce a series of utility clubs,
which include wedges and putters. All of the Company's products for men can
be purchased with a shaft designed for the senior golfer.

-JUNIOR PRODUCTS.
4

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The Company is introducing equipment for children and teenage golfers.
The Company intends to offer junior sets consisting of a 5-wood, 4-iron,
6-iron, 8-iron, pitching wedge and putter, designed for the five to nine year
old, and a package suited in weight and length for the ten to 13 year olds to
include a 3-wood, 3-iron, 5-iron, 7-iron, 9 iron, mid-wedge or sand wedge,
and a putter. In addition, both sets will include a bag that is smaller in
size and lighter in weight to accommodate the junior golfer. The Company's
junior sets will feature Latitude model. The Latitude model is a
game-improvement design. The Latitude offers two rails on the sole which
assists in getting the ball airborne from the less than perfect lie with a
face forward progression on the club face which removes the hosel from play.
This allows straighter hits even on the toe or the heel.

MARKETING AND DISTRIBUTION STRATEGY

Along with the renewed marketing emphasis, the Company's historical focus
on sales to green grass and golf specialty accounts is being redirected to
include the retail sporting goods market. The addition of the retail sporting
goods market as a target will allow the Company to better serve customers in the
rapidly expending youth, ladies, and public course markets. This segment of the
market already has an acute awareness of the Fila-Registered Trademark- brand.
This awareness will continue to be enhanced by the advertising and marketing
campaigns of Fila Sport. The Company will continue to produce and supply the
green grass and golf specialty accounts with a product line of superior quality,
fashion, and technology designed to maintain the image of the Fila-Registered
Trademark- brand in these prestige accounts.

-DOMESTIC MARKET. The Company targets golf shops, pro shops, various
specialty shops, and the golf departments of mass merchants for the sale of
its products. Distribution in the domestic market is coordinated through
manufacturer's representative firms and independent sales representatives who
are assigned individual territories and compensated with a commission of 2%
to 10% at the time of shipment. The existing territories cover all of the
major golf markets in the United States. The performance of these
manufacturer's representative firms and independent sales representatives is
regularly reviewed and those that do not perform at an acceptable level are
replaced. Generally, the Company appoints manufacturer representative firms
and independent sales representatives that do not carry product lines which
directly compete with the product lines offered by the Company; although,
some exceptions are made based representative and the related territory.

In addition to independent representation, telemarketing representatives
call on and work jointly with the independent representatives in expanding the
customer base and increasing volume.

Management of the Company is also involved directly in specific
accounts, either individually or in coordination with the independent
representatives if the situation so merits.

-INTERNATIONAL MARKET. Distributors are responsible for market
penetration in their respective countries. Distributors are sold company
product at U.S. wholesale prices at a specified discount. This discount is
designed to allow foreign distributors to sell product at competitive
pricing. Foreign distributors advertise, promote, and are responsible for
their own accounts receivable. The Company anticipates that certain product
lines will continue to be designed specifically

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for introduction into foreign markets. Approximately 28% in 1996, 30%
in 1995, 22% in 1994, 31% in 1993, and 48% in 1992 of the Company's sales
have been for international distribution. However because the Company no
longer is marketing in Asia and Australia, it is anticipated that the
domestic market will account for a higher percentage of the Company's sales.
Quotas are given the first year and sales levels are monitored to judge
distributor performance and to evaluate the potential of the territory.
Second year minimum sales requirements are determined by the Company after
evaluating the first year's operating results. Advertising of the Company's
products outside the United States is typically handled by distributors of
the products within their particular territory.

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DESIGN AND PRODUCT DEVELOPMENT

The Company attempts to foster the development of innovative golf club and
golf bag designs and believes that its efforts have resulted in the development
of a complete product line of high-quality golf products. The Company's
management and staff perform substantially all of the research and development
activities of the Company and conduct regular product development meetings to
discuss market openings and niches, potential benefits of equipment concepts,
production feasibility, and potential market acceptance. The Company also
utilizes consultants to assist in the development of equipment design and
obtains licenses to commercialize the designs of independent golf club
designers. The Company believes this collaborative style, which includes
members of the executive management of the Company from all phases of the
Company's operations, enhances the Company's ability to manufacture innovative,
premium products while keeping research and development costs to a minimum.
Historically, research and development costs have not been material.

When a new golf club idea is determined to merit further development, the
Company works with independent equipment designers and tool makers to create
soft shell tooling, initiate samples, and manufacture test models. New
equipment is then tested extensively to determine the trajectory, distance,
dispersion, and roll characteristics, as well as the optimum loft and lie. Upon
completion of testing, the Company proceeds to manufacture the final tooling
required for mass production of the equipment. Extensive weight checking is
performed to confirm that the tooling produces equipment within acceptable
tolerance ranges. The design and development of new equipment is accomplished
with reference to the rules and interpretations of the USGA and in coordination
with USGA staff to insure that the Company's products comply with the standards
established by the USGA for its sponsored events.

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FILA LICENSE

In November 1990, the Company entered into a license agreement (the
"Original License") with Fila Sport pursuant to which Fila Sport granted the
Company the right to design, manufacture, and market certain golf-related
products under the Fila-Registered Trademark- brand name. The initial term
of the agreement originally expired December 31, 1995, but had been extended
by Fila Sport to December 31, 2000. The agreement was terminated on June 30,
1996 as the Company was in default under the agreement. In October 1996, the
Company entered into a new license agreement with Fila Sport (the "License
Agreement") which provides that the Company has the exclusive right to
manufacture golf clubs, balls, headcovers, travel covers, gloves, bags, and
umbrellas for sale in North and South America, Europe, the Middle East, and
Africa. The Company has a non-exclusive right to market golf headwear and
towels in the Territory. The terms of the License Agreement do not limit
Fila Sport from manufacturing and marketing articles for active sport, such
as jackets, women's tops, sweaters, all styles of hats, all styles of towels,
sports bags, some of which items may compete with the Company's products.
The initial term of the License Agreement extends through December 31, 2000
with an option to renew the license for an additional five-year period. The
License Agreement also required that the Company pay to Fila Sport $675,000
in past due royalties on or before November 21, 1996. As of December 31,
1996, all past due royalties to Fila Sport were paid in full.

In consideration for the trademark license, the Company pays Fila Sport a
royalty on net sales. The royalty is 6% of annual net sales up to $7,500,000,
5.5% of annual net sales from $7,500,000 up to $15,000,000, and 5% of annual net
sales in excess of $15,000,000. Annual minimum royalties are due and payable in
installments of 25% of the annual minimum on the 15th day prior to the end of
each calendar quarter. Future minimum annual royalties are as follows: 1997,
$400,000; 1998, $500,000; 1999, $600,000; 2000, and $700,000. During the
renewal period, minimum annual royalties are as follows: 2001, $800,000; 2002,
$900,000; and 2003 through 2005, $1,000,000.

The Company is required to obtain an irrevocable letter of credit in
favor of Fila Sport each year equal to the amount of the applicable minimum
royalty. The license is terminable by Fila Sport if, among other things, the
Company fails to meet its obligations under the License Agreement, fails to
meet certain agreed upon product introduction dates in the Licensed
Territory, fails to maintain product liability insurance, or fails to
properly utilize the trademark. The Company also is required to expend in
each year for the duration of the License Agreement an amount equal to 5% of
net sales on advertising the Company's products and 3% of net sales on
promotions.

The License Agreement also requires the submission to Fila Sport of
quarterly royalty reports, sample advertising, sample products, price lists, and
an annual marketing and advertising plan. New product design plans and
prototypes must also be submitted to Fila Sport for approval prior to marketing,
and Fila Sport has the right to withhold approval of marketing approaches or
products if it determines that such new product or promotion would reflect
adversely on Fila Sport or impair the quality or image of the Fila-Registered
Trademark- trademark.

The License Agreement may be terminated by Fila Sport in whole, or in
part, upon the occurrence of certain events, including the following: failure
to perform or any material breach of the obligations under the agreement
where there is no remedy within 30 days of the receipt of written notice of
intent to terminate the License Agreement; failure to make timely royalty
payments, use best efforts to meet established product introduction dates,
maintain required levels of product liability insurance, or meet established
guidelines for quality control; failure to meet advertising, promotional,
and/or sales targets within a country included in the Territory; and sale or
disposal of substantially all of the Company's business or assets to a third
party, transfer of control of the company to a third party, or the cessation
of the Company's relationship with Miles T. Doody.

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Further, Fila Sport may terminate the License Agreement if the Company's
financial condition becomes unstable, as evidenced by, among other matters,
insolvency or the Company's inability to pay its debts as they become due.

There can be no assurance that the Company will be able to obtain a
sufficient level of sales to meet the licensing fee requirements or to achieve
profit margins necessary to enable the Company to operate profitably. The loss
of the license would have a material adverse effect on the Company's operations.

JAPANESE SUBLICENSE

Prior to granting the license to the Company to use the Fila-Registered
Trademark- trademark, Fila Sport granted an exclusive license covering Japan
to Kanebo, Ltd. ("Kanebo") to use the trademark in connection with the
manufacture and sale of certain items including golf bags, headcovers, and
gloves, but not including golf clubs or balls. Consequently, the Original
License granted by Fila Sport to the Company limited the use of the trademark
in Japan to golf clubs and golf balls. The Company subsequently entered into
a sublicensing agreement with Kanebo giving the Company a non-exclusive right
to sell golf bags, headcovers, and gloves in Japan. The sublicensing
agreement was terminated as of June 30, 1996 upon the termination of the
Company's Original License agreement with Fila Sport. As of December 31,
1996, the Company had accrued royalties due to Kanebo in the amount of
$118,355. The Company is currently negotiating an informal resolution of the
payment balance and timing of payments related thereto.

LICENSE AGREEMENT FOR LATITUDE IRONS

The Company had a licensing agreement with a third party for the sale of
Latitude golf club heads whereby the Company was obligated to pay a $2.00
royalty for each club head sold. The term of the agreement was an initial
period of three years ending on October 31, 1996, which was extendible at the
option of the Company in one year increments. The Company did not exercise its
option to renew the agreement. Total accrued royalties related to such
agreement amounted to $18,241 at December 31, 1996. The Company is currently
negotiating an informal resolution of the payment balance, timing of payments,
and the form of a continuing agreement.

PGA OF EUROPE LICENSE

In June 1993, the Company entered into a license agreement with the PGA of
Europe pursuant to which the Company was granted the exclusive, world-wide right
to use the PGA of Europe trademark and logo on all printed material and
equipment related to golf clubs, putters, golf bags, and certain other related
golf accessories. The PGA of Europe license was granted for an initial period
expiring March 31, 1996, subject to a three-year extension at the Company's
option, at which time the royalty amount would be renegotiated. In
consideration for the license grant, the Company agreed to pay a royalty to the
PGA of Europe equal to 5% of the net sales price of products bearing the PGA of
Europe trademark sold by the Company, with a minimum annual royalty of L30,000
(approximately $51,000 at current exchange rates). The PGA of Europe license
expired on March 31, 1996 and the Company has no intentions of renewing this
agreement. Total accrued royalties related to such agreement amounted to
$47,550 as of December 31, 1996. The Company is currently negotiating an
informal resolution of the payment balance and timing of payments related
thereto.

9
<PAGE>

TRADEMARKS AND OTHER INTELLECTUAL PROPERTY RIGHTS

Although the Company has not filed for any patents, it will seek to protect
its intellectual property, such as product designs, manufacturing processes, new
product research, concepts, and trademarks. These rights may be protected, in
some cases, through the acquisition of licenses for utility and design patents,
trademark registrations, the maintenance of trade secrets, the development of
trade dress, and, when necessary and appropriate, litigation against those who
are, in the Company's opinion, unfairly competing. The Company has instituted
stringent procedures to maintain the secrecy of its confidential business
information, which it believes give the Company competitive advantages. These
procedures include "need to know" criteria for dissemination of information and
written confidentiality agreements from visitors and employees. Suppliers, when
engaged in joint research projects, are required to enter into additional
confidentiality and non-circumvention agreements.

The Company utilizes the Fila-Registered Trademark- trademark pursuant to a
license from Fila Sport. See " - Fila License." The United States Patent and
Trademark Office (the "PTO") has registered the various Fila-Registered
Trademark- trademarks to Fila Sport. The Company has obtained trademarks for
Powerspoon-Registered Trademark-, Taggart-Registered Trademark-,
Latitude-Registered Trademark-, Integrator-Registered Trademark-,
Thunderhawk-Registered Trademark-, Scalpel-Registered Trademark-,
Nessie-Registered Trademark-, Stiletto-TM-, Knife-TM-, and 928-Registered
Trademark-, and will apply to the PTO for trademark protection for other marks
it anticipates using in connection with its products.

SEASONALITY

Golf is generally regarded as a warm-weather sport and sales of golf
equipment by the Company have historically been strongest during the second
calendar quarter. Although the Company's business has generally followed this
trend, the Company anticipates that the timing of the introduction of new
products may mitigate the adverse impact of sales seasonality. No assurances
can be given, however, that the Company will be able to successfully introduce
new products to offset the impact of sales seasonality.

COMPETITION

The golf products business is intensely competitive and the Company
competes with numerous companies providing similar products. The Company
believes that there are over 50 companies manufacturing and marketing golf
equipment which have annual golf equipment sales in excess of $1,000,000. The
Company also believes that the 10 largest golf equipment manufacturers account
for a substantial majority of wholesale golf equipment sales. Most of the
Company's competitors have substantially greater capital resources, depth of
management, and brand name identification in the golf business than the Company.
In addition, there are several golf equipment manufacturers not currently
producing premium quality products which could affect sales if they did so.

A company's ability to compete is in part dependent upon its ability to
satisfy various subjective requirements of golfers, including the look and
"feel" of the equipment and its level of acceptance among professional and other
golfers. Equipment designs and concepts developed by one manufacturer which
gain popularity have been widely imitated by other manufacturers. The
subjective preferences of consumers may also be subject to rapid and
unanticipated changes. There can be no assurances as to the Company's ability
to achieve or maintain market acceptance sufficient to enable the Company to
operate profitably. A decline in the size of the golf equipment market, whether
from a decrease in the popularity of particular equipment or otherwise, could
have a material adverse effect on the Company's business.

MANUFACTURE AND ASSEMBLY

10
<PAGE>

The components of the Company's golf clubs, primarily club heads, shafts,
and grips, are manufactured by suppliers in the United States and the Far East.
Suppliers are carefully selected and continuously evaluated by the Company on
the basis of the quality of raw materials utilized, quality of the workmanship,
and attention to quality control. The Company works closely with its suppliers
in the development of golf clubs and tooling to maintain the high standards of
quality consistent with management's commitment for the Company's product line
and with the image associated with the Fila-Registered Trademark- trademark.
Although the Company's operating history is short, management of the Company has
had long-term relationships with its independent vendors. The Company believes
that its relationships with suppliers are excellent; however, there are numerous
suppliers of high-quality components and management believes that the loss of a
supplier may result in production delays, but would not have a material adverse
impact on the Company's long-term business.

The Company assembles its golf clubs at its facility in Huntington Beach,
California. During the assembly process, the equipment is spot checked and
tested extensively to assure a quality product. Completed inventory is also
stored at the Company's facility prior to shipment. Bags, gloves, and other
golf accessories sold by the Company are manufactured by independent vendors,
primarily in the Far East. Products are either shipped to the Company's
facilities or drop shipped directly to distributors, in the case of
international sales. The Company anticipates that some of its club lines will
continue to be manufactured and assembled in the Far East in an effort to reduce
certain expenses while maintaining a high-quality product.

WARRANTY

The Company currently supports all of its golf clubs with a five year
warranty to the original consumer against any defects in workmanship or
material, provided that the product has not been subject to abuse or alteration.
Golf bags are covered by a limited warranty covering manufacturing defects only.
The Company has experienced minimal problems with respect to its products and
the warranty granted.

EMPLOYEES

As of March 31, 1997, the Company employed 15 employees, including six
salaried employees on a full-time basis who are considered executive personnel,
six salaried full-time employees in administrative, supervisory, and clerical
positions, one part-time employee, and two production workers who are paid on an
hourly basis. None of the Company's employees are covered by a collective
bargaining agreement, the Company has never experienced a work stoppage, and the
Company considers its labor relations to be excellent.

ITEM 2. DESCRIPTION OF PROPERTY

The Company currently occupies approximately 12,000 square feet of office,
manufacturing, and warehouse space located at 5812 Machine Drive, Huntington
Beach, California 92649. The lease provides for rent of $76,260 per year and
expired November 14, 1995. The lessor and the Company have agreed to an
extension of the lease, at the same base rent, on a month-to-month basis with a
90 day notice of termination. The Company leased an additional 6,250 square
feet of space at 5781 Machine Drive, Huntington Beach, California, for $36,000
per year and which lease expired in January 1996.

ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings, and the Company is not
aware of any threatened legal proceedings to which the Company may be a party.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote by security holders in 1996. At its
1997 annual stockholders meeting the Company's Board of Directors anticipates
recommending a 4:1 reverse stock split for approval by the stockholders
whereby each four shares of common stock would be combined into one share. If
approved, all of the shares of common stock would be subject to the reverse
stock split, including the Unit Shares issued through the 1996 Financing. If
all of the Financing Unit Shares offered

<PAGE>

are issued, as a consequence of the reverse stock split, the 6,250,000 Unit
Shares would be combined into 1,562,500 shares and the 5,461,163 shares
outstanding as of October 31, 1996 would be combined into 1,365,291 shares.
Because the shares issuable upon conversion of the Debentures offered in the
Financing and issuable upon exercise of the 1996 stock options are not
subject to adjustment in the event of a reverse stock split, the percentage
of the outstanding shares represented by the Unit Shares, assuming total
conversion of the Debentures and exercise of the 1996 stock options, would
represent 15.7% of the outstanding shares upon such conversion and exercise
while the percentage represented by the shares issuable upon conversion of
the Debentures would be 25.2%, and the shares issuable upon exercise of the
1996 stock options would be 45.3% while present stockholders would be 13.8%.
The Company cannot predict whether the stockholders will vote to approve the
proposal for the reverse stock split or predict the impact of the reverse
stock split on the price of the shares in the market.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

From November 12, 1993 to November 2, 1995, the Company's Common Stock was
quoted on the NASDAQ Small Cap Market under the symbol "FGLF." Effective
November 3, 1995, the Company's securities were delisted from the NASDAQ Small
Cap Market based on a failure to comply with a minimum bid price of $1.00, and
failure to maintain capital and surplus of $2,000,000. The Company's request
for the grant of an exception to the minimum bid price requirement was denied by
the NASD Listing Qualifications Committee. The Company's securities are
currently traded on the OTC Bulletin Board market.

The following table sets forth, for the period from November 17, 1993
through December 31, 1996, the high and low bid and asked quotations for the
Common Stock during the two most recent fiscal years as reported by the National
Quotation Bureau Incorporated from November 4, 1995 to December 31, 1996 and the
NASDAQ Small Cap Market prior to November 4, 1995. The prices represent
quotations between dealers, without adjustment for retail mark up, mark down or
commission, and do not necessarily represent actual transactions.

BID ASKED*
------------------ --------------------
HIGH LOW HIGH LOW
---- --- ---- ---
1996
----
<S> <C> <C> <C> <C>
1st Quarter 1/4 3/16
2nd Quarter 7/32 1/8
3rd Quarter 9/16 1/8
4th Quarter 3/8 7/32

1995
----

1st Quarter 1 7/16 7/8 1 1/2 1
2nd Quarter 1 1/4 7/16 1 5/16 11/16

3rd Quarter 3/4 1/2 7/8 5/8
4th Quarter 1/2 1/4 5/8 9/32

</TABLE>

* not provided by National Quotation Bureau Incorporated for 1996.

The Company has not paid any cash dividends on its Common Stock since its
incorporation and anticipates that, for the foreseeable future, earnings, if
any, will continue to be retained for use in its business. As of March 31,
1997, the approximate number of record holders of the Company's Common Stock was
207.

In October 1996, the Company offered in conjunction with the Financing plan
up to a maximum of 100 Units at an issue price of $25,000 per Unit, each Unit
consisting of (i) a Debenture due November 1, 2001 in the principal amount of
$12,500 bearing interest, payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year commencing on June 30, 1997, at the
rate of 10% per annum for the first 24 months and bearing interest thereafter at
the prime rate charged by the Company's bank plus four points; and (ii) 62,500
Unit Shares, at a price of $.20 per share for a total of $12,500 for the Unit
Shares. The Debenture is convertible at any time from issuance prior to
maturity at the rate

<PAGE>

of $.50 per share and is redeemable by the Company at any time after the closing
price of the Company's common stock equals or exceeds $1.50 per share for 20
consecutive trading days. No trading market is expected to develop for the
Debentures and the Unit Shares will not be freely tradable unless subsequently
registered with the SEC or an exemption from the registration requirements of
the Securities Act is available. The Units, Debentures, and Unit Shares have
not been registered under the Securities and Exchange Act of 1933 or any state
securities act. As a result of the conversion right, existing shareholders
could be substantially diluted if the Debentures are converted.

REVERSE STOCK SPLIT

The Company's Board of Directors anticipates recommending a 4:1 reverse
stock split for approval by the stockholders whereby each four shares of common
stock would be combined into one share. See "Item 4."

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion and analysis should be read in conjunction with
the Financial Statements and Notes thereto appearing elsewhere in this report.

GENERAL

The Company designs, develops, assembles, and distributes high-quality golf
products and golf accessories in North and South America, Europe, the Middle
East, and Africa utilizing the Fila-Registered Trademark- trademark and logo
under license from Fila Sport S.p.A. of Biella, Italy, a subsidiary of Fila
Holding, S.p.A. The Fila-Registered Trademark- brand name is recognized
worldwide and is associated with high-quality, high-performance products with a
high-fashion design concept. Fila Sport has cultivated this image for its
athletic footwear, active sportswear, and leisure and casual wear, and the
Company capitalizes on the worldwide identification with other products bearing
the Fila-Registered Trademark- trademark. The Company believes that the
technical and design specifications of its products support the high-quality,
high-performance, high-fashion concept fostered by Fila Sport.

RESULTS OF OPERATIONS

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1996 TO THE YEAR ENDED DECEMBER
31, 1995. Net sales for the year ended December 31, 1996 decreased 52% to
$2,403,000 compared to $5,007,000 for the year ended December 31, 1995. The
decrease was due primarily to a shortage of working capital to fund inventory
purchase requirements.

Management believes golf bags represent a product segment which supports
the major market lines of Fila Sport. Management plans to focus on the
continued strength of the bag and accessory line while continuing to pursue the
club market and product innovation. The Company's business is seasonal in
nature. Therefore, operating results for one or more quarters may not be
indicative of future trends or operating results for the full fiscal year.

Cost of sales decreased from $3,852,000 for the year ended December 31,
1995 to $2,167,000 for the comparable period in 1996, a decrease of $1,685,000
or 44%. The gross profit margin decreased from 23% for the year ended December
31, 1995 to 10% for the comparable period in 1996. This decrease is due
primarily to lower margins and discounts given on certain product lines. In
addition, lower margins can be attributed to an increase in the reserve for
obsolete inventory to $730,000 as of December 31, 1996 as compared to $409,000
for the comparable period in 1995.

13
<PAGE>

Selling, general and administrative costs were $2,425,000 for the year
ended December 31, 1996 compared to $3,332,000 for the comparable period in
1995, a decrease of $907,000 or 27%. The decrease resulted primarily from
lower sales and marketing expenses ($656,000 for the year ended December 31,
1996 as compared to $1,734,000 for the same period in 1995), mainly
consisting of advertising, athletic endorsements, demo program, outbound
freight expenses, sales promotion, tour promotion, and sales commissions; a
decrease in finance and administrative expenses ($263,000 for the year ended
December 31, 1996 as compared to $406,000 for the same period in 1995),
mainly consisting of insurance, office expense, and telephone expenses; a
decrease in salaries and staff costs ($520,000 for the year ended December
31, 1996 as compared to $678,000 for the same period in 1995.) These
decreases were offset by an increase in professional costs ($627,000 for the
year ended December 31, 1996 as compared to $157,000 for the same period in
1995), mainly consisting of consulting expense. In addition, the Company
expensed $178,000 related to a write-down of impaired assets.

Other income and expense items increased to a net expense of $364,000
for the year ended December 31, 1996 as compared to a net expense of $342,000
for the same period in 1995. This net increase resulted primarily from a
decrease of $96,000 in interest expense ($44,000 for the year ended December
31, 1996 as compared to $140,000 for the same period in 1995), as a result of
decreased debt in 1996 and an increase of $112,000 in inventory write-downs
($321,000 for the year ended December 31, 1996 as compared to $209,000 for
the same period in 1995.)

The Company experienced a net loss of $2,541,000 for the year ended
December 31, 1996 compared to $2,520,000 for the comparable period in 1995,
an increase of $21,000 or 1%.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1995 TO THE YEAR ENDED
DECEMBER 31, 1994. Net sales for the year ended December 31, 1995 decreased
13% to $5,007,000 compared to $5,762,000 for the year ended December 31,
1994. The decrease was due to decreased sales of Latitude-Registered
Trademark- irons and a shortage of working capital to fund inventory purchase
requirements, mainly related to the increased demand for golf bags. Net
sales of Latitude-Registered Trademark- irons decreased as a percentage of
total net sales from 31% for the year ended December 31, 1994 to 6% for the
comparable period in 1995. Sales of golf bags and accessories increased 14%
in the year ended December 31, 1995 as compared to the comparable period in
1994. Sales of bags and accessories have increased as a percentage of net
sales from 32% for the year ended December 31, 1994 to 42% for the comparable
period in 1995. For the year ended December 31, 1995, international sales
increased 16% and domestic sales decreased 22% as compared to the same
period in 1994.

Cost of sales increased from $3,456,000 for the year ended December 31,
1994 to $3,852,000 for the comparable period in 1995, an increase of $396,000
or 11%. The gross profit margin decreased from 40% for the year ended
December 31, 1994 to 23% for the comparable period in 1995. This decrease is
due primarily to lower margins and discounts given on certain product lines
and lower margins on international sales, both of which represented a higher
percentage of the sales mix in 1995 as compared to 1994.

Selling, general and administrative costs were $3,332,000 for the year
ended December 31, 1995 compared to $5,726,000 for the comparable period in
1994, a decrease of $2,394,000 or 42%. The decrease resulted primarily from
lower sales and marketing expenses ($1,734,000 for the year ended December
31, 1995 as compared to $3,613,000 for the same period in 1994), mainly
consisting of advertising, athletic endorsements, demo program, outbound
freight expenses, sales promotion, tour promotion, and sales commissions; a
decrease in finance and administrative expenses ($406,000 for the year ended
December 31, 1995 as compared to $530,000 for the same period in 1994),
mainly consisting of insurance, office expense, and telephone expenses; a
decrease in salaries and staff costs ($678,000 for the year ended December
31, 1995 as compared to $816,000 for the same period in 1994); a decrease in
professional costs ($157,000 for the year ended December 31, 1995 as compared
to $439,000 for the same period in 1994), mainly consisting of consulting and
legal expenses.

Other income and expense items increased to a net expense of $342,000
for the year ended December 31, 1995 as compared to a net expense of $126,000
for the same period in 1994 as a result of increased debt in 1995 and the
result of inventory write downs increasing from $100,000 to $209,000 for 1994
and 1995 respectively.

Selling, general and administrative costs decreased, as a percentage of
sales, from 99% for the year ended December 31, 1994 to 67% for the
comparable period in 1995. The Company experienced a net loss of $2,520,000
for the year ended December 31, 1995 compared to $3,547,000 for the
comparable period in 1994, a decrease of $1,027,000 or 29%.

PLAN OF OPERATION - LIQUIDITY AND CAPITAL RESOURCES

14
<PAGE>

The Company's cash from operations is generated by sales of golf products
to distributors at wholesale prices. Sales to domestic accounts are typically
due 30 to 90 days after shipment while sales to international distributors are
paid by letter of credit facilities or wire transfer upon shipment.

Net cash used in operating activities for 1996 and 1995 was $1,000,000 and
$323,000, respectively. Working capital at the end of 1996 and 1995 was
$(502,000) and ($11,774), respectively. Cash and cash equivalents at December
31, 1996 were $276,000 compared to $97,000 at December 31, 1995. Inventories,
net of reserves at December 31, 1996 were $349,000 compared to $946,000 at
December 31, 1995, a decrease of $597,000. Also, accounts receivable decreased
$591,000 from $734,000 at December 31, 1995 to $143,000 at December 31, 1996.
Notes payable for $921,000 were outstanding at December 31, 1996. Accounts
payable and accrued liabilities increased by $138,000 from December 31, 1995 to
December 31, 1996. Accrued royalties decreased by $403,000 from December 31,
1995 to December 31, 1996.

The Company strives to maintain a sufficient inventory of golf club
components, bags, and accessories to fulfill orders. Generally, the Company
does not maintain a substantial finished product inventory. Management believes
that all of the golf club components and other products manufactured for the
Company by suppliers are readily available from a variety of sources.

In November 1993, the Company issued 1,400,000 units consisting of one
share of common stock and one common stock purchase warrant at $5.50 per unit,
realizing net proceeds of $6,318,000 from the Offering. Approximately $977,000
of the proceeds of the Offering were utilized to repay the outstanding
short-term borrowing and accrued interest thereon.

In March 1995 the Company obtained a $1,000,000 borrowing facility with a
national asset-based lender to assist in funding its domestic and international
operations. The availability of this line was contingent upon the Company's
amount of eligible accounts receivable. This asset-based lending agreement was
terminated as of June 4, 1996.

In October 1996, the Company, through the Financing, offered up to a
maximum of 100 Units at an issue price of $25,000 per unit, each Unit
consisting of (i) a convertible subordinated debenture due November 1, 2001
in the principal amount of $12,500 bearing interest, payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year
commencing on June 30, 1997, at the rate of 10% per annum for the first 24
months and bearing interest thereafter at the prime rate charged by the
Company's bank plus four points; and (ii) 62,500 shares of common stock, par
value $.001, at a price of $.20 per share for a total of $12,500 for the Unit
Shares. The Debenture is convertible at any time from issuance prior to
maturity at the rate of $.50 per share and is redeemable by the Company at
any time after the closing price of the Company's common stock equals or
exceeds $1.50 per share for 20 consecutive trading days.

The Financing has resulted in the infusion of $1,825,000 from the time of
the Financing to the time of this filing. The Financing has permitted the
Company to pay off accrued royalties to Fila Sport and certain other outstanding
liabilities, while also adding to working capital. Additionally, the infusion
of capital resulted in the Company being able to obtain a revolving loan from a
private trust of up to $1,000,000 based upon open customer sales orders. The
Company's management believes that the proceeds provided by the Financing and
through the loan will permit the Company to experience a positive cash flow
sufficient to purchase inventory and increase sales. As a result, management
believes the capital infusion and the increased sales levels will provide
working capital sufficient for the Company to continue operations for the next
year; although, additional capital will be needed to implement all of
management's marketing strategies over time.

Throughout the Company's operating history, net losses have caused
significant cash flow problems, particularly during the last two years. At
December 31, 1994, the Company had cash and cash equivalents of $1,060,380. At
December 31, 1995 and December 31, 1996, the Company's available cash and
equivalents totaled $92,927 and $276,012 respectively. Although the proceeds
from this Financing are anticipated to enable the Company to generate positive
cash flow in 1997, there can be no assurance that it will. Although the
proceeds of this Financing and cash flow from operations are anticipated to be
sufficient from operations in 1997, the Company will likely require additional
capital for future development and the marketing of existing and future product
lines. In the event the Company cannot fund operations through sales after the
initial infusion of capital from this Financing, and if the Company is unable to
secure additional financing in the future, its ability

15
<PAGE>

to pursue its business strategy, its financial position, and its results of
operations for future periods may be adversely impacted.

In January 1997, the Company entered into a line of credit agreement with a
bank in which the Company can borrow up to $400,000 in connection with the
letter of credit established in accordance with the Fila Sport License
Agreement. The line bears interest at the bank's prime rate plus 1.5% and is
collateralized by essentially all of the Company's assets and is guaranteed by
the Chairman of the Board of Directors. The Company established a letter of
credit with an accredited bank in the amount of $400,000. The letter of credit
is secured by the line of credit. The line of credit and letter of credit
expire January 31, 1998.

The Company and the Company's Chairman of the Board of Directors jointly
entered into a loan and security agreement with a lender on March 31, 1997
which will provide the Company up to the maximum aggregate principal amount
of the lesser of $1,000,000, and 50% of the aggregate of all open customer
purchase orders. The amount outstanding on the loan and revolving promissory
note is adjusted upward or downward on a monthly basis, throughout the term
of the note, based on total open customer purchase orders. The revolving
promissory note executed pursuant to this agreement bears an interest rate of
12% and expires December 31, 1997. Amounts outstanding under the Agreement
are collateralized by the Company's inventory and open customer purchase
orders. As of March 31, 1997, the Company's total open customer purchase
orders were approximately $980,000 and no amounts had been borrowed.

Effective March 21, 1997, the Company borrowed $225,000 from a
stockholder. The borrowing bears interest at a rate of 1% per month. The
Company anticipates repaying the total amount of the loan plus accrued
interest from the proceeds of the renewing loan and security agreement
recently obtained by the Company.

During 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based
Compensation," which defines a fair value based method of accounting for
stock-based compensation. However, SFAS 123 allows an entity to continue to
measure compensation cost related to stock and stock options issued to employees
using the intrinsic method of accounting prescribed by Accounting Principles
Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees."
Entities electing to remain with the accounting method of APB 25 must make pro
forma disclosures of net income and earnings per share, as if the fair value
method of accounting defined in SFAS 123 had been applied. The Company has
elected to account for its stock-based compensation to employees under APB 25.

ITEM 7. FINANCIAL STATEMENTS

The financial statements listed in the accompanying Index to Financial
Statements are attached hereto and filed as a part of this Report under Item 13.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT

On May 2, 1995, the Audit Committee of the Board of Directors of the
Company approved and appointed the firm of Corbin & Wertz as its independent
accountants for the fiscal year ending December 31, 1995 to replace Deloitte &
Touche LLP (the "Accountant"). The Accountant was dismissed on May 2, 1995. At
the time of the dismissal, no disagreements existed with the Accountant.

During the Company's two most recent fiscal years there were no
disagreements with the Accountant on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
During the Company's two most recent fiscal years there were no "reportable
events," as the term is defined in Regulation S-K, Section 229.304(a)(1). The
Accountant's independent auditor's report dated March 14, 1995 on the Company's
financial statements as of and for the years ended December 31, 1994 and 1993,
contained an explanatory paragraph about there being conditions which raise
substantial doubt about the Company's ability to continue as a going concern.

Prior to the engagement of Corbin & Wertz, neither the Company nor
anyone on the Company's behalf consulted Corbin & Wertz regarding either the
application of accounting principles to a specific transaction, either
completed or proposed; or the type of audit opinion that might be rendered on
the Company's financial statements; or any matter that was

<PAGE>

the subject of a disagreement with the former accountant or a reportable event.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT

COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT

Section 16 (a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors, and persons who own more than 10% of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the "SEC"),
NASDAQ, and the Boston Stock Exchange. Officers, directors, and greater than
10% beneficial owners are required by SEC regulation to furnish the Company with
copies of all Section 16 (a) forms they file. The Company believes that all
filing requirements applicable to its officers, directors, and greater than 10%
beneficial owners were complied with.

DIRECTORS AND EXECUTIVE OFFICERS

The names, ages and positions of the Company's Directors and executive
officers as of March 31, 1997 are listed below:

NAME AGE POSITION WITH THE COMPANY FIRST ELECTED
<S> <C> <C> <C>
John B. Hewlett 44 Chairman of the Board, Director 1996
Miles T. Doody 69 Vice Chairman 1993
Kenneth W. Craig 42 President, Chief Executive Officer, Director 1996
James T. Doody 45 Chief Operating Officer, Executive Vice President 1993
Janet R. Gardner 54 Vice President - Administration 1993
Mont E. Warren 35 Vice President, Chief Financial Officer 1993
Dennis L. Crockett 45 Director 1996
Wade M. Mitchell 32 Director 1996
Bruce H. Haglund 45 Secretary 1994
</TABLE>

JOHN B. HEWLETT has served as Chairman of the Board of the Company since
October 1996. Mr. Hewlett is President of Hewlett Financial Corporation. He
has 22 years of experience in the insurance field, specializing in sales and
long and short-term planning. From 1985 to the present, Mr. Hewlett has been a
nationally recognized consultant and seminar leader on closely held business
succession and financial planning. He is a member of the Million Dollar Round
Table, Court of the Table, and one of three Top of the Table members in the
Intermountain West with career insurance sales approaching $650,000,000. Mr.
Hewlett is a member of the National Basketball Association Utah Jazz 100 Club
and Advisory Board.

MILES T. DOODY served as Chief Executive Officer of the Company from
January 1993 through December 1996, served as President from 1990 to 1996,
and currently serves as Vice Chairman and a Director. From 1986 to 1990, Mr.
Doody operated a golf industry consulting service, advising such companies as
Callaway Golf and Bullet/Cougar Golf Company. From 1971 through 1986, Mr.
Doody was employed with Lynx Precision Golf Company, where he was involved in
specific club designs, various manufacturing procedures, and set-up, and
where he served eventually as General Manager and Executive Vice President.
Mr. Doody negotiated the acquisition by Lynx of Lilly Dache, a leading
leisure sportswear company, whereupon he became the General Manager of Lilly
Dache, working with overseas and domestic soft goods suppliers. From 1967 to
1971, Mr. Doody was employed by P.G.A. Golf Co., serving as National Accounts
Executive and National Sales Manager. Miles T. Doody is the father of James
T. Doody.

KENNETH W. CRAIG has served as President and a Director since October
1996 and as Chief Executive Officer since January 1997. Mr. Craig has been a
private investor since June 1993. He began his career as an attorney in
Houston, Texas and practiced law from 1980 to 1989, specializing in
contracts, tax, mergers, and acquisitions. In the early 1980's, he
participated in the growth of Telecommunications Specialist Inc. ("TSI"), a
telephone system rental company which became the largest

17
<PAGE>
distributor for TIE Communications ("TIE"). In 1987, he founded TIE National
Rental Company, Inc. ("TNR") to prove a pilot program for TIE's national
telephone rental system. In 1991, he sold his interest in TNR to TIE to
pursue the acquisition of Centel Business Systems ("Centel") by the Williams
Companies. Upon the acquisition, Centel became Wiltel Communications
Systems, Inc. where he was President of the Finance/Marketing Divisions until
May 1993. Mr. Craig has also been actively involved in golfing in various
capacities including coach of the University of Mississippi golf team and as
a buyer, director, and president of numerous golf and country clubs. He is a
graduate of Stetson University and the University of Mississippi School of
Law.

JAMES T. DOODY served as Executive Vice President of the Company since
January 1993 and as Chief Operating Officer since January 1997. He was a
Director from January 1994 to December 1994 and served as the Company's Vice
President-Sales from July 1991 to January 1993. From 1983 through July 1991,
Mr. Doody was employed by Bullet/Cougar Golf Company, where he served
eventually as National Sales Manager. From 1981 to 1983, Mr. Doody was
employed by Sounder Golf Company as Western Regional Sales Manager. He
started his career in the golf industry in 1970 when he joined the P.G.A.
Victor staff in the custom club development department. Mr. Doody's
involvement in golf-related marketing began in 1971 when he began an
apprenticeship as a golf pro in the PGA professional program, training to
manage retail golf programs, and he eventually managed three major retail
golf shops. James T. Doody is the son of Miles T. Doody.

JANET R. GARDNER has been Vice President - Administration of the Company
since January 1993, and since 1990 has served as Officer Manager and
Executive Assistant, responsible for all personnel matters, advertising, and
office procedures. From 1980 through 1990, Ms. Gardner was employed by
Bullet/Cougar Golf Company, where she served as Office Manager for the
National Sales Office. Prior to her employment with Bullet/Cougar Golf
Company, Ms. Gardner was employed by the Bally Corporation, Holiday Health
Spas Financial Services, as Communications Manager.

MONT E. WARREN has served as Vice President and Chief Financial Officer
of the Company since January 1993 and as the Company's Controller since
February 1991. In December 1987, Mr. Warren began his PGA apprenticeship at
Desert Highlands Golf Club in Scottsdale, Arizona where he served as
assistant Golf Professional through October 1990. From 1986 to 1987, Mr.
Warren was employed by American Capital Financial Services where he
eventually served as a District Manager. Mr. Warren is also the President
and a member of the Board of Directors of Villavante Maintenance Corporation.
Mr. Warren obtained a B. S. degree in Accounting from Brigham Young
University in 1986.

DENNIS L. CROCKETT has been a Director of the Company since October 1996.
He is co-founder and Chief Operations Officer of Broadcast International,
Inc., a communications firm specializing in the delivery of business
information via satellite, FM wireless and cable television technologies,
which recently merged with Data Broadcasting Corporation. Further, Mr.
Crockett co-founded the Instore Satellite Network, one of the nation's
largest private satellite communications networks providing private audio,
video, voice and data broadcasts to retail clients including Safeway Stores,
Osco/Savon Drug, Lucky Stores and RE/MAX Reality. Mr. Crockett is also a
nationally published composer, arranger, vocalist and keyboardist as well as
a respected musical producer of both record, radio and television
entertainment. He is a graduate of Brigham Young University in Provo, Utah.

WADE M. MITCHELL has been a Director since October 1996. He has been
employed as a business consultant through Mitchell & Associates, a
professional corporation specializing in mergers, acquisitions, and corporate
turn-arounds since 1989. Mitchell & Associates is owned and controlled by
Mr. Mitchell. From 1993 to 1995, he was a special consultant and member of
the Board of Directors of Environmental Safeguards, Inc., of Springville,
Utah, and a member of the Board of Directors of National Fuel & Energy, Inc.,
a wholly-owned subsidiary of Environmental Safeguards, Inc. From 1991 to
1993, he was the Chief Operating Officer for Enpak Surgical Products, Inc.,
Salt Lake City, Utah. During 1989, he was a marketing consultant for
Novations Group, Inc., Provo, Utah, and from 1985 to 1988, he was the
Director of Marketing for Great Wave Software, Inc., Scotts Valley,
California. Mr. Mitchell also serves as a director of Mitchell's Nursery &
Gifts, Inc., a member of the advisory board of GT Travel, Inc., and, a
director of Paradise Optical, Park City, Utah. Mr. Mitchell graduated from
Brigham Young University in April 1988, with a B.S. degree in science, and
received an MBA degree from Brigham Young University's Marriott School of
Management in April 1990.

BRUCE H. HAGLUND has served as Secretary of the Company since January
1994. Since April 1994, Mr. Haglund has been a partner in the law firm of
Gibson, Haglund & Johnson. From February 1991 to April 1994, Mr. Haglund was
a principal in the law firm of Phillips, Haglund, Haddan & Jeffers. From
1984 to February 1991, he was a partner in the
18
<PAGE>

law firm of Gibson & Haglund. Mr. Haglund is also the Secretary and a member of
the Board of Directors of GB Foods Corporation and the Secretary of Metalclad
Corporation, public companies whose stock is traded on the NASDAQ Small Cap
Market. He is a graduate of the University of Utah College of Law.

LIMITATION OF LIABILITY OF DIRECTORS

Pursuant to the Delaware General Corporation Law, the Company's Articles of
Incorporation exclude personal liability for its Directors for monetary damages
based upon any violation of their fiduciary duties as Directors, except as to
liability for any breach of the duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law, or
any transaction from which a Director receives an improper personal benefit.
This exclusion of liability does not limit any right which a Director may have
to be indemnified and does not affect any Director's liability under federal or
applicable state securities laws. The Company has agreed to indemnify its
directors against expenses, judgments, and amounts paid in settlement in
connection with any claim against a Director if he acted in good faith and in a
manner he believed to be in the best interests of the Company.

BOARD OF DIRECTORS COMMITTEES AND COMPENSATION

The Board of Directors has the responsibility for establishing broad
corporate policies and for overseeing the overall performance of the Company.
However, in accordance with corporate legal principles, it is not involved in
day-to-day operating details. Members of the Board are kept informed of the
Company's business through discussions with the Chairman and other officers, by
reviewing analyses and reports sent to them, and by participating in Board and
committee meetings.

In October 1996, Michael B. Orr and J. Arthur Wright resigned as
directors of the Company. The Board acted to fill these two vacancies and
two other vacancies on the Board by electing John B. Hewlett, Dennis L.
Crockett, Kenneth W. Craig and Wade M. Mitchell as directors to serve until
the annual meeting of the Company.

The Board held 5 meetings in 1996 with an average attendance of over 75%.
All directors attended more than 75% of the meetings held during their tenures
as directors. Board members are not presently compensated, other than
reimbursement for their expenses, for their attendance at Board meetings.

The Board has recently established a number of committees, including a
Finance Committee, an Audit Committee, and a Compensation Committee, each of
which is briefly described below. The committees which were established to
begin serving during 1997, did not meet in 1996.

The Finance Committee has been established to oversee Company expenditures
and approve contracts entered into by the Company. The committee must, by
majority, approve all payments to be made by the Company which exceed $2,500.
The committee consists of two non-employee directors, one employee director, and
one employee EX OFFICIO member.

The Audit Committee has been established to meet with management to
consider the adequacy of the internal controls and the objectivity of financial
reporting; the committee meets with the independent auditors and with
appropriate Company financial personnel about these matters. The committee
recommends to the Board the appointment of the independent auditors, subject to
the ratification by the shareholders at the annual meeting. Both the internal
auditors and the independent auditors periodically meet alone with the committee
and always have unrestricted access to the committee. The committee consists of
two non-employee directors, one employee director, and one employee EX OFFICIO
member.

The Compensation Committee negotiates employment contracts, recommends to
the Board compensation for officers, directors, and employees, and administers
management incentive compensation plans, including stock option plans. The
committee consists of two non-employee directors, one employee director, and one
non-employee EX OFFICIO member.

ITEM 10. EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

The Company's compensation programs are designed to link executives'
compensation to the performance of the

19
<PAGE>
Company. The annual salary paid to executives over the past three years reflect
fixed amounts that are deemed competitive for executives with comparable ability
and experience in the industry. Additionally, because of cash flow issues for
the Company, executives have not received increases in salary for two years, and
in some instances, executives have taken a salary cut.

The Company believes that providing stock options to executive helps
reinforce their alignment of interests with the shareholders. Accordingly, as a
part of the recent Financing, executive officers were awarded stock options
based upon performance over the next three years.

The compensation paid to Mr. M. Doody, the highest paid executive during
the past four years, is summarized in the compensation table below:

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
- --------------------------------------------------------------------------------------------------------------------------
AWARDS PAYOUT
---------------------------------------------------
NAME AND OTHER ALL
PRINCIPAL YEAR SALARY BONUS ANNUAL OTHER
POSITION ($) ($) COMPE- (1)
NSATION RESTRICTED OPTIONS/
($) STOCK($) SARS(#0)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Miles T 1996 75,000 -0- -0- $360,000 (2) -0- -0-
--------------------------------------------------------------------------------------------------------------
Doody, CEO 1995 121,000 -0- -0- -0- -0- -0- -0-
--------------------------------------------------------------------------------------------------------------
1994 150,000 19,800 -0- -0- -0- -0- -0-
--------------------------------------------------------------------------------------------------------------
1993 150,000 1,100 30,300 36,000 160,000 -0- -0-
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The remuneration described in the table does not include the cost to the
Company of benefits furnished to the named executive officer, including
premiums for health insurance and other personal benefits provided to such
individual that are extended to all employees of the Company in connection
with their employment. The value of such benefits cannot be precisely
determined; however, the executive officer named above did not receive
other compensation in excess of the lesser of $50,000 or 10% of such
officers' cash compensation. Salary for Mr. M. Doody for 1991 and 1992 in
the aggregate amount of $30,300 was deferred to 1993.

(2) In conjunction with the Financing Mr. M. Doody agreed to forfeit a stock
option for 160,000 common stock shares at $4.00 per share granted in 1993
and to convert a short-term $50,000 note of the Company to a promissory
note in exchange for a stock option for 360,000 common stock shares at $.50
per share.

The Company entered into three-year employment agreements in January 1993
with Miles T. Doody, James T. Doody, Janet R. Gardner, and Mont E. Warren, its
executive officers. The agreements provide for minimum base salaries of
$150,000 for Mr. M. Doody, $80,000 for Mr. J. Doody, $39,500 for Ms. Gardner,
and $55,000 for Mr. Warren. In connection with their employment agreements,
each of the executive officers also received shares of Common Stock of the
Company as part of their compensation. In January 1994, the Company agreed to
extend these contracts through December 31, 1997. Miles T. Doody agreed to
reduce his compensation to $75,000 per year commencing on July 31, 1996.

In October 1996, the Company entered into an oral agreement with Kenneth
W. Craig to serve as President of the Company for three years. It is
anticipated that the formal agreement will be executed in 1997. The
employment agreement will provide for a minimum base salary of $48,000 per
annum plus a quarterly incentive compensation bonus equal to 1% of the
adjusted gross sales of the Company.

STOCK OPTION PLAN

On July 13, 1993, the Board of Directors of the Company adopted the 1993
Stock Option Plan (the "Plan") which

20
<PAGE>

was approved by the shareholders on the same day. The Plan is intended to
provide incentive to key employees and Directors of, and key consultants,
vendors, customers, and others expected to provide significant services to, the
Company, to encourage proprietary interest in the Company, to encourage such key
employees to remain in the employ of the Company and its subsidiaries, to
attract new employees with outstanding qualifications, and to afford additional
incentive to consultants, vendors, customers, and others to increase their
efforts in providing significant services to the Company. The Company has
reserved 600,000 shares of Common Stock for issuance under the Plan. The Plan
provides that incentive stock options ("Incentive Stock Options") may be granted
to full-time employees (who may also be Directors) and nonstatutory stock
options ("Nonstatutory Stock Options") may be granted to non-employee Directors
and consultants from time to time on a discretionary basis by the Board or the
Committee. The Plan also provides for the grant of Nonstatutory Stock Options
to outside members of the Board of Directors on a "formula award" basis as
provided in Rule 16b-3 of the Securities Exchange Act of 1934 ("Rule 16b-3").
As of the date of this filing, Incentive Stock Options are outstanding for the
purchase of 240,000 shares at $4.00 per share pursuant to the Plan, all of which
are vested, to the following executive officers: James T. Doody (120,000
options), Mont W. Warren (60,000 options), and Janet R. Gardner (60,000
options). These options expire in July 1998. At the present average market
share price, none of the Incentive Stock Options are "in the money."

The Plan provides for administration by the Board in compliance with Rule
16b-3, or by a Committee (the "Committee") appointed by the Board, which
Committee shall be constituted to permit the Plan to comply with Rule 16b-3,
and which shall consist of not less than two members, each of whom has not
participated in the Plan by way of receipt of any discretionary grant of an
option (Incentive Stock Options and Nonstatutory Stock Options are together
hereinafter referred to as "Option" or "Options", unless the context
otherwise requires), and who will not so participate while serving as a
member of the Committee, and each of whom has not participated under any
other plan or have received options of the Company during the year preceding
adoption of the Plan by the shareholders (other than pursuant to a formula
award grant under the Plan). A member of the Board or a Committee member
shall in no event participate in any determination related to Options held by
or to be granted on a discretionary basis to such Board or Committee member.

The aggregate number of shares of the Company's authorized but unissued
common stock which may be issued upon exercise of Options under the Plan may
not exceed 600,000 shares. If any unexercised option, or any portion
thereof, for any reason expires or is terminated, do not vest or are not
delivered, the unexercised or unvested shares allocable to such Option may
again be made subject to any Award.

Options must be evidenced by written stock option agreements in such form
as the Committee may from time to time determine. Each Option must state the
number of shares to which it pertains and must provide for the adjustment
thereof if the outstanding shares of common stock are exchanged for cash or a
different number or kind of shares or securities of the Company, or if the
outstanding shares of the common stock are increased, decreased, exchanged
for, or otherwise changed, or if additional shares or new or different shares
or securities are distributed with respect to the outstanding shares of the
Common Stock, through a reorganization or merger in which the Company is the
surviving entity or through a combination, consolidation, recapitalization,
reclassification, stock split, stock dividend, reverse stock split, stock
consolidation or other capital change or adjustment. In addition, the Board
or the Committee may grant such additional rights in the foregoing
circumstances as the Board or the Committee deems to be in the best interests
of any participant and the Company in order to preserve for the participant
the benefits of the Award.

21
<PAGE>

The exercise price in the case of any Incentive Stock Option must not be
less than the fair market value on the date of grant and, in the case of any
Option granted to an optionee who owns more than 10% of the total combined
voting power of all classes of outstanding stock of the Company, must not be
less than 110% of the fair market value on the date of grant. The exercise
price, in the case of any Nonstatutory Stock Option, must not be less than 85%
of the fair market value on the date of grant.

The purchase price is payable in full in United States dollars upon the
exercise of the Option; provided, however, that if the applicable Option
agreement so provides, the purchase price may be paid (i) by the surrender of
shares in good form for transfer, owned by the participant and having a fair
market value on the date of exercise equal to the purchase price, or in any
combination of cash and shares, as long as the sum of the cash so paid and the
fair market value of the shares so surrendered equals the purchase price; (ii)
by cancellation of indebtedness owed by the Company to the participant; (iii)
with a full recourse promissory note executed by the participant; or (iv) any
combination of the foregoing. The interest rate and other terms and conditions
of such note must be determined by the Board or the Committee. The Board or
Committee may require that the participant pledge his shares of common stock to
the Company for the purpose of securing the payment of such note, in which event
the stock certificate(s) representing such shares may not be released to the
participant until such note has been paid in full.

Each Option must state the time or times which all or part thereof becomes
exercisable. No Option may be exercised after the expiration of 10 years from
the date it was granted, and no Option granted to an optionee who owns more than
10% of the total combined voting power of all classes of outstanding stock of
the Company may be exercised after the expiration of five years from the date it
was granted. During the lifetime of a participant in the Plan, his Options may
be exercisable only by him and shall not be assignable or transferable. If a
participant dies while Options are exercisable, they may be exercised, subject
to the condition that no option shall be exercisable after the expiration of 10
years from the date granted and to the extent the right to exercise the Option
accrued at any time within three months after the death of the participant, by
the executors or administrators of the deceased participant or by persons who
acquired the option directly from the deceased option holder by bequest or
inheritance.

Within the limitations of the Plan, the Board or Committee may modify,
extend or renew outstanding Options or accept the cancellation of outstanding
Options (to the extent not previously exercised) for the granting of new Options
in substitution therefor. No modification of an Option may, without the consent
of the participant, alter or impair any rights or obligations under any Option
previously granted.

In the case of Incentive Stock Options granted under the Plan, the
aggregate fair market value (determined as of the date of the grant thereof) of
the shares with respect to which Incentive Stock Options become exercisable by
any participant for the first time during any calendar year (under the Plan and
all other plans maintained by the Company) may not exceed $100,000. The Board
or Committee may, however, with the participant's consent, authorize an
amendment to the Incentive Stock Option which renders it a Nonstatutory Stock
Option.

The stock option agreements authorized under the Plan may contain such
other provisions not inconsistent with the terms of the Plan (including, without
limitation, restrictions upon the exercise of the Options) as the Board or the
Committee deems advisable.

COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT

Section 16 (a) of the Securities Exchange Act requires the Company's
officers, directors, and persons who own more than 10% of a registered class of
the Company's equity securities to file reports of ownership and changes in
ownership with the SEC, NASDAQ, and the Boston Stock Exchange. Officers,
directors, and greater than 10% beneficial owners are required by SEC regulation
to furnish the Company with copies of all Section 16 (a) forms they file. The
Company believes that all filing requirements applicable to its officers,
directors, and greater than 10% beneficial owners were complied with.

OPTION GRANTS IN 1996

The following table reflects the non-qualified options granted to the
Chief Executive officer in 1996.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or Base
Name Granted(#) Fiscal Year Price($/Share) Expiration Date
- --------------------------------------------------------------------------------
OFFICERS:
Miles T. Doody 360,000 100% $.50 12/31/06
- --------------------------------------------------------------------------------

The Company agreed to grant a total of 4,127,000 non-qualified stock
options in October 1996 (the "1996 Stock Options"), all of which are exercisable
at a price of $.50 per share and expire on December 31, 2006. Certain of the
options to be granted vest upon the sale of all 100 Units offered hereby
including the following: Pine Valley, Ltd., an affiliate of Mr.

22
<PAGE>

Hewlett, and Culley W. Davis, a consultant to the Company were each granted
options to purchase 400,000 shares. Granite Hollow Insurance Agency, LLC., an
affiliate of Mr. Hewlett, was granted options to purchase 1,000,000 shares.
Michael B. Orr and J. Arthur Wright, former directors of the Company were each
granted options to purchase 50,000 shares. Miles T. Doody was granted options
to purchase 360,000 shares in consideration for his waiver of rights to purchase
160,000 options previously granted and his agreement to reduce his salary to
$75,000 per year. Bruce H. Haglund, Secretary and general counsel to the
Company, received 150,000 options and he agreed to waive his rights to 50,000
options previously granted.

Further, the Company agreed to grant Mr. Craig non-qualified stock options
to purchase 600,000 shares at a price of $.50 per share. A total of 300,000 of
the options vest upon the sale of the 100 Units offered in the Financing and the
balance of the options vest upon the earlier of achieving certain performance
goals or ratably over ten years.

The remaining options granted are to vest upon the earlier of achieving
certain performance goals or ratably over ten years. The performance goals are
that the Company achieves sales of Fila-Registered Trademark- trademarked
products in the amount of $5,000,000 in 1997, $8,000,000 in 1998, and
$10,000,000 in 1999. Mr. Craig was granted an additional 300,000 options and
current employees of the Company were granted an aggregate of 417,000 options.
James T. Doody received 225,000 of the 417,000 options, Mr. Warren received
150,000 options, and Ms. Gardner received 9,000 of the options.
The shares issuable upon exercise of the 1996 Stock Options are not subject to
adjustment in the event of a reverse stock split.

In addition, the Company, by unanimous written consent in October 1996,
granted John B. Hewlett 1,000,000 non-qualified stock options exercisable at the
price of $1.00 per share any time until their expiration 10 years from the date
of grant. The options were granted Mr. Hewlett for his services in 1996 as a
director of the Company. The shares issuable upon exercise of these options are
not subject to adjustment in the event of a reverse stock split.

The Company, also by unanimous written consent in October 1996, granted
Wade B. Mitchell 200,000 non-qualified stock options exercisable at the price of
$.50 per share any time until their expiration 10 years from the date of grant
and 150,000 non-qualified stock options exercisable at the price of $1.00 per
share anytime until their expiration 10 years from the date of grant. The
options were granted to Mr. Mitchell for his services in 1996 as a director of
the Company. The shares issuable upon exercise of these options are not subject
to adjustment in the event of a reverse stock split.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of March 31, 1997
relating to the beneficial ownership of the Company's Common Stock by (I) all
persons known by the Company to beneficially own more than 5% of the outstanding
shares of the Company's Common Stock, (ii) each officer and director of the
Company, and (iii) all officers and directors of the Company as a group.

<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT OF TOTAL PERCENT OF TOTAL
BENEFICIAL OWNER(1) BENEFICIALLY OWNED(2) BEFORE SPLIT (3) AFTER SPLIT (4)
- ------------------ -------------------- ---------------- ----------------

<S> <C> <C> <C> <C>
John B. Hewlett 2,537,500 (5) 20.0% 50.5%

Bruce H. Haglund 757,000 (6) 7.1% 23.3%

Kenneth W. Craig 300,000 (7) 2.9% 10.8%

Dennis L. Crockett 512,500 (8) 4.9% 8.5%

Miles T. Doody 449,375 (9) 4.5% 13.5%

James T. Doody 165,250 (10) 1.6% 5.0%
</TABLE>

23
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C>
Mont E. Warren 97,250 (11) 1.0% 2.8%

Janet R. Gardner 96,375 (11) 1.0% 2.8%

Wade M. Mitchell 350,000 (12) 3.4% 12.4%

All officers and Directors 5,265,250 (13) 34.7% 66.4%
as a group (nine persons)
</TABLE>

- ----------------------------------------
(1) Unless otherwise noted, the Company believes that all shares are
beneficially owned and that all persons named in the table or family
members have sole voting and investment power with respect to all shares
of Common Stock owned by them. Unless otherwise indicated, the address
of each stockholder is 5812 Machine Drive, Huntington Beach, California
92649.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of warrants or options. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are
held by such person (but not those held by any other person) and which
are exercisable within 60 days from the date hereof have been exercised.
(3) Including 9,898,663 shares of Common Stock outstanding plus, for each
person or group listed, any securities that person or group has the right
to acquire within 60 days pursuant to options, warrants, or conversion
rights before giving effect to a proposed 4 to 1 reverse stock split.
(4) Including 2,474,666 shares of common stock that will be outstanding upon
approval and completion of a proposed 4 to 1 reverse stock split, plus
for each person or group listed, any securities that person or group has
the right to acquire within 60 days pursuant to options, warrants, or
conversion rights. Options held by each person or group listed are not
subject to adjustment upon a reverse stock split resulting in a greater
percentage ownership interest for each person or group who exercises
options after a reverse stock split.
(5) Represents 2,400,000 shares issuable to Mr. Hewlett and affiliates, which
he controls, upon the exercise of presently exercisable stock options
and stock options to by issued upon completion of the Financing,
1,400,000 to be exercisable at $.50 and 1,000,000 exercisable at $1.00,
125,000 common stock shares, and 12,500 debenture conversion shares
issued as a result of an investment in the Company through the
Financing. Mr. Hewlett's address is 2919 East Granite Hollow Street,
Sandy, Utah 84092.
(6) Includes 750,000 shares issuable upon the exercise of presently
exercisable stock options and stock options to be issued upon completion
of the Financing and 7,000 Common Stock shares currently owned. Mr.
Haglund's address is 2010 Main Street, Suite 400, Irvine, California
92660.
(7) Includes 300,000 shares issuable upon the exercise of presently
exercisable stock options and stock options to be issued upon completion
of the Financing.
(8) Includes 100,000 shares issuable upon the exercise of presently
exercisable stock options and stock options to be issued upon completion
of the Financing, 375,000 common stock shares, and 37,500 debenture
conversion shares issued as a result of an investment in the Company
through the Financing. Mr. Crockett's address is 7050 Union Park Center,
Suite 600, Midvale, Utah 84047.
(9) Includes 360,000 shares issuable upon the exercise of presently
exercisable stock options and stock options to be issued upon completion
of the Financing.
(10) Includes 120,000 shares issuable upon the exercise of presently
exercisable incentive stock options at a price of $4.00 per share and
Common Stock shares currently owned.
(11) Includes 60,000 shares issuable upon the exercise of presently
exercisable incentive stock options at a price of $4.00 per share and
Common Stock shares currently owned.
(12) Includes 350,000 shares issuable upon the exercise of presently
exercisable stock options. Mr. Mitchell's address is 2919 East Granite
Hollow Street, Sandy, Utah 84092.
(13) Includes 4,500,000 shares issuable upon the exercise of stock options.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the first quarter of 1997, Mr. John B. Hewlett agreed to guaranty
the Company's letter of credit to Fila Sport in the amount of $400,000 with a
personal line of credit. Additionally, the Company and Mr. Hewlett jointly
entered into a loan and security agreement, and promissory note with a lender
on March 31, 1997 which will provide the Company up to a maximum of
$1,000,000 to fund open customer purchase orders.

During 1996, Miles T. Doody advanced a total of $50,000 to the Company to
enable the Company to pay various expenses during the year. In October 1996,
the Company agreed to convert the $50,000 advance into a promissory note due on
June 30, 1999, and to permit Mr. Doody to convert the note into Common Stock at
the rate of $.50 per share at any time before maturity of the note.

In October 1996, the Company agreed with Bruce H. Haglund, Secretary and
general counsel to the Company, to

<PAGE>

convert up to $150,000 of accrued legal fees into a promissory note due on
June 30, 1999. The Company also agreed to grant Mr. Haglund non-qualified
stock options to purchase 750,000 shares at a price of $.50 per share. The
options vest upon the completion of the Financing and are exercisable until
December 31, 2006. Mr. Haglund's billings for legal fees for the fiscal year
ended December 31, 1996 totaled approximately $63,000.

In October 1996, the Company agreed to pay an affiliate of John B.
Hewlett a consulting fee for his services to the Company of $250,000 payable
as follows: $50,000 on January 1, 1997, $100,000 on January 1, 1988, and
$100,000 on January 1, 1999. Further, the Company agreed to grant an
affiliate of Mr. Hewlett non-qualified stock options to purchase 400,000
shares at a price of $.50 per share. The options vest upon the completion of
the Financing and are exercisable until December 31, 2006.

In October 1996, the Company agreed orally to employ Kenneth W. Craig as
President of the Company. The agreement provides for compensation at the rate
of $4,000 per month plus 1% of annual revenues attributable to sale of
Fila-Registered Trademark- trademarked products. The employment agreement
expires on December 31, 1999, subject to one-year renewals at the option of the
Company on each anniversary of the employment agreement. Further, the Company
agreed to grant Mr. Craig non-qualified stock options to purchase 600,000 shares
at a price of $.50 per share. A total of 300,000 of the options vest upon the
sale of the 100 Units offered hereby and the balance of the options are to vest
upon the earlier of achieving certain performance goals or ratably over ten
years. The performance goals are that the Company achieves sales of
Fila-Registered Trademark- trademarked products in the amount of $5,000,000 in
1997, $8,000,000 in 1998, and $10,000,000 in 1999. The options are exercisable
until December 31, 2006.

The shares issuable upon exercise of the 1996 Stock Options are not subject
to adjustment in the event of a reverse stock split.

In addition, the Company, by unanimous written consent in October 1996,
granted John B. Hewlett 1,000,000 non-qualified stock options exercisable at the
price of $1.0 per share any time until their expiration 10 years from the date
of grant. The options were granted Mr. Hewlett for his services in 1996 as a
director of the Company. The shares issuable upon exercise of these options are
not subject to adjustment in the event of a reverse stock split.

The Company, also by unanimous written consent in October 1996, granted
Wade B. Mitchell 200,000 non-qualified stock options exercisable at the price of
$.50 per share any time until their expiration 10 years from the date of grant
and 150,000 non-qualified stock options exercisable at the price of $1.0 per
share anytime until their expiration 10 years from the date of grant. The
options were granted to Mr. Mitchell for his services in 1996 as a director of
the Company. The shares issuable upon exercise of these options are not subject
to adjustment in the event of a reverse stock split.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report on Form 10-KSB:

1. Financial Statements

Independent Auditors' Reports
Balance Sheet
Statements of Operations
Statements of Shareholders' Equity
Statements of Cash Flows
Notes to Financial Statements

2. Exhibits

The following exhibits are being filed with this Annual Report on Form
10-KSB and/or are incorporated by reference therein in accordance with the
designated footnote references:

<PAGE>

3.1 Certificate of Incorporation, Restated Certificate of Incorporation
and Bylaws of the Company(1)

4.1 Form of Class A Warrant Agreement and Certificate(1)

4.2 Form of Class B Warrant Agreement and Certificate(1)

4.3 Form of Class C Warrant Agreement and Certificate(1)

4.4 Form of Underwriters' Warrants(1)

4.5 Form of Common Stock Certificate(1)

4.6 Form of Class F Warrant Agreement and Certificate(2)

4.7 Form of Class G Warrant Agreement and Certificate(2)

*4.8 Form of Debenture utilized in the October 1996 Financing

10.1 Employment Agreement between the Company and Miles T. Doody dated
January 1, 1993(1)

10.2 Employment Agreement between the Company and James T. Doody dated
January 1, 1993(1)

10.3 Employment Agreement between the Company and Mont E. Warren dated
January 19, 1993(1)

10.4 Employment Agreement between the Company and Janet R. Gardner dated
January 19, 1993(1)

10.5 Facilities Lease between the Company and Joe Byron and Pat Byron dated
September 11, 1990(1)

10.6 License Agreement between the Company and Fila Sport, S.p.A. dated
October 18, 1990(1)

10.7 1993 Stock Option Plan, Incentive Stock Option Agreement and
Nonstatutory Stock Option Agreement(1)

10.8 Agreement between the Professional Golfers' Associations of Europe
Limited and the Company dated June 7, 1993(1)

10.9 Agreement between Kanebo, Ltd. and the Company dated April 11, 1993(1)

10.10 Lease between the Company and Saint Enterprises dated November 22,
1993(2)

10.11 Purchase and Sale Agreement between the Company and Fidelity Funding
of California, Inc. dated March 13, 1995(2)

*10.12 License Agreement between the Company and Fila sport, S.p.A. dated
October 1, 1996

*10.13 Amendment to Employment Agreement between the Company and Miles T.
Doody dated October 30, 1996

*10.14 Loan and Security Agreement between the Company, John B. Hewlett and
AKA Charitable Remainder Unit Trust Number 2

*10.15 Revolving Promissory Note between the Company, John B. Hewlett and AKA
Charitable Remainder Unit Trust Number 2

*10.16 UCC-1 filings for the state of Utah and California related to the Loan
and Security Agreement between the Company, John B. Hewlett and AKA
Charitable Remainder Unit Trust Number 2

26
<PAGE>

*10.17 Non-qualified Stock Option Agreement for Bruce H. Haglund

*10.18 Non-qualified Stock Option Agreements for Kenneth W. Craig

*10.19 Non-qualified Stock Option Agreement for Janet Gardner

*10.20 Non-qualified Stock Option Agreement for Michael B. Orr

*10.21 Non-qualified Stock Option Agreement for Miles T. Doody

*10.22 Non-qualified Stock Option Agreement for James T. Doody

*10.23 Non-qualified Stock Option Agreement for Pine Valley Ltd.

*10.24 Non-qualified Stock Option Agreement for Mont E. Warren

*10.25 Non-qualified Stock Option Agreement for J. Arthur Wright

*10.26 Non-qualified Stock Option Agreement for John B. Hewlett

*10.27 Non-qualified Stock Option Agreement for Wade M. Mitchell

10.28 Non-qualified Stock Option Agreement for Granite Hollow Insurance
Agency

*23.1 Independent Auditors' Consent - Corbin & Wertz

- -----------------------------

(1) Filed with the Company's Registration Statement on Form SB-2 dated
November 12, 1993 and incorporated by reference.
(2) Filed with the Company's Annual Report on Form 10KSB for the year
ended December 31, 1995.
(b) Reports on Form 8-K.

None.

27
<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Huntington Beach, State of
California, on the 15th day of April, 1997.

By: /s/ Ken W. Craig
-----------------------------------
Ken W. Craig, Chief Executive Officer, President

In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

SIGNATURE TITLE DATE

/s/ John B. Hewlett Chairman of the Board April 15, 1997
- ----------------------------
John B. Hewlett

/s/ Miles T. Doody Vice Chairman, Director April 15, 1997
- ----------------------------
Miles T. Doody

/s/ Wade Mitchell Director April 15, 1997
- ----------------------------
Wade Mitchell

/s/ Dennis Crockett Director April 15, 1997
- ----------------------------
Dennis Crockett

Chief Executive Officer,

28
<PAGE>

/s/ Ken W. Craig President, Director April 15, 1997
- ---------------------------- (Principal Executive Officer)
Ken W. Craig

Vice President, Chief
Financial Officer,
/s/ Mont E. Warren (Principal Accounting Officer) April 15, 1997
- ----------------------------
Mont E. Warren

EXHIBITS

<PAGE>

EXHIBIT INDEX

The following exhibits are being filed with this Annual Report on Form
10-KSB:

EXHIBIT SEQUENTIALLY
NUMBER NUMBERED
PAGE

*4.8 Form of Debenture utilized in the October 1996
Financing
----------
*10.12 License Agreement between the Company and Fila
sport, S.p.A. dated October 1, 1996 ----------

*10.13 Amendment to Employment Agreement between the
Company and Miles T. Doody dated October 30, 1996 ----------

*10.14 Loan and Security Agreement between the Company,
John B. Hewlett and AKA Charitable Remainder Unit
Trust Number 2 ----------

*10.15 Revolving Promissory Note between the Company,
John B. Hewlett and AKA Charitable Remainder Unit
Trust Number 2 ----------

*10.16 UCC-1 filings for the state of Utah and California
related to the Loan and Security Agreement between
the Company, John B. Hewlett and AKA Charitable
Remainder Unit Trust Number 2 ----------

*10.17 Non-qualified Stock Option Agreement for Bruce H.
Haglund ----------

*10.18 Non-qualified Stock Option Agreements for Kenneth
W. Craig ----------

*10.19 Non-qualified Stock Option Agreement for
Janet Gardner ----------

*10.20 Non-qualified Stock Option Agreement for Michael
B. Orr ----------

*10.21 Non-qualified Stock Option Agreement for Miles
T. Doody ----------

*10.22 Non-qualified Stock Option Agreement for James
T. Doody ----------

*10.23 Non-qualified Stock Option Agreement for Pine
Valley Ltd. ----------

*10.24 Non-qualified Stock Option Agreement for Mont
E. Warren ----------

<PAGE>

*10.25 Non-qualified Stock Option Agreement for J.
Arthur Wright ----------

*10.26 Non-qualified Stock Option Agreement for
John B. Hewlett ----------

*10.27 Non-qualified Stock Option Agreement for Wade
M. Mitchell ----------

10.28 Non-qualified Stock Option Agreement for
Granite Hollow Insurance Agency ----------

23.1 Independent Auditors' Consent - Corbin & Wertz ----------

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

FINANCIAL STATEMENTS

For The Years Ended December 31, 1996 and 1995

with

INDEPENDENT AUDITORS' REPORT THEREON

<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors
Renaissance Golf Products, Inc.

We have audited the accompanying balance sheet of Renaissance Golf Products,
Inc. (the "Company") as of December 31, 1996, and the related statements of
operations, stockholders' equity (deficit) and cash flows for each of the years
in the two-year period then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Renaissance Golf Products, Inc.
as of December 31, 1996, and the results of its operations and its cash flows
for each of the years in the two-year period then ended in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
Renaissance Golf Products, Inc. will continue as a going concern. As discussed
in Note 1 to the financial statements, certain conditions raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans concerning these matters are also discussed in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

CORBIN & WERTZ

Irvine, California
February 20, 1997, except as
to Note 14, which is as of
April 11, 1997

F-1

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

BALANCE SHEET

December 31, 1996

ASSETS

Current assets:
Cash and cash equivalents $ 276,012
Accounts receivable, net of allowance for
doubtful accounts of $90,000 142,539
Inventories, net 348,640
Prepaid expenses and other current assets 10,315
------------
Total current assets 777,506

Property and equipment, net 49,207

Other assets 21,143
------------
------------

$ 847,856

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Current portion of long-term debt $ 52,935
Accounts payable 321,294
Accrued liabilities 453,332
Accrued royalties 184,146
Deferred revenue 267,723
------------
Total current liabilities 1,279,430

Notes payable, less current portion 920,500
------------

Total liabilities 2,199,930
------------

Commitments and contingencies

Stockholders' deficit:
Preferred stock, $.01 par value, 150,000
shares authorized; 250 shares issued and
outstanding 3
Common stock, $.001 par value, 20,000,000
shares authorized; 5,461,163 shares issued
and outstanding 5,461
Common stock subscribed, 3,812,500 shares 762,500
Additional paid-in capital 11,758,741
Accumulated deficit (13,878,779)
------------
Total stockholders' deficit (1,352,074)
------------

$ 847,856
------------
------------

See accompanying independent auditors' report
and notes to financial statements
F-2

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

STATEMENTS OF OPERATIONS

For The Years Ended December 31, 1996 and 1995

1996 1995
------------ ------------

Net sales $ 2,403,414 $ 5,007,347

Cost of sales 2,166,947 3,851,915
---------- ----------

Gross profit 236,467 1,155,432

Selling, general and administrative
expenses 2,424,791 3,332,278
---------- ----------

Operating loss (2,188,324) (2,176,846)

Other income (expense):
Interest income 1,114 6,609
Interest expense (43,747) (139,597)
Inventory write-downs (321,000) (209,000)
---------- ----------

Total other income (expense) (363,633) (341,988)
---------- ----------

Loss before provision for income taxes
and extraordinary item (2,551,957) (2,518,834)

Provision for income taxes (800) (800)
---------- ----------

Loss before extraordinary item (2,552,757) (2,519,634)

Extraordinary gain from forgiveness
of debt (net of income taxes of $0) 11,325 ---
---------- ----------

Net loss $ (2,541,432) $ (2,519,634)
---------- ----------
---------- ----------

Net loss per common share $ (0.44) $ (0.46)
---------- ----------
---------- ----------

Weighed average common shares
outstanding 5,834,221 5,447,471
---------- ----------
---------- ----------

See accompanying independent auditors' report
and notes to financial statements
F-3

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

For The Years Ended December 31, 1996 and 1995

Preferred Stock Common Stock Common Stock Subscribed
--------------------- ------------------- -----------------------
Shares Amount Shares Amount Shares Amount
------ ------ ------ ------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1995 --- $ --- 5,415,163 $ 5,415 --- $ ---

Issuance of common stock for
consulting services --- --- 46,000 46 --- ---

Issuance of Series A preferred
stock 250 3 --- --- --- ---

Net loss --- --- --- --- --- ---
--------- ------ --------- ------ --------- ---------

Balance, December 31, 1995 250 3 5,461,163 5,461 --- ---

Common stock subscribed,
3,812,500 shares --- --- --- --- 3,812,500 762,500

Issuance of stock options --- --- --- --- --- ---

Net loss --- --- --- --- --- ---
--------- ------ --------- ------ --------- ---------

Balance, December 31, 1996 250 $ 3 5,461,163 $ 5,461 3,812,500 $ 762,500
--------- ------ --------- ------ --------- ---------
--------- ------ --------- ------ --------- ---------

</TABLE>

Additional Total
Paid-in Accumulated Stockholders'
Capital Deficit Equity (Deficit)
---------- ----------- ----------------
<S> <C> <C> <C>
Balance, January 1, 1995 $ 11,367,789 $ (8,817,713) $ 2,555,491

Issuance of common stock for
consulting services 45,954 --- 46,000

Issuance of Series A preferred
stock 24,998 --- 25,001

Net loss --- (2,519,634) (2,519,634)
----------- ----------- ----------

Balance, December 31, 1995 11,438,741 (11,337,347) 106,858

Common stock subscribed,
3,812,500 shares --- --- 762,500

Issuance of stock options 320,000 --- 320,000

Net loss --- (2,541,432) (2,541,432)
----------- ----------- ----------
Balance, December 31, 1996 $ 11,758,741 $(13,878,779) $(1,352,074)
----------- ----------- ----------
----------- ----------- ----------

</TABLE>

See accompanying independent auditors' report
and notes to financial statements
F-4

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

STATEMENTS OF CASH FLOWS

For The Years Ended December 31, 1996 and 1995

1996 1995
------------ ------------

Cash flows from operating activities:
Net loss $ (2,541,432) $ (2,519,634)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 82,636 112,590
Change in allowance for doubtful accounts (110,000) 140,000
Change in allowance for inventory
obsolescence 321,000 209,000
Consulting expense related to
stock issuance --- 46,000
Loss (gain) on sale of property and
equipment 689 (1,057)
Loss on write-down of impaired assets 177,861 ---
Loss on write-off of intangible asset 6,925 ---
Gain on forgiveness of debt (11,325) ---
Discount recorded resulting from stock
options issued in connection with
debt (42,000) ---
Expense recorded in connection with
non-employee options 162,000 ---
Compensation expense recorded in
connection with employee options 158,000 ---
Changes in operating assets and
liabilities:
Accounts receivable 701,827 193,536
Inventories 276,415 973,215
Prepaid expenses and other current
assets 34,891 8,365
Other assets 1,799 2,201
Accounts payable and accrued
liabilities 138,108 (142,118)
Accrued royalties (403,356) 433,447
Deferred revenue 46,095 221,628
------------ ------------

Net cash used in operating activities (999,867) (322,827)
------------ ------------

Cash flows from investing activities:
Proceeds from sale of property and
equipment --- 2,814
Purchases of property and equipment --- (24,731)
Increase in intangible assets --- (2,351)
------------ ------------

Net cash used in investing activities --- (24,268)
------------ ------------

Continued

F-5

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

STATEMENTS OF CASH FLOWS - CONTINUED

For The Years Ended December 31, 1996 and 1995

1996 1995
------------ ------------

Cash flows from financing activities:
Net payments on lines of credit (287,901) (617,099)
Payments on long-term debt (108,147) (24,260)
Proceeds from issuance of long-term
debt to an officer of the Company 50,000 ---
Proceeds from issuance of subordinated
convertible debentures 762,500 ---
Proceeds from issuance of common
stock subscriptions 762,500 ---
Proceeds from issuance of preferred
stock --- 25,001
------------ ------------

Net cash provided by (used in) financing
activities 1,178,952 (616,358)
------------ ------------

Net change in cash and cash equivalents 179,085 (963,453)

Cash and cash equivalents, beginning
of year 96,927 1,060,380
------------ ------------

Cash and cash equivalents, end of
year $ 276,012 $ 96,927
------------ ------------
------------ ------------

Supplemental disclosures of cash flow
information -
Cash paid during the year for:
Interest $ 27,199 $ 131,668
------------ ------------
------------ ------------
Income taxes $ 800 $ 800
------------ ------------
------------ ------------
Supplemental schedules of non-cash investing
and financing activities:

During fiscal 1996, the Company converted $150,000 of accounts payable
into a note payable.

During fiscal 1996, the Company reclassed $8,418 of principal due on
a note payable to accrued interest.

See accompanying independent auditors' report
and notes to financial statements
F-6

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS

For The Year Ended December 31, 1996 and 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Renaissance Golf Products, Inc. (the "Company") assembles and distributes golf
clubs and accessories. The Company's products are sold domestically and
internationally under a license agreement with FILA Sport S.p.A. ("FILA").

BASIS OF PRESENTATION

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company has suffered
substantial recurring losses from operations and has a stockholders' deficit at
December 31, 1996. These matters raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments that might be necessary should the Company be unable to continue
as a going concern. The Company's continuation as a going concern is dependent
on its ability to generate sufficient cash flow to meet its obligations on a
timely basis, to obtain additional debt and/or equity financing as may be
required, and ultimately to attain profitable operations. Management's plans to
address these matters are as follows:

- - Obtain additional financing through third party investors (see Notes 10 and
14);

- - Utilize a revolving loan to borrow against open purchase orders to fund
sales growth (see Note 14);

- - Focus current marketing strategy on strength of bag and accessory product
lines;

- - Increase the marketing efforts of the ladies product lines;

- - Refocus on historically profitable product lines; and

- - Continue restructuring the operations of the Company.

There can be no assurance that the Company will be successful in these regards.

CONCENTRATIONS OF CREDIT RISK

On occasion, the Company maintains cash balances at certain financial
institutions in excess of amounts insured by Federal agencies.

The accounts receivable are from a diverse customer base. The Company provides
credit in the normal course of business to customers throughout the United
States and foreign markets. Accounts deemed uncollectible have been charged
against the allowance. The Company does not obtain collateral with which to
secure its accounts receivable. The Company performs ongoing credit evaluations
on its customers and maintains reserves for potential credit losses based on
experience and any unusual circumstances that may affect the ability of its
customers to meet their obligations.

One customer accounted for 11% and 15% of net sales for the years ended December
31, 1996 and 1995, respectively. As of December 31, 1996, the Company had
accounts receivable from three customers which represented 42%, 24% and 19%,
respectively, of net accounts receivable.

Continued

F-7

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Four vendors accounted for 22%, 20%, 11% and 10% of inventory purchases for the
year ended December 31, 1996, respectively, and two vendors accounted for 22%
and 14% of inventory purchases for the year ended December 31, 1995,
respectively. No other vendor accounted for 10% or more of inventory purchases
for these periods. As of December 31, 1996, the Company had accounts payable to
two vendors which represented 19% and 13% of accounts payable. The Company
believes that it could purchase such inventory from other vendors without a
material adverse effect to the Company.

The Company had sales to foreign markets of approximately $678,738 (28.2%) and
$1,478,380 (29.5%) for the years ended December 31, 1996 and 1995, respectively.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reported periods.
Significant estimates made by the Company's management include, but are not
limited to, allowances for trade receivables and the net realizable value of
inventories. Actual results could materially differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company has financial instruments whereby the fair market value of the
financial instruments could be different than that recorded on a historical
basis. The Company's financial instruments consist of its cash and cash
equivalents, accounts receivable, long-term debt and accounts payable. The
carrying amounts of the Company's financial instruments generally approximate
their fair values at December 31, 1996.

CASH EQUIVALENTS

For the purpose of the statements of cash flows, the Company considers cash
equivalents to be highly liquid investments with remaining maturities when
purchased of three months or less.

INVENTORIES

Inventories are stated at the lower of cost or market, and consist primarily of
golf clubs, golf bags, golf accessories and related components. Cost is
determined on the first-in, first-out method. Cost includes materials, direct
labor and an allocable portion of direct and indirect manufacturing overhead
based on estimates derived from historical trends and experience factors.
Market is determined by comparison with recent purchases or net realizable
value.

Management evaluates the net realizable value of its inventories based on its
current backlog, anticipated demand and existing competition and provides a
reserve accordingly. The Company increased its reserves by $321,000 and
$209,000 for the years ended December 31, 1996 and 1995, respectively. Should
an adverse change in the attributes which affect the carrying value of its
inventories become known to management, management may consider alternative uses
of the inventories or dispose of such inventories in such a manner to minimize
the risk of financial loss to the Company.

Continued

F-8

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and are depreciated using the
straight-line method over the estimated useful lives of the related assets,
ranging from five to seven years. Leasehold improvements are amortized over the
lesser of the estimated useful lives of the improvements or the related lease
term. Depreciation expense relating to property and equipment for the years
ended December 31, 1996 and 1995 amounted to $82,636 and $91,711, respectively,
of which $25,500 and $22,633, respectively, is included in cost of sales in the
accompanying statements of operations.

Maintenance and repairs are charged to expense as incurred. Renewals and
improvements of a major nature are capitalized. Gains or losses are recognized
upon sale or disposal of assets.

Management of the Company assesses the recoverability of property and equipment
by determining whether the depreciation of such assets over their remaining
lives can be recovered through projected undiscounted cash flows. The amount of
impairment, if any, is measured based on projected undiscounted cash flows and
is charged to operations in the period in which such impairment is determined by
management. During fiscal 1996, management identified the impairment of certain
property and equipment which has resulted in a loss of $177,861, which was
charged to selling, general and administrative expenses in the accompanying 1996
statement of operations. There was no impairment of property and equipment
identified during fiscal 1995.

REVENUE RECOGNITION

Revenues on product sales are recognized upon shipment of the merchandise.

STOCK-BASED COMPENSATION

During 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 ("SFAS 123"), "ACCOUNTING FOR STOCK-BASED
COMPENSATION," which defines a fair value based method of accounting for
stock-based compensation. However, SFAS 123 allows an entity to continue to
measure compensation cost related to stock and stock options issued to employees
using the intrinsic method of accounting prescribed by Accounting Principles
Board Opinion No. 25 ("APB 25"), "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES."
Entities electing to remain with the accounting method of APB 25 must make pro
forma disclosures of net income and earnings per share, as if the fair value
method of accounting defined in SFAS 123 had been applied. The Company has
elected to account for its stock-based compensation to employees under APB 25.

ADVERTISING

The Company expenses advertising costs as incurred. Advertising expense for the
years ended December 31, 1996 and 1995 was $33,686 and $554,853, respectively.

WARRANTY COSTS

The Company expenses warranty costs as incurred. Warranty expense for the years
ended December 31, 1996 and 1995 was not significant.

Continued

F-9

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

INCOME TAXES

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "ACCOUNTING FOR INCOME TAXES" ("SFAS 109"). Under
SFAS 109, the asset and liability method is used in accounting for income taxes.
Under this method, deferred tax assets and liabilities are determined based on
differences between the financial reporting and the tax basis of assets and
liabilities and are measured using enacted tax rates and laws that will be in
effect when the differences are expected to reverse. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized.

Business and foreign tax credits are accounted for as a reduction of income tax
expense in the years they are available for use under the flow-through method.

NET LOSS PER COMMON SHARE

Net loss per common share is computed based on the weighted average number of
common shares outstanding during the years presented. Common equivalent shares
from stock options and warrants are excluded from the computation as their
effect would be antidilutive for both periods presented.

RECLASSIFICATIONS

Certain amounts in the 1995 financial statements have been reclassified to
conform to the 1996 presentation.

NOTE 2 - INVENTORIES

Inventories consist of the following at December 31, 1996:

Component parts $ 709,873
Finished goods - clubs 316,748
Finished goods - bags and accessories 52,019
------------
1,078,640

Less inventory reserve (730,000)
------------

$ 348,640
------------
------------

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31, 1996:

Manufacturing equipment and tooling $ 162,270
Office furniture and equipment 47,382
Computer equipment and software 124,193
Trade show equipment and product displays 219,168
Automotive equipment 6,942
Leasehold improvements 32,884
------------
592,839
Less accumulated depreciation
and amortization (543,632)
------------

$ 49,207
------------
------------

Continued

F-10

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 4 - LINES OF CREDIT

In December 1993, the Company entered into a line of credit agreement with a
bank whereby the Company could borrow up to $950,000. The amount of letters of
credit outstanding under the line at any one time could not exceed $450,000.
The line bore interest at 1.25% above the bank's reference rate and was
collateralized by a certificate of deposit held by the Company. The line
expired in February 1995, at which time it was repaid in full with proceeds from
the certificate of deposit.

In February 1995, the Company entered into a line of credit agreement with a
bank whereby the Company could borrow up to $300,000 for working capital and/or
letters of credit. The line bore interest at the prime rate, as defined, and
expired in April 1996. The line was collateralized by certificates of deposit
purchased by the Company from the bank.

In March 1995, the Company executed an agreement with a financial institution to
borrow funds based on eligible accounts receivable, as defined, up to the lesser
of $1,000,000 or 80% of eligible accounts receivable. The financial institution
had full recourse against the Company for any of the receivables which were
deemed uncollectible. The line of credit bore interest at the prime rate, as
defined, plus 2.5%. Advances were collateralized by substantially all of the
Company's assets. The agreement was terminated on June 4, 1996.

Subsequent to December 31, 1996, the Company entered into a new line of credit
agreement (see Note 14).

NOTE 5 - LONG-TERM DEBT

Notes payable at December 31, 1996 consist of the following:

Note payable to a distributor, bearing
interest at 10% per annum, due December 31,
1995, secured by certain assets of the
Company. Partially forgiven and remaining
balance repaid subsequent to December 31,
1996 (see Note 14). $ 52,935

Unsecured note payable to an officer of
the Company, bearing interest at 10%
per annum, all unpaid interest and
principal due June 30, 1999. 50,000

Unsecured note payable to a vendor/related
party bearing interest at 10% per annum,
all unpaid interest and principal due
June 30, 1999. 150,000

Subordinated convertible debentures,
bearing interest at 10% per annum for
the first twenty-four (24) months and
then at the Company's bank's prime plus
4% (12.25% at December 31, 1996), interest
payable quarterly commencing June 30,
1997, all accrued interest and principal
due November 1, 2001; secured by
substantially all of the Company's
assets, subordinate to all other debt. 762,500
------------
1,015,435
Discount on long-term debt (42,000)
------------
973,435
Less: current maturities (52,935)
------------

$ 920,500
------------
------------

Continued
F-11

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 5 - LONG-TERM DEBT, CONTINUED

Annual maturities of long-term debt, excluding the expected accretion of the
discount on long-term debt, are as follows:

Years Ending
December 31,
------------

1997 $ 52,935
1998 ---
1999 200,000
2000 ---
2001 762,500
------------

$ 1,015,435
------------
------------
The subordinated convertible debentures were issued in connection with a private
placement memorandum (see Note 10). The debentures are convertible at any time
from issuance prior to maturity at the rate of $0.50 per share and are
redeemable by the Company at any time after the closing price of the Company's
common stock equals or exceeds $1.50 per share for 20 consecutive trading days.

Total interest expense incurred in connection with related party debt was $7,674
for the year ended December 31, 1996.

NOTE 6 - DEFERRED REVENUE

During 1995, the Company entered into a royalty agreement with a Japanese
distributor who designs clubs for Asian markets and distributes using the FILA
name and trademark. Royalties due to the Company related to such agreement are
9% on sales of bags, head covers and gloves designed and distributed by the
Japanese distributor. In connection with the royalty agreement, the distributor
agreed to prepay $280,048 which will be credited against future royalty payments
due to the Company from the distributor. During fiscal 1996, the distributor
advanced the Company additional amounts of $94,274. Royalty revenue recognized
under this agreement was $48,179 and $133,343 for the years ended December 31,
1996 and 1995, respectively. Deferred revenues in connection with this
arrangement amounted to $267,723 at December 31, 1996. See Note 14.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

The Company leases its office and warehouse facilities on a month-to-month basis
with a 90-day notice of termination and certain equipment under several
non-cancelable lease agreements accounted for as operating leases expiring
through November 2001. Real estate taxes, insurance and maintenance expenses
are obligations of the Company.

Continued

F-12

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 7 - COMMITMENTS AND CONTINGENCIES, CONTINUED

Minimum rental payments under non-cancelable operating leases on certain
equipment are as follows:

Years Ending
December 31,
------------
1997 $ 8,129
1998 2,010
1999 2,010
2000 2,010
2001 1,842
------------

$ 16,001
------------
------------

Rent expense totaled approximately $91,000 and $112,000 for the years ended
December 31, 1996 and 1995, respectively. It is expected that expiring leases
would be renewed in the ordinary course of business.

ROYALTY AND LICENSING AGREEMENTS

FILA LICENSE

The Company had an exclusive licensing agreement with FILA to use the FILA name
and trademark for the Company's golf clubs, bags and various other golf
accessories for sale in the United States, Japan and certain other countries.
The initial term of the agreement originally expired December 31, 1995, but had
been extended by FILA to December 31, 2000. The agreement was terminated on
June 30, 1996 as the Company was in default of the obligations under the
agreement. In October 1996, the Company entered into a new licensing agreement
which granted the Company the exclusive license to use the FILA name and
trademark for hard products, as defined, for sale in the United States and
foreign countries, excluding Asia and a non-exclusive license to use the FILA
name and trademark for soft products, as defined, for sale in the United States
and foreign countries, excluding Asia. The new license agreement expires
December 31, 2000 and can be renewed for an additional five-year period provided
that the Company is not in default of any obligation under the agreement.
Royalty expense under these agreements was $429,167 and $450,000 for the years
ended December 31, 1996 and 1995, respectively. There were no royalties due to
FILA at December 31, 1996.

The terms of the revised licensing agreement include, among others, the
following:

Minimum royalty payments during the remainder of the initial term are as
follows:

1997 $ 400,000
1998 500,000
1999 600,000
2000 700,000
------------

$ 2,200,000
------------
------------

Percentage royalty payments are due if such amounts exceed the minimum royalty
payments and are based on annual sales as follows:

Sales up to $7,500,000 6.0%
Sales from $7,500,001 to $15,000,000 5.5%
Sales over $15,000,000 5.0%

Continued

F-13

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 7 - COMMITMENTS AND CONTINGENCIES, CONTINUED

FILA can terminate the license if the Company does not have annual sales of
licensed product equal to or exceeding the following amounts for the respective
years:

1997 $ 5,000,000
1998 6,250,000
1999 7,500,000
Each year thereafter 8,333,000

The Company must expend annually not less than five percent of net sales for
advertising and not less than three percent of net sales for promotions.

The Company shall not offer discounts on current products greater than
twenty-five percent (25%) without first obtaining approval from FILA. The
Company shall not sell discontinued product lines at a discount exceeding fifty
percent (50%).

The Company must establish an irrevocable letter of credit for the minimum
annual royalty for each contract year which shall be renewed annually for the
minimum annual royalty for each subsequent contract year (see Note 14). The
Company shall pay one fourth (1/4) of the minimum annual royalty to FILA fifteen
(15) days prior to the end of each quarter. If the Company fails to make the
required payment, FILA may draw the required payment amount from the letter of
credit on the last day of the quarter.

The Company must submit a prototype of each product, as defined, for FILA's
approval prior to the manufacture, distribution or sale of such product. The
Company must submit to FILA for approval the Company's price lists and a
description of any plans to offer discounted prices (to eliminate overstock or
otherwise).

FILA may terminate the agreement in whole, or in part, upon the occurrence of
certain events, including the following:

- -Failure to perform or otherwise materially breach any of the obligations under
the agreement and there is no remedy within 30 days of the receipt of
written notice of intent to terminate the agreement from FILA.

- -Failure to make timely royalty payments, use best efforts to meet
established product introduction dates, maintain required levels of product
liability insurance or meet established guidelines for quality control.

- -Failure to meet advertising, promotional and/or sales targets within a
country included in the territory, as defined.

- -Sale or disposal of substantially all of the Company's business or assets to a
third party or transfer of control of the Company to a third party or the
cessation of an employment relationship with Miles Doody.

Further, FILA may terminate the license agreement if the Company's financial
condition becomes unstable, as evidenced by, among other matters, insolvency or
the Company's inability to pay its debts as they become due.

Continued
F-14

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 7 - COMMITMENTS AND CONTINGENCIES, CONTINUED

As of December 31, 1996, the Company was not in compliance with the FILA
licensing agreement as it relates to the establishment of a letter of credit.
The letter of credit was established subsequent to December 31, 1996 (see Note
14).

JAPANESE SUBLICENSE

FILA granted an exclusive licensing agreement to Kanebo, Ltd. ("Kanebo")
covering Japan, prior to granting the Company its licensing agreement. This
licensing agreement gave Kanebo an exclusive right and license to use FILA
trademarks in connection with the manufacture and sale of certain items
including golf bags, head covers and gloves sold in Japan, but not including
golf clubs or balls. Accordingly, the Company entered into a sublicensing
agreement with Kanebo giving the Company a non-exclusive right to sell golf
bags, head covers and gloves in Japan. The sublicensing agreement was
terminated as of June 30, 1996 upon the termination of the Company's license
agreement with FILA. Royalty expense in connection with this sublicense was
$26,766 and $74,079 for the years ended December 31, 1996 and 1995,
respectively. Accrued royalties related to the sublicense agreement totaled
$118,355 at December 31, 1996. As of December 31, 1996, the Company was not in
compliance with certain terms of the sublicense agreement.

LICENSE AGREEMENT FOR LATITUDE IRONS

The Company had a licensing agreement with a third party for the sale of certain
golf club heads. The Company was obligated to pay a $2.00 royalty on sales of
licensed club heads. The term of the agreement was an initial period of three
years ending on October 31, 1996, which was extendible at the option of the
Company in one year increments. The Company did not exercise its option to
renew therefore, the agreement expired on October 31, 1996. Total accrued
royalties related to such agreement amounted to $18,241 at December 31, 1996.
Amounts paid to the third party in 1996 and 1995 under this license agreement
was $0 and $17,917, respectively.

PGA OF EUROPE LICENSE

The Company had a license agreement with the PGA of Europe in which the Company
was granted the exclusive, worldwide right to use the PGA of Europe trademark
and logo on all printed material and equipment related to golf clubs, putters,
golf bags, and certain other related golf accessories. In consideration for the
license grant, the Company agreed to pay a royalty to the PGA of Europe equal to
5% of the net sales price of products bearing the PGA of Europe trademark sold
by the Company, with a minimum annual royalty of L30,000 (approximately $51,000
at current exchange rates). Royalty expense in connection with this license
agreement was $11,648 and $47,640 for the years ended December 31, 1996 and
1995, respectively. Total accrued royalties due amounted to $47,550 at
December 31, 1996. The PGA of Europe license expired on March 31, 1996.

Continued

F-15

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 7 - COMMITMENTS AND CONTINGENCIES, CONTINUED

LICENSE AGREEMENT FOR CONVERTIBLE GOLF BAGS

The Company has an exclusive agreement with a third party for the manufacture
and sale of certain golf bags. The Company is obligated to pay a $5.00 per bag
royalty on domestic sales and a $3.00 per bag royalty on foreign sales of
licensed golf bags. The Company shall pay a monthly minimum royalty of $3,000
on or before the first of each month. The initial term of the agreement expires
March 1, 1998, and is extendible at the option of the Company through March 1,
1999 provided certain performance requirements have been met. Thereafter, the
Company shall have a non-exclusive license for a period of ten (10) years from
October 1, 1996 unless sooner terminated. Royalty expense in connection with
this license agreement was $9,000 for the year ended December 31, 1996. There
were no accrued royalties as of December 31, 1996.

EMPLOYMENT AGREEMENTS

In January 1993, the Company entered into employment agreements with certain
officers which call for minimum base salaries per year for a three-year period.
In January 1994, the Company agreed to extend these agreements through December
31, 1997. Minimum payments required under these agreements in the aggregate
total $249,500 for 1997.

In October 1996, the Company entered into an employment agreement with a certain
officer which calls for a base salary of $48,000 and a commission equal to one
percent (1%) of adjusted gross sales, as defined, for a three-year period with a
one-year renewal option. In addition, the agreement provided for the issuance
of stock options (see Note 8).

LETTERS OF CREDIT

In connection with the FILA license discussed above, the Company is required to
establish a letter of credit with an accredited Italian bank in the amount of
$400,000, the minimum royalty for fiscal 1996. This letter of credit was
established subsequent to year end. See Note 14.

In connection with the purchase of inventory from an overseas vendor, the
Company was required to establish a letter of credit on the vendor's behalf.
The letter of credit is secured by a corresponding cash balance maintained by
the Company at the issuing bank which is used to pay the vendor. At December
31, 1996, the Company had $87,515 outstanding pursuant to this letter of credit.

LITIGATION

During 1995, a dispute arose between the Company and an outside consultant
related to services provided by the consultant to the Company. The consultant
tendered back to the Company certain out-of-the-money warrants (see Note 9).

LIMITATIONS ON DIVIDENDS

Pursuant to state laws, the Company is currently restricted, and may be
restricted for the foreseeable future, from making dividends to its stockholders
as a result of working capital and accumulated deficit as of December 31, 1996.

Continued

F-16

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 8 - STOCK OPTIONS

In July 1993, the Board of Directors adopted, and the stockholders approved, the
1993 Omnibus Stock Option Plan ("1993 Plan") which is intended to provide
incentives to key employees, directors, consultants and others. Pursuant to the
1993 Plan, up to 600,000 shares may be granted on a discretionary basis by the
Board of Directors in the form of incentive stock options for full-time
employees and directors and non-statutory stock options for non-employees.

In July 1993, incentive stock options were granted to certain officers and
directors for the purchase of 400,000 shares of the Company's common stock at
$4.00 per share. Of these options, 160,000 were canceled in October 1996. The
options are fully vested as of December 31, 1996, and expire July 12, 1998, or
upon termination of employment.

In January 1994, non-statutory stock options were granted outside of the 1993
Plan to professional golfers for the purchase of 25,500 shares of the Company's
common stock at $3.25 per share. Of these options, 15,500 vested on issuance
and 10,000 were to vest based on the golfers achieving certain performance
goals. These 15,500 options expire at various dates from December 31, 1997
through December 31, 1998. No non-statutory stock options expired during the
year ended December 31, 1996.

In June 1994, incentive stock options were granted outside of the 1993 Plan to
certain employees for the purchase of 38,500 shares of the Company's common
stock at $2.50 per share. These options vest ratably on October 15, 1994, 1995
and 1996 and expire June 14, 1999, or upon termination of employment. Of these
options, 10,001 were canceled during fiscal 1995. No incentive stock options
expired during the year ended December 31, 1996.

In May 1995, non-statutory stock options were granted outside of the 1993 Plan
for various consulting services provided to the Company for the purchase of
441,000 shares of the Company's common stock at prices ranging from $1.00 to
$2.50 per share, the estimated fair market value (or greater) of the Company's
common stock at the date of grant. These options expire at various dates from
December 31, 1995 to March 31, 2000 and vested immediately. During the year
ended December 31, 1995, 100,000 of such options expired and 46,000 of such
options were exercised. During the year ended December 31, 1996, non-statutory
stock options totaling 245,000 expired and 50,000 were canceled.

In August 1995, non-statutory stock options were granted to non-employee members
of the Company's Board of Directors for services rendered during 1995 and
previous years for the purchase of 200,000 shares of the Company's common stock
at $1.00 per share, the estimated fair market value of the Company's stock at
the date of grant. These options expired on December 31, 1996.

In October 1996, non-statutory stock options were granted outside of the 1993
Plan to non-employee members of the Company's Board of Directors and various
consultants for services provided to the Company for the purchase of 2,750,000
shares of the Company's common stock at $0.50 per share, the estimated fair
value of the Company's stock at the date of grant. These options expire on
December 31, 2006. These options are assumed to be vested as of December 31,
1996 as a result of the successful completion of the private placement
memorandum as discussed in Notes 5 and 10. These options are not subject to
adjustment in the event of a split of the Company's stock. Because the Company
anticipated a 4:1 reverse stock split, the exercise price per share, for
purposes of calculating the fair market value of these non-employee options, is
assumed to be $0.125 per

Continued
F-17

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 8 - STOCK OPTIONS, CONTINUED

share. The Company expensed $162,000 in connection with the issuance of
2,225,000 of the aforementioned options. An additional $8,000 of expense will
be recorded during each year ending December 31, 1997 and 1998 in connection
therewith. With respect to the remaining 525,000 options, the Company recorded
$42,000 of debt issuance costs (reflected as a discount in Note 5), which will
be amortized over the life of the related debt.

In October 1996, incentive stock options were granted outside of the 1993 Plan
to certain officers and key employees for the purchase of 1,377,000 shares of
the Company's common stock at $0.50 per share. Of these options, 717,000 vest
upon the earlier of achieving certain performance goals or ratably over ten
years and 660,000 were assumed to be vested as of December 31, 1996 as a result
of the successful completion of the private placement memorandum as discussed in
Notes 5 and 10. These options are not subject to adjustment in the event of a
split of the Company's stock. Because the Company anticipated a 4:1 reverse
stock split, the exercise price per share, for purposes of calculating the fair
market value of these non-employee options, is assumed to be $0.125 per share.
The Company expensed $50,000 in connection with the issuance of 660,000 of the
aforementioned options. An additional $54,000 of expense will be recorded pro
rata over ten years in connection with the 717,000 options. These options
expire on December 31, 2006.

In October 1996, the Company granted to a non-employee director an option to
acquire 200,000 shares of common stock at an exercise price of $0.50 per share
and an option to acquire 150,000 shares of common stock at an exercise price of
$1.00 per share in connection with the director's services performed in 1996.
The Company also granted to another non-employee director an option to acquire
1,000,000 shares of common stock at an exercise price of $1.00 per share in
connection with the director's services performed in 1996. The options vested
immediately and expire December 31, 2006. These options are not subject to
adjustment in the event of a split of the Company's stock. Because the Company
anticipates a 4:1 reverse stock split, the exercise price per share, for
purposes of calculating the fair market value of these two non-employee options,
is assumed to be $0.125 for the $0.50 options and $0.25 for the $1.00 options.
The Company expensed $108,000 in connection with the issuance of these two
options.

A summary of stock option activity for 1996 and 1995 follows:

1993 Plan Outside Plan Price
--------- ------------ -----

Balance at January 1, 1995 400,000 64,000 $2.50-4.00

Granted 200,000 441,000 1.00-2.50
Expired/canceled --- (120,001) 1.00-3.25
Exercised --- (46,000) 1.00
----------- ----------- -----------

Balance at December 31, 1995 600,000 338,999 1.00-4.00

Granted --- 5,477,000 0.50-1.00
Expired/canceled (360,000) (295,000) 1.00-4.00
Exercised --- --- ---
----------- ----------- -----------

Balance at December 31, 1996 240,000 5,520,999 $0.50-4.00
----------- ----------- -----------
----------- ----------- -----------

Exercisable at December 31,
1996 240,000 4,803,999 $0.50-4.00
----------- ----------- -----------
----------- ----------- -----------

Continued
F-18

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 8 - STOCK OPTIONS, CONTINUED

PRO FORMA STOCK OPTION INFORMATION

Pro forma information regarding net income (loss) is required by SFAS 123 and
has been determined as if the Company had accounted for its employee stock
options under the fair value method pursuant to SFAS 123, rather than the method
pursuant to APB 25 as discussed herein. The fair value for these options was
estimated at the date of grant using a BLACK-SCHOLES option pricing model with
the following assumptions: stock price, as determined by the Board of Directors,
of $.20 per share; a risk-free interest rate of 7.5%; dividend yields of 0.0%;
volatility factors of the expected market price of the Company's common stock of
100.0%; and expected term of five years.

The BLACK-SCHOLES valuation model was developed for use in estimating the fair
value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

For purposes of pro forma disclosure, the estimated fair value of the options is
amortized to expense over the options' vesting period. The Company's pro forma
information follows.

1996 1995
------------ ------------

Net loss:
As reported $ (2,541,432) $ (2,519,634)
Pro forma $ (2,700,773) $ (2,519,634)

Net loss per share:
As reported $ (0.44) $ (0.46)
Pro forma $ (0.46) $ (0.46)

NOTE 9 - STOCK WARRANTS

The Company is authorized to issue Class A, B, C, D, E, F and G warrants. The
terms of the warrants are summarized as follows:

- - Class A warrants entitle the holder to purchase one share of common stock
at a price of $6.50 per share. The warrants are exercisable for five years
from the date of issuance and may be redeemed by the Company at $.01 per
warrant if the closing bid price of the common stock exceeds $9.00 for 10
consecutive trading days.

- - Class B warrants entitle the holder to purchase one share of common stock
at a price of $4.00 per share. The warrants are exercisable for three
years beginning one year from the date of issuance.

- - Class C warrants entitle the holder to purchase one share of common stock
for $8.50 per share. The warrants are exercisable beginning January 1,
1995 for two years unless extended by the Board of Directors.

Continued
F-19

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 9 - STOCK WARRANTS, CONTINUED

- - Class D warrants entitle the holder to purchase one share of common stock
for $4.50 per share. The warrants are exercisable for one year from the
date of issuance.

- - Class E warrants entitle the holder to purchase one share of common stock
for $5.50 per share. The warrants are exercisable for one year from the
date of issuance.

- - Class F warrants entitle the holder to purchase one share of common stock
for $3.50 per share. The warrants are exercisable from the date of
issuance and expire December 31, 1997.

- - Class G warrants were issued with a private placement memorandum in January
1995 and entitle the holder to purchase one share of common stock for $2.50
per share. The warrants are exercisable for 18 months from the date of
issuance.

In connection with the offering of convertible debentures, bridge financing
arrangements and the initial public offering completed prior to 1995, the
Company issued 2,509,250 warrants with exercise prices of $3.50 to $8.50 which
expire between November 15, 1996 and November 15, 1998.

During 1995, in connection with a private placement memorandum, the Company
issued 1,250 Class G warrants. All of these warrants expired as of October 6,
1996.

In connection with a legal settlement in 1995 (see Note 7), 5,000 Class B
warrants and 10,000 Class C warrants issued prior to 1995 were tendered to the
Company and canceled. These warrants have been deducted from the summary of
warrants detailed below.

During 1996, 844,250 Class B warrants expired. These warrants have been
deducted from the summary of warrants detailed below.

A summary of the Company's warrants outstanding as of December 31, 1996 follows:

Class Outstanding Exercise Price Expiration Date
----- ----------- -------------- ---------------

A 1,400,000 $6.50 November 15, 1998
B --- $4.00 ---
C 240,000 $8.50 January 1, 1997
D --- $4.50 ---
E --- $5.50 ---
F 10,000 $3.50 December 31, 1997
G --- $2.50 ---

NOTE 10 - STOCKHOLDER'S DEFICIT

In January 1995, the Company issued a private placement memorandum offering
15,000 units at $100 per unit, each unit consisting of one share of Series A
preferred stock and five Class G warrants. Each share of the Series A preferred
stock is convertible into 50 shares of common stock. The offering originally
terminated on April 30, 1995, but was extended by the Company through December
31, 1995. A total of 250 units were sold for proceeds totaling $25,001.

Continued
F-20

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 10 - STOCKHOLDER'S DEFICIT, CONTINUED

During 1995, the Company issued 46,000 shares of common stock at $1.00 per share
in connection with the exercise of non-statutory stock options (see Note 8).

In October 1996, the Company issued a private placement memorandum offering 100
units at $25,000 per unit, each unit consisting of 62,500 shares of common stock
and a subordinated convertible debenture with a face value of $12,500 (see Note
5). As of December 31, 1996, the Company had sold 61 units and raised $762,500
from the private placement memorandum offering relating to the sale of common
stock. An equivalent amount was raised in the form of subordinated convertible
debentures (see Note 5).

NOTE 11 - PROVISION FOR INCOME TAXES

The provision for income taxes for the years ended December 31, 1996 and 1995
consists of the following:

Current Deferred Total
------- -------- -----

Year ended December 31, 1996:
U.S. Federal $ --- $ --- $ ---
State and local 800 --- 800
------- ------- -------
$ 800 $ --- $ 800
------- ------- -------
------- ------- -------

Year ended December 31, 1995:
U.S. Federal $ --- $ --- $ ---
State and local 800 --- 800
------- ------- -------
$ 800 $ --- $ 800
------- ------- -------
------- ------- -------

Income tax expense was $800 for each of the years ended December 31, 1996 and
1995, and differed from the amounts computed by applying the U.S. Federal income
tax rate of 34 percent to loss from operations before provision for income taxes
and extraordinary item as a result of the following:

1996 1995
------------ ------------

Computed "expected" benefit $ (864,087) $ (856,404)
Increase (reduction) in income taxes
resulting from:
Change in valuation allowance for
deferred tax assets 1,041,364 1,081,000
Non-deductible expenses 52,635 18,261
Change in deferred tax assets (233,489) (242,585)
Other 3,849 ---
State taxes, net of benefit 528 528
----------- -----------

$ 800 $ 800
----------- -----------
----------- -----------

Continued
F-21

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 11 - PROVISION FOR INCOME TAXES, CONTINUED

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets at December 31, 1996 are presented below:

Deferred tax assets:
Accounts receivable, principally due to
allowance for doubtful accounts $ 36,124
Inventories, principally due to allowance
for obsolete inventory 331,350
Compensated absences, principally due to
accrual for financial reporting
purposes 6,960
Property, primarily due to differences
in depreciation methods 71,390
Compensation expense relating to options
granted to employees and consultants not
currently deductible 109,000
State taxes, net of benefit 272
Net operating loss carryforwards 3,761,268
-----------

Total gross deferred tax assets 4,316,364
Less valuation allowance (4,316,364)
-----------

Net deferred tax assets $ ---
-----------
-----------

The valuation allowance for deferred tax assets as of January 1, 1996 was
$3,275,000. The net change in the total valuation allowance for the year ended
December 31, 1996 was an increase of $1,041,364.

At December 31, 1996, the Company had net operating loss carryforwards of
approximately $10,147,000 and $5,072,000 available to offset future taxable
Federal and state income, respectively. The carryforward amounts expire in
varying amounts between 1998 and 2011.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carryforwards for Federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur, net
operating loss carryforwards may be limited as to use in future years.

NOTE 12 - EXTRAORDINARY ITEM - GAIN ON FORGIVENESS OF DEBT

During 1996, the Company entered into several agreements with vendors to settle
amounts payable to such vendors for less than the face amount. As a result, the
Company recognized an aggregate gain of $11,325.

NOTE 13 - RELATED PARTY TRANSACTIONS

During the years ended December 31, 1996 and 1995, sales to an affiliate were
$38,720 and $364,179, respectively. There were no amounts due from this
affiliate as of December 31, 1996.

Continued
F-22

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Year Ended December 31, 1996 and 1995

NOTE 14 - SUBSEQUENT EVENTS

Subsequent to December 31, 1996, the following events occurred:

- - The Company entered into a settlement agreement relating to a note due and
payable as of December 31, 1996 (see Note 5). Under the financing
arrangement, the Company owed a total of $81,877 in accrued interest and
principal. The distributor accepted $71,139 in full satisfaction of the
balance due resulting in a gain of $10,738 which will be recognized during
1997. The Company made the final payment on February 11, 1997.

- - The Company entered into an agreement with a third party regarding certain
prepaid royalties (see Note 6). The third party released the Company from
any obligation to repay the prepaid royalties and required no additional
services from the Company. The result will be a gain of $267,723 which
will be recognized during fiscal 1997.

- - The Company sold the additional 12 units under the ongoing private
placement memorandum (see Note 10), thus raising an additional $150,000
relating to the sale of stock and an equivalent amount in the form of
subordinated convertible debentures. The Company's Board of Directors
elected to extend the offering to May 15, 1997.

- - The Company entered into a line of credit agreement with a bank in which
the Company can borrow up to $400,000 in connection with the letter of
credit established in accordance with the FILA license agreement (see
below). The line bears interest at the bank's prime rate plus 1.5% and is
collateralized by essentially all of the Company's assets and is guaranteed
by the Chairman of the Board of Directors. The line expires January 31,
1998.

- - In connection with the FILA license, the Company established a letter of
credit with an accredited bank in the amount of $400,000. The letter of
credit is secured by the line of credit discussed above. The letter of
credit expires January 31, 1998.

- - The Company and the Company's chairman of the Board of Directors jointly
entered into a loan and security agreement (the "Agreement") with a lender
on March 31, 1997 which will provide up to a maximum of $1,000,000 to fund
open purchase orders. The revolving promissory note executed pursuant to
the Agreement bears an interest rate of 12% and expires December 31, 1997.
Amounts outstanding under the Agreement will be collateralized by the
Company's inventory and open purchase orders, as defined.

- - Effective March 31, 1997, the Company borrowed $225,000 from a stockholder.
The borrowing bears interest at a rate of 1% per month.

Continued
F-23

<PAGE>

EXHIBIT "D"

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH, OR
APPROVED OR DISAPPROVED BY, THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
OR BY THE SECURITIES REGULATORY AUTHORITY OF ANY STATE. NO SUCH COMMISSION OR
AUTHORITY HAS PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OF THESE
SECURITIES OR THE ACCURACY OR ADEQUACY OF THE PRIVATE PLACEMENT MEMORANDUM DATED
OCTOBER 31, 1996 PURSUANT TO WHICH THESE SECURITIES ARE OFFERED, NOR IS IT
INTENDED THAT THEY WILL. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD, OR
TRANSFERRED UNLESS THE COMPANY RECEIVES A WRITTEN OPINION OF COUNSEL, IN FORM
AND SUBSTANCE SATISFACTORY TO THE COMPANY TO EFFECT THAT SUCH OFFER, SALE, AND
TRANSFER ARE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933, AS AMENDED.

No. 11/96-______ $____________

RENAISSANCE GOLF PRODUCTS, INC.

10% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2001

DATE OF ISSUANCE: ___________________, 1996

RENAISSANCE GOLF PRODUCTS, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay _________________ or registered assigns, the principal
sum of ______________ Dollars ($____________) at the executive offices of the
Company at 5812 Machine Drive, Huntington Beach, California, on November 1,
2001, in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, and
to pay interest, quarterly on March 31, June 30, September 30, and December 31,
commencing on June 30, 1997, until this Debenture is paid in full, on said
principal sum at said office in like coin or currency, at the rate of 10% per
annum for the first 24 months and bearing interest at the prime rate charged by
the Company's bank plus four points therafter to maturity, as more specifically
provided in this Debenture. This Debenture is one of a duly authorized issue of
Debentures of the Company designated as its 10% Convertible Subordinated
Debentures Due 2001" (herein called the "Debentures"), and limited in aggregate
principal amount to One Million Two Hundred Fifty Thousand Dollars ($1,250,000).

ARTICLE ONE

DEFINITIONS.

SECTION 1.01. DEFINITIONS. The terms defined in this Section 1.01 (except
as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Debenture shall have the respective meanings specified
in this Section 1.01.

BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board of
Directors of the Company or the Executive Committee of such Board.

BUSINESS DAY: The term "business day" shall mean a day which in Huntington
Beach, California, is neither a legal holiday nor a day on which banking
institutions are authorized by law to close.

COMMON STOCK: The term "Common Stock" shall mean all shares now or
hereafter authorized of the class of Common Stock, par value $.001 per share, of
the Company presently authorized and stock of any other class into which such
shares may hereafter have been changed.

Page 1 of Twenty-two
<PAGE>

COMPANY: The term "Company" shall mean RENAISSANCE GOLF PRODUCTS, INC., a
Delaware corporation.

DEBENTURE OR DEBENTURES; OUTSTANDING: The terms "Debenture" or
"Debentures" shall mean any Debenture or Debentures, as the case may be,
executed and delivered by the Company in accordance with the offering pursuant
to the terms of the Memorandum, limited in aggregate principal amount to a
maximum of One Million Two Hundred Fifty Thousand Dollars ($1,250,000). The term
"Outstanding", when used with reference to Debentures, shall mean, as of any
particular time, all Debentures except:

(a) Debentures theretofore canceled or delivered to the Company for
cancellation;

(b) Debentures, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been set aside and segregated in
trust by the Company, provided that if such Debentures are to be redeemed prior
to the maturity thereof, notice of such redemption shall have been given as in
Article Three provided;

(c) Debentures in lieu of or in substitution for which other
Debentures shall have been authenticated and delivered or which shall have been
paid pursuant to the terms of Section 2.04, unless proof satisfactory to the
Company is presented that any of such Debentures are held by persons in whose
hands any of such Debentures are valid, binding, and legal obligations of the
Company; and

(d) Debentures converted into Common Stock pursuant to Article Eleven.

DEBENTUREHOLDER: The terms "Debentureholder", "holder of Debentures", or
other similar terms, shall mean any person in whose name at the time a
particular Debenture is registered on the Debenture register kept for that
purpose in accordance with the terms hereof.

EVENT OF DEFAULT: The term "Event of Default" shall mean any event
specified in Section 6.01, continued for the period of time, if any, and after
the giving of the notice, if any, therein designated.

OFFICERS' CERTIFICATE: The term "Officers' Certificate" shall mean a
certificate signed by the Chairman of the Board, the President, or any Vice
President and by the Treasurer, any Assistant Treasurer, the Controller, any
Assistant Controller, the Secretary, or any Assistant Secretary of the Company.
Each such certificate shall include the statements provided for in Section 6.05
if and to the extent required by the provisions of such Section.

RECORD DATE: The term "Record Date" as used in Section 2.02 with respect
to any regular interest payment date shall mean the 15th day of the calendar
month preceding such interest payment date.

REDEMPTION DATE: The term "Redemption Date", when used with respect to any
Debenture to be redeemed, shall mean the date fixed for such redemption by or
pursuant to this Debenture.

REDEMPTION PRICE: The term "Redemption Price", when used with respect to
any Debenture to be redeemed, shall mean the price at which it is to be redeemed
pursuant to this Debenture.

SENIOR INDEBTEDNESS: The term "Senior Indebtedness" of the Company and its
Subsidiaries shall mean (i) the principal of and accrued and unpaid interest
(whether or not accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to the Company) on all indebtedness of the Company
and its Subsidiaries, whether outstanding on the date of issuance of this
Debenture or thereafter created, incurred, or assumed, for money borrowed from
one or more banks, insurance companies, financial institutions, or other persons
which regularly engage in lending money, unless such indebtedness shall, in the
instrument creating the same, be specifically designated as not being senior in
right of payment to the Debentures; and (ii) any modifications, renewals,
extensions, deferrals, and refundings of any such indebtedness, liabilities, or
obligations; provided, however, that Senior Indebtedness shall not be deemed to
include any obligation of the Company or any Subsidiary in connection with
extensions of credit by trade creditors and suppliers.

Page 2 of Twenty-two
<PAGE>

SUBSIDIARY: The term "Subsidiary" shall mean any corporation of which the
Company, or the Company and one or more Subsidiaries, or any one or more
Subsidiaries, directly or indirectly own voting securities sufficient to entitle
the holders thereof to elect a majority of the directors, either at all times or
so long as there is no default or contingency which permits the holders of any
other class or classes of securities to vote for the election of one or more
directors.

ARTICLE TWO

ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES.

SECTION 2.01. DESIGNATION, AMOUNT, AND ISSUE OF DEBENTURES. The
Debentures shall be designated as hereinabove set forth. Debentures offered
pursuant to the Memorandum in the maximum aggregate principal amount of One
Million Two Hundred Fifty Thousand Dollars ($1,250,000), may from time to time
be executed and delivered by the Company in exchange for the payment to the
Company of the aggregate principal amount thereof. Nothing herein shall limit
the amount of other debentures the Company may issue or debt the Company may
incur.

SECTION 2.02. DATE AND DENOMINATION OF DEBENTURES; PAYMENT OF INTEREST.
The Debentures shall be issuable Debentures registered with the Company without
coupons in the minimum denomination of Twelve Thousand Five Hundred Dollars
($12,500) and any integral multiple thereof, and shall be numbered, lettered, or
otherwise distinguished in such manner or in accordance with such plan as the
officers of the Company executing the same may determine. The Debenture shall
bear interest at the rate of 10% per annum for 24 months from the date of
issuance and thereafter until maturity at the prime rate charged by the
Company's bank plus four points.

Each Debenture shall be dated the date of its issuance and, except as
otherwise provided in this Section 2.02, shall bear interest, payable quarterly
on March 31, June 30, September 30, and December 31 of each year, from the date
of such Debenture until payment of the principal sum of such Debenture has been
made or duly provided for. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months. The first interest payment date shall be June 30,
1997.

The person in whose name a Debenture (or any Debenture evidencing the same
debt) was registered at the close of business on any Record Date with respect to
any interest payment date shall be entitled to receive the interest payable on
such interest payment date notwithstanding the cancellation of such Debenture
upon any registration of transfer or exchange subsequent to the Record Date and
prior to such interest payment date; provided, however, that if and to the
extent the Company shall default in the payment of the interest due on such
interest payment date, such defaulted interest shall be paid to the persons in
whose names outstanding Debentures are registered at the close of business on a
subsequent Record Date established by notice given by mail by or on behalf of
the Company to the holders of Debentures not less than 15 days preceding such
subsequent Record Date, such Record Date to be not less than ten days preceding
the date of payment of such defaulted interest.

In the case of any Debenture which is converted after any Record Date and
on or prior to the next succeeding interest payment date, interest whose stated
maturity is on such interest payment date shall be payable on such interest
payment date notwithstanding such conversion, and such interest (whether or not
punctually paid or duly provided for) shall be paid to the person in whose name
that Debenture is registered at the close of business on such Record Date.

The Company may, in its sole discretion, elect to accept less than Twelve
Thousand Five Hundred Dollars ($12,500) as the minimum denomination of
Debentures issuable.

Page 3 of Twenty-two
<PAGE>

SECTION 2.03. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBENTURES.
Debentures may be exchanged for a like aggregate principal amount of Debentures
of other authorized denominations. Debentures to be exchanged shall be
surrendered at the executive office of the Company, and the Company shall
execute, register, and deliver in exchange therefor the Debenture or Debentures
which the Debentureholder making the exchange shall be entitled to receive.

The Company shall keep a Debenture register in which, subject to such
reasonable regulations as it may prescribe, the Company shall register
Debentures and shall register the transfer of Debentures as in this Article Two.
Such register shall be in written form or in any other form capable of being
converted into written form within a reasonable time. Upon due presentment for
registration of transfer of any Debenture, the Company shall execute, register,
and deliver in the name of the transferee or transferees a new Debenture or
Debentures for an equal aggregate principal amount.

All Debentures presented for registration of transfer shall be duly
endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company duly executed by, the holder or his
attorney duly authorized in writing. No service charge shall be made for any
exchange or registration of transfer of Debentures, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith.

The Company shall not be required to exchange or register a transfer of (a)
any Debentures for a period of 15 days next preceding any selection of
Debentures to be redeemed, or (b) any Debentures selected, called or being
called for redemption except, in the case of any Debentures to be redeemed in
part, the portion thereof not so to be redeemed.

SECTION 2.04. MUTILATED, DESTROYED, LOST, OR STOLEN DEBENTURES. In case
any temporary or definitive Debenture shall become mutilated or be destroyed,
lost, or stolen, the Company in its discretion may execute, register, and
deliver a new Debenture, bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Debenture, or in lieu of and in
substitution for the Debenture so destroyed, lost, or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company such security
or indemnity as may be required by the Company to save the Company harmless,
and, in every case of destruction, loss, or theft, the applicant shall also
furnish to the Company evidence to its satisfaction of the destruction, loss, or
theft of such Debenture and of the ownership thereof.

Upon the issuance of any substituted Debenture, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.
In case any Debenture which has matured or is about to mature shall become
mutilated or be destroyed, lost, or stolen, the Company may, but only with the
consent of the holder thereof in the case of a Debenture as to which the right
to convert provided in Section 11.01 shall not have terminated, instead of
issuing a substitute Debenture, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Debenture) if the
applicant for such payment shall furnish to the Company such security or
indemnity as may be required by them to save the Company harmless and, in case
of destruction, loss, or theft, evidence satisfactory to the Company of the
destruction, loss, or theft of such Debenture and of the ownership thereof.

Every substituted Debenture issued pursuant to the provisions of this
Section 2.04 by virtue of the fact that any Debenture is destroyed, lost, or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost, or stolen Debenture shall be found at any
time, equally and proportionately with any and all other Debentures executed and
delivered by the Company. All Debentures shall be held and owned upon the
express condition that the foregoing provisions are exclusive with respect to
the replacement or payment of mutilated, destroyed, lost, or stolen Debentures
and shall preclude any and all other rights or remedies notwithstanding any law
or statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.

Page 4 of Twenty-two
<PAGE>

SECTION 2.05. CANCELLATION OF DEBENTURES. All Debentures surrendered for
the purpose of payment, redemption, exchange, registration of transfer, or
conversion, shall, if surrendered to the Company, be promptly canceled by the
Company, and no Debentures shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Debenture.

ARTICLE THREE

REDEMPTION OF DEBENTURES.

SECTION 3.01. RIGHT OF REDEMPTION. The Debentures may be redeemed prior
to maturity without penalty at the option of the Company at any time after the
closing price of the Company's Common Stock is traded at a price in excess of
$1.50 per share for 20 consecutive trading days subject to the right of the
Debentureholder to convert the Debenture into shares of Common Stock as provided
in Article Eleven, at a price equal to the principal amount of the Debentures so
redeemed plus interest accrued to, and not paid on or before, the date fixed for
redemption of such Debentures.

SECTION 3.02. SELECTION BY COMPANY OF DEBENTURES TO BE REDEEMED. In case
of any redemption at the election of the Company of less than all of the
Debentures, the Company shall, at least 30 days prior to the Redemption Date
fixed by the Company, select the particular Debentures to be redeemed from the
Outstanding Debentures not previously called for redemption, by such method as
the Company shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to Twelve Thousand Five Hundred
Dollars ($12,500) or any integral multiple thereof) of the principal amount of
Debentures.

If any Debenture selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Debenture so selected, the converted portion of such Debenture shall be deemed
(so far as may be) to be the portion selected for redemption. Debentures which
have been converted during a selection of Debentures to be redeemed shall be
treated as Outstanding for the purpose of such selection.

SECTION 3.03. NOTICE OF REDEMPTION. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not less than 30 nor more than 90
days prior to the Redemption Date, to each holder of Debentures to be redeemed,
at his address appearing in the Debenture register. Notice of redemption of
Debentures to be redeemed at the election of the Company shall be given by the
Company at the expense of the Company. All notices of redemption shall state:

(a) the Redemption Date;

(b) the Redemption Price;

(c) if less than all the Outstanding Debentures are to be redeemed,
the identification (and, in the case of partial redemption, the principal
amounts) of the particular Debentures to be redeemed;

(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debenture to be redeemed and that interest thereon
will cease to accrue on and after said date;

(e) the conversion price, the date on which the right to convert the
principal of the Debentures to be redeemed will terminate (which shall be on the
15th day prior to the Redemption Date) and the place or places where such
Debentures may be surrendered for conversion; and

Page 5 of Twenty-two
<PAGE>

(f) the place or places where such Debentures are to be surrendered
for payment of the Redemption Price.

SECTION 3.04. DEPOSIT OF REDEMPTION PRICE. Prior to any Redemption Date,
the Company shall deposit into a segregated account an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an interest payment date) accrued interest on, all the Debentures which
are to be redeemed on that date other than any Debentures called for redemption
on that date which have been converted prior to the date of such deposit.

If any Debenture called for redemption is converted, any money deposited
for the redemption of such Debenture shall (subject to any right of the holder
of such Debenture to receive interest as provided in the last paragraph of
Section 2.02) be discharged from such account.

SECTION 3.05. DEBENTURES PAYABLE ON REDEMPTION DATE. Notice of redemption
having been given as aforesaid, the Debentures so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Debentures shall
cease to bear interest. Upon surrender of any such Debenture for redemption in
accordance with said notice, such Debenture shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
provided, however, that installments of interest whose stated maturity is on or
prior to the Redemption Date shall be payable to the holders of such Debentures,
registered as such at the close of business on the relevant record dates
according to their terms and the provisions of Section 2.02.

If any Debenture called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the rate borne by the Debenture.

SECTION 3.06. DEBENTURES REDEEMED IN PART. Any Debenture which is to be
redeemed only in part shall be surrendered at the executive office of the
Company (with, if the Company so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company duly executed by, the
holder thereof or his attorney duly authorized in writing), and the Company
shall execute, register, and deliver to the holder of such Debenture without
service charge, a new Debenture or Debentures, of any authorized denomination as
requested by such holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Debenture so surrendered.

ARTICLE FOUR

PARTICULAR COVENANTS OF THE COMPANY.

SECTION 4.01. PAYMENT OF PRINCIPAL AND INTEREST. The Company covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of and interest on each of the Debentures at the place, at the
respective times and in the manner provided in the Debentures. The principal of
and interest on the Debentures shall be payable at the executive office of the
Company; provided, however, that interest may be payable, at the option of the
Company, by check mailed to the address of the person entitled thereto as such
address shall appear on the Debenture register.

SECTION 4.02. OFFICE FOR TRANSFER, EXCHANGE, CONVERSION, NOTICES AND
PAYMENTS, ETC. Presentation and demand may be made and notice may be served in
respect of the Debentures at the principal office of the Company.

SECTION 4.03. NO INTEREST EXTENSION. In order to prevent any accumulation
of claims for interest after maturity thereof, the Company will not directly or
indirectly extend or consent to the

Page 6 of Twenty-two
<PAGE>

extension of the time for the payment of any claim for interest on any of the
Debentures and will not directly or indirectly be a party to or approve any such
arrangement by the purchase or funding of said claims for interest or in any
other matter. No claim for interest, the time of payment of which shall have
been so extended or which shall have been so purchased or funded, shall be
entitled in case of an Event of Default to the rights and remedies provided
hereunder except after the prior payment in full of the principal of all the
Debentures and claims for interest not so extended, purchased or funded;
provided, however, that this Section 4.03 shall not apply in any case where an
extension shall be made pursuant to a plan proposed by the Company to the
holders of all the Debentures then outstanding.

SECTION 4.04. COMPANY AS PAYING AGENT. The Company shall act as its own
paying agent, and will, on or before each due date of the principal if any, or
interest on the Debentures, set aside, segregate and hold in trust for the
benefit of the holders of the Debentures a sum sufficient to pay such principal
or interest so becoming due and will notify each holder of any of the Debentures
of any failure to take such action and of any failure by the Company (or by any
other obligor under the Debentures) to make any payment of the principal of or
interest on the Debentures when the same shall become due and payable. Anything
in this Section 4.04 to the contrary notwithstanding, the agreement to hold sums
in trust as provided in this Section 4.04 is subject to the provisions of
Article Twelve.

SECTION 4.05. CORPORATE EXISTENCE. Subject to Article Nine, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.

SECTION 4.06. DIVIDENDS AND REPURCHASE OF SHARES. Without the prior
written consent of the holders of record of not less than 60% in principal
amount of the Debentures then outstanding, the Company will not directly or
indirectly, through any of its Subsidiaries or otherwise, pay or declare any
dividends (other than dividends payable in capital stock of the Company) or
apply any of its property or assets to the purchase, redemption or other
retirement of, or set apart any sum for the payment of any dividends on, or for
the purchase, redemption or retirement of, or make any distribution by reduction
of capital or otherwise in respect of, or permit any Subsidiary or the Company
to purchase any shares of, any class of the capital stock of the Company.
However, the Company shall not be precluded from repurchasing any of its shares
of Common Stock pursuant to an obligation to repurchase such shares from the
proceeds of any life insurance policy on the life of an employee, officer or
director of the Company.

ARTICLE FIVE

DEBENTUREHOLDERS LISTS AND REPORTS BY THE COMPANY.

SECTION 5.01. DEBENTUREHOLDERS LISTS. The Company covenants and agrees
that it will at all times maintain, or cause its transfer agent to maintain, a
list of the names and addresses of the holders of Debentures, in as current a
form as is reasonably practicable.

SECTION 5.02. REPORTS BY THE COMPANY. The Company covenants and agrees to
mail to each registered holder of a Debenture, copies of the annual reports and
other information as are furnished to shareholders of the Company from time to
time.

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ARTICLE SIX

REMEDIES OF THE DEBENTUREHOLDERS ON EVENT OF DEFAULT.

SECTION 6.01. EVENTS OF DEFAULT. In case one or more of the following
Events of Default shall have occurred and be continuing:

(a) default in the payment of any installment of interest upon any of
the Debentures as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; or

(b) default in the payment of the principal of any of the Debentures
as and when the same shall become due and payable either at maturity, upon
redemption, by declaration or otherwise; or

(c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company contained in
this Debenture for a period of 90 days after the date on which written notice of
such failure, stating that such failure is a "Notice of Default" hereunder and
requiring the same to be remedied, shall have been given to the Company, by
registered mail, by the holders of at least 40% in aggregate principal amount of
the Debentures at the time outstanding; or

(d) default in the payment of principal or interest on any Senior
Indebtedness, or on any other indebtedness for borrowed money in the aggregate
principal amount of Five Hundred Thousand ($500,000) or more, in either case if
such default shall continue for a period of 30 days; or

(e) the entry of a decree or order for relief by a court having
jurisdiction in the premises with respect to the Company in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect or the appointing of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of all or substantially all of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 120 consecutive days; or

(f) the institution by the Company of proceedings under Title 11 of
the United States Code or to be adjudged insolvent, or the consent by it to the
institution of bankruptcy or insolvency or other similar proceedings against it
or the consent by it to the entry of an order for relief in an involuntary case
or to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of the
Company or of all or substantially all of its property, or the making by it of
an arrangement for the benefit of creditors, or the admission by it in writing
of the failure generally by it to pay its debts as they become due or the taking
of corporate action by the Company in furtherance of any such action; then and
in each and every such case, unless the principal of all of the Debentures shall
have already become due and payable, the holders of not less than 25 in
aggregate principal amount of the Debentures then outstanding hereunder, by
notice in writing to the Company, may declare the principal of this Debenture
and the interest accrued thereon to be due and payable immediately, and upon any
such declaration the same shall become and shall be immediately due and payable,
anything contained in this Debenture to the contrary notwithstanding. This
provision, however, is subject to the condition that if, at any time after the
principal of the Debentures shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall have paid all
matured installments of interest upon all of the Debentures and the principal of
any and all Debentures which shall have become due otherwise than by
acceleration (with interest on overdue installments of interest to the extent
that payment of such interest is enforceable under applicable law and on such
principal at the rate borne by the Debentures, to the date of such payment or
deposit), and any and all defaults under this Debenture other than the
nonpayment of principal of and accrued interest on Debentures which shall have
become due by acceleration, shall have been cured

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or shall have been waived in accordance with Section 6.04; then, and in every
such case, the holders of at least 60% in aggregate principal amount of the
Debentures then outstanding, by written notice to the Company, may rescind and
annul such declaration and its consequences; but no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon.

SECTION 6.02. PROCEEDINGS BY DEBENTUREHOLDER. In case of an Event of
Default hereunder, the holder of this Debenture shall be entitled to institute
any actions or proceedings at law or in equity for the collection of all sums
due and payable on this Debenture for principal or interest, or both, as the
case may be, with interest upon the overdue principal, and (to the extent that
payment of such interest is enforceable under applicable law) upon the overdue
installments of interest at the rate borne by the Debentures, and such further
reasonable amount as shall be sufficient to cover the costs and expenses of
collection, including attorneys' fees, and may prosecute any such action or
proceeding to judgment or final decree, and may enforce any such judgment or
final decree against the Company and collect in the manner provided by law out
of the property of the Company wherever situated the moneys adjudged or decreed
to be payable, it being understood and intended, and being expressly covenanted
by the taker and holder of every Debenture with every other taker and holder
that no one or more holders of Debentures shall have any right in any manner
whatsoever by virtue of or by availing of any provision of the Debentures to
affect, disturb or prejudice the rights of any other holder of such Debentures,
or to obtain or seek to obtain priority over or preference to any other such
holder, or to enforce any right under this Debenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of
Debentures. Notwithstanding any other provisions in this Debenture, the right
of any holder of any Debenture to receive payment of the principal of and
interest on such Debenture, on or after the respective due dates expressed in
such Debenture, and to convert such Debenture in accordance with the provisions
hereof or to institute suit for the enforcement of any such payment on or after
such respective dates or to compel conversion shall not be impaired or affected
without the consent of such holder.

SECTION 6.03. REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
Section 6.02, all powers and remedies given by this Article Six to the
Debentureholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any thereof or of any other powers and remedies available to
the holders of the Debentures, by judicial proceedings or otherwise, to enforce
the performance or observance of the covenants and agreements contained in this
Debenture, and no delay or omission of any holder of any of the Debentures to
exercise any right or power accruing upon any default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 6.02, every power and remedy given by this Article Six or
by law to the Debentureholders may be exercised from time to time, and as often
as shall be deemed expedient, by any of the Debentureholders.

SECTION 6.04. WAIVER OF DEFAULTS BY DEBENTUREHOLDERS. The holders of 60%
in aggregate principal amount of the Debentures at the time outstanding may on
behalf of the holders of all of the Debentures waive any past default or Event
of Default hereunder and its consequences except a default in the payment of
interest on, or the principal of, the Debentures or a default in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the holder of each Debenture affected. Upon any such waiver the
Company and the holders of the Debentures shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder shall
have been waived as permitted by this Section 6.04, said Event of Default shall
for all purposes of the Debentures be deemed to have been cured and to be not
continuing.

SECTION 6.05. UNDERTAKING TO PAY COSTS. Each holder of any Debenture by
his acceptance thereof shall be deemed to have agreed that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
the Debentures, the filing by any party litigant in such suit of

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an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 6.05 shall not apply to any suit instituted by any
Debentureholder, or group of Debentureholders, holding in the aggregate more
than 20% in principal amount of the Debentures outstanding, or to any suit
instituted by any Debentureholder for the enforcement of the payment of the
principal or interest on any Debenture against the Company on or after the due
date expressed in such Debenture.

ARTICLE SEVEN

CONCERNING THE DEBENTUREHOLDERS.

SECTION 7.01. ACTION BY DEBENTUREHOLDERS. Whenever in this Debenture it
is provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action) the fact that at the time of taking any such action the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article Eight, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders.

SECTION 7.02. PROOF OF EXECUTION BY DEBENTUREHOLDERS. Subject to the
provisions of Section 8.04, proof of the execution of any instrument by a
Debentureholder or his agent or proxy shall be sufficient if made in accordance
with such reasonable rules and regulations as may be prescribed by the Company
or in such manner as shall be satisfactory to the Company. The ownership of
Debentures shall be proved by the Debenture register. The record of any
Debentureholders' meeting shall be proved in the manner provided in Section
8.05.

SECTION 7.03. WHO ARE DEEMED ABSOLUTE OWNERS. The Company deem the person
in whose name such Debenture shall be registered upon the Debenture register to
be, and may treat him as, the absolute owner of such Debenture (whether or not
such Debenture shall be overdue and notwithstanding any notation of ownership or
other writing thereon made by anyone other than the Company) for the purpose of
receiving payment of or on account of the principal and (subject to Section
2.02) interest on such Debenture and for all other purposes; and the Company
shall not be affected by any notice to the contrary. All such payments so made
to any holder for the time being or upon his order shall be valid and to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Debenture.

SECTION 7.04. COMPANY-OWNED DEBENTURES DISREGARDED. In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction or consent under the Debentures, Debentures
which are owned by the Company or any other obligor on the Debentures or by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any other obligor on the Debentures
shall be disregarded and deemed not to be outstanding for the purpose of any
such determination. Debentures so owned which have been pledged in good faith
may be regarded as outstanding for the purposes of this Section 7.04 if the
pledgee shall establish to the satisfaction of the Company the pledgee's right
to vote such Debentures and that the pledgee is not a person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In the case of a dispute as
to such right, any decision by the Company based upon the advice of counsel
shall be full protection to the Company.

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SECTION 7.05. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time
prior to (but not after) the taking of any action by the holders of the
percentage in aggregate principal amount of the Debentures specified herein in
connection with such action, any holder of a Debenture which is shown by the
evidence to be included in the Debentures the holders of which have consented to
or are bound by consents to such action may, by filing written notice with the
Company at its principal office and upon proof of holding as provided in Section
7.02, revoke such action so far as concerns such Debenture. Except as
aforesaid, any such action taken by the holder of any Debenture shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Debenture and of any Debenture issued in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon any such Debenture.

SECTION 7.06. WAIVER OF PROVISIONS OF DEBENTURES. Any and all provisions,
covenants, conditions, or restrictions relating to the Debentures may be waived
by the affirmative vote, at a meeting duly held in accordance with Article Eight
hereof, or by written consent obtained by the Company, of the holders of 60% of
the aggregate principal amount of the Debentures registered and outstanding as
of the date of such meeting or the date on which such consent is requested in
writing.

ARTICLE EIGHT

DEBENTUREHOLDERS' MEETINGS.

SECTION 8.01. PURPOSES OF MEETINGS. A meeting of Debentureholders may be
called at any time and from time to time pursuant to the provisions of this
Article Eight to give any notice to the Company, or to give any directions to
the Company, or to consent to the waiving of any default hereunder and its
consequences, or to take any other action authorized to be taken by
Debentureholders pursuant to any of the provisions of Article Six, and to take
any other action authorized to be taken by or on behalf of the holders of any
specified aggregate principal amount of the Debentures under any other provision
of this Debenture or under applicable law.

SECTION 8.02. CALL OF MEETINGS BY THE COMPANY OR DEBENTUREHOLDERS. The
Company, pursuant to a resolution of its Board of Directors, or the holders of
at least 10% in aggregate principal amount of the Debentures then outstanding,
shall be entitled to call a meeting of Debentureholders, by the giving of notice
thereof in writing, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, which shall be
mailed to holders of Debentures at their addresses as they shall appear on the
Debenture register. Such notice shall be mailed not less than 20 nor more than
90 days prior to the date fixed for the meeting.

SECTION 8.03. QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Debentureholders a person shall (i) be a holder of one or more
Debentures, or (ii) be a person appointed by an instrument in writing as proxy
by a holder of one or more Debentures. The only persons who shall be entitled
to be present or to speak at any meeting of Debentureholders shall be the
persons entitled to vote at such meeting and their counsel and any
representatives of the Company and its counsel.

SECTION 8.04. REGULATIONS. Notwithstanding any other provisions of this
Debenture, the Company may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.

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The Company or the Debentureholders calling the meeting, as the case may
be, shall appoint a temporary chairman for the meeting. A permanent chairman
and a secretary of the meeting shall be elected by majority vote of the meeting.

At any meeting each Debentureholder or proxy shall be entitled to one vote
for each $1,000 of principal amount of Debentures held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Debenture challenged as not outstanding and ruled by the chairman
of the meeting to be not outstanding. The chairman of the meeting shall have no
right to vote other than by virtue of Debentures held by him or instruments in
writing as aforesaid duly designating him as the person to vote on behalf of
other Debentureholders. Any meeting of Debentureholders duly called pursuant to
the provisions of Section 8.02 may be adjourned from time to time by a majority
vote of the meeting, whether or not constituting a quorum, and the meeting may
be held as so adjourned without further notice.

SECTION 8.05. VOTING. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballots on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the principal amount of the Debentures voted. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Debentureholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 8.02.

The record shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Company to be preserved by the Company. Any record so signed
and verified shall be conclusive evidence of the matters therein stated.

SECTION 8.06. NO DELAY OF RIGHTS BY MEETING. Nothing in this Article
Eight contained shall be deemed or construed to authorize or permit, by reason
of any call of a meeting of Debentureholders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the
Debentureholders under any of the provisions of the Debentures.

ARTICLE NINE

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.

SECTION 9.01. COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. Nothing
contained in any of the Debentures shall prevent (i) any consolidation or merger
of the Company with or into any other corporation or corporations (whether or
not affiliated with the Company), or successive consolidations or mergers in
which the Company or its successor or successors shall be a party or parties,
provided that the corporation or successive acquiring corporations shall have a
class of equity securities registered under Section 12(g) of the Securities
Exchange Act of 1934, as amended, and that the Debentures shall thereafter be
convertible into such class of equity securities, or (ii) any sale, or
conveyance of assets not exceeding 10% of the consolidated net tangible assets
of the Company, the assumption of otherwise prohibited liens or sale and
leaseback of assets owned by the Company as of the date of this Debenture, or,
provided that the aggregate amount of the otherwise prohibited liens and the
present value of the sale and leaseback transactions does not exceed 25% of the
consolidated net tangible assets of the Company, to any other corporation
(whether or not affiliated with the Company) authorized to

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acquire and operate the same; provided, however, that in the event of a sale or
conveyance of assets the Company hereby covenants and agrees that upon any such
sale or conveyance, and upon any such merger or consolidation in which the
Company is not the surviving corporation, the due and punctual payment of the
principal and interest on all of the Debentures, according to their tenor, and
the due and punctual performance and observance of all of the covenants and
conditions of the Debentures to be performed by the Company, shall be expressly
assumed by the corporation (if other than the Company) formed by such
consolidation, or into which the Company shall have been merged, or by the
corporation which shall have acquired such property, and immediately after such
consolidation, merger, or acquisition, the Company, its Subsidiaries, or such
successor corporation, as the case may be, shall not be or become in violation
of any of the terms, covenants or conditions of the Debentures. In case of any
such consolidation, merger, sale, or conveyance, changes in phraseology and form
(but not in substance) may be made in the Debentures thereafter to be issued as
may be appropriate.

ARTICLE TEN

IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS.

SECTION 10.01. DEBENTURES SOLELY CORPORATE OBLIGATIONS. No recourse for
the payment of the principal of or interest on any Debenture, or for any claim
based thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in any Debenture, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the issue of the Debentures.

ARTICLE ELEVEN

CONVERSION OF DEBENTURES.

SECTION 11.01. CONVERSION PRIVILEGE. The Debentures are subject to
conversion as follows:

(a) Voluntary Conversion. Subject to and upon compliance with the
provisions of this Article Eleven, at the option of the holder thereof, any
Debenture may, at any time on or prior to the close of business on the maturity
date, or in case such Debenture or portion thereof shall have been called for
redemption prior to such date, then in respect of such Debenture or portion
thereof until and including, but (unless the Company shall default in payment
due upon the redemption thereof) not after, the close of business on the 15th
day prior to such Redemption Date, be converted into duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock of the Company.
The number of shares of Common Stock issuable upon conversion shall be equal to
the principal amount of such Debenture, or such portion thereof, divided by the
conversion price (determined as hereinafter provided) in effect at the time of
conversion and rounded to the nearest one-hundredth of a share. The price at
which shares of Common Stock shall be delivered upon conversion (herein called
the "conversion price") shall be $.50 per share of Common Stock. The Company
may at any time reduce the conversion price by any amount.

(b) Involuntary Conversion. The Company may force conversion of the
Debentures at any time after the closing price of the Company's Common Stock is
traded at a price in excess of $1.50 per share for 20 consecutive trading days,
subject to the right of the Debentureholder to convert the Debenture into shares
of Common Stock as provided in Article Eleven, at a price equal to the principal

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amount of the Debentures so redeemed plus interest accrued to, and not paid on
or before, the date fixed for the involuntary conversion of such Debentures.

SECTION 11.02. MANNER OF EXERCISE OF CONVERSION PRIVILEGE. In order to
exercise the conversion privilege, the holder of any Debenture to be converted
shall surrender such Debenture during regular business hours to the executive
office of the Company in accordance with Section 4.02, accompanied by written
notice to the Company at said office that the holder elects to convert such
Debenture or, if less than the entire principal amount of the Debenture is to be
converted, the portion thereof to be converted. Such notice shall also state
the name or names (with address and tax identification number) in which the
certificate or certificates for shares of Common Stock issuable upon such
conversion shall be issued. Debentures surrendered for conversion shall be
accompanied by proper assignments thereof to the Company or in blank for
transfer. As promptly as practicable after the receipt of such notice and the
surrender of such Debenture as aforesaid, but subject to Section 11.03, the
Company shall deliver or cause to be delivered at said office or agency to such
holder, or on his written order, a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of such Debenture (or
specified portion thereof) and provision shall be made in respect of any
fractional interest as provided in Section 11.03. Such conversion shall be
deemed to have been effected immediately prior to the close of business on the
date on which such notice shall have been received by the Company and such
Debenture shall have been surrendered as aforesaid, and at such time the rights
of the holder of such Debenture as such holder shall cease and the person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares represented thereby.

Subject to the requirement for a payment provided in Section 2.02 in the
event of conversion after the close of business on the record date preceding an
interest payment date, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Debentures delivered for
conversion or on account of any dividends on the shares of Common Stock issued
upon such conversion.

In case any Debenture is converted in part only, upon such conversion the
Company shall execute, register and deliver to the holder thereof, at the
expense of the Company, a new Debenture or Debentures of authorized
denominations in principal amount equal to the unconverted portion of such
Debenture.

SECTION 11.03. CASH ADJUSTMENT UPON CONVERSION. No fractional shares of
Common Stock shall be issued upon conversions of Debentures. If more than one
Debenture shall be surrendered for conversion at one time by the same holder,
the number of full shares which shall be issuable upon conversion thereof shall
be computed on the basis of the aggregate principal amount of the Debentures (or
specified portions thereof to the extent permitted hereby) so surrendered.
Instead of any fractional share of Common Stock which would otherwise be
issuable upon conversion of any Debenture or Debentures or specified portions
thereof, the Company shall pay a cash adjustment in respect of such fraction in
an amount equal to the same fraction of the closing bid price of the Common
Stock as reported by NASDAQ, or the last sale price if the Common Stock is then
traded on a national securities exchange, at the close of business on the
business day which next precedes the day of conversion.

SECTION 11.04. NO ADJUSTMENT OF CONVERSION PRICE. The conversion price
shall not be subject to manditory adjustment under any circumstances:

SECTION 11.05. COMPANY TO GIVE NOTICE OF CERTAIN EVENTS. In case:

(a) the Company shall authorize the distribution to all holders of its
Common Stock of evidence of its indebtedness or assets (other than dividends or
other distributions paid out of earned surplus); or

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(b) the Company shall authorize the granting to the holders of its
Common Stock of rights to subscribe for or purchase any shares of capital stock
of any class or of any other rights; or

(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of Common Stock), or
of any consolidation or merger to which the Company is a party and for which
approval of any stockholders of the Company is required, or of the sale or
transfer of all or substantially all the assets of the Company; or

(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; then the Company shall cause to be filed at the
office or agency maintained for the purpose of conversion of Debentures pursuant
to Section 4.02, and shall cause to be mailed, first class postage prepaid, to
the holders of Debentures at their last addresses as they shall appear upon the
Debenture register provided for in Section 5.01, at least 20 days (or 10 days in
any case specified in clause (a) or (b) above) prior to the applicable record
date hereinafter specified, a notice stating (i) the date on which a record is
to be taken for the purpose of such distribution or rights, or, if a record is
not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such distribution or rights are to be determined, or (ii) the
date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.

SECTION 11.06. RESERVATION OF COMMON STOCK. The Company shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock, for the purpose of effecting the conversion of
Debentures, the full number of shares of Common Stock then issuable upon the
conversion of all Outstanding Debentures. For the purpose of this Section 11.06,
the full number of shares of Common Stock issuable upon the conversion of all
Outstanding Debentures shall be computed as if at the time of computation of
such number of shares of Common Stock all Outstanding Debentures were held by a
single holder. The Company covenants and agrees that, if any shares of Common
Stock required to be reserved for issuance upon conversion of Debentures
hereunder require registration with or approval of any governmental authority
under any Federal or State law, before such shares may be issued upon such
conversions, the Company will in good faith and as expeditiously as possible
endeavor to cause such shares to be so registered or approved.

SECTION 11.07. TAXES ON CONVERSIONS. The Company will pay any and all
documentary or transfer taxes that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Debentures pursuant hereto.
The Company shall not, however, be required to pay any such tax which may be
payable in respect of any transfer involved in the issue or transfer and
delivery of shares of Common Stock in a name other than that of the holder of
the Debenture or Debentures to be converted, and no such issue or delivery shall
be made unless and until the person requesting such issue has paid to the
Company the amount of any such tax or has established to the satisfaction of the
Company that such tax has been paid.

SECTION 11.08. ABSENCE OF PREEMPTIVE RIGHTS. The Company covenants that
all authorized but unissued shares of Common Stock which may at any time be
reserved pursuant to Section 11.06 for issuance upon conversions of Debentures
will be free from preemptive rights and duly and validly authorized for issuance
upon such conversions; and that all shares of Common Stock which may at any time
be issued upon conversions of Debentures in accordance with the terms of this
Debenture will upon such issuance be free from preemptive rights, duly and
validly authorized and issued, fully paid and non-assessable.

SECTION 11.9. DEBENTURES CONVERTED. All Debentures delivered for
conversion shall be delivered to the Company to be canceled by or at the
direction of the Company, who shall dispose of the same as provided in Section
2.05.

Page 15 of Twenty-two
<PAGE>

ARTICLE TWELVE

SUBORDINATION OF DEBENTURES.

SECTION 12.01. AGREEMENT TO SUBORDINATE. The Company covenants and agrees,
and each holder of Debentures, by his acceptance thereof, likewise covenants and
agrees, that the indebtedness evidenced by the Debentures and the payment of the
principal thereof and interest thereon shall be subordinate and subject in right
of payment, to the extent and in the manner hereinafter set forth, to the prior
payment in full of all Senior Indebtedness.

SECTION 12.02. NO PAYMENT ON DEBENTURES IN EVENT OF DEFAULT ON SENIOR
INDEBTEDNESS. The Company shall not make any payment on account of the
principal of or interest on the Debentures if, at the time thereof or
immediately after giving effect thereto, there exists (and has not been waived)
any default in the payment of principal of or interest on any Senior
Indebtedness or any event of default with respect to any Senior Indebtedness as
defined therein (after giving effect to any grace period provided for therein)
or in any agreement pursuant to which any Senior Indebtedness is issued and the
default is the subject of a judicial proceeding or the Company receives notice
of the default as provided in this Debenture or from any holder of Senior
Indebtedness or any trustee therefor; provided, however, that, in the event the
Debentures have been declared due and payable pursuant to Section 6.01, the
provisions of the next succeeding paragraph of this Section 12.02 shall be
applicable.

In the event that any Event of Default as defined in Section 6.01 shall
occur (under such circumstances that the provisions of Section 12.03 are not
applicable) and as a result the Debentures then Outstanding are declared due
and payable pursuant to Section 6.01, and such declaration shall not have been
rescinded or annulled, the Company shall not make any payment on account of the
principal of or interest on any Debentures, unless at least 90 days shall have
elapsed after said declaration and unless all principal of and interest on
Senior Indebtedness due at the time of such payment (whether by acceleration of
the maturity thereof or otherwise) shall first be paid in full.

SECTION 12.03. DISTRIBUTION ON DISSOLUTION, LIQUIDATION AND REORGANIZATION.
In the event of any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or total or partial liquidation or
reorganization of the Company, whether voluntary or involuntary and whether in
bankruptcy, insolvency or receivership proceedings, or upon an assignment for
the benefit of creditors or any other marshaling of the assets and liabilities
of the Company, or upon other proceedings:

(a) all principal, and interest due on all Senior Indebtedness shall
first be paid in full, or due provision made for such payment, in accordance
with the terms of such Senior Indebtedness, before any payment is made on
account of the principal of or interest on the indebtedness evidenced by the
Debentures, or before the holders of the Debentures shall be entitled to retain
any assets so paid or distributed in respect thereof; and

(b) any payment or distribution of assets or securities of the Company
of any kind or character, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted or securities of the
Company or any other corporation provided for by a plan of reorganization or
readjustment, which are in any such case subordinated to Senior Indebtedness to
the same extent as the Debentures), to which the holders of the Debentures would
be entitled except for the provisions of this Section 12.03, shall be paid or
delivered by the Company or any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution directly to
the holders of Senior Indebtedness (pro rata to each such holder on the basis of
the respective amount of Senior Indebtedness held by such holder) or their
representative or representatives or the trustee or trustees under any indenture
pursuant to which any instruments evidencing any Senior Indebtedness may

Page 16 of Twenty-two
<PAGE>

have been issued, as their respective interests may appear, for application to
the payment of all Senior Indebtedness remaining unpaid to the extent necessary
to pay all Senior Indebtedness in full in accordance with the terms of such
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment or
distribution is made to the holders of the Debentures.

The Company shall give prompt written notice to the Debentureholders of any
dissolution, winding up, liquidation or reorganization of the Company within the
meaning of Section 12.03.

SECTION 12.04. PAYMENT TO HOLDERS OF SENIOR INDEBTEDNESS. Subject to the
provisions of Section 12.06, in the event that, notwithstanding the provisions
of Section 12.02 or Section 12.03, any payment or distribution of assets or
securities of the Company of any kind or character, whether in cash, property or
securities shall be received by the holders of the Debentures (i) from the
Company in violation of such provisions, or (ii) from any other person under
such circumstances that such payment would, if made directly by the Company, be
in violation of such provisions, such payment or distribution shall immediately
be paid over by such holders to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture under which any instrument evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts then due on
account of the principal of and interest on such Senior Indebtedness (after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness), to the extent necessary to pay in full all such amounts
then due.

Upon any payment or distribution of assets or securities of the Company
referred to in Sections 12.02 and 12.03, the holders of the Debentures shall be
entitled to rely upon any order or decree of a court of competent jurisdiction,
or upon any certificate of any liquidating trustee or agent or other person
making any payment or distribution to the holders of the Debentures, for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness, the amount thereof or
payment thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Twelve.

SECTION 12.05. SUBROGATION. Subject to the payment in full of all amounts
then due (whether by acceleration of the maturity thereof or otherwise) on
account of the principal of and interest on all Senior Indebtedness at the time
outstanding, the holders of the Debentures shall be subrogated to the rights of
each holder of Senior Indebtedness (to the extent of the payments or
distributions made to such holder pursuant to the provisions of Sections 12.02,
12.03, and 12.04) to receive payments or distributions of assets or securities
of the Company applicable to the Senior Indebtedness until the Debentures shall
be paid in full, and each holder of Senior Indebtedness by the act of accepting
such payments or distributions pursuant to the provisions of Sections 12.02,
12.03 and 12.04 shall be deemed to have agreed to the subrogation aforesaid. No
payments or distributions of assets or securities of the Company applicable to
Senior Indebtedness which the holders of the Debentures receive by reason of
their being subrogated to the rights of the holders of such Senior Indebtedness
pursuant to the provisions of Sections 12.02, 12.03 and 12.04 shall, as between
the Company, its creditors other than the holders of Senior Indebtedness, and
the holders of the Debentures, be deemed to be a payment by the Company on
account of the Debentures, it being understood that the provisions of this
Article Twelve are intended solely for the purpose of defining the relative
rights of the holders of the Debentures, on the one hand, and the holders of the
Senior Indebtedness on the other hand, and nothing contained in this Article
Twelve or elsewhere in the Debentures, is intended to or shall impair, as
between the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Debentures, the obligation of the Company,
which is absolute and unconditional, to pay to the holders of the Debentures the
principal of and interest on the Debentures, as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the holders of the Debentures and creditors of the
Company other than the holders of Senior Indebtedness, nor shall anything herein
or therein prevent the holder of any Debentures from exercising all remedies
otherwise permitted by applicable law upon default under this Debenture, subject
to the rights, if any, under this Article

Page 17 of Twenty-two
<PAGE>

Twelve of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.

SECTION 12.06. PAYMENTS ON DEBENTURES PERMITTED. Nothing contained in this
Article Twelve or elsewhere in any of the Debentures, shall prevent the Company
from making payment of the principal of or interest on the Debentures at any
time, except under the conditions described in Section 12.02 and except during
the pendency of any dissolution, winding up, liquidation or reorganization of
the Company within the meaning of Section 12.03. Nothing contained in this
Article Twelve or elsewhere in any of the Debentures, shall prevent the
application by the Company of any moneys held hereunder for the purpose of
payment of or on account of the principal of or interest on the Debentures,
unless, prior to the business day next preceding the date upon which such
principal shall have become payable, or, in the case of any payment on account
of interest unless, prior to two business days before the date upon which such
interest shall have become payable, the Company shall have received written
notice, directed to it at its principal office, from any holder of Senior
Indebtedness or any trustee therefor of the existence of any of the conditions
described in Section 12.02 or of any dissolution, winding up, liquidation or
reorganization of the Company within the meaning of Section 12.03.

SECTION 12.07. AUTHORIZATION OF HOLDERS TO COMPANY TO EFFECT SUBORDINATION.
Each holder of Debentures by his acceptance thereof authorizes and directs the
Company in his behalf to take such action as may be necessary or appropriate to
effectuate, as between the holders of the Debentures and the holders of Senior
Indebtedness, the subordination provided in this Article Twelve and appoints the
Company his attorney-in-fact for any and all such purposes.

ARTICLE THIRTEEN

REGISTRATION RIGHTS.

SECTION 13.01. INCIDENTAL REGISTRATION.

(a) If, at any time prior to the maturity of the Debentures, the
Company shall determine to register under the Securities Act any shares of its
Common Stock to be offered for cash by it or others, pursuant to a registration
statement on Form SB-2 or Form S-1 (or their equivalent if either of such forms
is not in effect or on an alternative form if such alternative form is then
authorized for the sale to the general public of the Company's securities), the
Company will (i) promptly give written notice of its intention to file such
registration statement to the holders of the Debentures and each holder of
Common Stock, if any, which has been issued upon conversion of any of the
Debentures (collectively, the "Holders"), and (ii) subject to the provisions of
subsections (b) and (c), below, include among the shares covered by the
registration statement such portion of the shares of Common Stock issued or
issuable upon the conversion of any of the Debentures (the "Shares") as shall be
specified in a written request given to the Company by the Holders within 30
days after the date on which the Company gave such written notice.

(b) Upon receipt of any written request described in Section 13.01(a)
above, but subject to the provisions hereof and of Section 13.01(c) below, the
Company shall:

(i) use its best efforts within reason to effect the
registration, qualification or compliance under the Securities Act and under
other applicable federal law and any applicable securities or "blue sky" laws of
jurisdictions within the United States of the Shares specified in the request
(the Holders and any other holders of the Company's Common Stock who are
entitled hereunder or otherwise to request registration of any shares of the
Company's Common Stock are in this Section 13.01 individually called a "Selling
Shareholder" and collectively, the "Selling Shareholders"); provided, however,
that in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not so qualified or to take any action that would
subject it to tax

Page 18 of Twenty-two
<PAGE>

or the service of process (other than process in connection with such
registration) in any jurisdiction where it is not subject thereto, nor shall the
Company be required to include the Shares among the securities covered by the
registration statement if (A) less than 50% of the Holders have joined in such
request and the requests of the Holders cover shares of the Company's Common
Stock issued or issuable upon conversion of the Debentures having an aggregate
value of less than One Million Dollars ($1,000,000), based upon the offering
price of the Company's Common Stock, for the 10 consecutive days immediately
preceding the date on which the notice specified by Section 13(a)(i) above is
given; or (B) the Board of Directors of the Company determines in good faith
that including shares of Common Stock held by any Selling Shareholder among the
securities covered by the registration statement would have a materially
detrimental effect on the proposed offering and would therefore not be in the
best interests of the Company;

(ii) furnish each Selling Shareholder such number of copies of
the prospectus contained in the registration statement filed under the
Securities Act (including each preliminary prospectus) in conformity with the
requirements of the Securities Act, and such other documents as the Selling
Shareholders may reasonably request in order to facilitate the disposition of
the Common Stock held by them which is covered by the registration statement;
and

(iii) notify each Selling Shareholder, at any time when a
prospectus relating to such Common Stock is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus in the registration statement, as then in effect, includes an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
at the request of the Selling Shareholders prepare and furnish to them any
reasonable number of copies of any supplement to or amendment of such prospectus
as may be necessary so that, as thereafter delivered, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.

(c) The Company alone shall determine and control all decisions
concerning any registration of the Company's securities which might give rise to
the registration rights granted hereunder, including any registration in which
Shares of any Selling Shareholder are to be included. The Corporation's
exclusive right to make decisions shall include, without limitation, the
decision as to whether to use underwriters, the selection of underwriters and
arrangements therewith, the size, timing and other terms of any offering, the
provisions of the registration statements and prospectuses and all supplements
and amendments thereto, the selection of accountants and attorneys for the
Company, and the states in which the sale of shares shall occur and be
registered or qualified for sale.

If the offering registered by the Company is to be underwritten, each
Selling Shareholder shall sell all shares of Common Stock included in the
registration statement to or through the underwriter or underwriters selected by
the Company on the same terms and conditions provided in any underwriting
agreement entered into therewith by the Company, and shall complete and execute
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
Notwithstanding anything to the contrary hereunder, if the underwriter or
underwriters selected by the Company reasonably determine that all or any
portion of the shares of Common Stock held by the Selling Shareholders should
not be included in the registration statement, the determination of the
underwriter or underwriters shall be conclusive; provided, however, that if
such underwriter or underwriters determine that some but not all of the shares
of Common Stock of the Selling Shareholders shall be included in the
registration statement, the number of shares owned by each Selling Shareholder
to be included in the registration statement will be proportionately reduced in
accordance with their respective aggregate holdings of Common Stock. In no
event shall the Company be required to reduce or limit the number of newly to be
issued shares of its Common Stock to be covered by any registration statement
for the purpose of permitting the Shares of any Selling Shareholder to be
included in the registration.

Page 19 of Twenty-two
<PAGE>

(d) The Company shall not be obligated to give notice of or include
Shares held by any subscriber hereunder in more than two registration statements
to be filed by the Company, exclusive of (i) any registration statement as to
which a request for inclusion has been rejected in full under subsection
13.01(b) or as to Shares requested to be registered under subsection 13.01(c)
hereof, (ii) registration statements filed on Form S-3 if such Form is then
available to the Company for the registration of Common Stock to be offered to
the public for cash, and (iii) a registration effected as provided in Section
13.02 below.

SECTION 13.02. INDEMNIFICATION.

(a) In connection with any registration in which a Selling
Shareholder is participating, each such Selling Shareholder shall furnish to the
Company such information in writing regarding the Selling Shareholder as the
Company reasonably requests for inclusion in the registration statement,
prospectus, offering circular and other documents filed in connection therewith,
and shall state that such information is provided specifically for use in the
registration statement, prospectus, offering circular or other documents. Each
such Selling Shareholder shall also furnish to the Company an undertaking
satisfactory to the Company and each underwriter of the offering, if any,
agreeing to indemnify and hold harmless, to the extent permitted by law, the
Company, and its directors and officers, and each such underwriter, and each
person who controls the Company or each such underwriter (within the meaning of
the Securities Act), against any actions, losses, claims, damages, liabilities,
and expenses (including legal and other expenses reasonably incurred in the
investigation and defense thereof) resulting from any untrue or alleged untrue
statement of a material fact or any omission or alleged omission of a material
fact required to be stated in any such documents or any supplement or amendment
thereto, or necessary to make the statements therein not misleading, but only to
the extent that such untrue statement or omission is made in reliance on and in
conformity with the written information furnished to the Company by such Selling
Shareholder specifically for use in such documents.

(b) The Company shall indemnify and hold harmless, to the extent
permitted by law, each Selling Shareholder against any actions, losses, claims,
damages, liabilities and expenses (including legal fees and other expenses
reasonably incurred in the investigation and defense thereof) resulting from any
untrue or alleged untrue statement of a material fact or any omission or alleged
omission of a material fact in any registration statement, prospectus, offering
circular or other document filed in connection with any registration or
qualification, unless and to the extent that any such actions, claims, losses,
damages, liabilities or expenses arise out of the written information
specifically provided by the Selling Shareholder for use in such registration
statement, prospectus, offering circular or other document pursuant to
subsection (a) of this Section 13.03.

SECTION 13.03. EXPENSES OF REGISTRATION. The Company shall bear all costs
and expenses relating to or incurred by it in connection with any registration
in which any Selling Shareholder participates pursuant hereto, including without
limitation all registration and filing fees, printing expense, fees and
disbursements of counsel and independent accountants for the Company and fees
and expenses incident to compliance with state securities or "blue sky" laws,
but specifically excluding any fees and disbursements of counsel, accountants or
other professionals engaged by any Selling Shareholder. Each Selling
Shareholder shall be responsible for and bear any underwriters' discounts and
commissions properly allocable to shares of Common Stock included in a
registration statement at the request of a Selling Shareholder hereunder.

Page 20 of Twenty-two
<PAGE>

ARTICLE FOURTEEN

MISCELLANEOUS PROVISIONS.

SECTION 14.01. PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements in this Debenture contained by
the Company shall bind its successors and assigns whether so expressed or not.

SECTION 14.02. DEBENTURES FOR SOLE BENEFIT OF COMPANY AND DEBENTUREHOLDERS.
Nothing in the Debentures, expressed or implied, shall give or be construed to
give to any person, firm or corporation, other than the parties hereto and the
holders of the Debentures, any legal or equitable right, remedy or claim under
or in respect of this Debenture, or under any covenant, condition or provision
herein contained; all such covenants, conditions and provisions being for the
sole benefit of the parties hereto and the holders of the Debentures.

SECTION 14.03. ADDRESSES FOR NOTICES, ETC. Any notice or demand which by
any provision of the Debentures is required or permitted to be given or served
by the holders of Debentures on the Company may be given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until notified of another address by the Company) to
RENAISSANCE GOLF PRODUCTS, INC., 5812 Machine Drive, Huntington Beach,
California 92649, Attention: Secretary. Any notice, report or other instrument
required by any of the provisions of the Debentures to be given by the Company
to the Debentureholders shall be deemed to have been sufficiently given for all
purposes if mailed by first class mail to the Debentureholder at the last
address for such holder appearing in the Debenture register.

SECTION 14.04. CALIFORNIA CONTRACT. This Debenture and each other
Debenture executed and delivered by the Company shall be deemed to be a contract
made under the laws of the State of California and for all purposes shall be
construed in accordance with the laws of said state.

SECTION 14.05. LEGAL HOLIDAYS. In any case where the date of maturity of
interest on or principal of or interest on the Debentures or the date fixed for
redemption of any Debenture will not be a business day, then payment of such
interest on or principal of the Debentures need not be made on such date but may
be made on the next succeeding business day with the same force and effect as if
made on such date of maturity or the date fixed for redemption and no interest
shall accrue for the period from and after such prior date.

SECTION 14.06. NO SECURITY INTEREST CREATED. Nothing in the Debentures,
expressed or implied, shall be construed to constitute a security interest under
the Uniform Commercial Code or similar legislation, as now or hereafter enacted
and in effect, in any jurisdiction where property of the Company or its
Subsidiaries is located.

SECTION 14.07. TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and
the titles and headings of the articles and sections of the Debentures have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

Page 21 of Twenty-two
<PAGE>

IN WITNESS WHEREOF, RENAISSANCE GOLF PRODUCTS, INC. has caused this
Debenture to be signed and acknowledged by its Chief Executive Officer, and its
corporate seal to be affixed hereunto, and the same to be attested by its
Secretary or an Assistant Secretary, as of the day of
, 1997.

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation

By:
----------------------------------------
John B. Hewlett, Chief Executive Officer

Attest:
---------------------------
Bruce H. Haglund, Secretary

(Seal)

Page 22 of Twenty-two

<PAGE>

TRADEMARK LICENSE AGREEMENT

THIS AGREEMENT, made this 1st day of October, 1996, by and between Fila
Sport S.p.A., an Italian corporation having its place of business at Via Cesare
Battisti, 26, Biella, Italy ("Licensor") and Renaissance Golf Products, Inc., a
U.S. corporation, having its place of business at 5812 Machine Drive, Huntington
Beach, California 92649 (the "Licensee").

WITNESSETH
WHEREAS, Licensor and Licensee entered into a certain license agreement
dated as of October 18th, 1990, for the use of the "F" and "FILA" trademarks in
connection with production, advertising and sale of certain golf products (which
agreement, together with any amendments thereof, is hereinafter referred to as
the "Original Agreement");

WHEREAS, Licensee was in default under certain of the terms of the Original
Agreement;

WHEREAS, Licensee desires to obtain, subject to the terms and conditions
below, a license to use the Trademarks (as indicated in Schedule A) on and in
connection with certain Products (as set forth in Section 1.1 below and in
Schedule C).

NOW, THEREFORE, upon the premises above and in consideration of the
promises below, the parties agree as follows:

<PAGE>

1. GRANT OF LICENSE

1.1. GRANT OF LICENSE. Subject to the terms and conditions hereof,
Licensor grants to Licensee, for the Term (as defined in section 2.1
below):

(i) a limited and EXCLUSIVE license to use the Trademarks only
in the Territory (as set forth in Schedule B) in connection
with the advertising, marketing, promotion, distribution and
sale of Hard Products (as defined in Schedule C);

(ii) a limited and NON EXCLUSIVE license to use the Trademarks
only in the United States in connection with the
advertising, marketing, promotion, distribution and sale of
Soft Products (as defined in Schedule C);

(iii) a limited and NON EXCLUSIVE license to use the Trademarks
only in the United States, Italy, Taiwan, Korea, Indonesia,
Japan, China, Thailand, Singapore, Malaysia, United Kingdom
and Mexico in connection with the manufacture of Soft
and/or Hard Products. Licensee shall not manufacture
Products in any other country without the express written
authorization of Licensor who will not unreasonably withhold
consent.

Licensee shall use the Trademarks only as granted herein and for no
other use or purpose unless expressly agreed in writing between
Licensor and Licensee. All rights in and to the Trademarks not
specifically granted to Licensee by this Agreement are reserved to
Licensor for Licensor's own use and benefit.

1.2. NO SUBLICENSES. Licensee shall have no right to license or
sublicense any use of the Trademarks or assign or transfer all or
any part of this Agreement or all or any

<PAGE>

of its rights or obligations hereunder, unless expressly approved by
Licensor in writing.

1.3. TERRITORY. Licensee understands and acknowledges that the License
granted in this Agreement is limited to the specific territories as
set forth in Section 1.1 above and schedule B. Licensee's use of
the Trademarks outside the Territories shall be deemed a material
breach of this Agreement.

1.4. NO LIMITATIONS ON LICENSOR. Except as expressly set forth herein,
nothing contained in this Agreement shall in any way restrict,
impair, limit, or affect Licensor's ownership of or rights in the
Trademarks, including licensing third parties to use the Trademarks,
whether on or in connection with the Hard Products outside the
Territory, with the Soft Products in or outside the Territory or
otherwise.

2. TERM AND OPTION TO EXTEND

2.1. TERM. Unless sooner terminated by any party in accordance with the
provisions of this Agreement, the term of this Agreement (the
"Term") and the License granted thereby shall commence upon
Licensor's receipt of the consideration as set forth in Section 6.2
(the "Effective Date") and shall expire on December 31, 2000. For
purposes hereof, a Contract Year shall mean each twelve month period
commencing January 1 and terminating December 31 of the same
calendar year,

<PAGE>

except that the first Contract Year shall run from September 1, 1996
and shall expire on December 31, 1996.

2.2. OPTION TO EXTEND. Licensee shall have the right to extend this
Agreement on the same terms and conditions contained hereinbelow
from January 1, 2001 to December 31, 2005, only if:

(i) Licensee is not in default of any obligation under this
Agreement; and

(ii) the aggregate Royalties (as defined hereinafter) paid or
payable (so long as Licensee is not in default of any
payment obligations) for the Term equal or exceed the
amount of US$2,400,000; and

(iii) the aggregate Royalties paid or payable (so long as Licensee
is not in default of any payment obligations) for the period
January 1, 2000 - December 31, 2000 equal or exceed the
amount of $700,000; and

(iv) Licensor exercises such renewal option in writing, if it is
entitled to do so, on or before September 30, 2000.

3 LICENSED PRODUCTS

3.1. AGGRESSIVE EFFORTS. Licensee shall continuously throughout the Term
aggressively develop, promote, advertise, market, and sell the
Products in the Territory during the Term subject to the Quality
Control provisions in Section 4 hereof.

3.2. PRODUCTS INTRODUCTION. Licensee shall:

<PAGE>

(i) use its best efforts to commence sale and distribution of
Hard Products in commercial quantities, in each Country as
set forth in Schedule D;

(ii) use its best efforts to attain Net Sales for Hard Products
in each Country as indicated in Schedule D opposite the name
of each Country (the "Sales Targets").

4. QUALITY CONTROL

4.1. PRODUCTS. Licensee acknowledges that the Trademarks enjoy
substantial good will, reputation, fame, prestige and
distinctiveness throughout the world (the "Trademark Image"). The
quality of the Products under this Agreement shall be of a high
standard consistent with the Trademark Image and shall otherwise and
at all times conform to the specifications and quality standards of
Licensor. All of the Products shall be sourced, manufactured,
labeled, distributed, marketed, advertised, promoted, and sold in
accordance with all applicable national, state, provincial and local
laws and regulations, and shall not infringe trademarks, patents,
industrial design rights, copyrights, or other intellectual property
rights of others. Before engaging in any sourcing or manufacture of
the Products, Licensee shall submit to Licensor, for Licensor's
prior written approval, all designs and specifications for such
Products and the final prototype of each of the Products to be
manufactured, marketed and sold by Licensee. Licensor agrees to
approve or disapprove, in writing within twenty (20) working days of
receipt by Licensor, the designs and the prototypes or samples of
the Products. Such approval shall not be

<PAGE>

unreasonably withheld as far as the Hard Products are concerned;
approvals relating to the Soft Products rest in Licensor's sole
discretion. Failure to disapprove designs, prototypes or samples
of the Products submitted by Licensee, within twenty (20) working
days of receipt of same, shall constitute approval. Licensor shall
be entitled to inspect, or cause to be inspected, during regular
business hours, Licensee's facilities, or the facilities of
Licensee's manufacturers, in order to ascertain that the current
production samples of each model or style of the Products marketed
under this Agreement are manufactured in accordance with Licensor's
quality standards. Samples submitted by Licensee for this purpose
may be retained by Licensor.

4.2. SIMILAR PRODUCTS. The parties agree that the quality of the
Products, the Trademark Image, and the reputation of Licensor shall
be best maintained if Licensee does not sell goods identical or
substantially similar in design to the Products for any other party.
Licensee shall not, therefore, source, manufacture, distribute,
market, advertise, promote, or sell any goods identical or
substantially similar in design to the Products for itself (except
for the purposes of this Agreement) or for any other party. This
obligation shall not, however, be construed to prevent Licensee from
selling goods which are not substantially similar in design to the
Products.

4.3. PROMOTIONAL ITEMS. Licensee shall not give away any promotional
items to promote the sales of the Products except as otherwise
provided in Section 4.7.3.

<PAGE>

4.4 MARKETING AND DISTRIBUTION.
4.4.1. Licensee shall submit to Licensor for Licensor's prior
approval all containers, packaging, labels, tags, brochures,
catalogs, and the like; all advertising, promotional, and
other marketing materials; and all other transactional
documents and business materials (collectively the
"Materials") using the Trademarks or to be used on or in
connection with the Products. Licensee shall submit all
Materials in their proposed final form to Licensor at least
forty (40) working days before the proposed publication or
release of the Materials. Licensor shall have twenty (20)
working days after receipt to approve or disapprove such
materials. Licensor's failure to respond within the said
twenty (20) working days shall be deemed approval.

4.4.2. Licensee shall submit to Licensor, for Licensor's prior
written approval and no later than the September 30th
preceding the beginning of each Contract Year (commencing
with September 30, 1997 for the 1998 Contract Year), a
written marketing plan (the "Marketing Plan"), except
Licensee shall submit a Marketing Plan by November 30, 1996
for the 1997 Contract Year. Each Marketing Plan submitted
by Licensee shall state, at a minimum: (i) Licensee's
proposed advertising, promotional, marketing, distribution
and sales strategies and targets for the Products for each
Contract Year; (ii) the proposed and actual distribution
channels, and wholesale and retail accounts for the
Products; (iii) any proposed give-

<PAGE>

aways of the Products; (iv) the pricing structure and price
points for the Products; (v) the anticipated advertising and
promotional expenses; (vi) the proposed media placement for
the Products and frequency thereof; and (vii) any and all
other proposals. Licensor shall have the specific and
irrevocable right to approve or disapprove in its reasonable
discretion, taking into consideration solely the interest to
maintain the Trademark Image, of any or all such elements of
the Marketing Plan, provided such approval or disapproval is
made within twenty (20) working days after Licensor's
receipt of the Marketing Plan. Failure to disapprove said
Marketing Plan, or any part thereof, in writing, within such
twenty (20) working days, shall be deemed approval.

4.4.3. Licensee shall not sell the Products to anyone other than
(1) pro shops at public and private golf courses, driving
ranges and golf speciality shops, which right Licensor may
cancel as to any customer upon reasonable grounds; and (2)
as for Hard Products only, sporting goods retailers in the
Territory provided that such sporting goods retailer (i)
sells golf products, (ii) is authorized by Licensor or Fila
U.S.A. to sell other FILA brand sportswear or footwear and
(iii) Licensee provides Licensor with a current list of all
customers with the accounting and royalty payment due under
Sections 6.4 and 6.5. Licensor has the right to cancel or
terminate sales to any customer upon reasonable grounds,
including if Licensor or Fila U.S.A. terminates the customer
as an authorized FILA account.

<PAGE>

Licensee shall not knowingly sell Products destined for
resale to or in any countries outside the Territory.
Licensee shall not knowingly sell Products at a discount of
greater than 25% unless specifically approved in writing by
Licensor. The parties acknowledge and agree that it is
essential for Licensor to have these approval rights to
maintain the high quality of the Products, the Trademark
Image, and the reputation of Licensor and any breach thereof
by Licensee shall be deemed a material breach of this
Agreement. Licensor in its discretion may terminate this
Agreement for material breach as defined herein and require
payment by Licensee to Licensor of all gross sales received
by Licensee as a result of said breach.

4.5. REQUIRED MARKINGS.

4.5.1. Licensee shall cause the Trademarks to appear on and in
connection with all Products, and Licensee shall place and
display the Trademarks on and in connection with the
Products only in such form and manner as are specifically
approved in advance by Licensor as provided in this
Agreement.

4.5.2. Licensee shall place or affix on the Products, the packaging
for the Products and all other materials which display any
of the Trademarks: (a) Licensee's trade name or trademark
in a manner sufficient to inform consumers that the Products
are manufactured, distributed, and/or sold by Licensee,
under license from Licensor, and that the Trademarks are
owned

<PAGE>

by Licensor; and (b) such other legends, markings, and
notices as may be required by any law or regulation in the
Territory and as Licensor may reasonably request. Language
for such markings already approved by Licensor is "The F and
FILA Trademarks are used under license from Fila Sport
S.p.A.." With respect only to golf clubs, Licensee may
affix its tradename, trademarks, and other language required
under this subsection, on a clear plastic sticker on the
Product, the style and language of which shall be approved
in advance in writing by Licensor. With respect only to
golf balls, golf ball markers and golf tees, Licensee shall
affix its tradename, trademarks, and other language required
under this subsection, on the packaging and other materials
used for the Products, but is not obligated to do so on the
actual Product due to the size of such Product.

4.6. APPROVALS. Unless and until an approval has been made by Licensor
as provided in this Agreement, Licensee shall not release, publish,
market, advertise, promote, distribute, or sell any item bearing the
Trademarks. Licensor's approval of any item submitted for approval
to Licensor shall not be construed to mean that Licensor has
determined that such items conform to the laws or regulations of any
jurisdiction or that the Product samples and/or the Products or
other materials are safe or fit for their intended purpose.
Licensor may revoke, in its sole and reasonable discretion, its
approval of a Product or other material or item at any time if the
Product, material or item subsequently proves to be ineffective for
its

<PAGE>

intended purpose, or is unsafe, or is of poor or sub-standard
quality (items which Licensor determines in its sole discretion fall
below the quality standards and specifications established by
Licensor) or is disparaging the Trademark Image. If any Product or
other item approval is so revoked, Licensee shall immediately cease
and desist from all manufacturing, sale or distribution thereof, and
shall provide Licensor with an audit of orders out, inventory,
orders in manufacture and orders in transit of the revoked Products.
Licensee shall indemnify Licensor and hold Licensor harmless from
any and all claims resulting from defects, quality control problems
or other consumer complaints. After Licensor has approved any
Product or other item for use for which approval is required under
this Agreement, Licensee shall not make any change in the approved
Product or other item without again obtaining Licensor's prior
written approval. All Products or other items subject to Licensor's
prior written approval shall be sent, by courier or commercial
express delivery company, return receipt requested, to the attention
of: License Dept., Fila Sport S.p.A., with a copy to: Legal Dept.,
Fila Sport S.p.A. Receipt of such items shall not be construed
against Licensor unless such provisions are complied with respect to
method of delivery and return receipt notification.

4.7 PROHIBITED USE OF THE TRADEMARKS.

4.7.1. In addition to all other restrictions imposed on Licensee
pursuant to this Agreement, Licensee shall not use the
Trademarks (a) as a portion of or in connection with any
other trademarks, except as provided under Section 4.5.2;
(b) as all or part of a corporate name, trade name or any
other

<PAGE>

designation used by Licensee to identify its products,
services, or business; or (c) for any other purpose other
than as trademarks for the Products. Licensee, or any
parent, subsidiary, affiliated, or related company, or any
person or entity owned or controlled by Licensee or under
common ownership or control as Licensee, shall not use any
name, trademark, service mark, trade name, trade dress, or
logo, which incorporates or is similar or identical to any
of the Trademarks. In particular, Licensee shall, effective
October 1, 1996, sooner upon execution of Agreement forever
terminate "FILAGOLF" as a trade name, or as a service
trademark and refrain from identifying itself as "Fila" or
"FILAGOLF" in any manner whatsoever, including, but not
limited to, letterhead, business directory, telephone
directory, NASDAQ material and communications, leaflets,
brochures, commercial registrations, voice mail, phone
operator, etc. Failure to comply with this subparagraph
will be deemed a material breach of this Agreement.

4.7.2. After October 1, 1996, Licensee shall remove the name
"FILAGOLF" from any existing material, Product, packaging,
or in the event removal is not possible, to destroy any such
material or item. Notwithstanding the above, Licensee may
use the term "FILAGOLF" only as a trademark in a certain
limited manner on some Products which use shall be
specifically approved in advance by Licensor as provided for
in this Agreement. Licensee shall be allowed to sell
Products in inventory as of the date of

<PAGE>

execution of this Agreement which bear the term "FILAGOLF"
and which have already been approved by Licensor.

4.7.3. Licensee acknowledges and agrees that Products cannot be
used in any manner whatsoever as favors, premiums,
promotional tie-ins, or gift with purchase to promote any
other item manufactured by a third party; including
providing them to such entities which will use them as a
gift with purchase, give-away or in any other manner to
promote other items. Licensee may, however, give-away
certain Products solely to promote the Products as follows:
(1) providing hats, golf tees, ball markers and golf towels
at golf tournaments, (2) providing Products as golf
tournament prizes, (3) providing Products to a golf pro at a
pro shop which purchases the Products, and (4) providing
Products to athletes who have endorsement contracts with
Licensor. Licensee shall notify Licensor twenty (20) days
prior to any such give-away of Products, including the name
of the golf tournament, pro shop or athlete, the proposed
Products and the quantity of Products and Licensor shall not
unreasonably withhold approval.

4.8. DISPOSAL OF SURPLUS, OUTMODED, DEFECTIVE, OR SUB-STANDARD PRODUCTS.

4.8.1. During the Term, Licensor shall approve the manner by which
Licensee proposes to dispose any Products which are surplus,
outmoded, or defective, or which Licensor determines fall
below the quality standards and specifications established
by Licensor ("Sub-Standard Products")

<PAGE>

provided that any sell-off arrangements shall be consistent
with the reputation, prestige and goodwill of the
Trademarks, and shall maintain Licensor's reputation and the
Trademark Image.

4.8.2. Licensee shall destroy all defective or sub-standard
Products unless Licensor grants express written approval to
otherwise dispose of such Products. Licensor's approval of
any sell-off of defective or sub-standard Products shall be
conditioned upon removal of all Trademarks from the
Products, their packaging and any other Materials used in
conjunction therewith.

4.8.3. As to any surplus or outmoded inventory on hand or in
production, or for which approval has been revoked under
Section 4.6, or Products which remain following expiration
or termination of this Agreement (collectively the
"Remaining Inventory"), Licensee shall, provided Licensee is
not in breach of any terms of this Agreement, have the right
to sell-off on a non-exclusive basis all or any portion of
such Remaining Inventory within six (6) months following
expiration or termination of this Agreement. Licensee's
proposed sell-off arrangements shall be subject to
Licensor's prior written approval, shall be consistent with
the reputation, prestige and goodwill of the Trademarks, and
shall maintain Licensor's reputation and the Trademark
Image.

<PAGE>

4.8.4. Prior to any sell-off or offering any Remaining Inventory to
any wholesaler or retailer, Licensee shall provide Licensor
with a complete and detailed report of its Remaining
Inventory. Within thirty (30) days of receipt of the
Remaining Inventory report, Licensor shall advise Licensee
whether it will purchase all or a specified percentage of
the Remaining Inventory. Any Remaining Inventory which is
not sold to Licensor or others under the above provisions
shall be destroyed by Licensee after expiration of the six
(6) month sell-off period under the supervision of Licensor.
Licensee shall not sell Remaining Inventory at a discount
exceeding fifty percent (50%). For the purposes of this
Agreement, the sale of any such Products at a discount
exceeding fifty percent (50%) of the regular price list or
advertise the sale as a "discount," is hereby deemed to be
not consistent with the reputation, goodwill and prestige of
the Trademark Image.

4.9. LICENSEE'S DISTRIBUTORS. During the Term, Licensee shall have the
right to appoint a distributor of the Products (the "Distributor")
in any Country included in the Territory, consistent with the image
and reputation of Licensor and the Trademarks, providing that (i)
Licensee notifies Licensor in writing about such Distributor; (ii)
any such proposed Distributor shall be bound by the terms and
conditions of this Agreement and shall enter into a distribution
agreement consistent with the terms and provisions hereof, including
those relating to the use of the Trademarks and quality control, and
(iii) Licensor approves the Distributor and the required
distribution agreement in writing, which approval shall not be

<PAGE>

unreasonably withheld. All Materials used by any proposed
Distributor must be approved by the Licensor pursuant to Section
4.6. Licensee shall indemnify Licensor and hold Licensor harmless
for any and all acts of any Distributor which violate any terms and
conditions of this Agreement. Any and all distribution agreements
shall expire and/or terminate upon the expiration or termination of
this Agreement and all Distributors shall immediately cease all use
of the Trademarks pursuant to Section 9.

5. INTELLECTUAL PROPERTY OWNERSHIP RIGHTS

5.1. OWNERSHIP OF THE TRADEMARKS.

5.1.1. Licensee, and any agents, employees or any entity affiliated
and/or controlled by Licensee, including without limitation
any approved Distributor, acknowledge, understand and agree
that Licensor has sole and exclusive ownership of all right,
title and interest in and to the Trademarks, and all
registrations and applications therefor. Licensee, and any
agents, employees or any entity affiliated and/or controlled
by Licensee, including without limitation any approved
Distributor further acknowledge, represent and warrant that
they have not acquired, and shall not acquire, whether by
operation of law, this Agreement, or otherwise, any right,
title, interest, or other ownership in or to the Trademarks.
Should any such right, title, interest, or other ownership
become vested in Licensee, or any agents, employees or
any entity affiliated and/or controlled by Licensee,
including without limitation any approved Distributor, by
operation of law, this

<PAGE>

Agreement, or otherwise, they hereby assign all such right,
title, interest, and other ownership to Licensor free of
additional consideration. Licensee, its agents, employees
and any entity affiliated and/or controlled by Licensee,
including without limitation any approved Distributor, shall
provide and execute all documents necessary to effectuate
and record such assignment to Licensor.

5.1.2. Licensee recognizes the value of the goodwill associated
with the Trademarks and acknowledges that all rights therein
belong exclusively to Licensor and further acknowledges that
the Trademarks have acquired substantial secondary meaning
and distinctiveness in the mind of the public. All use of
the Trademarks and all goodwill and benefit arising from
such use shall inure to the sole and exclusive benefit of
Licensor. All rights in and to the Trademarks other than
those specifically granted in this Agreement are reserved by
Licensor for its own use and benefit. Licensee shall not,
during the Term or thereafter, do anything which would in
any way damage, inure, or impair the validity and
subsistence of the Trademarks, nor shall Licensee attack,
dispute, or challenge, nor aid other to do so. Licensor's
right, title and interest in and to the Trademarks, or the
validity of this Agreement or any provisions herein
specifically relating to Licensor's rights to guard and
protect its Trademarks to the fullest extent of the law.
All Trademarks, logos, designs, and/or slogans appearing on
or in connection with the Products shall be the sole and
exclusive property

<PAGE>

of Licensor. Licensee agrees to assign, and hereby assigns,
all right, title, interest and other ownership of same to
Licensor free of additional consideration. Licensee shall
timely provide and execute all documents necessary to
effectuate and record such assignments to Licensor and
failure to do so shall be deemed a material breach of this
Agreement.

5.2. REGISTRATIONS AND LICENSING FORMALITIES. Licensee shall promptly
cooperate with Licensor, as Licensor may request, with respect to
the execution, filing and prosecution of any trademark applications
(including Trademark renewals) that Licensor may desire to file, and
for the purpose Licensee shall supply to Licensor from time to time
and without charge such samples, packaging, containers, labels,
tags, invoices, evidence of use of the Trademarks in any given
Country within the Territory, and similar materials as may be
reasonably required hereunder. Licensee shall execute and deliver
to Licensor, at any time whether during or after the Term and
without further consideration or compensation, such instruments of
transfer and other documents as Licensor may request for Licensor's
trademark applications or to confirm Licensor's ownership right. At
Licensor's request, the License to use the Trademarks granted to
Licensee by this Agreement shall be confirmed by a separate
trademark agreement for any country within the Territory which
permits or requires a separate agreement, including without
limitation Registered User agreements, or where a separate trademark
agreement is deemed appropriate by Licensor. At Licensor's request,
Licensee shall timely execute whatever documents or forms Licensor
deems necessary to confirm the license, to

<PAGE>

record Licensee as a Registered User, and/or to record the license,
in any country within the Territory. Expiration or termination of
this Agreement shall terminate or act to terminate immediately all
Registered User and other license recordal documents executed,
filed, and/or recorded pursuant to this Agreement and Licensee
shall, at Licensor's request, take all steps and actions as may be
necessary to reflect or confirm the expiration, termination, and/or
surrender of Licensee's rights under same. The parties expressly
agree that all documents filed or recorded with any applicable
Trademark Office or other authority relating to the License granted
herein may be canceled by Licensor alone and Licensee hereby agrees
and consents to any such cancellation. If Licensee fails or refuses
to execute or deliver in timely fashion any document requested or
required hereunder, Licensee hereby grants Licensor a limited power
of attorney to sign the document in Licensee's name and make
appropriate disposition of it provided it is consistent with this
Agreement.

5.3. INFRINGEMENTS. Licensee shall inform Licensor forthwith if Licensee
observes or has notice of any goods or activities which infringe, or
which may reasonably infringe, the Products, the Trademarks or any
other intellectual property rights now or hereafter owned by
Licensor, Licensee shall provide, at Licensee's expense, complete
information, cooperation, and assistance to Licensor concerning such
infringements and/or potential infringements, and any consequent
further investigation and/or legal action. Upon learning of such
infringements and/or potential infringements, Licensor shall have
the right, but not the obligation, at its

<PAGE>

sole discretion and expense, to take such action as Licensor
considers a necessary or appropriate to enforce Licensor's rights,
including without limitation legal action to suppress or eliminate
the infringements and/or to settle any such dispute and/or action.
Licensor shall take legal action in such cases in which it believes
the infringer's activities are such as to impair the marketing
activity for the Products in a given Country within the Territory.

5.4. EVIDENCE OF USE. Licensee acknowledges the need to supply ample
evidence of use of the Trademarks in each Country in the Territory
for purposes of trademark registrations, applications, renewals and
other related proceedings., and agrees to supply to Licensor on
every June 30 and/or December 31 of the Term with copies of
representative invoices or invoices for specifically requested
accounts relating to the sales of Products for each Country.

5.5. TRADEMARK UNAVAILABILITY. In case Licensee failed to distribute
certain golf products under the original Agreement in certain
Countries, the Trademarks in such Country may be subject to
abandonment for lack of use in case of such an occurrence, Licensor
agrees to file, at its expense, new applications for the Trademarks
in the concerned Countries. If, as a consequence of abandonment for
non use successfully filed against Trademarks in one or more
Country, Licensee will not be entitled to market the Products in
such Country, the Country will be excluded from the Territory, with
no liability for either party.

<PAGE>

6. MINIMUM GUARANTEED ROYALTIES, ROYALTIES, OTHER CONSIDERATIONS, ACCOUNTING

6.1. MINIMUM ANNUAL ROYALTIES. The "Minimum Annual Royalty" for each
Contract Year is as follows:

1st Contract Year (Oct. 1-Dec. 31, 1996) US$ 200,000
2nd Contract Year (1997) US$ 400,000
3rd Contract Year (1998) US$ 500,000
4th Contract Year (1999) US$ 600,000
5th Contract Year (2000) US$ 700,000
------------
US$2,400,000

In order to secure payment of the Minimum Annual Royalties and as a
precondition for this Agreement, Licensee shall cause Licensor to
receive an irrevocable letter of credit, confirmed by a primary
Italian bank designated by Licensor, in a form determined by
Licensor, for the amount of the Minimum Annual Royalty for each
Contract Year which shall be Four Hundred Thousand Dollars
(US$400,000) for 1997 and shall be renewed for the Minimum Annual
Royalty for each subsequent contract year.

Licensee shall pay one fourth (1/4) of the Minimum Annual Royalty
to Licensor fifteen (15) days prior to the end of each quarter
(i.e., March 15, June 15, September 15 and December 15 of each
Contract Year). If Licensee fails to timely make any of the
quarterly payments, Licensor shall be entitled to draw as of the
last day of each quarter (i.e., March 31, June 30, September 30, and
December 31) from the letter of credit one fourth (1/4) of the
Minimum Annual Royalty

<PAGE>

indicated opposite each Contract Year in the above schedule. The
drawings against the letter of credit should be at Licensor's first
written request, all exceptions or reserves waived. Licensor's
right to draw against the letter of credit is independent of, and
shall in no way effect, Licensor's right to terminate this Agreement
if Licensee fails to timely make any of the quarterly payments.

In case of termination of the Agreement, for any reason whatsoever,
Licensor shall be entitled to immediately withdraw the remaining
Minimum Annual Royalty. The letter of credit shall be opened on or
before October 31, 1996 as a precondition for the validity of this
Agreement.

In case of extension of the term of the Agreement (the "Extended
Term"), Licensee shall cause Licensor to receive an irrevocable
letter of credit, confirmed by a primary Italian bank designated by
Licensor, in a form determined by Licensor, for the amount of the
Extended Minimum Annual Royalty for each Contract Year. The
Extended Minimum Annual Royalty for each Contract Year for the
Extended Term is as follows:

6th Year (2001) US$ 800,000
7th Year (2002) US$ 900,000
8th Year (2003) US$1,000,000
9th Year (2004) US$1,000,000
10th Year (2005) US$1,000,000
------------
Extended Minimum Annual Royalty US$4,700,000

The letter of credit shall be opened on or before November 30, 2000,
as a precondition to the extension of the Term. In case of
termination of this

<PAGE>

Agreement, at any time during the Extended Term, Licensor shall be
entitled to immediately withdraw the remaining Extended Minimum
Annual Royalty.

6.2. ADDITIONAL CONSIDERATION. In addition to any other consideration
hereunder, Licensee shall pay to Licensor, the amount of US$675,000
within 30 days of signing this Agreement. Payment of the above
amount is a precondition for the validity of this Agreement and this
Agreement will not become effective until such payment has been
fully cleared in Licensor's bank account.

6.3. ROYALTY. Licensee shall pay to Licensor, on a quarterly basis for
each applicable Contract Year, in addition to the consideration
referred to in Section 6.2. above, royalty on the Net Sales (as
hereinafter referred) of Products, as follows:

6% on Net Sales of Products up to US$7,500,000
5.5% on Net Sales of US$7,500,001 to US$15,000,000
5% on Net Sales in excess of US$15,000,000
("the Royalty").

The Royalty for each applicable Contract Year shall be due, solely
for the portion of it which exceeds the Minimum Annual Royalty for
such Contract Year.

Royalty payments shall be made by the Licensee to the Licensor on
all Products upon which royalty payments are due by the Licensee.
In the case of sales of Products to individuals and/or companies
which are affiliates or associated with and/or subsidiaries of
Licensee, the net sales shall be calculated upon the Licensee's
usual net sales price for such Products sold to unrelated third
parties in

<PAGE>

the course of the Licensee's normal distribution, shipment and sales
activities. Where the billed price for any Products is less than
the usual net sales price for such Products sold to third parties in
the course of the Licensee's normal distribution, shipment and sales
activities, the royalty payment shall be based upon the Licensee's
usual net sales price. Licensee shall not offer discounts greater
than twenty-five (25%) percent without prior written approval.

For purposes hereof, "Net Sales" shall mean gross sales less:

- quantity discounts which Licensor has pre-approved
(including those quantity discounts that are evaluated, for
each customer, at the end of every Contract Year);

- returns actually credited which were initially paid for in
cash;

- uncollectible accounts (not more than one percent (1%) of
total yearly billing in any one Contract Year);

- loss for pilferage, actually credited to the customers;

being it understood that the total of such deductions cannot exceed
five percent (5%) of the total gross sales in any applicable
Contract Year. In case Licensee will deliver the Products on a CIF
basis, then the Net Sales shall not include the insurance and
freight costs. No deductions shall be made for commissions, taxes,
fees, assessments, impositions, penalties, payments or expenses of
any kind which may be incurred or paid by the Licensee in connection
with the royalty payments due to Licensor hereunder or in connection
with the transfer of the funds or royalties or with the conversion
of any currency into Italian Lire, or for any cost incurred in the
manufacture, offering for sale, sale, advertising, promotion,

<PAGE>

shipment, distribution of the Products. Licensee must base all
Royalty Payments on the exact amount invoiced to its customers and
no deductions shall be taken in the event less funds are received by
Licensee due to unfavorable exchange rates in effect at the time
Licensee receives payment from its customers. If Licensees recovers
any amounts, from insurance or otherwise, attributable to damages
suffered for any reason in the sale of Products, then the amounts of
lost sales or diminished sales revenues upon which such recovered
damages were based shall be included in Net Sales for the next
applicable Contract Year. If same are received after expiration or
termination of this Agreement, the applicable payments to Licensor
shall be made within 10 days of receipt of same by Licensee.

6.4. ACCOUNTING. Licensee shall provide Licensor on a quarterly basis
for each Contract Year of the Term commencing with the quarter
ending March 31, 1997, a detailed written accounting, in the form of
Schedule E, of Products sold during such quarter, divided per
Country included in the Territory and per category of Products and
the Net Sales thereof, together with the amount of royalties due for
such quarter to Licensor. The detailed written accounting for the
second and all subsequent accounting periods shall contain not only
the required information for the most recently concluded quarter,
but also a recap covering the entire year to date. The written
accountings shall be accompanied by a payment to Licensor for the
amounts due, if any, for such recently concluded quarter.

<PAGE>

6.5. FORM AND MANNER OF PAYMENTS. Unless otherwise provided in this
Agreement or otherwise specified in writing by Licensor, all
payments by Licensee under this Agreement shall be made within
thirty (30) days after March 31, June 30, September 30, December 31,
for each applicable Contract Year and payable in US Dollars to
Licensor or to a bank or other organization designated by Licensor
at the official rate of conversion of currency existing at the
moment of the issue of any invoice from Licensee to customers.
Payments shall be by wire transfer. Failure to timely provide a
written accounting under Section 6.4 and make the applicable Royalty
Payment shall be cause for immediate termination of this Agreement.

6.6. TIME OF ESSENCE. Timely payment is of the essence as to all royalty
payments due to Licensor under this Agreement.

6.7. LATE PAYMENT. All late payments under this Agreement shall bear
interest at a rate equal to the then current annual commercial
lending rate charged by the leading commercial banks in New York,
New York, U.S.A., plus five percent (5%), without prejudice for any
other remedy available to Licensor.

6.8. TAXES. Licensee shall be entitled to withhold from any royalty
payment payable pursuant to this Agreement any sum required to be
withheld under the applicable tax laws of the Territory, and to pay
such sum withheld to the appropriate tax authorities. In such case
Licensee shall furnish Licensor with the official tax receipt or
other appropriate evidence of taxes paid issued by the tax
authorities of

<PAGE>

the Territory. If such withheld sum exceeds ten percent (10%) of
the total Royalty sum due and payable prior to withholding of such
tax sum, then with respect to each remaining applicable Contract
Year hereunder, the Royalty due to Licensor hereunder shall be
increased by ten percent (10%).

6.9. INSPECTION OF BOOKS AND RECORDS AND RIGHT TO AUDIT. Licensee shall
keep complete and accurate records of all operations affecting
royalty payments hereunder, and shall permit Licensor or its
designee to inspect all such records and to make copies of or
extracts from such records during regular business hours throughout
the term of this Agreement and for a period of five (5) years after
the completion or termination of this Agreement. Such inspection
shall be made upon reasonable notice to Licensee and with minimum
interference in the business activities of Licensee. As part of
Licensor's right to inspect Licensee's books of account and records,
Licensor shall have the right to have Licensee's books of accounts
and records audited, at Licensor's expense. However, if the audit
reveals a payment deficiency in the amount owed to Licensor under
this Agreement of two percent (2%) or more for any royalty period,
then Licensee shall bear and pay all costs of the audit and shall
immediately pay Licensor all such sums due and payable plus interest
on the deficient amount at the same rate provided for late payments
under Section 6.7.

7. ADVERTISING AND PROMOTIONAL COMMITMENT

<PAGE>

Licensee and Licensor agree that Licensee shall actively advertise and
promote the sale of Hard Products in each Country included in the
Territory; to that purpose, Licensee shall invest at least such percentage
of the Net Sales in advertising and promotion for Hard Products, and for
each Country included in the Territory, as indicated in Schedule F opposite
to the name of each Country.

8. REPRESENTATIONS - INDEMNITY - INSURANCE

8.1. LICENSOR. Licensor represents and warrants that:

(i) Licensor is able to license all of Licensor's rights to the
Trademarks in the Territory for purposes of this Agreement
except as provided in Section 5.2 hereof.

(ii) Licensor's entering into and performing this Agreement will
not conflict with or violate any agreements or obligations
Licensor may have with any other person or entity.

8.2. LICENSEE. Licensee represents and warrants that:

(i) The Products, aside from use of the Trademarks pursuant to
this Agreement, shall not infringe the patents, industrial
design rights, copyrights, trademark rights, or other
intellectual property rights of others.

(ii) Licensee's entering into and performing this Agreement will
not conflict with or violate any agreements or obligations
Licensee may have with any other person or entity.

<PAGE>

(iii) Licensee acknowledges and represents that it has no claims
whatsoever against Licensor or any Affiliate for any
activity or matter arising from or related to the Original
Agreement, its performance and fulfillment.

8.3. Licensee acknowledges that Licensor has not promised, and has not
engaged itself, to perform any activity whatsoever on behalf of
Licensee, or to enter into any cooperation program in connection
with the marketing of the Products, such marketing shall rest solely
under Licensee's responsibilities, subject to all terms and
conditions of this Agreement.

8.4. INDEMNITY. Licensor shall indemnify and hold Licensee harmless from
and against any claim, suit, loss, damage, or expense (including
without limitation reasonable attorneys' fees) arising out of or
relating to any breach of Licensor's representations and warranties.
Licensee shall indemnify and hold harmless from and against any
claim, suit, loss, damage, or expense (including without limitation
reasonable attorneys' fees) arising out of or relating to any breach
of Licensee's representations and warranties, arising out of or
relating to the manufacture, marketing, distribution, advertising,
promotion, or sale of any of the Products, including without
limitation, products liability claims, or any other breach of this
Agreement. Either Licensor or Licensee, as the case may be, shall
provide the other party notice of any claim or suit for which the
other party may be liable in indemnity within ten (10) business days
after learning of same. The indemnity party, at its expense, shall
have the right to enter and defend against any such claim or suit

<PAGE>

using counsel of the indemnifying party's choice. The indemnified
party shall have the right, at its own expense, to participate in
such claim or suit using the indemnified party's own counsel.

8.5. NO COMPETITION. During the Term, Licensee shall not carry on or be
engaged in or concerned with or interested in, directly or
indirectly, whether alone or in conjunction with any person, any
business, enterprise, or undertaking which his in whole or in part
in any way competitive with the business of Licensor, or which
involves the use of a trademark belonging to a competitor of the
Licensor.

8.6. INSURANCE POLICY. Licensee shall maintain at its own expense, in
full force and effect, at all times during which the Products are
sold and for a period of two (2) years, thereafter, but effective
from the effective date of this License with a reputable national
insurance carrier acceptable to Licensor, and approved by Licensor,
a products liability insurance policy with respect to the Products,
for the amount of US$2,000,000. This insurance shall be for the
benefit of the Licensee but shall include Licensor as an additional
named insured. This insurance shall provide for at least ten (10)
business days' prior written notice to Licensor and Licensee of the
cancellation or any substantial modification of the policy. This
insurance may be obtained by Licensee for Licensor in conjunction
with a policy which covers products other than the Products.
Failure to maintain this insurance at all times relevant hereto will
constitute a material breach by this Agreement.

<PAGE>

Immediately after October 1, 1996 and at least once per each year of
the Term and thereafter once per year for two (2) years, and in
addition from time to time upon reasonable request by Licensor,
Licensee shall deliver to Licensor a certificate of insurance
evidencing the insurance required under this Agreement.

9. TERMINATION

9.1. TERMINATION WITH NOTICE. If Licensor fails to perform or otherwise
materially breaches any of its obligations under this Agreement,
Licensee shall have the right, without prejudice to any other rights
Licensee may have, to terminate this Agreement by giving thirty (30)
days written notice to Licensor, and this written notice shall
automatically become effective unless Licensor effectively remedies
the breach within said thirty-day period. If Licensee fails to
perform or otherwise breaches any of its obligations under this
Agreement, Licensor shall have the right, without prejudice to any
other rights Licensor may have, to terminate this Agreement by
giving thirty (30) days written notice to Licensee, and this notice
shall automatically become effective unless Licensee completely
remedies the breach to Licensor's satisfaction within the said
thirty-day period.

9.2. IMMEDIATE TERMINATION. Licensor may terminate immediately and
without prior notice or opportunity to cure on the following
conditions: 1) Licensee fails to use its best efforts to meet the
Product Introduction dates as stated in Section 3.2.; 2) Licensee
fails to make timely royalty payments; 3) Licensee fails to
maintain, at

<PAGE>

all relevant times, product liability insurance as stated in Section
8; or 4) Licensee fails to comply with any of the provisions set
forth in Section 4.

9.3. PARTIAL TERMINATION. Licensee acknowledges that it is essential to
this Agreement to assure the effective marketing of the Hard
Products in every Country in the Territory, so that, if in a certain
Country there will be no marketing of the Hard Products, or if such
marketing will not occur in commercial quantities, or if in a
certain Country the Sales Targets are not met, Licensor shall have
the right, but not the obligation, to terminate this Agreement
solely and limited to such Country or Countries, without prejudice
to any other remedy available to Licensor.

If one of the above cases occur, Licensor shall have the option to
exercise the right referred to in this Section 9.3 OR to exercise
the rights referred to in Section 9.1. If Licensor elects to
exercise any of the rights referred to in this Section, it should
do so within thirty (30) days from the moment in which Licensor is
aware of any of the occurrences referred to in this Section.

9.4. LICENSEE'S INSOLVENCY. If Licensee commences or becomes the subject
of any case or proceeding under the bankruptcy, insolvency, or
equivalent laws of any Country in the Territory, or if a court
appoints a received, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) for Licensee or for any
substantial part of Licensee's property, or if Licensee makes an
assignment for the benefit of creditors, or if Licensee takes
corporate action in furtherance of any of the foregoing, Licensee
shall give notice of the event immediately to Licensor.

<PAGE>

Whether or not such notice is given, Licensor shall have the right
upon the occurrence of any of the foregoing, without prejudice to
any other rights Licensor may have, to terminate this Agreement by
giving written notice to Licensee, effectively immediately.

9.5. CHANGE OF BUSINESS. If Licensee sells or otherwise disposes of
substantially all of its business or assets to a third party, or
control of Licensee is transferred to any third party, either by
way of assignment of the majority of Licensee's stock, or by
mortgaging, pledging or otherwise encumbering such stocks, or in
other way, Licensor shall have the right, without prejudice to
any other rights Licensor may have, to terminate this Agreement,
effectively immediately, by giving written notice to Licensee.
It is acknowledged that the personal performance of Miles Doody
is of the essence for Licensor to enter into this Agreement. In
case any of the above subjects shall cease working for Licensee,
or otherwise cease providing their services to Licensee, Licensor
shall be entitled in its reasonable evaluation, to terminate this
Agreement.

9.6. EFFECT OF EXPIRATION OR TERMINATION. With the exception of the
limited right of sell-of under Section 4.8.3, no rights whatsoever
shall extend to Licensee beyond the expiration or termination of
this Agreement, and Licensee shall not be entitled to any
compensatory payment on the expiration or termination of this
Agreement. Upon the expiration or termination of this Agreement for
any reason whatsoever, all rights in the Trademarks shall
automatically revert to Licensor, and Licensee

<PAGE>

immediately shall cease, and thereafter refrain from, all use of (a)
the Trademarks, including without limitation removing all articles,
tags and labels bearing the Trademarks from the Products in
inventory and otherwise, and (b) trademarks similar to the
Trademarks and materials similar in appearance to those used for the
Products, such as package designs, labels, tags, and marketing,
advertising or promotional materials. The preceding sentence shall
not apply to use on articles, tags, labels, and packaging
necessarily incident to sale of Products as Remaining Inventory
during the six month sell-off period under Section 4.8.3 of this
Agreement. Use in any other manner, however, including without
limitation use in advertising and promotional materials and
activities, shall be prohibited during the sell-off period.
Licensee further agrees to surrender all tools, dies, molds and raw
materials, sew-in labels, silkscreens, embroidery heads, and the
like, bearing the Trademarks, to the possession of Licensor
immediately upon termination of this Agreement or to destroy or
modify them in the presence of Licensor. The designs, utilized or
conceived for Products, cannot be adopted by either party after the
expiration or termination of this Agreement.

9.7. SURVIVORSHIP. The following provisions shall survive expiration or
termination of this Agreement: 1.4, 4.7.1, 4.8, 5.1, 5.2, 6.4
through 6.9, 7, 8.1, 8.2, 8.3, 9.6 and 10.1 through 10.11.

10. GENERAL

<PAGE>

10.1. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and contains a complete statement of all the arrangements between
the parties with respect to its subject matter and supersedes all
prior agreements, understandings, commitments, negotiations, and
discussions, whether oral or written, including the Original
Agreement and any amendment thereto which is terminated by mutual
consent effective immediately upon execution of this Agreement.

10.2. HEADINGS. The section headings in this Agreement are included
solely for convenience of reference. They are not intended to be
complete or accurate description of the section contents, and shall
not affect the interpretation or be considered a part of this
Agreement.

10.3. AMENDMENT. This Agreement may not be amended, altered, modified, or
otherwise changed in any respect or particular whatsoever except in
writing signed by both parties.

10.4. WAIVER. The failure of a party to insist upon strict adherence to
any provision of this Agreement on any occasion shall not be
considered a waiver or deprive or limit that party's right
thereafter to insist upon strict adherence to that provision in the
particular instance or that provision or any other provision of this
Agreement in any instance. Any waiver shall be in writing signed by
the party against whom the waiver is sought to be enforced.

<PAGE>

10.5. NO ASSIGNMENT. This Agreement is personal to Licensee, and Licensee
shall not assign or transfer of its rights or delegate any of its
obligations under this Agreement. Any attempted assignment,
transfer, or delegation in violation of this provision or by virtue
of the operation of law shall be void. However, Licensor shall be
entitled to assign or transfer any of its rights or to delegate any
of its obligations under this Agreement to any of its affiliates,
provided that Licensor shall remain responsible toward Licensee for
the performance of this Agreement.

10.6. BIND AND BENEFIT. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties and parties' respective
successors, and permitted assigns and transferees, if any.

10.7. SEVERABILITY. The provisions of this Agreement are severable. If a
court of competent jurisdiction should declare any provision of this
Agreement void or otherwise unenforceable, the other provisions
shall remain unchanged and in full force and effect.

10.8. IRREPARABLE INJURY. Licensee acknowledges and admits that its
failure to manufacture, sell, advertise, promote, ship and
distribute the Products in accordance with this Agreement and
particular in compliance with the provisions set forth in Section 4
of this Agreement, or to otherwise fulfill Licensee's obligation
under this Agreement or to cease its activities as required upon
expiration or termination of this Agreement under Section 9 will
result in immediate and irreparable damage

<PAGE>

to Licensor. Licensee agrees that, in the event of such failure,
Licensor shall be entitled to equitable relief by way of temporary,
preliminary and permanent injunctions, and such other and further
relief as any court with competent jurisdiction may deem just and
proper, in addition to and without prejudice to any other relief to
which Licensor may be entitled.

10.9. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by
and construed in accordance with the internal substantive laws of
Italy. Licensee hereby consents to the exclusive jurisdiction of
the court of Milan for resolution of all claims, differences,
disputes which the parties may have regarding interpretation,
application or enforcement of this Agreement.

10.10. DELIVERY OF SAMPLES AND NOTICES. Unless otherwise specified in this
Agreement, or unless Licensor instructs Licensee differently,
production samples of the Products, and duplicate copies of all
items and materials bearing or mentioning the Trademarks, including
without limitation artwork, containers packaging, labels, tags, and
the like; marketing, advertising, and promotional materials; and
transactional documents, shall be delivered to the address set forth
in Section 4.4 of this Agreement. Any other notice, accounting
statement, or other communications under this Agreement shall be in
writing and shall be considered given when received by the parties
at the following addresses (or at such other address as a party may
specify by notice to the others):

As to Licensor: Attention - License Dept.

<PAGE>

Fila Sport S.p.A.
Viale Cesare Battisti, 26
Biella, Italy

With a copy to:
Franco Maula
Legal Dept.
Fila Sport S.p.A.
Viale Cesare Battisti, 26
Biella, Italy

As to Licensee: Attention - Chief Executive Officer
Renaissance Golf Products, Inc.
5812 Machine Drive
Huntington Beach, Ca 92649

With a courtesy copy to: Bruce H. Hagland, Esq.
Gibson, Hagland & Johnson
2010 Main Street, Suite 400
Irvine, CA 92614

10.11. CONFIDENTIALITY. Except as required by Section 5.2 or by order of a
court or government agency of competent jurisdiction, this Agreement
and its provisions shall be kept confidential by and among the
parties, unless otherwise agreed in writing. Licensor and Licensee
shall jointly develop and agree upon any press releases or other
public statements to the media to be released upon or after
execution of this Agreement.

10.12. COMPLIMENTARY PRODUCTS. During each Contract Year during the Term
and any renewal term, Licensee shall provide to Licensor free of
charge of ten (10) of each style or model of the Products.

<PAGE>

10.13. LICENSOR'S RIGHT TO PURCHASE. During each Contract Year during the
Term and any Extended Term, Licensor shall have the right to
purchase up to one hundred (100) of each style or model of the
Products at Licensee's manufacturing cost, for Licensor's
promotional purposes; and other Products at Licensee's price list
for distribution and sale in any point of sale owned by Licensor or
its Affiliates.

10.14. AGREEMENT ONLY UPON FULL EXECUTION AND DELIVERY. This document
shall not be binding on either Licensor or Licensee or constitute a
note or memorandum of the material terms of an agreement until each
party has received delivery of a copy executed on behalf of all
parties.

10.15. AUTHORIZATION AND ABILITY TO EXECUTE. The undersigned represent
that they are authorized to sign this Agreement on behalf of the
parties hereto. Each party has relief upon said representation in
entering this Agreement.

LICENSOR: LICENSEE:

By:______________________________ By:______________________________

Title:____________________________ Title:____________________________

Date:____________________________ Date:____________________________

<PAGE>

SCHEDULE A

TRADEMARKS

<PAGE>

SCHEDULE B

TERRITORY

Italy Poland Peru
ex - U.S.S.R. Nigeria Lesotho
Germany Tunisia Chad
Algerie Sweden Panama
France Kenya Liberia
Bulgaria Zimbabwe Congo
Mauritius Argentina Jamaica
Spain Neth. Antilles Lybia
Cyprus Bahamas Gabon
Portugal Barbados Haiti
Finland Un. Arab Emir. Guinea
Belgium Bermuda Ecuador
Ireland Bolivia Madagascar
Seychelles Saudi Arabia Maldive
Holland Chile Malawi
Iceland Colombia Malta
Luxembourg Somaliland Cyprus
Great Britain Costa Rica St. Kitts/Nevis
Sri Lanka Cuba St. Lucia
Liechenstein South Africa Tonga
Greece El Salvador Uganda
Monaco Ivory Coast Virgin Isl.
Norway Guatemala Zanzibar
Switzerland Mali Western Samoa
Uruguay Honduras Quatar
Bahrain Falkland Isl. Rwanda
Ex-Yugoslavia Mauritania Solomon Isl.
*U.S.A. Nicaragua Sierra Leone
Dubai Guernsey Vanuatu
Austria Niger Tanganika
Jordan Paraguay St. Vincent and Grenadines
Hungary Ghana Cameroun
Iran Senegal Mexico
Morocco Dominican Rep. Namibia
Brunei Belize Central African Rep.
Iraq Togo Canada
Egypt Trinidad and Tobago Israel
Fiji Burkina Faso
Lebanon Brazil
Roumania Cayman Isl.
Syria Benin
Tchzeck Rep. Botswana

*Excluding Guam, Saipan and any other Micronesian or Asian U.S. Possessions or
territories.

<PAGE>

SCHEDULE C

PRODUCTS

SOFT PRODUCTS

golf hats
golf caps
golf visors
golf towels (a towel specially designed with a ring to enable it to be hung from
the golf club bag and to be used when playing golf)

HARD PRODUCTS

golf gloves
golf balls
golf clubs
golf club bags (caddy bags)
golf club head covers
golf umbrellas (with special device for golf playing)
golf score boards
golf tees

<PAGE>

SCHEDULE D

COUNTRY DATE FOR INTRODUCTION OF THE PRODUCTS IN
COMMERCIAL QUANTITIES
Italy
ex - U.S.S.R.
Germany
Algerie
France
Bulgaria
Mauritius
Spain
Cyprus
Portugal
Finland
Belgium
Ireland
Seychelles
Holland
Iceland
Luxembourg
Great Britain
Sri Lanka
Liechtenstein
Greece
Monaco
Norway
Switzerland
Uruguay
Bahrain
Ex-Yugoslavia
U.S.A.
Dubai
Austria
Jordan
Hungary
Iran
Morocco
SCHEDULE D CONTINUED
COUNTRY DATE FOR INTRODUCTION OF THE PRODUCTS IN
COMMERCIAL QUANTITIES
Brunei
Iraq
Egypt
Fiji

<PAGE>

Lebanon
Roumania
Syria
Tchzeck Rep.
Poland
Nigeria
Tunisia
Sweden
Kenya
Zimbabwe
Argentina
Neth. Antilles
Bahamas
Barbados
Un. Arab Emir.
Bermuda
Bolivia
Saudi Arabia
Chile
Colombia
Somaliland
Costa Rica
Cuba
South Africa
El Salvador
Ivory Coast
Guatemala
Mali
Honduras
Falkland Isl.
Mauritania
SCHEDULE D CONTINUED
COUNTRY DATE FOR INTRODUCTION OF THE PRODUCTS IN
COMMERCIAL QUANTITIES
Nicaragua
Guernsey
Niger
Paraguay
Ghana
Senegal
Dominican Rep.
Belize
Togo
Trinidad and Tobago
Burkina Faso

<PAGE>

Brazil
Cayman Isl.
Benin
Botswana
Cameroun
Mexico
Namibia
Central African Rep.
Peru
Lesotho
Chad
Panama
Liberia
Congo
Jamaica
Lybia
Gabon
Haiti
Guinea
Ecuador
Madagascar
Maldive
Malawi
SCHEDULE D CONTINUED
COUNTRY DATE FOR INTRODUCTION OF THE PRODUCTS IN
COMMERCIAL QUANTITIES
Malta
St. Kitts/Nevis
St. Lucia
Tonga
Uganda
Virgin Isl.
Zanzibar
Western Samoa
Quatar
Rwanda
Solomon Isl.
Sierra Leone
Vanuatu
Tanganika
St. Vincent and Grenadines

<PAGE>

SCHEDULE E

SALES TARGETS

COUNTRY SALES TARGET YEAR % INCREASE
Italy
ex - U.S.S.R.
Germany
Algerie
France
Bulgaria
Mauritius
Spain
Cyprus
Portugal
Finland
Belgium
Ireland
Seychelles
Holland
Iceland
Luxembourg
Great Britain
Sri Lanka
Liechtenstein
Greece
Monaco
Norway
Switzerland
Uruguay
Bahrain
Ex-Yugoslavia
U.S.A.
Dubai
Austria
Jordan
Hungary
Iran

SCHEDULE E CONTINUED
COUNTRY SALES TARGET YEAR % INCREASE
Morocco
Brunei
Iraq
Egypt

<PAGE>

Fiji
Lebanon
Roumania
Syria
Tchzeck Rep.
Poland
Nigeria
Tunisia
Sweden
Kenya
Zimbabwe
Argentina
Neth. Antilles
Bahamas
Barbados
Un. Arab Emir.
Bermuda
Bolivia
Saudi Arabia
Chile
Colombia
Somaliland
Costa Rica
Cuba
South Africa
El Salvador
Ivory Coast
Guatemala
Mali
Honduras
Falkland Isl.

SCHEDULE E CONTINUED
COUNTRY SALES TARGET YEAR % INCREASE
Mauritania
Nicaragua
Guernsey
Niger
Paraguay
Ghana
Senegal
Dominican Rep.
Belize
Togo
Trinidad and Tobago

<PAGE>

Burkina Faso
Brazil
Cayman Isl.
Benin
Botswana
Cameroun
Mexico
Namibia
Central African Rep.
Peru
Lesotho
Chad
Panama
Liberia
Congo
Jamaica
Lybia
Gabon
Haiti
Guinea
Ecuador
Madagascar
Maldive
Malawi
Malta

SCHEDULE E CONTINUED
COUNTRY SALES TARGET YEAR % INCREASE
St. Kitts/Nevis
St. Lucia
Tonga
Uganda
Virgin Isl.
Zanzibar
Western Samoa
Quatar
Rwanda
Solomon Isl.
Sierra Leone
Vanuatu
Tanganika
St. Vincent and Grenadines

In case of extension: for any Contract Year, and for each Country the Sales
Target of the preceding Contract Year increased by 5%.

<PAGE>

SCHEDULE E

LICENSEE ACCOUNTING STATEMENT

Licensee:____________________

Statement Date:__________, 19__

Royalty Period:___________, 19__ to ___________, 19__

Computation of Royalties:

Product Category:

Minimum Royalty for the Royalty Period:

Royalty Rate:_____%

Description of Licensed Products (style & model #):

Net Sales Price for each Licensed Product:

Number of each Style and Model of Licensed Products Sold:

Royalties due for the Royalty Period:

Sales divided by Country and by style/category:

<PAGE>

SCHEDULE F

COUNTRY ADVERTISING PROMOTION
IN WHICH ADVERTISING AND 5% 3%
PROMOTION ACTIVITIES FOR
PRODUCTS SHOULD BE DONE
Italy
ex - U.S.S.R.
Germany
Algerie
France
Bulgaria
Mauritius
Spain
Cyprus
Portugal
Finland
Belgium
Ireland
Seychelles
Holland
Iceland
Luxembourg
Great Britain
Sri Lanka
Liechtenstein
Greece
Monaco
Norway
Switzerland
Uruguay
Bahrain
Ex-Yugoslavia
U.S.A.
Dubai
Austria
Jordan
Hungary

SCHEDULE G CONTINUED
COUNTRY ADVERTISING PROMOTION
IN WHICH ADVERTISING AND 5% 3%
PROMOTION ACTIVITIES FOR
PRODUCTS SHOULD BE DONE
Morocco
Brunei

<PAGE>

Fiji
Roumania
Tchzeck Rep.
Poland
Nigeria
Tunisia
Sweden
Kenya
Argentina
Neth. Antilles
Bahamas
Barbados
Un. Arab Emir.
Bermuda
Bolivia
Saudi Arabia
Chile
Colombia
Somaliland
Costa Rica
South Africa
El Salvador
Ivory Coast
Guatemala
Mali
Honduras
Falkland Isl.
Mauritania
Nicaragua
Guernsey
Niger
Paraguay

SCHEDULE G CONTINUED
COUNTRY ADVERTISING PROMOTION
IN WHICH ADVERTISING AND 5% 3%
PROMOTION ACTIVITIES FOR
PRODUCTS SHOULD BE DONE
Ghana
Senegal
Dominican Rep.
Trinidad and Tobago
Brazil
Cayman Isl.
Mexico
Namibia

<PAGE>

Peru
Panama
Jamaica
Gabon
Haiti
Guinea
Ecuador
Malta
St. Kitts/Nevis
St. Lucia
Tangeri
Tonga
Virgin Isl.
St. Vincent and Grenadines

<PAGE>

EXHIBIT "A"

AMENDMENT TO EMPLOYMENT AGREEMENT OF
MILES T. DOODY

This Amendment to Employment Agreement is entered into as of
_____________, 1996, by and between RENAISSANCE GOLF PRODUCTS, INC., a Delaware
corporation (hereinafter the "Company"), and MILES T. DOODY (hereinafter
"Doody").

WHEREAS, the Company has agreed to grant Doody new stock options in the
Company in connection with a financing plan to be completed no later than March
1997, and

WHEREAS, Doody has agreed to waive his rights to all previously granted
stock options in the Company and reduce his annual salary to $75,000 per year;

NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:

The salary set forth in Doody's employment agreement is hereby changed
to $75,000 per year. The remaining terms and provisions of the agreement shall
remain unchanged.

Dated: ________________ THE COMPANY:

By: ______________________________
Its Duly Authorized Officer

Dated: ________________ EMPLOYEE:

________________________________
MILES T. DOODY

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EXHIBIT "B"

PROMISSORY NOTE

$50,000.00 October --, 1996

Huntington Beach, California

FOR VALUE RECEIVED, the undersigned, RENAISSANCE GOLF PRODUCTS, INC.
("Payor") promises to pay to MILES T. DOODY, or holder ("Payee"), the principal
sum of Fifty Thousand Dollars and No Cents ($50,000.00) on or before June 30,
1999.

In the event of default, Payee may at any time provide notice of default to
Payor at its principle place of business and demand repayment of the Note.

Payee shall be entitled to collect a reasonable attorneys' fee and interest
from the Payor, as well as other costs, charges, and expenses reasonably
incurred, in curing any default or attempting collection of the payment due on
this Note, whether or not litigation or any proceeding to enforce this Note is
commenced.

This Note may be prepaid in whole or in part at any time without penalty.

If any term or provision of this Note, or any portion of any such term or
provision, shall be held invalid or against public policy, or if the application
of the same to any person or circumstance is held invalid or against public
policy, then the remainder of this Note (or the remainder of such term or
provision) and the application thereof to other persons or circumstances shall
not be affected thereby and shall remain valid and in full force and effect to
the extent permitted by law.

This Note shall be governed by and construed solely in accordance with the
laws of the State of California.

IN WITNESS WHEREOF, Payor has executed this Promissory Note as of the day
first hereinabove written at Huntington Beach, California.

"PAYOR"
RENAISSANCE GOLF PRODUCTS, INC.

BY:_____________________________
MILES T. DOODY
CHAIRMAN OF THE BOARD

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LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement ("Agreement") is dated as of March 31,
1997, by and between Renaissance Golf Products, Inc., a Delaware corporation
("RGPI"), and John B. Hewlett, an individual, jointly and severally
(collectively referred to as the "Borrower"), and AKA Charitable Remainder Unit
Trust Number 2 ( "Lender").

1. DEFINITIONS. As used herein, the following terms have the meanings
indicated:

1.1 "ACCOUNT," "ACCOUNTS" OR "OPEN ACCOUNTS" shall mean any right to
payment on Open Orders.

1.2 "ACCOUNT DEBTOR" shall mean the Person or entity obligated on an
Account.

1.3 "AFFILIATE," as applied to any Person, shall mean any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person.

1.4 "CODE" shall mean the Utah Uniform Commercial Code, except where
the Uniform Commercial Code of another state governs the perfection of a
security interest in Collateral located in that state.

1.5 "COLLATERAL" shall mean all Open Orders and Accounts securing the
Obligations as described herein.

1.6 "DEBT" shall mean, at any date, the aggregate amount of, without
duplication, all obligations of Borrower for borrowed money.

1.7 "EVENT OF DEFAULT" shall mean an event described in Section 8 of this
Agreement.

1.8 "INVENTORY" shall mean goods held for sale or lease in the ordinary
course of business, work in process and any and all raw materials used in
connection with the foregoing on Open Orders.

1.9 "LOAN" OR "LOANS" shall mean one or more of the Loans extended by
Lender to Borrower.

1.10 "NOTE" shall mean any Note required of Borrower by Lender.

1.11 "OBLIGATIONS" shall mean all present and future liabilities and
obligations of Borrower to Lender hereunder and all other liabilities and
obligations of Borrower to Lender of every kind and description, now existing or
hereafter owing, matured or unmatured, direct or indirect, absolute or
contingent, joint or several, including any extensions and renewals thereof and
substitutions therefor.

1.12 "OPEN ORDER" OR "OPEN ORDERS" shall mean each order for the purchase
of goods from RGPI which have arisen, have been conformed from, or will arise
from January 1, 1997 through the term of this Agreement and which have not been
filled.

1.13 "OPEN PURCHASE ORDER" shall mean each purchase order issued by RGPI
for Open Orders.

1.14 "PERSON" shall mean and include natural persons, corporations, limited
partnerships, general partnerships, joint ventures, associations, joint stock
companies, companies, trusts, banks, trust companies, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.

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1.15 "POTENTIAL EVENT OF DEFAULT" shall mean any condition that with the
giving of notice or passage of time or both would, unless cured or waived,
become an Event of Default.

1.16 "REVOLVING CREDIT LOANS" shall mean loans from Lender to
Borrower under the terms of this Agreement.

1.17 "REVOLVING LOAN COMMITMENT" shall mean, Lender's commitment, in
accordance with the terms of this Agreement, to make Revolving Credit Loans in
the maximum aggregate principal amount of the lesser of $1,000,000, and 50% of
the aggregate of all Open Accounts and Open Orders.

1.18 "REVOLVING PROMISSORY NOTE" shall mean a promissory note
executed by Borrower payable to Lender pursuant to this Agreement.

1.19 "TERMINATION DATE" shall mean December 31, 1997, unless
terminated earlier pursuant to Section 8 hereof, or as mutually modified in
writing by the parties.

2. LOANS.

2.1 REVOLVING CREDIT LOANS. Subject to the terms and conditions of
this Agreement and the Revolving Promissory Note entered into between the
parties, Lender agrees to make Revolving Credit Loans to Borrower from time to
time from the date of this Agreement to, but not including, the Termination
Date, up to the maximum aggregate principal amount of the lesser of $1,000,000,
and 50% of the aggregate of all Open Accounts and Open Orders, which Revolving
Credit Loans may be repaid and reborrowed at any time up to the Termination
Date. The aggregate unpaid principal amount of the Revolving Credit Loans shall
be paid by Borrower to Lender on the Termination Date. The Revolving Credit
Loans shall be evidenced by a Revolving Promissory Note in the form attached
hereto as Exhibit "A."

2.1.1 INTEREST ON REVOLVING CREDIT LOANS. Each advance of a
Revolving Credit Loan shall bear interest from the date of disbursement on the
unpaid principal amount thereof until repaid in full, at an annual interest rate
equal to 12% per annum. Interest on each advance shall be payable monthly in
arrears on or before the 10th day of the month for each advance received during
the previous month, commencing on May 10, 1997 and on the date all Revolving
Credit Loans are paid in full.

2.1.2 AVAILABILITY OF REVOLVING CREDIT LOANS. Each Revolving
Credit Loan shall be made monthly within the first five days of the month in
response to a request from Borrower and upon Borrower's presentation to Lender
of a summary of Open Purchase Orders and Borrower's compliance with the other
terms and conditions of this Agreement. For example if Open Purchase Orders
total $300,000 at the beginning of any month, Lender would loan, at Borrower's
request, up to $150,000 to Borrower. If on the first day of the next month,
Open Purchase Orders total $350,000, Lender would loan an additional $25,000 to
Borrower and Borrower would make an interest payment equal to 12% per annum to
Lender on the total Revolving Credit Loan balance for the time period the loan
made during the previous month was outstanding.

2.1.3 OVERADVANCE. The total balance of Revolving Credit
Loans outstanding from time to time, shall not at any time exceed the Revolving
Loan Commitment. Any amount held by Borrower in excess of the Revolving Loan
Commitment shall be repaid by Borrower no later than the 10th day of the month
the excess was created. For example if Open Purchase Orders for the current
month total $50,000 less than the Open Purchase Orders for the previous month
upon which a loan was made, Borrower shall repay $25,000 on the Revolving Loan
Commitment on or before the 10th day of the current month together with any
interest due at 12% per annum on the total Revolving Credit Loan balance for the
time period the loan made during the previous month was outstanding.

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2.2 PAYMENTS. All payments hereunder shall be in United States
Dollars and in immediately available funds. All interest shall be computed on
the basis of a 360-day year and actual days elapsed. All payments of principal,
interest, fees and other charges on the Revolving Credit Loan shall be made to
AKA Charitable Remainder Unit Trust Number 2 and delivered personally, by
registered mail or by overnight carrier to the attention of Ralph Rasmussen at
261 East, 1200 South, Orem, Utah 84058. Lender is hereby authorized to note
the date, amount and interest rate of the Loan and each payment of principal and
interest with respect thereto on Lender's books and records, which notations
shall constitute presumptive evidence of the accuracy of the information noted.

2.3 OVERDUE PAYMENT CHARGE. Overdue payments of principal (and of
interest to the extent permitted by law) on the Loan shall be subject to an
additional payment equal to 4% per month of the total overdue payment amount
from and after written notice by Lender to Borrower of the occurrence of an
Event of Default (and without constituting a waiver of such Event of Default),
until such overdue amount has been paid in full.

3. CONDITIONS TO EACH EXTENSION OF ALL LOANS. The obligation of Lender to
make any Loan hereunder shall be subject to the fulfillment of each of the
following conditions to Lender's satisfaction:

3.1 EXECUTED NOTE. Lender shall have received the Note duly executed
and delivered by Borrower;

3.2 FINANCING STATEMENTS. Lender shall have received (a) executed
copies of financing statements (Form UCC-1), in form and substance satisfactory
to Lender, duly filed under the Uniform Commercial Code in all such
jurisdictions as may be necessary, or in Lender's opinion desirable, to perfect
Lender's security interests in the Collateral; and (b) evidence, in form and
substance acceptable to Lender, that all filings, recordings and other actions
that are necessary or advisable, in the opinion of Lender, in order to
establish, protect, preserve and perfect Lender's security interests and liens
as legal, valid and enforceable first security interests and liens in the
Collateral have been effected;

3.3 WARRANTIES. The representations and warranties of Borrower as
set forth herein shall be true and correct on the date of the making of each
Loan with the same effect as though such representations and warranties had been
made on and as of such date;

3.4 NO DEFAULT. There shall have occurred no Event of Default or
Potential Event.

4. REPRESENTATIONS AND WARRANTIES. To induce Lender to enter into this
Agreement, RGPI makes the following representations and warranties which shall
survive the making and repayment of the Loans:

4.1 CORPORATE EXISTENCE. RGPI is duly organized, validly existing
and in good standing under the laws of Delaware, and is duly qualified to
conduct business as a foreign corporation in all jurisdictions where the failure
to do so would have a material adverse effect on its business.

4.2 REQUISITE POWER. RGPI has all requisite corporate power to
borrow the sums provided for in this Agreement, and to execute and deliver this
Agreement and each other document, contract and instrument delivered to Lender
in connection with this Agreement to which RGPI is required hereunder to be a
party. The execution, delivery and performance of this Agreement have been duly
authorized by the Board of Directors of RGPI and do not require any consent or
approval of the stockholders of RGPI.

4.3 BINDING AGREEMENT. This Agreement and the Note when delivered
pursuant hereto, will constitute the valid and legally binding obligations of
Borrower, enforceable against Borrower in

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accordance with their terms, except as the enforceability thereof may be
affected by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.

4.4 OTHER AGREEMENTS. The execution, delivery and performance of
this Agreement and the Note will not violate any provision of law or regulation
or any order of any governmental authority, court, arbitration board or tribunal
or the Articles of Incorporation or Bylaws of RGPI, or result in the breach of,
constitute a default under, contravene any provisions of, or result in the
creation of any security interest, lien, charge or encumbrance upon any of the
property or assets of Borrower pursuant to any indenture or agreement to which
Borrower or any of its properties is bound.

4.5 LITIGATION. There is no litigation, investigation or proceeding
in any court or before any arbitrator or regulatory commission, agency or other
governmental authority pending, or threatened against or affecting Borrower or
any of their respective properties, which, if adversely determined would have a
material adverse effect on the business, operation or condition, financial or
otherwise, of Borrower.

4.6 FINANCIAL CONDITION. RGPI's most recent financial statements,
copies of which have heretofore been delivered to Lender, are true, complete and
correct and fairly present the financial condition of RGPI, including operating
results, as of the accounting period referenced therein. The financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied. There has been no material adverse change in
the business, operations or conditions, financial or otherwise, of RGPI since
the date of such financial statements. RGPI does not have any material
liabilities for taxes, long-term leases or long-term commitments, except as
disclosed in the aforementioned financial statements.

4.7 COLLATERAL.

4.7.1 RGPI owns and has the right and power to grant a
security interest in the Collateral;

4.7.2 The Collateral is genuine and free from liens, adverse
claims, set-offs, defaults, prepayments, defenses and encumbrances except those
in favor of Lender;

4.7.3 No bills of lading, warehouse receipts or other
documents or instruments of title are outstanding with respect to the Collateral
or any portion of the Collateral in favor of a person other than RGPI; and

4.7.4 The principal place of business and chief office of
Borrower is at the address specified in Section 9 herein.

4.8 CONSENTS. No consent, license, permit, approval or authorization
of, exemption by, notice to, report to, or registration, filing or declaration
with, any governmental authority or agency is required in connection with the
execution, delivery and performance by Borrower of this Agreement or the Note or
the transactions contemplated hereby or thereby.

5. AFFIRMATIVE COVENANTS. RGPI agrees that until payment in full of all
Obligations, RGPI shall comply with the following covenants:

5.1 BOOKS AND RECORDS. RGPI shall maintain, in accordance with sound
accounting practices, accurate records and books of account showing, among other
things, all Inventory and Accounts, the proceeds of the sale or other
disposition thereof and the collections therefrom. RGPI shall not change the
accounting method used to determine RGPI's Inventory cost without notification
to Lender. RGPI shall permit any representative of Lender, at any reasonable
time, to inspect, audit, examine and make extracts from or copies of all books,
records and other data, to inspect any of RGPI's properties and to

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confirm balances due on Accounts by direct inquiry to Account Debtors, and shall
furnish Lender with all information regarding the business or finances of RGPI
promptly upon Lender's request.

5.2 COLLATERAL. RGPI shall execute and deliver to Lender any
instrument, document, financing statement, assignment or other writing which
Lender may deem necessary or desirable to carry out the terms of this Agreement,
to perfect Lender's security interest in any Collateral for the Obligations, or
to enable Lender to enforce its security interest in any of the foregoing.

5.3 FINANCIAL STATEMENTS. RGPI shall furnish to Lender:

5.3.1 Upon Lender's request and as soon as available, all
10K, 10Q, and any and all other securities filings prepared and filed by the
RGPI with the Securities and Exchange Commission;

5.3.2 Each month, a report, in form acceptable to Lender
listing all current, unshipped Open Purchase Orders (including the cancellation
date and Purchase Order number and invoice number relative to each Account), to
be signed and attested to as true and correct by a corporate officer of RGPI;

5.3.3 Upon Lender's request and as soon as available, a copy
of its annual year-end financial statement consisting of at least a balance
sheet and income statement, prepared according to generally accepted accounting
principles consistently applied, and compiled by an independent certified public
accountant satisfactory to Lender; and

5.3.4 Upon Lender's request such additional information,
reports and/or statements as Lender may from time to time, reasonably request.

5.4 TAXES AND PREMIUMS. RGPI shall pay and discharge all taxes,
assessments, governmental charges and real and personal property taxes,
including, but not limited to, federal and state income taxes, employee
withholding taxes and payroll taxes, and all premiums for insurance required
hereunder prior to the date upon which penalties are attached thereto.

5.5 INSURANCE. RGPI shall maintain and keep in force insurance of
the types and in amounts customarily carried in its lines of business,
including, but not limited to, fire, public liability, property damage, business
interruption and worker's compensation, such insurance to be carried with
companies and in amounts reasonably satisfactory to Lender, and shall deliver to
Lender from time to time, as Lender may request, schedules setting forth all
insurance then in effect.

5.6 NOTICE. RGPI shall promptly advise Lender in writing of (a) each
location at which Inventory is or will be kept, and of the change of RGPI's
name, trade name or other name under which it does business or of any such new
or additional name; (b) the occurrence of any Event of Default or Potential
Event of Default; (c) any litigation pending or threatened against RGPI where
the amount or amounts in controversy exceed $50,000.00; (d) any unpaid taxes of
RGPI which are more than 15 days delinquent; and (e) any other matter that might
materially or adversely affect RGPI's financial condition, operations, property
or business.

5.7 CHANGE IN MANAGEMENT. RGPI shall provide Lender written notice,
as soon as possible, but in no event less than 30 days before, any planned
changes in its general or financial management.

6. NEGATIVE COVENANTS. RGPI agrees that during the term of this Agreement or
until payment in full of all Obligations, RGPI shall not do any of the following
without Lender's prior written consent:

6.1 LOANS. Make loans or advances to any Person except credit
extended to employees or to customers in the ordinary course of its business.

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6.2 CONTINGENT LIABILITIES. Assume, guarantee, endorse, contingently
agree to purchase or otherwise become liable for the obligation of any Person
including RGPI or Affiliate, except (a) by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, and (b) contingent liabilities in favor of Lender.

6.3 MORTGAGES, LIENS, ETC. Mortgage, pledge, hypothecate, grant or
contract to grant any security interest of any kind in the Collateral, to anyone
except Lender.

6.4 INVOLUNTARY LIENS. Permit any involuntary liens to arise with
respect to any property or assets including but not limited to those arising
from the levy of a writ of attachment or execution, or the levy of any state or
federal tax lien which lien shall not be removed within a period of 30 days.

6.5 SALE AND LEASEBACK. Enter into any sale-leaseback transaction.

6.6 MERGERS AND ACQUISITIONS. Enter into any merger or
consolidation, or, acquire all or substantially all the assets of any Person.

6.7 REDEMPTIONS, DIVIDENDS AND DISTRIBUTIONS. Redeem or repurchase
stock or partnership interests, declare or pay any dividends or make any other
distribution, whether of capital, income or otherwise, and whether in cash or
other property.

6.8 EVENT OF DEFAULT. Permit a default to occur under any document
or instrument evidencing Debt incurred under any indenture, agreement or other
instrument under which such Debt may be issued, or any event to occur under any
of the foregoing which would permit any holder of the Debt outstanding
thereunder to declare the same due and payable before its stated maturity,
whether or not such acceleration occurs or such default be waived.

7. SECURITY AGREEMENT.

7.1 GRANT OF SECURITY INTEREST. To secure all of RGPI's Obligations
hereunder as well as other Obligations to Lender, RGPI hereby grants and
transfers to Lender a continuing security interest in the following whether now
owned or hereafter acquired:

7.1.1 All of RGPI's Open Accounts and Open Orders;

7.1.2 All of RGPI's Inventory;

7.1.3 All proceeds received on Open Orders and Open Accounts
and any other sale of Inventory; and

7.1.4 Any other Collateral which Lender and RGPI may
designate as additional security from time to time by separate instruments.

7.2 LENDER'S RIGHTS. Lender shall have the right to notify any
Account Debtor to make payments thereon directly to Lender, to take control of
the cash and non-cash proceeds of any Account and to settle any Account, which
right Lender may exercise at any time in the Event of Default.

8. EVENTS OF DEFAULT.

8.1 EVENTS OF DEFAULT. The following shall constitute Events of
Default for purposes of this Agreement:

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8.1.1 Borrower shall fail to pay when due any installment of
principal or interest or any other payment payable hereunder or under the Note;

8.1.2 Borrower shall fail to perform or observe any of the
terms, provisions, covenants, conditions, agreements or obligations contained in
this Agreement;

8.1.3 There shall occur the entry of an order for relief or
the filing of an involuntary petition with respect to Borrower under the United
States Bankruptcy Code; there shall occur the appointment of a receiver,
trustee, custodian or liquidator of or for any part of the assets or property of
Borrower; or Borrower shall make any general assignment for the benefit of
creditors.

8.1.4 Any financial statement, representation or warranty
made or furnished by Borrower in connection with this Agreement should prove to
be in any material respect incorrect;

8.1.5 Lender's security interest in or lien on any portion of
the Collateral shall become impaired or otherwise unenforceable;

8.1.6 Any person shall obtain an order or decree in any court
of competent jurisdiction enjoining or prohibiting Borrower or Lender or either
of them from performing this Agreement, and such proceedings shall not be
dismissed or such decree shall not be vacated within 10 days after the granting
thereof;

8.1.7 Borrower shall neglect, fail or refuse to keep in full
force and effect any governmental permit or approval which is necessary to the
operation of its business;

8.1.8 All or substantially all of the property of Borrower
shall be condemned, seized or otherwise appropriated;

8.2 NOTICE OF DEFAULT AND CURE OF POTENTIAL EVENTS OF DEFAULT.
Lender shall give Borrower at least 10 days' written notice of any event which
constitutes or, with the lapse of time would become an Event of Default, during
which time Borrower shall be entitled to cure such Default.

8.3 LENDER'S REMEDIES. Upon the occurrence of an Event of Default
and failure to timely cure such Event of Default, at the sole and exclusive
option of Lender, and upon written notice to Borrower, Lender may (a) declare
the principal of and accrued interest on the Loans immediately due and payable
in full, whereupon the same shall immediately become due and payable; (b)
terminate this Agreement as to any future liability or obligation of Lender, but
without affecting Lender's rights and security interest in the Collateral and
without affecting the Obligations owing by Borrower to Lender; and/or (c)
exercise its rights and remedies hereunder and under the Note, or any security
agreement or deed of trust securing the Obligations, and in addition to the
rights and remedies given it by this Agreement, all of the rights and remedies
of a secured party under the Code and other applicable laws with respect to all
of the Collateral.

8.4 ADDITIONAL REMEDIES. Notwithstanding any other provision of this
Agreement, upon the occurrence of any event, action or in action by Borrower, or
in the event any action or inaction is threatened which Lender reasonably
believes will materially affect the value of the Collateral, Lender may take
such legal actions as it deems reasonably necessary under the circumstances to
protect the Collateral, including but not limited to, seeking injunctive relief
and the appointment of a receiver, irrespective of whether an Event of Default
or Potential Event of Default has occurred under this Agreement.

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9. MISCELLANEOUS.

9.1 COSTS AND EXPENSES. Borrower shall reimburse Lender for all
costs and expenses, including reasonable attorney fees, expended or incurred by
Lender in collecting any sum which becomes due Lender under this Agreement, the
Note, or any other agreement delivered hereunder or in connection herewith,
irrespective of whether suit is filed, or in the protection, perfection,
preservation or enforcement of any and all rights of Lender in connection with
this Agreement, the Note, or any other agreements delivered hereunder or in
connection herewith, including, without limitation, the fees and costs incurred
in any out-of-court work-out or a bankruptcy or reorganization proceeding.

9.2 CUMULATIVE RIGHTS AND NO WAIVER. Each and every right and remedy
granted to Lender hereunder or under any other document delivered hereunder or
in connection herewith, shall be cumulative and no one such right or remedy
shall be exclusive of any other. No failure on the part of Lender to exercise,
and no delay in exercising, any right or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise or waiver by Lender of any
right or remedy preclude any other or future exercise thereof or the exercise of
any other right or remedy.

9.3 APPLICABLE LAW. This Agreement and the rights and obligations of
the parties hereunder shall be governed by and interpreted and construed in
accordance with the laws of the State of Utah and venue and jurisdiction with
respect hereto shall be with any court of competent jurisdiction located in Salt
Lake County, State of Utah.

9.4 LIEN AND RIGHT OF SETOFF. Borrower hereby grants to Lender a
continuing lien for all Obligations of Borrower to Lender upon any and all Open
Accounts and the proceeds thereof, now or hereafter held or received by or in
transit to Lender from or for Borrower, whether for safekeeping, custody,
pledge, transmission, collection or otherwise, and also upon any and all
deposits (general or special) and credits of Borrower with, and any and all
claims of Borrower against Lender at any time existing. Upon the occurrence of
any Event of Default, Lender is hereby authorized at any time and from time to
time, without notice to Borrower or any other person, to setoff, appropriate and
apply any or all items hereinabove referred to against all Obligations of
Borrower whether under this Agreement or otherwise, and whether now existing or
hereafter arising.

9.5 NOTICES. Any notice required or permitted to be given shall be
given in writing and shall be deemed to have been given when deposited in the
United States mail certified, return receipt requested, with first-class postage
prepaid and properly addressed or with a commercial express mail service (e.g.
Federal Express, Airborne, etc.) for next day delivery to the address of the
party receiving the notice as set forth in this Section 9.5. For the purposes
hereof, the addresses of the parties hereto shall, until further notice given as
herein provided, be as follows:

Lender: AKA Charitable Remainder Unit Trust Number 2
Attention: Ralph Rasmussen
261 East 1200 South
Orem, Utah 84058

Borrower: Renaissance Golf Products, Inc.
5812 Machine Drive
Huntington Beach, California 92649

John B. Hewlett
2919 East Granite Hollow Street
Sandy, Utah 84092

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Copy to: Bruce H. Haglund, Esq.
Gibson, Haglund & Johnson
2010 Main Street, Suite 400
Irvine, California 92614

9.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original with the same effect as if the
signatures thereto and hereto were upon the same instrument.

9.7 INDEMNIFICATION. Borrower shall, at all times, defend and
indemnify and hold Lender harmless from and against any and all liabilities,
claims, demands, causes of action, losses, damages, expenses, attorney fees,
costs, settlements, judgments or recoveries arising out of or resulting from (a)
any breach of the representations, warranties, agreements or covenants made by
Borrower herein; (b) any suit or proceeding of any kind or nature whatsoever
against Lender arising from or connected with the transactions contemplated by
this Agreement or any of the documents, instruments or agreements to be executed
pursuant hereto or any of the rights and properties assigned to Lender
hereunder; and/or (c) any suit or proceeding that Lender may deem necessary or
advisable to institute, in the name of Lender, Borrower or both, against any
other person, company or entity, for any reason whatsoever to protect the rights
of Lender hereunder or under any of the documents, instruments or agreements
executed or to be executed pursuant hereto. Any obligation or liability of
Borrower to Lender under this Section 9.7 shall survive the expiration or
termination of this Agreement and the repayment of all Loans and the payment or
performance of all other Obligations of Borrower to Lender.

9.8 ASSIGNMENTS. The provisions of this Agreement are hereby made
applicable to and shall inure to the benefit of Lender's successors and assigns
and Borrower's successors and assigns; provided, however, that Borrower may not
assign or transfer its rights or Obligations under this Agreement without the
prior written consent of Lender.

9.9 HEADINGS. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of the Agreement for any purpose or be given any substantive effect.

9.10 DEFINITIONS. Any of the terms defined in this Agreement may,
unless the context otherwise requires, be used in the singular or the plural
depending on the reference.

9.11 ACCOUNTING TERMS. All accounting terms not specifically defined
in this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
generally accepted accounting principles applied on a consistent basis, as in
effect on the date hereof, except as otherwise specifically prescribed herein.

9.12 SEVERABILITY. Any provision of this Agreement and the Note which
is prohibited or unenforceable in any jurisdiction, shall be, only as to such
jurisdiction, ineffective to the extent of such prohibition or unenforceability,
but all the remaining provisions of this Agreement and the Note shall remain
valid.

9.13 DISPUTE RESOLUTION. Any dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance or breach of
this Agreement shall be resolved through arbitration to be presided over by a
mutually agreeable arbitrator. If the parties cannot agree upon a specific
arbitrator, one shall be appointed by the presiding judge in the county in which
the matter is to be heard, provided that the arbitrator so appointed shall not
be currently or formerly associated with the Borrower or Lender.

Page 9 of Ten

<PAGE>

9.14 COMPLETE AGREEMENT. This written Agreement, together with the
exhibits is intended by Lender and Borrower as a final expression of their
agreement and is intended as a complete statement of the terms and conditions of
their agreement.

IN WITNESS WHEREOF, Lender and Borrower have caused this Agreement to be
executed on the day and year first written at the head of this Agreement.

"Borrower" RENAISSANCE GOLF PRODUCTS, INC.
a Delaware Corporation

By: ___________________________
John B. Hewlett,
Chairman of the Board

ATTEST:

______________________________________
Bruce H. Haglund, Secretary

"Borrower" _______________________________
JOHN B. HEWLETT

"Lender" AKA CHARITABLE REMAINDER TRUST
NUMBER 2

By: ___________________________
Ralph Rasmussen
Trustee

Page 10 of Ten

This FINANCING STATEMENT is presented for filing and will remain effective with certain exceptions for a period
of five years from the date of filing pursuant to section 9403 of the California Uniform Commercial Code.
- ------------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL) 1A. SOCIAL SECURITY OR FEDERAL TAX NO.
RENAISSANCE GOLF PRODUCTS, INC. 86-0664849
- ------------------------------------------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS 1C. CITY, STATE 1D. ZIP CODE
5812 Machine Drive Huntington Beach, CA 92649
- ------------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST--IF AN INDIVIDUAL) 2A. SOCIAL SECURITY OR FEDERAL TAX NO.
John B. Hewlett ###-##-####
- ------------------------------------------------------------------------------------------------------------------------------------
2A. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
2919 East Granite Hollow Street Sandy, Utah 84092
- ------------------------------------------------------------------------------------------------------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER

- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO., FEDERAL TAX NO.
OR BANK TRANSIT AND A.B.A. NO.
NAME AKA CHARITABLE REMAINDER UNITRUST NUMBER 2

MAILING ADDRESS 261 EAST 1200 SOUTH

CITY OREM STATE UTAH ZIP CODE 84058
- ------------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO., FEDERAL TAX NO.
OR BANK TRANSIT AND A.B.A. NO.
NAME

MAILING ADDRESS

CITY STATE ZIP CODE
- ------------------------------------------------------------------------------------------------------------------------------------
6. This FINANCING STATEMENT covers the following types or items of property (INCLUDE DESCRIPTION OF REAL PROPERTY ON WHICH
LOCATED AND OWNER OF RECORD WHEN REQUIRED BY INSTRUCTION 4).
a) Orders for the purchase of goods from the Debtor which have arisen, have been conformed from, or will arise from January
1, 1997;
b) Any right to payments to be received for orders for the purchase of goods from the Debtor which have arisen, have been
conformed from or will arise from January 1, 1997;
c) Inventory which consists of goods held for sale or lease in the ordinary course of the Company's business, work in process
and any and all raw materials held or received by the Company to be used in connection with orders for the purchase of
goods from the Debtor which have arisen, have been conformed from, or will arise from January 1, 1997; and
d) Proceeds received by the Company for orders for the purchase of goods from the Debtor which have arisen, have been
conformed from, or will arise from January 1, 1997.
The Secured Party is not a seller or purchase money lender of the Collateral.
- ------------------------------------------------------------------------------------------------------------------------------------
7. CHECK /X/ 7A. / / PRODUCTS OF COLLATERAL 7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH
IF APPLICABLE ARE ALSO COVERED INSTRUCTION B(4) ITEM:
/ /(1) / /(2) / /(3) / /(4)
- ------------------------------------------------------------------------------------------------------------------------------------
8. CHECK /X/ / / DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC SECTION 9100 (1)(n)
IF APPLICABLE
- ------------------------------------------------------------------------------------------------------------------------------------
9. DATE: | C | 10. THIS SPACE FOR USE OF FILING OFFICER
RENAISSANCE GOLF PRODUCTS, INC. | O | (DATE, TIME, FILE NUMBER
- --) BY: /S/ BRUCE H. HAGLUND APRIL 4, 1997 | D | AND FILING OFFICER)
SIGNATURE(S) OF DEBTOR(S) | E |
- ------------------------------------------------------------------------------------------|
| 1 |
TYPE OR PRINT OF PRINT NAME(S) OF DEBTOR(S) Bruce H. Haglund, Secretary | 2 |
- ------------------------------------------------------------------------------------------|
- --) | 3 |
SIGNATURE(S) OF SECURED PARTY(IES) | 4 |
- ------------------------------------------------------------------------------------------|
| 5 |
TYPE OR PRINT NAME(S) OF SECURED PART(IES) | 6 |
- ------------------------------------------------------------------------------------------|
11. RETURN COPY TO: | 7 |
| 8 |
--- --- | 9 |
NAME | Bruce H. Haglund | | 0 |
ADDRESS 2010 Main Street, Suite 400 | |
CITY Irvine | |
STATE | California | | |
ZIP CODE --- 92614 --- | |
- ------------------------------------------------------------------------------------------|
FORM UCC.1 | |
APPROVED BY THE SECRETARY OF STATE | |
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

REVOLVING PROMISSORY NOTE
(FIXED 12% INTEREST)

Up to $1,000,000 March 31, 1997
Salt Lake City, Utah

On December 31, 1997, the undersigned, Renaissance Golf Products,
Inc., a Delaware corporation, and John B. Hewlett, an individual (collectively
referred to as "Borrower"), promise to pay to the order of AKA Charitable
Remainder Unit Trust Number 2 ("Lender"), in lawful money of the United States
of America and in immediately available funds, the principal sum of $1,000,000,
or so much thereof as may be advanced and outstanding, with interest thereon to
be computed on each advance from the date of its disbursement at a rate computed
on the basis of a 360-day year, actual days elapsed, equal to 12% per year.

All or any portion of the principal of this Note may be borrowed,
repaid and reborrowed from time to time prior to maturity, provided at the time
of any borrowing no Event of Default (as herein defined) exists, and provided
further that the total borrowings outstanding at any one time shall not exceed
the principal amount stated above. Each borrowing and repayment hereunder shall
be noted in the books and records of Lender. The excess of borrowings over
repayments shall evidence the principal balance due hereon from time to time and
at any time. Borrowings hereunder shall be conclusively presumed to have been
made to or for the benefit of Borrower when made as noted in such books and
records.

Interest accrued on this Note shall be payable in arrears on the tenth
day of each month, commencing May 10, 1997.

The occurrence of any of the following with respect to Borrower shall
constitute an "Event of Default" hereunder:

1. The failure to make any payment of principal or interest when due
under this Note;

2. The filing of a petition by or against any of such parties under any
provisions of the Bankruptcy Code;

3. The appointment of a receiver or an assignee for the benefit of
creditors;

4. The commencement of dissolution or liquidation proceedings or the
disqualification of any such parties which is a corporation,
partnership, joint venture or any other type of entity;

5. The death or incapacity of any of such parties who is an individual;

6. Any financial statement provided by or on behalf any such parties to
Lender is false or misleading;

7. Any material default in the payment or performance of any obligation,
or any default under any provisions of any contract or instrument
pursuant to which any of such parties has incurred any obligation for
borrowed money, any purchase obligation or any other liability of any
kind to any person or entity, including Lender;

8. Any sale or transfer of all or a substantial or material part of the
assets of any of such parties other than in the ordinary course of
business; or

Page 1 of Two

<PAGE>

9. Any violation, breach or default under any letter agreement, security
agreement, or any other contract or instrument executed in connection
with this Note or securing this Note.

Upon the occurrence of any Event of Default and upon 10 days written
notice thereof to Borrower without cure of the Event of Default within 10 days
of such notice, Lender, at its option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, protest or notice of dishonor all of which are expressly
waived by Borrower, and Lender shall have no obligation to make any further
advances hereunder. Borrower agrees to pay all costs and expenses, including
reasonable attorneys' fees, expended or incurred by Lender in connection with
the enforcement of this Note or the collection of any sums due hereunder and
irrespective of whether suit is filed. Any principal or interest not paid when
due hereunder shall bear an additional cost equal to 4% per month of the total
overdue payment amount from and after written notice by Lender to Borrower of
the occurrence of an Event of Default (and without constituting a waiver of such
Event of Default), until such overdue amount has been paid in full.

This Note and all matters relating thereto, shall be governed by the
laws of the State of Utah.

"BORROWER"

RENAISSANCE GOLF PRODUCTS, INC.

By: _________________________________
John B. Hewlett, Chairman of the
Board

_____________________________________
JOHN B. HEWLETT

Page 2 of Two

<PAGE>

UNIFORM COMMERCIAL CODE - FINANCING STATEMENT - FORM UCC-1

This FINANCING STATEMENT is presented to a filing officer for filing
pursuant to the Uniform Commercial Code.

1. DEBTOR AND ADDRESS: 2. SECURED PARTY AND ADDRESS:

Renaissance Golf Products, Inc. AKA Charitable Remainder
5812 Machine Drive Unit Trust Number 2
Huntington Beach, California 92649 261 East 1200 South
Orem, Utah 84058
Employer Federal I.D. No. 86-0664849

3. MATURITY DATE: December 31, 1997

4. THIS FINANCING STATEMENT COVERS THE FOLLOWING TYPES OF PROPERTY
(COLLECTIVELY THE "COLLATERAL"):

a) Orders for the purchase of goods from the Debtor which have
arisen, have been conformed from, or will arise from January 1, 1997;

b) Any right to payments to be received for orders for the purchase
of goods from the Debtor which have arisen, have been conformed from,
or will arise from January 1, 1997;

c) Inventory which consists of goods held for sale or lease in the
ordinary course of the Company's business, work in process and any and
all raw materials held or received by the Company to be used in
connection with orders for the purchase of goods from the Debtor which
have arisen, have been conformed from, or will arise from January 1,
1997; and

d) Proceeds received by the Company for orders for the purchase of
goods from the Debtor which have arisen, have been conformed from, or
will arise from January 1, 1997.

The Secured Party is not a seller or purchase money lender of the
Collateral.

5. ASSIGNEE OF SECURED PARTY AND ADDRESS:

No assignee currently exists.

DEBTOR: RENAISSANCE GOLF PRODUCTS, INC.

_____________________________
By: Bruce H. Haglund
Secretary

For Filing Officer (Date, Time, Number, and Filing Office)

Approved by the Division of Corporations and
Commercial Code Department of Business Regulation.

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 30th day of October 1996, between
RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter referred to
as the "COMPANY"), and BRUCE H. HAGLUND (the "OPTIONEE"), residing at 20
Foxboro, Irvine, California 92614.

In consideration for the OPTIONEE's (i) agreement to waive his rights to
all previously granted stock options in the COMPANY, (ii) his efforts in
connection with raising capital for the COMPANY, (iii) his agreement to convert
$150,000 of accounts payable of the COMPANY to him to a promissory note due and
payable on June 30, 1999 (in the form attached hereto as Exhibit "A"), the Board
of Directors of the COMPANY hereby grants an option on 750,000 shares of common
stock of the COMPANY ("Common Stock") to the OPTIONEE at the price and in all
respects subject to the terms, definitions and provisions of the Agreement.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.1 RIGHT TO EXERCISE. The options shall be exercisable by the
OPTIONEE, his personal representative, or his assignee, in whole or in part in
accordance with the terms of this Agreement and is exercisable from the date
that 100 Units, consisting of 10% Convertible Subordinated Debentures and shares
of Common Stock, are subscribed pursuant to a Private Placement Memorandum dated
October 31, 1996 or as such offering may be extended by the Board of Directors,
until the close of business on December 31, 2006.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

(a) State the election to exercise the Option, the number of
shares in respect of which it is being exercised, the person in whose name the
shares are to be issued (if the shares are issued to individuals), the names,
addresses and Social Security Numbers of such persons; and

(b) Contain such representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as are
required by law may be satisfactory to the COMPANY's counsel; and

(c) Be signed by the person or persons entitled to exercise the
Option and, if the Option is being exercised by any person or persons other than
the OPTIONEE, be accompanied by proof, satisfactory to counsel for the COMPANY,
of the right of such person or persons to exercise the Option; and

(d) Be accompanied by a payment for the purchase price of those
shares with respect to which the Option is being exercised in the form of cash
or check. The certificate or certificates for shares of Common Stock as to
which the Option shall be exercised shall be registered in the name of the
person or persons exercising the Option.

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of this
Option, the COMPANY may require the person exercising this Option to comply with
applicable laws or regulations.

Page 1 of Three

<PAGE>

2.4 ALTERNATIVE FORMS OF PAYMENT OF THE PURCHASE PRICE. In addition
to payment of the purchase price of those shares with respect to which the
Option is being exercised in cash, as specified in Section 2.2 (d) above, the
purchase price of the shares with respect to which the Option is being exercised
may be paid (i) by forgiveness of indebtedness owed by the COMPANY to the
OPTIONEE; (ii) by delivery to the COMPANY of shares of Common Stock of the
COMPANY equal in value, based on the "fair market value" (as hereinafter
defined), to the exercise price; (iii) by reducing the number of shares to be
delivered to the OPTIONEE upon exercise of the option by such number of shares
of Common Stock equal in value, based on the "fair market value" (as hereinafter
defined), to the exercise price; or (iv) by the delivery, concurrently with such
exercise, of a properly executed exercise notice for the option and irrevocable
instructions to a broker promptly to deliver to the COMPANY the purchase price
for the shares with respect to which the Option is being exercised or from the
proceeds of a loan being secured by the option shares. The term "fair market
value" shall mean the average over the previous five trading days of the
reported closing sales price on the Nasdaq Small Cap Market, the Nasdaq National
Market System, or such other national securities exchange on which the COMPANY's
shares may be traded, or if not trading on the Nasdaq Small Cap Market, the
Nasdaq National Market System, or a national securities exchange, the average of
the closing bid and asked prices in the over-the-counter market as furnished by
any New York Stock Exchange member firm selected from time to time by the
COMPANY for that purpose.

3. TRANSFERABILITY OF OPTION. This Option may be transferred in any
manner by will or the laws of descent or distribution and may be exercised
during the lifetime of the OPTIONEE by an assignee of the OPTIONEE.

4. STOCK SUBJECT TO THE OPTION. The COMPANY shall set aside shares of
Common Stock, which it now holds as authorized and unissued shares, in an amount
equal to the number of shares which will be issued upon the exercise of this
Option. If the Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased shares which were subject
thereto shall be free from any restrictions occasioned by this Option Agreement.
If the COMPANY has been listed on a stock exchange, the COMPANY will not be
required to issue or deliver any certificate or certificates for shares to be
issued hereunder until such shares have been listed (or authorized for listing
upon official notice of issuance) upon each stock exchange on which outstanding
shares of the same class may then be listed and until the COMPANY has taken such
steps as may, in the opinon of counsel for the CORPORATION, be required by law
and applicable regulations, including the rules and regulations of the
Securities and Exchange Commission, and state blue sky laws and regulations, in
connection with the issuance or sale of such shares, and the listing of such
shares on each such exchange. The COMPANY will use its best efforts to comply
with any such requirements forthwith upon the exercise of the Option.

5. NO ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR STOCK SPLITS. Neither
the number of shares subject to the Option nor the exercise price shall be
subject to adjustment upon a change in capitalization, stock split, or under any
other circumstances.

6. NOTICES. Each notice relating to this Agreement shall be in writing
and delivered in person or by certified mail to the proper address. Each notice
shall be deemed to have been given on the date it is received. Each notice to
the COMPANY shall be addressed to it at its principal office at 5812 Machine
Drive, Huntington Beach, California 92649, or to its then primary business
address, to the attention of the Secretary of the COMPANY. Each notice to the
OPTIONEE or other person or persons then entitled to exercise the Option shall
be addressed to the OPTIONEE or such other person or persons at the OPTIONEE's
address set forth in the heading of this Agreement. Anyone to whom a notice may
be given under this Agreement may designate a new address by notice to that
effect.

Page 2 of Three

<PAGE>

7. BENEFITS OF AGREEMENT. This Agreement shall inure to the benefit of
and be binding upon each successor of the COMPANY. All obligations imposed upon
the OPTIONEE and all rights granted to the COMPANY under this Agreement shall be
binding upon the OPTIONEE's heirs, legal representatives, and successors. This
Agreement shall be the sole and exclusive source of any and all rights which the
OPTIONEE, his heirs, legal representatives, or successors may have in respect to
the Plan or any options or Common Stock granted or issued thereunder, whether to
him, or herself, or to any other person.

8. RESOLUTION OF DISPUTES. Any dispute or disagreement which should arise
under, or as a result of, or in any way relate to, the interpretation,
construction or application of this Agreement will be determined by the Board of
Directors of the COMPANY. Any determination made hereunder shall be final,
binding, and conclusive for all purposes.

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

THE COMPANY:

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation

By: __________________________
John B. Hewlett,
Chairman of the Board

(CORPORATE SEAL)

THE OPTIONEE:

__________________________
BRUCE H. HAGLUND

Page 3 of Three

<PAGE>

EXHIBIT "A"

PROMISSORY NOTE

$150,000.00 ______________________, 1996
Huntington Beach, California

FOR VALUE RECEIVED, the undersigned, RENAISSANCE GOLF PRODUCTS, INC.
("Payor") promises to pay to BRUCE H. HAGLUND, or holder ("Payee"), the
principal sum of One Hundred Fifty Thousand Dollars and No Cents ($150,000.00)
on or before June 30, 1999. This Promissory Note (the "Note") is issued to the
Payee for an account payable accrued for legal services rendered by Payee to
Payor prior to the date of this Note.

In the event of default, Payee may at any time provide notice of default to
Payor at its principle place of business and demand repayment of the Note.

This Note may be prepaid in whole or in part at any time without penalty.

This Note shall be governed by and construed solely in accordance with the
laws of the State of California.

IN WITNESS WHEREOF, Payor has executed this Promissory Note as of the day
first hereinabove written at Huntington Beach, California.

"PAYOR"
RENAISSANCE GOLF PRODUCTS, INC.

BY: ____________________________
JOHN B. HEWLETT,
CHAIRMAN OF THE BOARD

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 30th day of October 1996, between
RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter referred to
as the "COMPANY"), and KENNETH W. CRAIG (the "OPTIONEE"), 612 Downs Avenue,
Temple Terrace, Florida 33617.

The Board of Directors of the COMPANY hereby grants an option on 300,000
shares of common stock of the COMPANY ("Common Stock") to the OPTIONEE at the
price and in all respects subject to the terms, definitions and provisions of
the Agreement.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.1 RIGHT TO EXERCISE. The options shall be exercisable by the
OPTIONEE, his personal representative, or his assignee, in whole or in part in
accordance with the terms of this Agreement and is exercisable from June 30,
2006, until the close of business on December 31, 2006. However, portions of
such Options shall be exercisable earlier if the following conditions are
satisfied: (i) 100,000 of the Options shall be exercisable after March 31, 1998
on the condition that the Company's sales, as reported in its quarterly and
annual filings with the Securities and Exchange Commission total at least
$5,000,000 during the period from October 1, 1996 through December 31, 1997;
(ii) 100,000 of the Options shall be exercisable after March 31, 1999 on the
condition that the Company's sales, as reported in its quarterly and annual
filings with the Securities and Exchange Commission total at least $8,000,000
during the period from January 1, 1998 through December 31, 1998; and (iii)
100,000 of the Options shall be exercisable after March 31, 2000 on the
condition that the Company's sales, as reported in its quarterly and annual
filings with the Securities and Exchange Commission total at least $10,000,000
during the period from January 1, 1999 through December 31, 1999.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

(a) State the election to exercise the Option, the number
of shares in respect of which it is being exercised, the person in whose name
the shares are to be issued (if the shares are issued to individuals), the
names, addresses and Social Security Numbers of such persons; and

(c) Be signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by any person or persons other
than the OPTIONEE, be accompanied by proof, satisfactory to counsel for the
COMPANY, of the right of such person or persons to exercise the Option; and

(d) Be accompanied by a payment for the purchase price of
those shares with respect to which the Option is being exercised in the form of
cash or check. The certificate or certificates for shares of Common Stock as to
which the Option shall be exercised shall be registered in the name of the
person or persons exercising the Option.

Page 1 of Three

<PAGE>

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of
this Option, the COMPANY may require the person exercising this Option to comply
with applicable laws or regulations.

2.4 ALTERNATIVE FORMS OF PAYMENT OF THE PURCHASE PRICE. In
addition to payment of the purchase price of those shares with respect to which
the Option is being exercised in cash, as specified in Section 2.2 (d) above,
the purchase price of the shares with respect to which the Option is being
exercised may be paid (i) by forgiveness of indebtedness owed by the COMPANY to
the OPTIONEE; (ii) by delivery to the COMPANY of shares of Common Stock of the
COMPANY equal in value, based on the "fair market value" (as hereinafter
defined), to the exercise price; (iii) by reducing the number of shares to be
delivered to the OPTIONEE upon exercise of the option by such number of shares
of Common Stock equal in value, based on the "fair market value" (as hereinafter
defined), to the exercise price; or (iv) by the delivery, concurrently with such
exercise, of a properly executed exercise notice for the option and irrevocable
instructions to a broker promptly to deliver to the COMPANY the purchase price
for the shares with respect to which the Option is being exercised or from the
proceeds of a loan being secured by the option shares. The term "fair market
value" shall mean the average over the previous five trading days of the
reported closing sales price on the Nasdaq Small Cap Market, the Nasdaq National
Market System, or such other national securities exchange on which the COMPANY's
shares may be traded, or if not trading on the Nasdaq Small Cap Market, the
Nasdaq National Market System, or a national securities exchange, the average of
the closing bid and asked prices in the over-the-counter market as furnished by
any New York Stock Exchange member firm selected from time to time by the
COMPANY for that purpose.

Page 2 of Three

<PAGE>

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

THE COMPANY:

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation

By: __________________________
John B. Hewlett,
Chairman of the Board

(CORPORATE SEAL)

THE OPTIONEE:

__________________________
KENNETH W. CRAIG

Page 3 of Three

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 30th day of October 1996,
between RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter
referred to as the "COMPANY"), and JANET GARDNER (the "OPTIONEE"), residing at
______________________________________________________.

The Board of Directors of the COMPANY hereby grants an option on 9,000
shares of common stock of the COMPANY ("Common Stock") to the OPTIONEE at the
price and in all respects subject to the terms, definitions and provisions of
the Agreement.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.1 RIGHT TO EXERCISE. The options shall be exercisable by the
OPTIONEE, his personal representative, or his assignee, in whole or in part in
accordance with the terms of this Agreement and is exercisable from June 30,
2006, until the close of business on December 31, 2006. However, portions of
such Options shall be exercisable earlier if the following conditions are
satisfied: (i) 3,000 of the Options shall be exercisable after March 31, 1998
on the condition that the Company's sales, as reported in its quarterly and
annual filings with the Securities and Exchange Commission total at least
$5,000,000 during the period from October 1, 1996 through December 31, 1997;
(ii) 3,000 of the Options shall be exercisable after March 31, 1999 on the
condition that the Company's sales, as reported in its quarterly and annual
filings with the Securities and Exchange Commission total at least $8,000,000
during the period from January 1, 1998 through December 31, 1998; and (iii)
3,000 of the Options shall be exercisable after March 31, 2000 on the condition
that the Company's sales, as reported in its quarterly and annual filings with
the Securities and Exchange Commission total at least $10,000,000 during the
period from January 1, 1999 through December 31, 1999.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

(a) State the election to exercise the Option, the number
of shares in respect of which it is being exercised, the person in whose name
the shares are to be issued (if the shares are issued to individuals), the
names, addresses and Social Security Numbers of such persons; and

(c) Be signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by any person or persons other
than the OPTIONEE, be accompanied by proof, satisfactory to counsel for the
COMPANY, of the right of such person or persons to exercise the Option; and

(d) Be accompanied by a payment for the purchase price of
those shares with respect to which the Option is being exercised in the form of
cash or check. The certificate or certificates for shares of Common Stock as to
which the Option shall be exercised shall be registered in the name of the
person or persons exercising the Option.

Page 1 of Three

<PAGE>

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of
this Option, the COMPANY may require the person exercising this Option to comply
with applicable laws or regulations.

2.4 ALTERNATIVE FORMS OF PAYMENT OF THE PURCHASE PRICE. In
addition to payment of the purchase price of those shares with respect to which
the Option is being exercised in cash, as specified in Section 2.2 (d) above,
the purchase price of the shares with respect to which the Option is being
exercised may be paid (i) by forgiveness of indebtedness owed by the COMPANY to
the OPTIONEE; (ii) by delivery to the COMPANY of shares of Common Stock of the
COMPANY equal in value, based on the "fair market value" (as hereinafter
defined), to the exercise price; (iii) by reducing the number of shares to be
delivered to the OPTIONEE upon exercise of the option by such number of shares
of Common Stock equal in value, based on the "fair market value" (as hereinafter
defined), to the exercise price; or (iv) by the delivery, concurrently with such
exercise, of a properly executed exercise notice for the option and irrevocable
instructions to a broker promptly to deliver to the COMPANY the purchase price
for the shares with respect to which the Option is being exercised or from the
proceeds of a loan being secured by the option shares. The term "fair market
value" shall mean the average over the previous five trading days of the
reported closing sales price on the Nasdaq Small Cap Market, the Nasdaq National
Market System, or such other national securities exchange on which the COMPANY's
shares may be traded, or if not trading on the Nasdaq Small Cap Market, the
Nasdaq National Market System, or a national securities exchange, the average of
the closing bid and asked prices in the over-the-counter market as furnished by
any New York Stock Exchange member firm selected from time to time by the
COMPANY for that purpose.

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

THE COMPANY:

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation

By: __________________________
John B. Hewlett,
Chairman of the Board

(CORPORATE SEAL)

THE OPTIONEE:

__________________________
JANET GARDNER

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 30th day of October 1996,
between RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter
referred to as the "COMPANY"), and MICHAEL B. ORR (the "OPTIONEE"), 3620 Pelham
Road, Greenville, South Carolina 29615.

The Board of Directors of the COMPANY hereby grants an option on 50,000
shares of common stock of the COMPANY ("Common Stock") to the OPTIONEE at the
price and in all respects subject to the terms, definitions and provisions of
the Agreement.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

(a) State the election to exercise the Option, the number
of shares in respect of which it is being exercised, the person in whose name
the shares are to be issued (if the shares are issued to individuals), the
names, addresses and Social Security Numbers of such persons; and

(c) Be signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by any person or persons other
than the OPTIONEE, be accompanied by proof, satisfactory to counsel for the
COMPANY, of the right of such person or persons to exercise the Option; and

(d) Be accompanied by a payment for the purchase price of
those shares with respect to which the Option is being exercised in the form of
cash or check. The certificate or certificates for shares of Common Stock as to
which the Option shall be exercised shall be registered in the name of the
person or persons exercising the Option.

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of
this Option, the COMPANY may require the person exercising this Option to comply
with applicable laws or regulations.

Page 1 of Three

<PAGE>

be free from any restrictions occasioned by this Option Agreement. If the
COMPANY has been listed on a stock exchange, the COMPANY will not be required to
issue or deliver any certificate or certificates for shares to be issued
hereunder until such shares have been listed (or authorized for listing upon
official notice of issuance) upon each stock exchange on which outstanding
shares of the same class may then be listed and until the COMPANY has taken such
steps as may, in the opinon of counsel for the CORPORATION, be required by law
and applicable regulations, including the rules and regulations of the
Securities and Exchange Commission, and state blue sky laws and regulations, in
connection with the issuance or sale of such shares, and the listing of such
shares on each such exchange. The COMPANY will use its best efforts to comply
with any such requirements forthwith upon the exercise of the Option.

6. NOTICES. Each notice relating to this Agreement shall be in writing
and delivered in person or by certified mail to the proper address. Each
notice shall be deemed to have been given on the date it is received. Each
notice to the COMPANY shall be addressed to it at its principal office at 5812
Machine Drive, Huntington Beach, California 92649, or to its then primary
business address, to the attention of the Secretary of the COMPANY. Each notice
to the OPTIONEE or other person or persons then entitled to exercise the Option
shall be addressed to the OPTIONEE or such other person or persons at the
OPTIONEE's address set forth in the heading of this Agreement. Anyone to whom a
notice may be given under this Agreement may designate a new address by notice
to that effect.

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

THE COMPANY: THE OPTIONEE:

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation
_____________________________
MICHAEL B. ORR
By: ___________________________
John B. Hewlett,
Chairman of the Board (CORPORATE SEAL)

Page 2 of Three

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 30th day of October 1996,
between RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter
referred to as the "COMPANY"), and MILES T. DOODY (the "OPTIONEE"), residing at
_________________________________________________.

In consideration for the OPTIONEE's agreement to (i) waive his rights to
all previously granted stock options in the COMPANY, (ii) amend his Employment
Agreement with the Company to reduce his annual salary to $75,000 per year (in
the form attached hereto as Exhibit "A"), and (iii) convert the short-term
$50,000 indebtedness of the COMPANY to a promissory note due and payable on June
30, 1999 (in the form attached hereto as Exhibit "B"), the Board of Directors of
the COMPANY hereby grants an option on 360,000 shares of common stock of the
COMPANY ("Common Stock") to the OPTIONEE at the price and in all respects
subject to the terms, definitions and provisions of the Agreement.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.1 RIGHT TO EXERCISE. The options shall be exercisable by the
OPTIONEE, his personal representative, or his assignee, in whole or in part in
accordance with the terms of this Agreement and is exercisable from the earlier
of (i) the date that 100 Units, consisting of 10% Convertible Subordinated
Debentures and shares of Common Stock, are subscribed pursuant to a Private
Placement Memorandum dated October 31, 1996 or as such offering may be extended
by the Board of Directors, or (ii) June 30, 2006, until the close of business on
December 31, 2006.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

Page 1 of Three

<PAGE>

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of this
Option, the COMPANY may require the person exercising this Option to comply with
applicable laws or regulations.

Page 2 of Three

<PAGE>

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

THE COMPANY:

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation

By: ________________________________
John B. Hewlett,
Chairman of the Board

(CORPORATE SEAL)

THE OPTIONEE:

_____________________________________
MILES T. DOODY

Page 3 of Three

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 30th day of October 1996, between
RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter referred to
as the "COMPANY"), and JAMES T. DOODY (the "OPTIONEE"), residing at ___________
___________________________________________________.

The Board of Directors of the COMPANY hereby grants an option on 225,000
shares of common stock of the COMPANY ("Common Stock") to the OPTIONEE at the
price and in all respects subject to the terms, definitions and provisions of
the Agreement.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.1 RIGHT TO EXERCISE. The options shall be exercisable by the
OPTIONEE, his personal representative, or his assignee, in whole or in part in
accordance with the terms of this Agreement and is exercisable from June 30,
2006, until the close of business on December 31, 2006. However, portions of
such Options shall be exercisable earlier if the following conditions are
satisfied: (i) 75,000 of the Options shall be exercisable after March 31, 1998
on the condition that the Company's sales, as reported in its quarterly and
annual filings with the Securities and Exchange Commission total at least
$5,000,000 during the period from October 1, 1996 through December 31, 1997;
(ii) 75,000 of the Options shall be exercisable after March 31, 1999 on the
condition that the Company's sales, as reported in its quarterly and annual
filings with the Securities and Exchange Commission total at least $8,000,000
during the period from January 1, 1998 through December 31, 1998; and (iii)
75,000 of the Options shall be exercisable after March 31, 2000 on the condition
that the Company's sales, as reported in its quarterly and annual filings with
the Securities and Exchange Commission total at least $10,000,000 during the
period from January 1, 1999 through December 31, 1999.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

Page 1 of Three

<PAGE>

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of this
Option, the COMPANY may require the person exercising this Option to comply with
applicable laws or regulations.

Page 2 of Three

<PAGE>

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

THE COMPANY:

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation

By: __________________________
John B. Hewlett,
Chairman of the Board

(CORPORATE SEAL)

THE OPTIONEE:

_______________________________
JAMES T. DOODY

Page 3 of Three

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 30th day of October 1996,
between RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter
referred to as the "COMPANY"), and PINE VALLEY, LTD., a Utah Limited Partnership
(the "OPTIONEE"), with offices at 2919 East Granite Hollow Street, Sandy, Utah
84092.

In connection with the placement of 100 Units, consisting of 10%
Convertible Subordinated Debentures and shares of Common Stock, pursuant to a
Private Placement Memorandum dated October 31, 1996 (the "Offering"), the Board
of Directors of the COMPANY hereby grants an option on 400,000 shares of common
stock of the COMPANY ("Common Stock") to the OPTIONEE at the price and in all
respects subject to the terms, definitions and provisions of the Agreement.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of this
Option, the COMPANY may require the person exercising this Option to comply with
applicable laws or regulations.

Page 1 of Three

<PAGE>

exercised may be paid (i) by forgiveness of indebtedness owed by the COMPANY
to the OPTIONEE; (ii) by delivery to the COMPANY of shares of Common Stock of
the COMPANY equal in value, based on the "fair market value" (as hereinafter
defined), to the exercise price; (iii) by reducing the number of shares to be
delivered to the OPTIONEE upon exercise of the option by such number of
shares of Common Stock equal in value, based on the "fair market value" (as
hereinafter defined), to the exercise price; or (iv) by the delivery,
concurrently with such exercise, of a properly executed exercise notice for
the option and irrevocable instructions to a broker promptly to deliver to
the COMPANY the purchase price for the shares with respect to which the
Option is being exercised or from the proceeds of a loan being secured by the
option shares. The term "fair market value" shall mean the average over the
previous five trading days of the reported closing sales price on the Nasdaq
Small Cap Market, the Nasdaq National Market System, or such other national
securities exchange on which the COMPANY's shares may be traded, or if not
trading on the Nasdaq Small Cap Market, the Nasdaq National Market System, or
a national securities exchange, the average of the closing bid and asked
prices in the over-the-counter market as furnished by any New York Stock
Exchange member firm selected from time to time by the COMPANY for that
purpose.

4. STOCK SUBJECT TO THE OPTION. The COMPANY shall set aside shares of
Common Stock, which it now holds as authorized and unissued shares, in an
amount equal to the number of shares which will be issued upon the exercise of
this Option. If the Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased shares which were subject
thereto shall be free from any restrictions occasioned by this Option Agreement.
If the COMPANY has been listed on a stock exchange, the COMPANY will not be
required to issue or deliver any certificate or certificates for shares to be
issued hereunder until such shares have been listed (or authorized for listing
upon official notice of issuance) upon each stock exchange on which outstanding
shares of the same class may then be listed and until the COMPANY has taken such
steps as may, in the opinon of counsel for the CORPORATION, be required by law
and applicable regulations, including the rules and regulations of the
Securities and Exchange Commission, and state blue sky laws and regulations, in
connection with the issuance or sale of such shares, and the listing of such
shares on each such exchange. The COMPANY will use its best efforts to comply
with any such requirements forthwith upon the exercise of the Option.

Page 2 of Three

<PAGE>

options or Common Stock granted or issued thereunder, whether to him, or
herself, or to any other person.

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

THE COMPANY:

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation

By: ________________________________
John B. Hewlett,
Chief Executive Officer

(CORPORATE SEAL)

THE OPTIONEE:

PINE VALLEY, LTD.
a Utah Limited Partnership

By:_________________________________
Its General Partner

Page 3 of Three

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 30th day of October 1996, between
RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter referred to
as the "COMPANY"), and MONT WARREN (the "OPTIONEE"), residing at _____________
______________________________________.

The Board of Directors of the COMPANY hereby grants an option on 150,000
shares of common stock of the COMPANY ("Common Stock") to the OPTIONEE at the
price and in all respects subject to the terms, definitions and provisions of
the Agreement.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.1 RIGHT TO EXERCISE. The options shall be exercisable by the
OPTIONEE, his personal representative, or his assignee, in whole or in part in
accordance with the terms of this Agreement and is exercisable from June 30,
2006, until the close of business on December 31, 2006. However, portions of
such Options shall be exercisable earlier if the following conditions are
satisfied: (i) 50,000 of the Options shall be exercisable after March 31, 1998
on the condition that the Company s sales, as reported in its quarterly and
annual filings with the Securities and Exchange Commission total at least
$5,000,000 during the period from October 1, 1996 through December 31, 1997;
(ii) 50,000 of the Options shall be exercisable after March 31, 1999 on the
condition that the Company s sales, as reported in its quarterly and annual
filings with the Securities and Exchange Commission total at least $8,000,000
during the period from January 1, 1998 through December 31, 1998; and (iii)
50,000 of the Options shall be exercisable after March 31, 2000 on the condition
that the Company s sales, as reported in its quarterly and annual filings with
the Securities and Exchange Commission total at least $10,000,000 during the
period from January 1, 1999 through December 31, 1999.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

Page 1 of Three

<PAGE>

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of this
Option, the COMPANY may require the person exercising this Option to comply with
applicable laws or regulations.

Page 2 of Three

<PAGE>

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

THE COMPANY:

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation

By: ____________________________________
John B. Hewlett,
Chairman of the Board

(CORPORATE SEAL)

THE OPTIONEE:

_________________________________________
MONT WARREN

Page 3 of Three

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 30th day of October 1996,
between RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter
referred to as the "COMPANY"), and J. ARTHUR WRIGHT (the "OPTIONEE"), 3981 Milky
Way, Salt Lake City, Utah 84124.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

Page 1 of Three

<PAGE>

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of this
Option, the COMPANY may require the person exercising this Option to comply with
applicable laws or regulations.

Page 2 of Three

<PAGE>

Machine Drive, Huntington Beach, California 92649, or to its then primary
business address, to the attention of the Secretary of the COMPANY. Each notice
to the OPTIONEE or other person or persons then entitled to exercise the Option
shall be addressed to the OPTIONEE or such other person or persons at the
OPTIONEE's address set forth in the heading of this Agreement. Anyone to whom a
notice may be given under this Agreement may designate a new address by notice
to that effect.

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

THE COMPANY:

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation

By: ________________________________
John B. Hewlett,
Chairman of the Board

(CORPORATE SEAL)

THE OPTIONEE:

_____________________________________
J. ARTHUR WRIGHT

Page 3 of Three

<PAGE>

NON-QUALIFIED
STOCK OPTION AGREEMENT
OF
RENAISSANCE GOLF PRODUCTS, INC.

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 31st day of October 1996, between
RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter referred to
as the "COMPANY"), and JOHN B. HEWLETT (the "OPTIONEE"), at 2919 East Granite
Hollow St., Sandy, Utah 84092.

The Board of Directors of the COMPANY hereby grants an option on 1,000,000
shares of common stock of the COMPANY ("Common Stock") to the OPTIONEE at the
price and in all respects subject to the terms, definitions and provisions of
the Agreement.

1. OPTION PRICE. The option price is $1.00 per share.

2. EXERCISE OF OPTION.

2.1 RIGHT TO EXERCISE. This Options shall be exercisable (i) by the
OPTIONEE, his personal representative, or his assignee, in whole or in part in
accordance with the terms of this Agreement, (ii) is exercisable from the date
hereof and on or before December 31, 2006, and, (iii) shall not be subject to
adjustment in terms of the exercise price or the number of shares issuable
hereunder.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of this
Option, the COMPANY may require the person exercising this Option to comply with
applicable laws or regulations.

<PAGE>

5. NO ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The Option price shall
not be subject to mandatory adjustment upon a change in capitalization or under
any other circumstances.

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

COMPANY: OPTIONEE: _________________________
RENAISSANCE GOLF PRODUCTS, INC. JOHN B. HEWLETT
a Delaware corporation

By: ______________________________ (CORPORATE SEAL)
Kenneth W. Craig,
Chief Operating Officer

<PAGE>

NON-QUALIFIED
STOCK OPTION AGREEMENT
OF
RENAISSANCE GOLF PRODUCTS, INC.

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 31st day of October 1996, between
RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter referred to
as the "COMPANY"), and WADE M. MITCHELL (the "OPTIONEE"), residing at 2919
East Granite Hollow St., Sandy, Utah 84092.

The Board of Directors of the COMPANY hereby grants an option on 200,000
shares of common stock of the COMPANY ("Common Stock") to the OPTIONEE at the
price and in all respects subject to the terms, definitions and provisions of
the Agreement.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.1 RIGHT TO EXERCISE. The options shall be exercisable (i) by the
OPTIONEE, his personal representative, or his assignee, in whole or in part in
accordance with the terms of this Agreement, (ii) is exercisable from the date
hereof and on or before December 31, 2006, and, (iii) shall not be subject to
adjustments in terms of the exercise price or the number of shares issuable
hereunder.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of this
Option, the COMPANY may require the person exercising this Option to comply with
applicable laws or regulations.

1
<PAGE>

5. NO ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The Option price shall
not be subject to manditory adjustment upon a change in capitalization or under
any other circumstances.

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

COMPANY: OPTIONEE:____________________________
RENAISSANCE GOLF PRODUCTS, INC. WADE M. MITCHELL
a Delaware corporation

By: ____________________________ (CORPORATE SEAL)
John B. Hewlett,
Chairman of the Board

<PAGE>

RENAISSANCE GOLF PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the
"Option" or the "Agreement," is made as of the 30th day of October 1996,
between RENAISSANCE GOLF PRODUCTS, INC., a Delaware corporation (hereinafter
referred to as the "COMPANY"), and Granite Hollow Insurance Agency, a Utah
Limited Liability Company (the "OPTIONEE"), with offices at 2919 East Granite
Hollow Street, Sandy, Utah 84092.

In connection with the placement of 100 Units, consisting of 10%
Convertible Subordinated Debentures and shares of Common Stock, pursuant to a
Private Placement Memorandum dated October 31, 1996 (the "Offering"), the
Board of Directors of the COMPANY hereby grants an option on 1,000,000 shares
of common stock of the COMPANY ("Common Stock") to the OPTIONEE at the price
and in all respects subject to the terms, definitions and provisions of the
Agreement.

1. OPTION PRICE. The option price is $.50 per share.

2. EXERCISE OF OPTION.

2.2 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

2.3 RESTRICTIONS ON EXERCISE. As a condition to his exercise of this
Option, the COMPANY may require the person exercising this Option to comply with
applicable laws or regulations.

Page 1 of Three

<PAGE>

4. STOCK SUBJECT TO THE OPTION. The COMPANY shall set aside shares of
Common Stock, which it now holds as authorized and unissued shares, in an
amount equal to the number of shares which will be issued upon the exercise of
this Option. If the Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased shares which were subject
thereto shall be free from any restrictions occasioned by this Option Agreement.
If the COMPANY has been listed on a stock exchange, the COMPANY will not be
required to issue or deliver any certificate or certificates for shares to be
issued hereunder until such shares have been listed (or authorized for listing
upon official notice of issuance) upon each stock exchange on which outstanding
shares of the same class may then be listed and until the COMPANY has taken such
steps as may, in the opinon of counsel for the CORPORATION, be required by law
and applicable regulations, including the rules and regulations of the
Securities and Exchange Commission, and state blue sky laws and regulations, in
connection with the issuance or sale of such shares, and the listing of such
shares on each such exchange. The COMPANY will use its best efforts to comply
with any such requirements forthwith upon the exercise of the Option.

Page 2 of Three

<PAGE>

options or Common Stock granted or issued thereunder, whether to him, or
herself, or to any other person.

IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement
to be executed as of the day, month and year first above-written.

THE COMPANY:

RENAISSANCE GOLF PRODUCTS, INC.
a Delaware corporation

By: ________________________________
John B. Hewlett,
Chief Executive Officer

(CORPORATE SEAL)

THE OPTIONEE:

PINE VALLEY, LTD.
a Utah Limited Partnership

By:_________________________________
Its General Partner

Page 3 of Three

<PAGE>

CONSENT OF INDEPENDENT AUDITORS

Board of Directors
Renaissance Golf Products, Inc.

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (33-92586) of our report dated February 20, 1997
appearing in the Annual Report on Form 10-KSB of Renaissance Golf Products,
Inc. for the year ended December 31, 1996.

CORBIN & WERTZ

Irvine, California
April 14, 1997

<PAGE>
<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 276,012
<SECURITIES> 0
<RECEIVABLES> 142,539
<ALLOWANCES> 0
<INVENTORY> 348,640
<CURRENT-ASSETS> 777,506
<PP&E> 49,207
<DEPRECIATION> 0
<TOTAL-ASSETS> 847,856
<CURRENT-LIABILITIES> 1,279,430
<BONDS> 0
0
3
<COMMON> 5,461
<OTHER-SE> 762,500
<TOTAL-LIABILITY-AND-EQUITY> 847,856
<SALES> 2,403,414
<TOTAL-REVENUES> 2,403,414
<CGS> 2,166,947
<TOTAL-COSTS> 2,424,791
<OTHER-EXPENSES> (319,886)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (43,747)
<INCOME-PRETAX> (2,551,957)
<INCOME-TAX> (800)
<INCOME-CONTINUING> (2,552,757)
<DISCONTINUED> 0
<EXTRAORDINARY> 11,325
<CHANGES> 0
<NET-INCOME> (2,541,432)
<EPS-PRIMARY> (0.44)
<EPS-DILUTED> 0

</TABLE>