BRASSIE GOLF CORP, DEF 14A, 1998-05-07

BRASSIE GOLF CORP
DEF 14A, 1998-05-07
MISCELLANEOUS AMUSEMENT & RECREATION

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<PAGE> 1

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

BRASSIE GOLF CORPORATION
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

<PAGE> 2

BRASSIE GOLF CORPORATION
ONE TAMPA CITY CENTER, SUITE 200
TAMPA, FLORIDA 33602

May 6, 1998

Dear Brassie Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of
Brassie Golf Corporation (the "Company") to be held at 10:00 a.m., Thursday, May
28, 1998, in the Metropolitan Suite at The Four Seasons Hotel, 57 East 57th
Street, New York, New York 10022. At the meeting, you will be asked to approve a
classified Board of Directors and to elect five directors to serve on the Board
for staggered terms, to approve a proposal to change the name of the Company to
"Divot Golf Corporation," to approve a proposal to increase the authorized
Common Stock of the Company to 200 million shares, par value $.001, to approve a
proposal to effect a reverse stock split of the Company's Common Stock on a 1
for 15 basis (the "Reverse Stock Split"), to approve the 1998 Stock Option Plan,
and to transact such other business as may properly come before the meeting or
any adjournment thereof.

We direct your attention to several of these proposals; in particular, (i)
the classification of the Board, (ii) the corporate name change, (iii) the
increase in authorized shares, and (iv) the Reverse Stock Split. Your Board of
Directors unanimously believes that each of the proposals is in the best
interest of the Company and its shareholders.

As we prepare for this important meeting, I would like to share some
perspectives with you regarding these important
proposals.

First, we believe that a new name, Divot Golf Corporation, will help to
communicate the attitude of the Company's new management and its approach to the
challenges facing the Company. We expect to retain our ticker symbol, "PUTT."
The Board of Directors has unanimously approved this proposal and recommends
that the Shareholders vote in its favor.

Second, the Company intends to acquire new companies, businesses and
properties, and to develop product lines. In order to help effectuate these
goals, the Board seeks an increase in the authorized Common Stock of the Company
to 200 million shares. The Board of Directors, by unanimous vote, has approved
and recommends a vote "for" this proposal.

Third, the Board of Directors seeks authority to effect a Reverse Stock
Split. The goal of the Reverse Stock Split is to obtain a higher per share price
which may preserve the Company's SmallCap listing, and increase its appeal to
both institutional investors and the brokerage community. Nasdaq has recently
instituted new listing requirements which increase the threshold criteria of The
Nasdaq SmallCap Market. There is now a requirement of a minimum bid price of
$1.00. The Company currently does not meet this requirement and is in jeopardy
of having its Common Stock delisted by Nasdaq. The Board hopes that the Reverse
Stock Split will result in an increase in the market value of the Common Stock
to a bid price of $1.00 or more. Of course, such market value will depend on all
relevant factors at the time of the split and thereafter, and there can be no
guaranty that the market value will actually increase as a result of the Reverse
Stock Split. The Board of Directors has unanimously approved this proposal and
recommends the Shareholders to vote in its favor.

<PAGE> 3

The Board of Directors unanimously believes the passing of each of the
proposals at this Annual Meeting is critical to the future of our Company and is
vital to the achievement of our long term objectives. In arriving at its
decision to recommend these proposals, the Board carefully reviewed and
considered the factors described in the enclosed Proxy Statement. Please be
assured that we do not approach any of these proposals lightly. We understand
that there are potential pitfalls. However, we believe that the best interests
of the Company and our shareholders are served by approving these proposals.

Your vote is very important, regardless of the number of shares you
own. All of the proposals, except for the election of directors, approval of the
1998 Stock Option Plan, and the selection of auditors, require the affirmative
vote of the holders of a majority of the Company's issued and outstanding shares
of capital stock. Whether or not you plan to attend the meeting in person, we
urge you to sign, date and mail the enclosed proxy card promptly in the
accompanying postage prepaid envelope. If you attend the meeting, you may vote
your shares in person, even though you have previously signed and returned your
proxy, by withdrawing your proxy prior to the meeting. Under Delaware law, if
you abstain from voting, your abstention will be treated as a "no" vote for
purposes of determining whether approval of the proposals which require amending
the Company's Certificate of Incorporation has been obtained.

Your affirmative vote in support of this strategic plan is anticipated, and
is greatly appreciated. Thank you for your continued support of the Company.

These are exciting times for our Company and we approach the many
challenges it faces with a renewed sense of vigor and optimism. We hope you
share our excitement and we look forward to seeing you on May 28, 1998.

Sincerely,

JOSEPH R. CELLURA
Chairman and Chief Executive Officer

<PAGE> 4

BRASSIE GOLF CORPORATION

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 28, 1998
----------------------

Notice is hereby given that the Annual Meeting of Shareholders of BRASSIE
GOLF CORPORATION (the "Company") will be held at 10:00 a.m., Thursday, May 28,
1998, in the Metropolitan Suite at The Four Seasons Hotel, 57 East 57th Street,
New York, New York 10022, for the following purposes:

1. To approve amendments to the Company's Certificate of Incorporation
and By-laws providing for the classification of the Board of Directors
into three classes, with members of each class serving for staggered
terms.

2. To elect five members of the Board of Directors. If the proposed
amendments to the Company's Certificate of Incorporation and By-laws
providing for a classified Board of Directors (proposal 1 above) are
adopted, the five directors will be elected to a classified Board of
Directors, with one director being elected for a one-year term, two
directors being elected for a two-year term and two directors being
elected for a three-year term. If the proposed amendments are not
adopted, all five directors will be elected for a one-year term.

3. To approve a proposal to amend the Company's Certificate of
Incorporation to change the Company's name to "Divot Golf
Corporation."

4. To approve a proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of Common
Stock, par value $.001, from 50 million to 200 million shares.

5. To approve the Company's 1998 Stock Option Plan.

6. To approve a proposal to amend the Company's Certificate of
Incorporation to effect a reverse stock split of the Company's Common
Stock on a 1 for 15 ratio.

7. To approve the appointment of Ernst & Young L.L.P., Certified Public
Accountants, as the auditors for the ensuing year and to authorize the
directors to fix the remuneration to be paid to the auditors.

8. To transact such other business as may properly come before the
meeting.

Only shareholders of record as of midnight on April 3, 1998 are entitled to
notice of and to vote at the Annual Meeting or any adjournment or postponement
thereof.

By Order of the Board of Directors

May 6, 1998 JOSEPH R. CELLURA
Chairman and Chief Executive Officer

<PAGE> 5

- - --------------------------------------------------------------------------------
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
- - --------------------------------------------------------------------------------

BRASSIE GOLF CORPORATION

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

PROXY STATEMENT

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

This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Shareholders of BRASSIE GOLF
CORPORATION, a Delaware corporation (the "Company"), to be held at 10:00 a.m.,
Thursday, May 28, 1998, in the Metropolitan Suite at The Four Seasons Hotel, 57
East 57th Street, New York, New York 10022, and at any adjournment or
postponement thereof. The Notice of Annual Meeting and this Proxy Statement and
the accompanying proxy are first being sent to shareholders entitled to vote at
the Annual Meeting on or about May 7, 1998.

Midnight on April 3, 1998 has been fixed as the record date for
determination of shareholders entitled to notice of and to vote at the meeting.
At that date, the Company had outstanding 48,343,526 shares of Common Stock,
$.001 par value ("Common Stock"), and 2,040 shares of Preferred Stock, par value
$.001 ("Preferred Stock"), all of which will be entitled to one vote.

PURPOSE OF THE MEETING

The meeting will be held to consider and vote on the following proposals:

3. To approve a proposal to amend the Company's Certificate of
Incorporation to change the Company's name to "Divot Golf
Corporation."

4. To approve a proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of Common
Stock, par value $.001, from 50 million to 200 million shares.

5. To approve the Company's 1998 Stock Option Plan.

<PAGE> 6

6. To approve a proposal to amend the Company's Certificate of
Incorporation to effect a reverse stock split of the Company's Common
Stock on a 1 for 15 ratio.

8. To transact such other business as may properly come before the
meeting.

The list of all shareholders entitled to vote at the Annual Meeting will be
available at the meeting and at the principal executive offices of the Company
at One Tampa City Center, 201 North Franklin Street, Suite 200, Tampa, Florida
33602, for ten days preceding the meeting.

The Company has provided as an Exhibit to this Proxy Statement its Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1997. Upon written
request, the Company will provide a copy of the exhibits to the Form 10-KSB to
any shareholder of record or any shareholder who owned Common Stock or Preferred
Stock listed in the name of a bank or broker, as nominee, at midnight on April
3, 1998. See "Incorporation by Reference," below. Requests should be addressed
to the Company, to Mr. Alan Anastos, Director of Corporate Communications,
Brassie Golf Corporation, One Tampa City Center, 201 North Franklin Street,
Suite 200, Tampa, Florida 33602. Written requests also may be sent via facsimile
to Mr. Anastos at (813) 222-3434.

The following exhibits are included with this Proxy Statement, and appear
on the last pages hereof:

1. Exhibit A -- Proposed Amendments to the Company's Certificate of
Incorporation and By-laws;

2. Exhibit B -- Proposed Amendment to Article I ("Name") of the Company's
Certificate of Incorporation;

3. Exhibit C -- Proposed Amendment to Article IV ("Capital Stock") of the
Company's Certificate of Incorporation; and

4. Exhibit D -- Proposed 1998 Stock Option Plan.

5. Exhibit E -- The Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1997.

<PAGE> 7

MATTERS FOR CONSIDERATION BY SHAREHOLDERS

PROPOSAL ONE: PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
AND BY-LAWS TO ADOPT A CLASSIFIED BOARD OF DIRECTORS

On January 23, 1998, the Board of Directors adopted amendments to the
Company's Certificate of Incorporation (the "Certificate") and By-laws which
provide for a classified Board of Directors. The full text of the proposed
amendments is set forth in Exhibit A to this Proxy Statement and the following
description is qualified in its entirety by reference thereto. If the proposed
amendments are approved, the five directors elected to the Board will be divided
into three classes as provided under "Election of Directors."

Delaware law authorizes provisions in a certificate of incorporation that
provide for a classified board of directors.

The proposed amendments to the Certificate and the By-laws provide that
directors will be classified into three classes, as nearly equal in number as
possible. One class would hold office initially for a term expiring at the
Annual Meeting to be held in 1999; another class would hold office initially for
a term expiring at the Annual Meeting to be held in 2000; and another class
would hold office initially for a term expiring at the Annual Meeting to be held
in 2001. At each Annual Meeting following this initial classification and
election, the successors to the class of directors whose terms expire at that
meeting would be elected for a term of office to expire at the third succeeding
Annual Meeting after their election and until their successors have been duly
elected and qualified. See "Election of Directors" as to the composition of each
class of directors, and each director's initial term, if this Proposal ONE is
adopted.

The Board believes that classification of the Board will help lend
continuity and stability to the management of the Company. Following adoption of
the classified board structure, at any given time at least approximately
two-thirds of the members of the Board will generally have had experience as
directors of the Company. The Board believes that this will facilitate
long-range business planning, strategic planning and policy making and will have
a positive impact on customer and employee loyalty. In particular, the Company
believes that a classified Board of Directors will permit the Company to more
effectively represent the interests of all of its shareholders in a variety of
situations, including responding to circumstances which might be created by
demands or actions of a single shareholder or shareholder group, than might be
the case if the Board of Directors were not classified and a measure of
continuity from year to year were not thereby assured. The proposed amendments
are not a response to any specific effort of which the Company is aware to
accumulate the Company's stock or to obtain control of the Company.

The proposed classified Board amendments could discourage efforts to obtain
control of the Company. The classification of directors will have the effect of
making it more difficult for shareholders to change the composition of the Board
in a relatively short period of time since at least two Annual Meetings will be
required to be held in order to effect a change in a majority of the members of
the Board. The delay afforded by the proposed amendments will help ensure that
the Board, if confronted with a hostile tender offer, a proxy contest or other
similar proposal, will have sufficient time to review and consider the proposal
and appropriate alternatives to the proposal and to act in what it believes to
be the best interests of the shareholders.

<PAGE> 8

The proposed classified Board amendments provide that directors may be
removed by the shareholders only for cause by the affirmative vote of the
holders of at least two-thirds of the shares of capital stock of the Company
issued and outstanding and entitled to vote, and requires the affirmative vote
of the holders of at least eighty percent of the shares of capital stock of the
Company issued and outstanding and entitled to vote to amend or repeal, or to
adopt any provision inconsistent with, the proposed amendments. The proposed
classified Board amendments provide that any vacancy in the Board may be filled
by vote of a majority of the directors then in office, although less than a
quorum, and that a director elected to fill a vacancy shall be elected to hold
office until the next election of the class for which such director shall have
been chosen, subject to the election and qualification of his successor and to
his earlier death, resignation or removal.

Under Delaware law, shareholders are not entitled to dissenter's rights
with respect to the proposed amendment to the Company's Certificate of
Incorporation.

If the amendments are approved by the Company's shareholders, the Company
will file a Certificate of Amendment with the Secretary of State of the State of
Delaware reflecting the amendment to the Certificate of Incorporation and will
note the amendment to the Company's By-laws in the Company's records.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Under Delaware law, Proposal ONE to amend the Company's Certificate of
Incorporation and By-laws to create a classified Board of Directors must be
approved by the affirmative vote of the holders of a majority of the issued and
outstanding shares of the Company's capital stock. THE BOARD OF DIRECTORS HAS
UNANIMOUSLY APPROVED THIS PROPOSAL AND BELIEVES THAT THE PROPOSED AMENDMENTS
CREATING A CLASSIFIED BOARD OF DIRECTORS ARE IN THE BEST INTEREST OF THE COMPANY
AND ITS SHAREHOLDERS. A VOTE "FOR" THIS PROPOSAL IS RECOMMENDED BY THE BOARD OF
DIRECTORS.

PROPOSAL TWO: ELECTION OF DIRECTORS

The number of directors of the Company has been fixed by the Board of
Directors (the "Board"), pursuant to the Company's By-laws, at five. At the
Annual Meeting, Common Stock and Preferred Stock represented by proxies, unless
otherwise specified, will be voted for the election of the nominees hereinafter
named, each to serve until the next Annual Meeting of Shareholders (or until the
expiration of his term if Proposal One is approved) and until his successor is
duly elected and qualified.

The Board knows of no reason why any of the nominees will be unavailable or
unable to serve as a director. The information presented below is as of March
25, 1998, and is based in part on information furnished by the nominees and, in
part, from the records of the Company. Directors are elected by the affirmative
vote of a plurality of the combined votes cast at the meeting.

The following information is set forth with respect to the persons
nominated for election as a director. THE BOARD OF DIRECTORS HAS UNANIMOUSLY
APPROVED THE NOMINEES AND RECOMMENDS

4
<PAGE> 9

THAT THE SHAREHOLDERS VOTE "FOR" THE ELECTION OF THE NOMINEES IDENTIFIED BELOW.

NOMINEES FOR ELECTION AT THE ANNUAL MEETING

<TABLE>
<CAPTION>
Term if
Proposal ONE is
Name Age Director Since Approved (1)
- - ---- --- -------------- ----------------
<S> <C> <C> <C>
Clifford F. Bagnall............................ 43 1997 3 years
Joseph R. Cellura.............................. 43 1997 3 years
Preston H. Cottrell............................ 48 -- 2 years
Jeremiah M. Daly............................... 44 1997 2 years
Gordon D. Ewart................................ 55 1991 1 year
</TABLE>

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

(1) If Proposal ONE is not approved by the shareholders, then the term of each
person who is elected as a director of the Company will be one year only.

CLIFFORD F. BAGNALL was elected as a director of the Company in September
1997. Prior to that time, since 1992, Mr. Bagnall owned and operated a
consulting company, Foxhole Consulting, Inc., serving primarily an international
clientele in the areas of real estate development, construction, and financing
transactions. From September 1988 through December 1991, Mr. Bagnall served as
Vice President-Chief Financial Officer of Trammell Crow Residential in Tampa,
Florida. Mr. Bagnall also has experience with other real estate development
companies, including Jack Nicklaus Development from March 1984 through May 1987
where he served as Vice President - Finance. Mr. Bagnall presently serves as
Chief Operating Officer of the Company. From November 20, 1997 through January
19, 1998, Mr. Bagnall served also as Chief Financial Officer of the Company. At
this time, Mr. Bagnall is neither employed by nor actively involved in any
entity other than the Company.

JOSEPH R. CELLURA was elected Chairman of the Board of Directors and Chief
Executive Officer of the Company in June 1997. Mr. Cellura has controlled and
served as a director and in executive capacities of several privately held
corporations, including most significantly Divot Corporation (since 1989) and
Divot Development Corporation (since 1994). Divot Corporation has owned
exclusive licensing, marketing and development rights at the World Golf Village,
Inc. and the PGA TOUR Golf Course Properties, Inc. In addition, Divot
Corporation has owned the patent rights to a specialized divot repair tool.
These rights, among others, have been (or are subject to agreements to be)
transferred to the Company. At this time, Mr. Cellura is neither employed by nor
actively involved in any entity other than the Company.

PRESTON H. COTTRELL founded, and has been since 1983 Chief Executive
Officer of, Cottrell Communication Corporation, which designs, installs and
maintains business telephone systems, data wiring, voice mail and
computer-telephone integration. Mr. Cottrell has also served as President and
Chief Executive Officer of CFC Leasing Company since 1992, which leases
telephone equipment. Mr. Cottrell is a Director of Branch Banking & Trust
Company of Virginia.

<PAGE> 10

JEREMIAH M. DALY was elected as a director in December 1997. Prior to this,
Mr. Daly had served as Vice President and General Manager of the Rockport Golf
Division of The Rockport Company, a shoe manufacturing company, since 1994. From
1989 through 1993, Mr. Daly served as Vice President of Operations, Golf
Division, for Etonic, Inc. While in that position, Mr. Daly also served as Vice
President Sales and Marketing for the Golf Division. Mr. Daly presently serves
as President of the Company. At this time, Mr. Daly is neither employed by nor
actively involved in any entity other than the Company.

GORDON D. EWART, a director of the Company since November 1991, is a
co-founder of the Company. He was President of the Company from November 12,
1991 to October 16, 1992, at which time he became Chairman of the Board and its
Chief Executive Officer, which latter position he held until July 11, 1995. Mr.
Ewart resigned as Chairman of the Board in May 1997. Since 1987, and prior to
joining the Company, Mr. Ewart was co-founder of three merchant banks based in
Toronto, Canada and Bermuda: Resources Capital International Ltd., Paramount
Funding Corp. and Grafco Ltd., which firms were utilized as investment vehicles
to finance Canadian industrial and natural resource companies. Mr. Ewart is also
a director of Global (GMPC) Holdings, Inc. (formerly New Total Group, Inc.), a
Canadian public company.

The Board held six meetings in 1997. Each nominee who served as a director
in 1997 attended all of the meetings of the Board and the committees thereof of
which he was a member. The Board presently has an Audit Committee and a
Compensation Committee, and formerly had a Stock Option Committee. The Board
does not have a Nominating Committee.

The present members of the Audit Committee are Messrs. Bagnall and Ewart.
Mr. Bagnall serves as Chairman of the Audit Committee. The Audit Committee held
one meeting during 1997. The Audit Committee is responsible for reviewing the
audit plans of the Company's independent auditors, evaluating the adequacy of
and monitoring compliance with the Company's accounting policies, and reviewing
the Company's annual financial statements.

The present members of the Compensation Committee are Messrs. Cellura and
Ewart. Mr. Cellura serves as Chairman of the Compensation Committee. The
Compensation Committee held one meeting during 1997. The Compensation Committee
is responsible for establishing the compensation to be provided to executive
officers, and effective December 1, 1997, benefits provided under the Company's
Amended and Restated Stock Option Plan.

The members of the Stock Option Committee were Messrs. Cellura and Ewart.
The Stock Option Committee held one meeting during 1997. The Stock Option
Committee was responsible for administering the Company's Amended and Restated
Stock Option Plan (the "Stock Option Plan"), including selecting employees to
whom options will be granted, and determining the type and amount of options
granted, the terms and conditions thereof, and the terms and conditions of the
agreement entered into with optionees. As a result of changes to the Securities
and Exchange Commission rules under Section 16(b) of the Securities Exchange Act
of 1934, the Board has disbanded the Stock Option Committee and the Stock Option
Plan is now administered by the Compensation Committee.

No family relationships exist between the current directors, executive
officers, and any person nominated or chosen by the Company to become a director
or executive officer.

<PAGE> 11

During 1997, several members of the Board of Directors resigned: Thomas K.
Richardson in May 1997; William E. Horne in September 1997; and Robert G.
Atkinson and Lance McNeill in November 1997. These resignations took place as a
result of the change in executive management of the Company and the desire for
the Company to pursue different business objectives. In the cases of Mr. Horne
and Mr. McNeill, the Company redeemed certain of their shares and made certain
other payments to them. These are described in more detail below in "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."

PROPOSAL THREE: PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO CHANGE THE COMPANY'S NAME TO "DIVOT GOLF CORPORATION"

There will be submitted to the shareholders at the Annual Meeting a
proposal to amend Article I of the Company's Certificate of Incorporation (the
"Certificate") to change the name of the Company to "Divot Golf Corporation."
Management believes that a new name will help convey the attitude of the
Company's new management and its approach to the growth opportunities available
to the Company.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Under Delaware law, the affirmative vote of a majority of the outstanding
capital stock is required for approval of this proposal. THE BOARD OF DIRECTORS,
BY UNANIMOUS VOTE, HAS APPROVED, AND RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THIS PROPOSAL TO AMEND THE CERTIFICATE.

PROPOSAL FOUR: PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED COMMON STOCK TO 200 MILLION SHARES

GENERAL

The sole purpose of this Proposal FOUR is to increase the number of
authorized shares of Common Stock, as set forth in Article IV of the Company's
Certificate of Incorporation, from 50 million to 200 million shares. The
amendment is attached to this Proxy Statement as Exhibit C.

Of the 50,000,000 shares were of Common Stock and 1,000,000 shares of
Preferred Stock presently authorized, 48,343,526 shares of Common Stock and
2,040 shares of Preferred Stock were issued and outstanding as of the Record
Date. A total of 1,500,000 shares are authorized for issuance under the
Company's 1994 Stock Option Plan and Restricted Stock Purchase Plan (under which
options for 594,261 shares have been granted and were outstanding as of the
Record Date at exercise prices ranging from $2.00 to $3.80). As of April 3,
1998, the Company had outstanding warrants to purchase 40,509,003 shares of the
Company's Common Stock. The exercise prices for these warrants range from $0.17
to $3.25 per share. The warrants expire at different times with the last
expiring in April, 2002.

<PAGE> 12

In addition to the warrants, there are the following other securities
outstanding as of April 3, 1998 that are convertible into Common Stock (the
"Convertible Securities"): (a) $500,181 of convertible debentures having a
conversion price of the lower of $0.17 per share, or 70% of the average closing
bid of the Common Stock during the last five trading days prior to conversion;
(b) 2,040 shares of Convertible Preferred Stock having a liquidation value of
$1,000 per share and convertible at a price of the lesser of $0.70 per share or
75% of the average closing bid of the Common Stock during the last ten trading
days prior to converting; and (c) $3,000,000 of convertible notes having a
conversion price of the lesser of $0.50 per share or 75% of the average closing
bid of the Common Stock during the last five trading days prior to conversion.

As a result of the over issuance of warrants, options, and other
Convertible Securities as compared to the remaining authorized and unissued
shares of Common Stock of the Company, the Company may be exposed to liability
in the event the proposal to increase the authorized shares is not approved by
the shareholders. Of the current outstanding warrants, 28,061,003 were recently
issued by the Company as a means of restructuring certain debt obligations. All
of these warrants were sold to a select group of accredited investors with the
anticipation of the shareholders approving the increase in authorized shares. In
connection with the issuance, the investors represented to the Company that each
of them had reviewed the Company's filings with the Securities and Exchange
Commission which adequately disclosed the shares of Common Stock outstanding at
that time. The extent of any potential liability of the Company for not being
able to fulfill its contractual obligations under the warrant agreements to
issue shares of Common Stock is not determinable at this time. The damages,
however, would be calculated to equal the spread between the fair market value
of the Common Stock on the date of attempted exercise of the warrants and the
exercise price under the warrant agreement.

As of December 31, 1997, the Company sold 1,920 shares of its 1997
Convertible Preferred Stock and in connection therewith granted 1,280,000
warrants. The Convertible Preferred Stock was sold solely to accredited
investors pursuant to a private placement offering in reliance upon Section 4(2)
of the Securities Act of 1933, as amended. The Convertible Preferred Stock was
offered in units of 15 preferred shares, plus 10,000 warrants (exercisable at
$1.00 per share for a period of three years). The private placement purchase
agreement executed by subscribers to the Convertible Preferred Stock provides
that neither the Preferred Stock nor the warrants will be convertible or
exercisable until the Company receives shareholder approval of the increase in
the Company's authorized Common Stock. In the event approval is not obtained,
the Company is required to redeem, on demand, any portion of the Convertible
Preferred Stock at a redemption price equal to $2,000 per share, payable within
thirty (30) business days of demand and accruing interest at a rate of 11% per
annum. Additionally, in the event the Company fails to issue Common Stock upon
the exercise of the warrants, the Company shall pay to the holder of the
warrants $250 per day for each 10,000 shares of Common Stock subject to the
warrant.

During the period from December 31, 1997 through April 3, 1998, the Company
sold 120 additional shares of its 1997 Convertible Preferred Stock under similar
terms as to those above. The Company granted 80,000 warrants to the purchasers
of these additional 120 shares.

As of April 3, 1998, the Company issued Convertible Secured Notes
("Convertible Notes") in the aggregate principal amount of $3,000,000 payable on
December 31, 1999. The Convertible Notes accrue interest at a rate of 7% per
annum, payable quarterly commencing on July 1, 1998. In connection with the
issuance of the Convertible Notes, the Company issued 1,472,727 warrants to the
note holders exercisable at $0.50 per share for a period of four (4) years.
Additionally, the Company issued 2,727,273 warrants as a commission for the
placement of the Convertible Notes exercisable at $0.40 per share for a period
of four (4) years. Both the Convertible Notes and the warrants are not
exercisable until shareholder approval of the increase in the Company's

<PAGE> 13

authorized Common Stock. In the event the approval is not obtained, the Company
will be required to redeem the Convertible Notes at a redemption price per share
equal to 125% of the sum of the principal amount of the note and accrued
interest. The redemption price must be paid within five business days after
demand and will accrue interest at 11% per annum. Failure to pay the redemption
amounts will result in the Company owing to the holder of the note an amount
accruing at a rate of $1,000 per day for each $100,000 principal amount of the
note, and failure to issue Common Stock upon the exercise of the warrants shall
result in the Company paying $250 per day for each 10,000 shares of stock
subject to the warrants. Additionally, the Company shall be obligated to redeem
the warrants at a redemption price per share equal to the pre-tax profit the
warrants would have earned if exercised and simultaneously sold at the closing
Nasdaq sales price on such date. The redemption price will be payable within
five days after demand and will accrue interest at 11% per annum.

The table below reflects the dates and exercise prices of the warrants
issued immediately prior to and after exceeding the authorized limit of Common
Stock:

<TABLE>
<CAPTION>
Number of Exercise Price
Transaction Warrants Granted Grant Dates of Warrants
<S> <C> <C> <C>
Convertible Debenture 15,041,134 November 18, 1997(1) $ 0.17(2)
Issuance

15,041,134 $ 0.34(2)
November 18, 1997(1)

Private Placement of 1997 1,360,000 December 3, 1997 - Present $ 1.00(3)
Convertible Preferred

Debt Funding 2,000,000 January 28, 1998 $ 0.1875

2,200,000 January 28, 1998 -
February 9, 1998 $ 0.20(3)

Private Placement of 1998 1,472,727 April 3, 1998 - Present $ 0.50
Convertible Secured Notes

2,727,273 April 3, 1998 - Present $ 0.40
</TABLE>

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

(1) As of November 18, 1997, there were 29,519,487 shares of Common Stock
outstanding. The number of warrants granted on such date and thereafter, if
exercised, would have resulted in the 50,000,000 shares of Common Stock
currently authorized being exceeded.

(2) The exercise price is the lesser of the specified price or 70% of the
average closing bid price of the Common Stock during the last five trading
days prior to conversion.

(3) Gordon Ewart, a director of the Company and nominee for reelection,
acquired 500,000 of these warrants through an affiliated entity. See
"Certain Relationships and Related Transactions" set forth below.

In addition to the outstanding warrants and options to purchase 40,509,003
and 594,261 shares, respectively, and the other Convertible Securities, the
Company has agreed, subject to approval by the shareholders of an

<PAGE> 14

increase in the authorized shares of Common Stock to issue 5,000,000 shares of
Common Stock to Joseph R. Cellura. The shares will be issued to Mr. Cellura as
additional consideration for his joining the Company as Chief Executive Officer
and Chairman of the Board, as described in the discussion of Employment
Contracts below.

The increase in the authorized shares of Common Stock, coupled with the
Reverse Stock Split described in Proposal SIX below, will allow the Company to
meet its current obligations and provide shares for various purposes, including
possible future stock splits or stock dividends, issuances from time to time in
the event opportunities are presented for the acquisition of companies, possible
future public offerings or private placements, and possible future employee
stock option or benefit plans based on the profitability of the Company.

The Company's Board of Directors has determined that the amendment to
increase the authorized number of shares of Common Stock is advisable and
unanimously voted to recommend it to the Company's shareholders for approval.
The Board of Directors has determined, after giving due consideration to the
foregoing, that the adoption of the amendment would be in the best interests of
the Company and its shareholders. If the amendment is approved by the Company's
shareholders, the Company will file a Certificate of Amendment with the
Secretary of State of the State of Delaware reflecting the amendment. Upon
acceptance of that filing, the amendment would become effective.

In the event the amendment is approved by the shareholders and the increase
in authorized shares of Common Stock becomes effective, such shares can be
issued at such times and for such consideration as the Board of Directors, in
its discretion, determines and without further shareholder action, except as may
be required by applicable law or the rules of any securities exchange on which
the Common Stock is listed. Because the Company's Certificate of Incorporation
does not provide for preemptive rights, shareholders will not have a
preferential right to subscribe for their proportionate share of any new issue
of stock unless so provided by the Board of Directors. Issuance of any of the
proposed additional authorized shares, other than as a pro rata distribution to
existing shareholders, would dilute the proportionate voting power of existing
shareholders.

The Company does not view the amendment as part of an "anti-takeover"
strategy. The amendment is not being advanced as a result of any known effort by
any party to accumulate shares of the Company's Common Stock or to obtain
control of the Company. Nevertheless, the amendment might have the effect of
discouraging an attempt by another person or entity, through the acquisition of
a substantial number of shares of the Company's Common Stock, to acquire control
of the Company with a view to imposing a merger, sale of all or any part of the
Company's assets or a similar transaction, because the issuance of new shares
could be used to dilute the stock ownership of such person or entity.
Furthermore, certain corporations have issued preferred stock or warrants or
other rights to acquire preferred stock or common stock to the holders of their
common stock pursuant to rights plans having terms designed to protect against
the adverse consequences to shareholders of partial takeovers and front-end
load, two-step takeovers and freezeouts. The purpose of such a rights plan is to
ensure that shareholders receive a fair price for their shares in the event of a
takeover, by requiring any person who seeks to acquire a significant block of
the corporation's stock to obtain a waiver of rights plan from its board of
directors.

<PAGE> 15

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Under Delaware law, Proposal FOUR to amend the Company's Certificate of
Incorporation to increase the number of authorized Common Stock must be approved
by the affirmative vote of the holders of a majority of the issued and
outstanding shares of the Company's capital stock. THE BOARD OF DIRECTORS, BY
UNANIMOUS VOTE, HAS APPROVED, AND RECOMMENDS A VOTE "FOR" THIS PROPOSAL.

PROPOSAL FIVE: PROPOSAL TO ADOPT THE COMPANY'S 1998 STOCK OPTION PLAN

GENERAL

The Company has proposed, and recommends to the shareholders, the adoption
and approval of the BRASSIE GOLF CORPORATION 1998 STOCK OPTION PLAN (the "Plan")
covering an aggregate of 22,500,000 shares of Common Stock (which would be
reduced to 1,500,000 shares in the event that Proposal SIX is adopted, see
below). This Proposal shall only be adopted if either Proposal FOUR to increase
the authorized Common Stock or Proposal SIX to effect a 1 for 15 reverse stock
split is first approved by the shareholders.

Under the Plan, incentive stock options, non-qualified stock options or any
combination thereof will be granted to eligible employees and non-employees. A
committee composed of from two to five directors of the Company will administer
the Plan and make the determination as to when and to whom to grant the options.

If the Plan is approved, the Company may also grant additional options
under its presently existing Stock Option Plan.

ELIGIBLE PERSONS

All officers and other employees of the Company who have executive or
supervisory responsibility will be eligible to receive options under the Plan,
except with respect to incentive stock options for any employee ineligible by
reason of the provisions of Section 422 of the Internal Revenue Code (e.g., an
employee owning or who would own upon the exercise of the option more than 10%
of the outstanding Common Stock of the Company, unless the option price is at
least 110% of the fair market value of the stock subject to the option and the
option is not exercisable after five years from the date of grant). Also,
certain non-employees of the Company, such as directors, consultants, vendors,
suppliers or other individuals who are determined by the committee to be of
special importance to the Company and its business, are eligible to receive
options under the Plan. However, such persons are eligible to receive only
non-qualified stock options.

The Plan contains no limit as to the number of options that could be
granted to any one eligible person.

AUTOMATIC ADJUSTMENT

The aggregate number of shares covered by the Plan, as well as the number
of shares covered by outstanding options (and the per share purchase price
thereof) are subject to automatic adjustment, without further action of the
Board of Directors or the shareholders, in the event of a stock dividend, a
stock split, a reverse stock

<PAGE> 16

split or certain other recapitalizations with respect to the Company's stock. If
Proposal SIX, described below, is adopted, such would result in an automatic
reduction in the number of shares covered by the Plan.

AMENDMENT AND TERM OF THE PLAN

The Board of Directors may amend the Plan (or suspend or discontinue it)
without further shareholder approval, except with respect to certain major
changes such as changing the number of shares subject to the Plan, the minimum
option price or the class of persons eligible to receive options, removing the
administration of the Plan from the committee or amending the Plan in any other
way so that incentive stock options granted thereunder would fail to qualify
under Section 422 of the Internal Revenue Code. No amendment may adversely
affect any then outstanding option.

The Plan will continue for 10 years, unless the Plan terminates earlier
upon the granting of options covering all of the shares (options that are
forfeited may be reissued by the committee).

SUMMARY OF TERMS RELATING TO INCENTIVE STOCK OPTIONS ONLY

The per share exercise price of each incentive stock option will not be
less than the fair market value of the stock on the date of grant or, in the
case of an employee owning more than 10% of the outstanding Common Stock of the
Company, the price will not be less than 110% of such fair market value. If
exercised, the option must be exercised within the exercise period by payment of
the option price in cash or by check or by other means prescribed by the
committee. Also, the aggregate fair market value of the stock with respect to
which options are exercisable for the first time by an employee in any calendar
year may not exceed $100,000.

No option will be exercisable within one year from the date of grant or
more than 10 years after the date of grant, or, in the case of an employee who
owns more than 10% of the outstanding Common Stock of the Company, more than
five years after the date of grant (or in either situation such shorter period
as the committee may specify). Each option will be exercisable in cumulative
installments of one third of the number of shares covered by the option every
year for three years beginning on the first anniversary date of the grant of the
option. If the employee's employment is terminated during the term of the
option, the end of the option period will be accelerated.

An employee may not transfer any option granted under the Plan, although in
some circumstances after the employee's death, the personal representative may
exercise the option.

The optionee should not recognize any taxable income or loss for federal
income tax purposes at the time the option is granted or exercised; however,
upon exercise the difference between the option price and the fair market value
of the shares received may be subject to the alternative minimum tax.
If the optionee does not dispose of the shares purchased upon the exercise of
an option within two years from the granting of the option and one year after
exercise, and otherwise meets the requirements for long-term capital gains
treatment, the optionee should receive a long term capital gain or loss upon the
sale or disposition of the stock based on the difference between the fair market
value of the stock on the date of sale or other disposition and the option
price. The Company will not be entitled to any deductions with respect to the
granting or exercise of the options.

If the optionee does dispose of the shares within the period specified
above, he will generally recognize as ordinary income in the year of disposition
the difference between (1) the option price and (2) the sales price

<PAGE> 17

or the fair market value of the shares on the date of exercise, whichever is
less; and the Company will be entitled to a deduction for such amount in that
year. Any remaining gain is capital gain, taxable to the optionee. However, if
the sales price is less than the option price, no income will be recognized; and
the optionee will generally recognize a short-term capital loss equal to the
difference between the purchase price and the disposition price, and the Company
will not receive any deduction.

SUMMARY OF TERMS RELATING TO NON-QUALIFIED STOCK OPTIONS ONLY

The per share exercise price of each option will not be less than the fair
market value of the stock on the date of grant, and if exercised at all, the
option must be exercised within the exercise period by payment of the option
price in cash or by check or by other means prescribed by the committee.

No option will be able to be exercisable within one year from the date of
grant or more than 10 years after the date of grant (or such shorter period as
the committee may specify in its discretion). Each option will be exercisable in
cumulative installments of one third of the number of shares covered by the
option every year from the date it is granted for three years. If the employee's
employment (or, in the case of an optionee who is not an employee, the business
relationship between the Company and such optionee) is terminated during the
term of the option, the end of the option period will be accelerated.

An optionee may not transfer any option granted under the Plan, although,
in some circumstances after the optionee's death, the optionee's personal
representative may exercise the option.

Because the Company does not anticipate that the option will have a readily
ascertainable fair market value, the optionee should not recognize any taxable
income or loss for federal income tax purposes at the time the option is
granted. The exercise of the option, however, will result in the immediate
recognition of taxable income by the optionee at ordinary income rates based on
the difference between the option price and the fair market value of the shares
received at the time of exercise. The Company will receive a corresponding
deduction at the same time.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

The Plan will be approved upon an affirmative vote of a majority of the
outstanding shares of capital stock present and entitled to vote at the Annual
Meeting. THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS PROPOSAL AND
RECOMMENDS TO THE SHAREHOLDERS TO VOTE "FOR" THIS PROPOSAL.

PROPOSAL SIX: PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO EFFECT A REVERSE STOCK SPLIT OF THE COMMON STOCK ON A 1
FOR 15 RATIO.

GENERAL

The Board of Directors, by unanimous vote, has approved, and recommends
that the Company's shareholders approve a proposal to effect a reverse exchange
(the "Reverse Stock Split") of the Company's Common Stock on a 1 for 15 ratio.
The Reverse Stock Split will not alter the number of shares of the Company's
Common

<PAGE> 18

Stock authorized for issuance, but will simply reduce the number of shares of
Common Stock issued and outstanding.

The Board believes that it is desirable to have additional authorized
shares of Common Stock available for possible future financing and acquisition
of transactions and other general corporate purposes. Because the need to raise
additional capital or the opportunity to effect an acquisition can arise when it
would be inconvenient to hold a shareholders' meeting or when there would not be
time for such a meeting, the Board of Directors believes that it would be
prudent business planning for the number of authorized shares of Common Stock to
remain at 50,000,000 (or 200,000,000 if Proposal FOUR is approved) following the
Reverse Stock Split.

SHAREHOLDERS SHOULD NOT SEND ANY STOCK CERTIFICATES WITH THEIR PROXY CARDS.
IF THE REVERSE STOCK SPLIT IS APPROVED, THE PROCEDURE FOR THE EXCHANGE OF
CERTIFICATES REPRESENTING SHARES OF COMMON STOCK WILL BE AS SET FORTH IN THIS
PROXY STATEMENT. SEE "MANNER OF EFFECTING THE REVERSE STOCK SPLIT: EXCHANGE OF
SHARES AND PAYMENT IN LIEU OF ISSUANCE OF FRACTIONAL SHARE INTERESTS."

PURPOSE AND EFFECT OF PROPOSED REVERSE STOCK SPLIT

The Company believes that the total number of shares of the Company's
Common Stock outstanding is disproportionately large in relation to the
Company's lack of earnings. Additionally, the Company's Common Stock has had a
low market value per share in recent months.

The Board believes that the current per share price of the Common Stock
limits the effective marketability of the Common Stock because of the reluctance
of many brokerage firms and institutional investors to recommend lower-priced
stocks to their clients or to hold them in their own portfolios. In addition,
certain policies and practices of the securities industry may tend to discourage
individual brokers within those firms from dealing in lower-priced stocks. Some
of those policies and practices involve time-consuming procedures that make the
handling of lower-priced stocks economically unattractive. The Board believes
that a decrease in the number of shares of Common Stock outstanding without any
material alterations of the proportionate economic interest in the Company
represented by individual stockholdings may increase the trading price of such
shares, although no assurance can be given that the market price of the Common
Stock will rise in proportion to the reduction in the number of outstanding
shares resulting from the Reverse Stock Split. If, as a result of the Reverse
Stock Split and other factors, the market price per share of the Common Stock is
increased sufficiently, the Company believes that the marketability of the
Common Stock may be enhanced. However, no assurance can be given that such will
indeed be the effect.

The market price of the Common Stock also will be based on Company
performance and other factors, some of which may be unrelated to the number of
shares outstanding. Accordingly, there can be no assurance that the market price
of the Common Stock after the Reverse Stock Split will actually increase in an
amount proportionate to the decrease in the number of outstanding shares.

Although the Board of Directors has no present intention of doing so, the
additional shares of authorized but unissued Common Stock which may result from
the proposed Reverse Stock Split could also be used by the Board of Directors to
defeat or delay a hostile takeover. Faced with an actual or proposed hostile
takeover, the directors could issue shares of Common Stock, in a private
transaction, to a friendly party who might align themselves with the Board of
Directors in opposing a hostile takeover. Accordingly, the proposed amendment

<PAGE> 19

could be considered to have the effect of discouraging a takeover of the
Company. The directors are not aware, however, of any current proposals by any
party to acquire control of the Company and the Reverse Stock Split is not
intended to be an anti-takeover device.

As of the Record Date, the Company had 48,343,526 shares of Common Stock
issued and outstanding. As noted above, the Company also had issued and
outstanding as of the Record Date 2,040 shares of Preferred Stock, outstanding,
unexercised stock options for 594,261 shares, warrants exercisable for
40,509,003 shares, and other Convertible Securities.

From August 6, 1993 through July 17, 1996, the Company's Common Stock
traded on the Toronto Stock Exchange (the "TSE") under the trading symbol "TEE."
The Company voluntarily delisted from the TSE.

The following table sets forth the high and low closing prices on the TSE
for each quarter from January 1, 1996 through the Company's voluntary request to
delist from the TSE on July 17, 1996 (all such prices are in Canadian dollars):

<TABLE>
<CAPTION>
Closing Prices
-----------------------
Period Ended High Low
------------ ----- -----
<S> <C> <C>
March 30, 1996 $3.60 $2.10
June 30, 1996 2.25 1.05
July 17, 1996 1.25 .68
</TABLE>

Since November 22, 1994, trading of the Company's Common Stock has been
quoted on the Nasdaq Market under the symbol "PUTT." The following table sets
forth, for the periods indicated, the quarterly range of the high and low
closing prices of the Common Stock as reported by on the Nasdaq SmallCap Market
(all such prices are in U.S. dollars):

<TABLE>
<CAPTION>
Closing Prices
-----------------------
Quarter Ended High Low
------------- ----- -----
<S> <C> <C>
March 31, 1996 $2.69 $1.50
June 30, 1996 1.69 .88
September 30, 1996 1.00 .25
December 31, 1996 .50 .25
March 31, 1997 .69 .25
June 30, 1997 .44 .25
September 30, 1997 .37 .19
December 31, 1997 .63 .13
March 31, 1998 .63 .38
</TABLE>

As of the Record Date, the closing market price for the Company's Common
Stock on the Nasdaq SmallCap Market was $.3125 per share.

<PAGE> 20

No dividend has been declared or paid by the Company since inception on the
Company's Common Stock. The Company does not anticipate that any dividends will
be declared or paid in the future on the Company's Common Stock.

EFFECT OF PROPOSED REVERSE STOCK SPLIT UPON HOLDERS OF COMMON STOCK

On the Record Date, there were 48,343,526 shares of Common Stock
outstanding. Consummation of the Reverse Stock Split at a 1 to 15 ratio, would
decrease the number of outstanding shares of Common Stock to approximately
3,222,901 shares. The par value of the Common Stock will remain as $0.001 per
share and the authorized number of shares of Common Stock will remain at
50,000,000 if Proposal FOUR is not approved, and will be increased to
200,000,000 if Proposal FOUR is approved. As a consequence, the aggregate par
value of the outstanding Common Stock will be reduced, while the aggregate
capital in excess of par value attributable to the outstanding Common Stock for
statutory and accounting purposes will be correspondingly increased. The
resolution approving the Reverse Stock Split provides that this increase in
capital in excess of par value will be treated as capital for statutory
purposes. However, under Delaware law, the Board of Directors of the Company
will have the authority, subject to various limitations, to transfer some or all
of such increased capital in excess of par value from capital to surplus, which
additional surplus could be distributed to shareholders as dividends or used by
the Company to repurchase outstanding stock. The Company currently has no plans
to use any surplus so created to pay any such dividend or to repurchase stock.

Subject to the provisions for elimination of fractional shares as described
below, consummation of the Reverse Stock Split will not result in a change in
the relative equity position or voting power of the holders of Common Stock.

No fractional shares of Common Stock will be issued to any shareholder.
Accordingly, shareholders of record who would otherwise be entitled to receive
fractional shares of Common Stock, will, upon surrender of their certificates
representing shares of the Company's Common Stock, receive a cash payment ("Cash
Consideration") in lieu thereof equal to the value of such fractional share
determined by reference to the average closing bid prices of the Common Stock
for a period of ten (10) trading days immediately preceding the effective date
of the Reverse Stock Split (the "Effective Date"), as reported on the Nasdaq
SmallCap Market (as defined above). Holders of less than one share of Common
Stock as a result of the Reverse Stock Split ("Fractional Shareholders") no
longer will be shareholders of the Company as of the Effective Date of the
Reverse Stock Split. Assuming the Reverse Stock Split is approved by the
shareholders, as of the Effective Date, the Company will continue to have more
than 300 shareholders of record.

Shareholders should be aware that as a general rule, a stock split will, in
and of itself, neither increase nor decrease the intrinsic value of a
shareholder's investment. Except for holders of a very small number of shares
who receive cash in lieu of a fractional share, the smaller number of shares
resulting from a reverse split generally leaves shareholders with approximately
the same proportionate ownership as before the reverse split. The issuance of
cash in lieu of a fractional share will increase the proportionate interest of
some shareholders and decrease the proportionate interest of others.

The greatest possible increase in ownership will accrue to any shareholder
holding a number of shares evenly divisible by 15, if any so exist. Those
current holders of a number of shares of Common Stock not evenly divisible by 15
will receive cash in lieu of fractional shares, and will correspondingly suffer
a dilution in ownership. The difference in the ownership interest of each
shareholder resulting from the Reverse Stock Split

<PAGE> 21

will generally be inversely proportional to the number of shares held by such
shareholder, with large shareholders generally affected the least.

The Reverse Stock Split may leave shareholders with one or more "odd lots"
of the Company's Common Stock, i.e., stock holdings in amounts of less than 100
shares. These shares may be more difficult to sell, or require a greater
commission per share to sell, than shares in lots of 100.

The Company believes that the Reverse Stock Split will have no detrimental
effect on the total value of the Company's Common Stock. However, to the extent
that a shareholder's holding is reduced by reason of the Reverse Stock Split to
less than 100 shares of Common Stock, the brokerage fees for the sale of his or
her shares may in all likelihood be higher than the brokerage fees applicable to
the sale of round lots of shares.

LACK OF OPINIONS, APPRAISALS, AND REPORTS

Neither the Company nor the Board of Directors received any report,
opinion, or appraisal from an outside party with respect to the Reverse Stock
Split, including, but not limited to, any report, opinion, or appraisal with
respect to the fairness of the Reverse Stock Split to the Company, any
affiliates of the Company, or any unaffiliated shareholders of the Company. The
Board of Directors determined that the cost and expense to obtain such report,
opinion or appraisal were not warranted in light of (i) the expected cash
consideration to be paid to the Fractional Shareholders pursuant to the Reverse
Stock Split, (ii) the relatively high cost and expense required to obtain such
report, opinion or appraisal when compared to the low value of the Company's net
assets, and (iii) the right of each of the Fractional Shareholders to dissent
from the Reverse Stock Split under the Delaware General Business Law.

PLANS FOR THE COMPANY AFTER THE REVERSE STOCK SPLIT

The Company does not have any present definitive plans or proposals which
relate to or would result in an extraordinary corporate transaction, such as a
merger, reorganization, or liquidation, involving the Company or any of its
subsidiaries; a sale or transfer of a material amount of assets of the Company
or any of its subsidiaries; any change in the present Board of Directors or
management of the Company including, but not limited to, any plan or proposal to
change the number or term of directors, to fill any existing vacancy on the
Board of Directors or to change any material term of the employment contract of
any executive officer; or any material change in the present dividend rate or
policy or indebtedness or capitalization of the Company. Upon consummation of
the Reverse Stock Split, the assets, business, and operations of the Company
will be continued substantially as they are currently being conducted.

MANNER OF EFFECTING THE REVERSE STOCK SPLIT: EXCHANGE OF
CERTIFICATES AND ELIMINATION OF FRACTIONAL SHARE INTERESTS

The Reverse Stock Split will be effected by the filing with the Secretary of
State of Delaware, in the event of the approval of the Reverse Stock Split by
the Company's shareholders, a Certificate of Amendment to the Certificate of
Incorporation (the "Amended Certificate of Incorporation") of the Company
amending Article IV in substantially the form attached as Exhibit C to this
Proxy Statement, in order to complete the transactions contemplated by the
Reverse Stock Split. The Reverse Stock Split will become effective on the date
of filing of the Amended Certificate of Incorporation unless the Company
specifies otherwise (the "Effective Date").

<PAGE> 22

If the Reverse Stock Split is approved at the Annual Meeting by the holders of a
majority of the currently issued and outstanding Common Stock, the Company
expects to file the Certificate of Amendment to the Certificate of Incorporation
with the Secretary of State of the State of Delaware as soon as practicable
thereafter.

On the Effective Date, each 15 shares of the "old" Common Stock will
automatically be combined and changed into one share of "new" Common Stock ("New
Common Stock"). No additional action on the part of the Company or any
shareholder will be required in order to effect the Reverse Stock Split.
Shareholders will be requested to exchange their certificates representing
shares of Common Stock held prior to the Reverse Stock Split for new
certificates representing shares of New Common Stock issued as a result of the
Reverse Stock Split. Shareholders will be furnished the necessary materials and
instructions to effect such exchange promptly following the Effective Date by
the Company's transfer agent.

CERTIFICATES REPRESENTING SHARES OF THE "OLD" COMMON STOCK SUBSEQUENTLY
PRESENTED FOR TRANSFER WILL NOT BE TRANSFERRED ON THE BOOKS AND RECORDS OF THE
COMPANY UNTIL THE CERTIFICATES REPRESENTING THE SHARES OF "OLD" COMMON STOCK
HAVE BEEN EXCHANGED FOR CERTIFICATES REPRESENTING SHARES OF NEW COMMON STOCK.

Shareholders should not submit any certificates until requested to do so.
In the event any certificate representing shares of the "old" Common Stock is
not presented for exchange upon request by the Company, any dividends that may
be declared after the Effective Date with respect to the Common Stock
represented by such certificate will be withheld by the Company until such
certificate has been properly presented for exchange, at which time all such
withheld dividends which have not yet been paid to the public official pursuant
to relevant abandoned property laws will be paid to the holder thereof or his
designee, without interest.

FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT

The following description of federal income tax consequences is based on
the Internal Revenue Code of 1986, as amended, and applicable Treasury
regulations promulgated thereunder, judicial authority and current
administrative rulings and practices as in effect on the date of this Proxy
Statement. The tax consequences of the Reverse Stock Split may not be the same
for all shareholders. In particular, this discussion does not address the tax
treatment of special classes of shareholders, such as banks, insurance
companies, tax-exempt entities and foreign persons. Shareholders desiring to
know their individual federal, state, local and foreign tax consequences should
consult their own tax advisors.

The combination and change of each 15 shares of "old" Common Stock into one
share of New Common Stock will be a tax-free transaction, and the holding period
and tax basis of the "old" Common Stock will be carried over to the New Common
Stock received in exchange therefor.

Generally, cash received in lieu of fractional shares will be treated as
received in exchange for the fractional shares (although in unusual
circumstances, a portion of such cash may possibly be deemed a dividend), and
shareholders will recognize gain or loss based upon the difference between the
amount of cash received and the tax basis in the surrendered fractional shares.
If the fractional shares surrendered have been held as capital assets by such
shareholder, then any gain or loss recognized by such shareholder will be a
capital gain or loss.

<PAGE> 23

The receipt by each Fractional Shareholder of cash in lieu of fractional
shares of New Common Stock pursuant to the Reverse Stock Split will be a taxable
transaction for federal income tax purposes under the Internal Revenue Code of
1986, as amended (the "Code").

Under Section 302 of the Code, a Fractional Shareholder will recognize gain
or loss upon receiving cash in lieu of fractional shares of New Common Stock if
(i) the Reverse Stock Split results in a "complete redemption" of all of the
Fractional Shareholder's shares of Common Stock, (ii) the receipt of cash is
"substantially disproportionate" with respect to the Fractional Shareholder, or
(iii) the receipt of cash is "not essentially equivalent to a dividend" with
respect to the Fractional Shareholder. These three tests are applied by taking
into account not only shares that a Fractional Shareholder actually owns, but
also shares that a Fractional Shareholder constructively owns pursuant to
Section 318 of the Code, described below.

If any one of these three tests is satisfied, the Fractional Shareholder
will recognize gain or loss equal to the difference between the amount of cash
received by the Fractional Shareholder pursuant to the Reverse Stock Split and
the tax basis in the existing shares of Common Stock held by the Fractional
Shareholder. Provided that the shares of Common Stock constitute a capital asset
in the hands of the Fractional Shareholder, this gain or loss will be
characterized in accordance with the shareholder's holding period for the
shares.

Pursuant to the constructive ownership rules of Section 318 of the Code, a
shareholder is deemed to constructively own shares owned by certain related
individuals and entities in addition to shares actually owned by the
shareholder. For instance, an individual shareholder is considered to own shares
owned by or for his or her spouse and his or her children, grandchildren, and
parents ("family attribution"). A shareholder is also considered to own a
proportionate number of shares owned by estates or certain trusts in which the
shareholder has a beneficial interest, by partnerships in which the shareholder
is a partner, and by corporations in which 50 percent or more of the value of
the stock is owned directly or indirectly by or for such shareholder. Similarly,
shares directly or indirectly owned by beneficiaries of estates of certain
trusts, by partners of partnerships and, under certain circumstances, by
shareholders of corporations may be considered owned by these entities ("entity
attribution"). A shareholder is also deemed to own shares which the shareholder
has the right to acquire by exercise of an option.

The receipt of cash by a Fractional Shareholder pursuant to the Reverse
Stock Split will result in a "complete redemption" of all of the Fractional
Shareholder's shares of Common Stock, so long as the Fractional Shareholder does
not receive nor constructively own any shares of New Common Stock as a result of
the Reverse Stock Split. However, a Fractional Shareholder who does not receive
any shares of New Common Stock as a result of the Reverse Stock Split may
qualify for gain or loss treatment under the "complete redemption" test even
though such Fractional Shareholder constructively owns shares of New Common
Stock provided that (i) the Fractional Shareholder constructively owns shares of
New Common Stock as a result of the family attribution rules (or, in some cases,
as a result of a combination of the family and entity attribution rules), and
(ii) the Fractional Shareholder qualifies for a waiver of the family attribution
rules (such waiver being subject to several conditions, one of which is that the
Fractional Shareholder has no interest in the Company immediately after the
Reverse Stock Split (including as an officer, director, or employee), other than
an interest as a creditor).

It is anticipated that Fractional Shareholders who do not receive any
shares of New Common Stock as a result of the Reverse Stock Split will qualify
for capital gain or loss treatment as a result of satisfying the "complete
redemption" requirements. However, if the constructive ownership rules prevent
compliance with these requirements, a Fractional Shareholder may nevertheless
qualify for capital gain or loss treatment by

<PAGE> 24

satisfying either the "substantially disproportionate" or the "not essentially
equivalent to a dividend" requirements. In general, the receipt of cash pursuant
to the Reverse Stock Split will be "substantially disproportionate" with respect
to the Fractional Shareholder if the percentage of shares of New Common Stock
constructively owned by the Fractional Shareholder immediately after the Reverse
Stock Split is less than 80 percent of the percentage of existing shares of
Common Stock actually and constructively owned by the Fractional Shareholder
immediately before the Reverse Stock Split. Alternatively, the receipt of cash
pursuant to the Reverse Stock Split will, in general, be "not essentially
equivalent to a dividend" if the Reverse Stock Split results in a "meaningful
reduction" in the Fractional Shareholder's proportionate interest in the
Company.

If none of the three tests described above is satisfied, a Fractional
Shareholder who does not receive any shares of New Common Stock as a result of
the Reverse Stock Split will be treated under the distribution rules of Section
301 of the Code. Generally, pursuant to Section 301 of the Code, a distribution
of cash by a corporation to its shareholders is considered a taxable dividend in
an amount equal to the entire amount of cash received by such shareholder to the
extent of the earnings and profits, both current and accumulated, of such
corporation. The Company does not have any current or accumulated earnings and
profits. Accordingly, a Fractional Shareholder who does not qualify for capital
gain or loss treatment under the above described Section 302 rules will
nonetheless qualify for capital gain or loss treatment under the distribution
rules of Section 301.

The receipt of shares of New Common Stock in the Reverse Stock Split by
shareholders of the Company who are not Fractional Shareholders will be a
nontaxable transaction for federal income tax purposes. However, it is
anticipated that a Fractional Shareholder who receives any shares of New Common
Stock as a result of the Reverse Stock Split will be treated as having received
a capital gain or loss in an amount equal to the difference between the amount
of cash received by the Fractional Shareholder pursuant to the Reverse Stock
Split and the tax basis in the fractional shares of Common Stock held by the
Fractional Shareholder for which cash was received by the Fractional Shareholder
in lieu of New Common Stock. Consequently, a shareholder of the Company
receiving only shares of New Common Stock will not recognize gain or loss, or
dividend income, as a result of the Reverse Stock Split with respect to the
shares of New Common Stock received. In addition, the basis and holding period
attributed to the shares of New Common Stock of the shareholders who receive
only New Common Stock and the Fractional Shareholders who receive shares of New
Common Stock as a result of the Reverse Stock Split will carry over as the basis
and holding period of such shareholder's shares of New Common Stock.

EACH SHAREHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH SHAREHOLDER OF THE REVERSE
STOCK SPLIT (INCLUDING THE APPLICATION AND EFFECT OF STATE AND LOCAL INCOME AND
OTHER TAX LAWS).

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Under Delaware law, Proposal SIX to effect the Reverse Stock Split must be
approved by the affirmative vote of the holders of a majority of the issued and
outstanding shares of the Company's capital stock. THE BOARD OF DIRECTORS, BY
UNANIMOUS VOTE, HAS APPROVED AND RECOMMENDS TO THE SHAREHOLDERS A VOTE "FOR"
THIS PROPOSAL.

<PAGE> 25

PROPOSAL SEVEN: APPOINTMENT OF AUDITOR

Unless otherwise instructed, the proxies given pursuant to this
solicitation will be voted for the appointment of Ernst & Young L.L.P.,
Certified Public Accountants, of Raleigh, North Carolina, as the auditor of the
Company for the ensuing year at a remuneration to be fixed by the directors.
Representatives of such firm plan to attend the meeting and will be available to
answer questions by telephone conference, if required.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG L.L.P. AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE
COMPANY.

BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the Company's capital stock as of March 25, 1998 (except as noted)
by each person known to the Company to own beneficially more than five percent
of the Company's capital stock, each director, each nominee for election as a
director, each executive officer, and all executive officers and directors as a
group. The information reported herein is based on a review of the records of
the Company's Registrar and Transfer Agent, the most recently filed reports of
beneficial ownership ("Section 16 Reports"), and information supplied by the
named individuals. Certain discrepancies may exist among such information which
are noted in the footnotes to this table. Relationships between the Company and
certain of its former management are hostile. No assurance can be given that the
information reported is accurate.

<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
---------------------- ----------------------
AMOUNT PERCENT AMOUNT PERCENT
BENEFICIALLY OF BENEFICIALLY OF
NAME OF BENEFICIAL OWNER (1) OWNED(1) CLASS OWNED (1) CLASS
---------------------------- ------------ ------- ------------ -------
<S> <C> <C> <C> <C>
Clifford F. Bagnall(2)............................. 0 0% 0 0
Joseph R. Cellura(3)............................... 0 0% 0 0
Preston H. Cottrell(4)............................. 20,000 * 75 3.7%
Jeremiah M. Daly(5)................................ 0 0% 0 0
Gordon D. Ewart(6)................................. 803,350 1.7% 510 25%
James A. McNulty(7)................................ 10,000 * 0 0
Divot Spa WGV, Inc.(8)............................. 3,000,000 6.2% 0 0
All directors and executive officers and beneficial
owners as a group (7 persons) .................... 3,833,350 7.9% 585 28.7%
</TABLE>

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

* Less than one percent.

(1) The named shareholders have sole voting and dispositive power with respect
to all shares shown as being beneficially owned by them, except as
otherwise indicated.

(2) Mr. Bagnall serves as Chief Operating Officer of the Company. He was
elected to the Board in September 1997 and is a nominee for reelection to
the Board. Mr. Bagnall's address is One Tampa City Center, 201 North
Franklin Street, Suite 200, Tampa, Florida 33602.

<PAGE> 26

(3) Mr. Cellura serves as Chairman of the Board and Chief Executive Officer of
the Company. Mr. Cellura was elected to the Board in June 1997 and is a
nominee for reelection. Mr. Cellura's address is One Tampa City Center, 201
North Franklin Street, Suite 200, Tampa, Florida 33602.

(4) Mr. Cottrell is a nominee for election to the Board. Mr. Cottrell's address
is 7300 Impala Drive, Richmond, Virginia 23228.

(5) Mr. Daly serves as President of the Company. He was elected to the Board in
December 1997 and is a nominee for reelection to the Board. Mr. Daly's
address is 17 Olde Meadow Road, Marion, Massachusetts 02738.

(6) Includes 603,350 shares of Common Stock and 510 shares of Preferred Stock
held by corporations controlled by Mr. Ewart and options for 200,000 shares
under the Company's current stock option plan. Mr. Ewart, who served as
Chairman of the Board of the Company until May 1997, is a nominee for
reelection. Mr. Ewart's address is 163 Ontario Street, Cobourg, Ontario K9A
3B6, Canada.

(7) Mr. McNulty serves as Chief Financial Officer of the Company. His address
is One Tampa City Center, 201 North Franklin Street, Suite 200, Tampa,
Florida 33602.

(8) Divot Spa WGV, Inc. is a Florida corporation which was formed and organized
in 1996 by Mr. Cellura. Mr. Cellura transferred his interest in the
corporation to Robert Gewant in October 1997. Mr. Gewant subsequently
conveyed 90% of the stock of the corporation to Ellee M. Knight. Ms. Knight
and Mr. Cellura reside at the same address. Mr. Bagnall serves as Vice
President and Secretary of Divot Spa WGV, Inc., but has no ownership
interest therein. Both Mr. Cellura and Mr. Bagnall disclaim any beneficial
ownership regarding any Company stock owned by Divot Spa WGV, Inc.

EXECUTIVE COMPENSATION

The Company's directors have heretofore served without compensation for
their services as directors, but have been reimbursed for expenses incurred in
connection with their duties. It is anticipated that directors will continue to
serve without compensation (other than reimbursement of expenses).

Other than the employment contracts described below, the Company had no
standard arrangements or policies for compensation of its executives. The Board
of Directors will, from time to time, determine the compensation of its senior
management in accordance with the prevailing financial condition of the Company
as the Board shall determine and provide other incentives to promote successful
management of the Company's business. There were no bonus, stock option or other
incentive plans in effect for any level of management as of the end of the last
year except for the Company's Stock Option Plan and certain performance bonuses
included in the employment agreements of Messrs. Cellura, Daly, and Bagnall as
more fully described below.

The following table sets forth information with respect to compensation
paid by the Company and its subsidiaries to both Chief Executive Officers. No
other executive of the Company received compensation in excess of $100,000 for
the last fiscal year.

<PAGE> 27

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------------- -------------------------------
AWARDS PAYOUTS
--------------------- -------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- - ---------------------- ---- ----------- ----- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William E. Horne 1997 $118,209(1)
Former President and 1996 $240,610
Chief Executive Officer 1995 $156,689(2)

Joseph R. Cellura 1997 $ 45,406(3)
Chairman and Chief 1996 $ -0-
Executive Officer 1995 $ -0-
</TABLE>

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

(1) Mr. Horne stepped down as President and Chief Executive Officer in May 1997
and as Director of the Company in November 1997.

(2) Represents the period beginning June 30, 1995 through December 31, 1995.

(3) Represents the period beginning June 2, 1997 through December 31, 1997.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
PERCENT OF
TOTAL
NUMBER OF OPTIONS/SARS
SHARES UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES IN FISCAL OR BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED YEAR ($/SH) DATE VALUE ($)
---- ------------ ------------------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
None
</TABLE>

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTIONS/SAR VALUE TABLE

<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT
AT FY-END (#) FY-END ($)
------------------------------- -------------------------------
SHARES
ACQUIRED VALUE
NAME ON EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
None
</TABLE>

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

Based on the average high and low sales prices of the Company's Common Stock on
December 31, 1997 as quoted on Nasdaq SmallCap Market.

<PAGE> 28

LONG-TERM INCENTIVE PLANS
AWARDS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
NUMBER PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER
OF SHARES, OR OTHER NON-STOCK PRICE-BASED PLANS
UNITS OR PERIOD UNTIL -----------------------------------------
OTHER RIGHTS MATURATION THRESHOLD TARGET MAXIMUM
NAME (#) OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
---- ------------ ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C>
None
</TABLE>

EMPLOYMENT CONTRACTS

The Company employed William E. Horne as its President and Chief Executive
Officer pursuant to the terms of an employment agreement dated June 5, 1995.
This agreement expired on June 5, 1997. Under the terms of the employment
contract, the Company was responsible to pay one year's salary as severance
compensation for failure to renew the contract. Mr. Horne waived his right to
receive his severance payment in connection with the Company's acquisition of
shares of his stock.

The Company employed Thomas K. Richardson as its Senior Vice President of
Operations and Chief Operating Officer pursuant to the terms of an employment
agreement dated June 5, 1995. Mr. Richardson resigned as an officer and director
of the Company effective May 2, 1997. Under the terms of his employment
contract, the Company is responsible to pay one year's salary as severance
compensation for failure to renew the contract. Mr. Richardson's annual salary
was $150,000. The Company also entered into a consulting agreement with Mr.
Richardson after the termination of his employment. In 1997, the Company paid
Mr. Richardson pursuant to the employment and consulting contracts total
compensation of $67,358 (of which $45,000 relates to compensation, $10,000 to
the consulting contract, and the remainder is other work-related consideration).
All relationships with Mr. Richardson have been terminated, and the Company has
no further obligation with respect to either contract.

The Company employed Hale Irwin as President of Hale Irwin Golf Courses,
Inc., a former subsidiary corporation, pursuant to the terms of an employment
agreement dated May 6, 1994. This agreement expired on May 16, 1997.

On September 3, 1997, the Company entered into a seven-year Employment
Contract with Joseph R. Cellura. Mr. Cellura is entitled to an annual salary of
$225,000. The contract, unless terminated by agreement or in accordance with the
termination provisions therein, automatically renews for annual periods unless
at least sixty (60) days notice is given by either party. During 1998,
management of the Company determined that Mr. Cellura may also be issued
5,000,000 shares of Common Stock of the Company as part of the consideration for
Mr. Cellura's employment. The shares will only be issued upon the shareholders'
approval to increase the authorized shares of Common Stock of the Company to
200,000,000 and will be subject to forfeiture in the event his employment
terminates for any reason other than death or disability prior to March 1, 1999.
In the event of any such termination, Mr. Cellura's shares will be forfeited and
must be returned to the Company without compensation. In the event the
shareholders do not approve the proposal to increase the authorized shares of
Common Stock, the Company has agreed to provide alternative consideration to Mr.
Cellura in substitution for such shares. Such alternative consideration will be
subject to comparable restrictions and forfeiture. The

<PAGE> 29

Employment Contract includes an incentive bonus which will pay Mr. Cellura
the following percentages depending upon the Company's earnings before interest
and taxes: $1,000,000 or less, 5% of base salary; $1,000,001 -$3,000,000, 15% of
base salary; $3,000,001 - $5,000,000, 30% of base salary; and greater than
$5,000,000, 50% of base salary. The Employment Contract will also provide Mr.
Cellura with benefits commensurate with other executives of the Company.
Additionally, Mr. Cellura will be entitled to maintain an office in New York,
New York, with the Company being responsible for any expenses related thereto
(currently $8,000 per month). At March 31, 1998, the Company had accrued $32,000
representing four months of such expenses that had not been paid to Mr. Cellura.
In the event Mr. Cellura is terminated without cause, unless such termination is
at the election of Mr. Cellura or upon the scheduled termination date pursuant
to the terms of the Employment Contract, the Company will be responsible for
paying Mr. Cellura severance compensation in the amount of $500,000 which shall
be payable within sixty (60) days of termination. The Employment Contract
provides for covenants against competition and solicitation of employees of the
Company for a one-year period after termination for cause or termination by Mr.
Cellura. As of December 31, 1997, the Company accrued, but did not pay, an
amount of $30,000 (which was due as salary under the Employment Contract), and
an additional amount of $35,000, representing an employee bonus. These amounts
due Mr. Cellura are being offset against amounts owed to the Company from Mr.
Cellura and affiliates. See "Certain Relationships and Related Transactions" set
forth below.

The Company signed an Employment Contract with Jeremiah M. Daly effective
December 1, 1997. The Employment Contract provides that Mr. Daly shall serve as
President of the Company for a five-year term, and unless terminated by
agreement or in accordance with the termination provisions therein, will be
automatically renewed for an additional five-year period unless either party
provides thirty days notice. The Company will pay Mr. Daly a salary of $250,000
per annum and he will be entitled to a one-time payment for relocation costs up
to $30,000. Mr. Daly shall also receive a performance bonus based upon the
Company's earnings before interest and taxes which shall be calculated as
follows: $1,000,000 or less, 5% of base salary; $1,000,001 -$3,000,000, 15% of
base salary; $3,000,001 - $5,000,000, 30% of base salary; and greater than
$5,000,000, 50% of base salary. The Employment Contract also provides for
benefits commensurate with other executives of the Company. In the event Mr.
Daly is terminated without cause, unless such termination is at the election of
Mr. Daly or upon the scheduled termination date pursuant to the terms of the
Employment Contract, the Company will be responsible for paying Mr. Daly
severance compensation in the amount of $500,000 which shall be payable within
sixty (60) days of termination. The Employment Contract provides for covenants
against competition and solicitation of employees of the Company for a one-year
period after termination for cause or termination by Mr. Daly.

On September 2, 1997, the Company entered into a three-year Employment
Contract with Clifford F. Bagnall, engaging Mr. Bagnall to serve in the capacity
of Chief Operating Officer of the Company and interim Chief Financial Officer
until the Company hired another executive. Mr. Bagnall is entitled to a salary
of $175,000 per year and the contract, unless terminated by agreement or in
accordance with the termination provisions therein, automatically renews for
annual periods unless terminated by thirty (30) days notice from either party.
Mr. Bagnall shall also be entitled to a performance bonus based upon the
Company's earnings before interest and taxes which shall be calculated as
follows: $1,000,000 or less, 5% of base salary; $1,000,001 - $3,000,000, 15% of
base salary; $3,000,001 - $5,000,000, 30% of base salary; and greater than
$5,000,000, 50% of base salary. Mr. Bagnall shall additionally receive benefits
commensurate with other executives of the Company. In the event Mr. Bagnall is
terminated without cause, unless such termination is at the election of Mr.
Bagnall or upon the scheduled termination date pursuant to the terms of the
Employment Contract, the Company will be responsible for paying Mr. Bagnall
severance compensation in the amount of $240,000 which shall be payable within
sixty (60) days of termination. The Employment Contract provides for restrictive
covenants of competition and solicitation of employees of the Company for a
one-year period after termination for cause or termination

<PAGE> 30

by Mr. Bagnall. During 1997, the Company accrued, but did not pay, an amount of
$16,667 (which was due under the Employment Contract). The Company expects to
pay such amount on or before April 30, 1998.

COMPLIANCE WITH SECTION 16 OF
THE SECURITIES EXCHANGE ACT OF 1934

During 1997, and based solely on a review of information received from
CDA/Investnet listing Forms 3, 4, and 5 filed with the Securities and Exchange
Commission, none of which have been furnished to the Company under Rule 16a-3(e)
promulgated under the Exchange Act with respect to 1997, all of the Company's
directors and executive officers failed to file on a timely basis such forms and
reports required by Section 16(a) of the Exchange Act during 1996. Messrs.
Atkinson, Horne, McNeill, and Richardson failed to file Forms 4 reporting
disposition of shares of Common Stock of the Company. Messrs. Atkinson, Ewart,
Horne, McNeill and Richardson each failed to file an Annual Report on Form 5.
Messrs. Cellura, Bagnall, and Daly each failed to timely file his Form 3, but
filed such forms as of December 31, 1997.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In December 1997, the Company entered into a Stock Purchase Agreement with
William E. Horne and certain family members. Pursuant to this Agreement, the
Company redeemed shares of its Preferred Stock which were owned by Mr. Horne and
his family. The shares of Preferred Stock were redeemed for $0.75 per share (for
a total purchase price of $210,937). In connection with the redemption of these
shares, Mr. Horne resigned as a director and officer of the Company and all
affiliated companies and executed a General Release in favor of the Company. The
Company also entered into an Indemnification Agreement with Mr. Horne to
indemnify him in connection with any liability that arose as a result of his
service as an officer and director of the Company.

In November 1997, the Company entered into a Cross Creek/Brassie Stock
Agreement with Lance McNeill. Pursuant to this Agreement, Mr. McNeill guaranteed
that the Company would receive $35,000 in repayment of certain amounts which had
been expended by the Company at the Cross Creek Golf Course Development Project.
Mr. McNeill pledged 100,000 shares of his Common Stock of the Company to secure
his guaranty. The Company also agreed to assist Mr. McNeill in having the Rule
144 restrictions on his shares of Common Stock removed. Mr. McNeill executed a
General Release in favor of the Company and resigned as an officer and director
of the Company and its affiliates. The Company entered into an Indemnification
Agreement with Mr. McNeill to indemnify him in connection with any liabilities
that arose as a result of his service as an officer and director of the Company.

A & E Capital loaned the Company $469,000, which was secured by a second
mortgage on the Company's Curtis Park property. Interest on the loan accrued at
a rate of nine and one-half percent (9.5%). The Company repaid this loan, and
all unpaid and accrued interest on or about December 5, 1997. A & E Capital is
owned by Robert G. Atkinson, a former director of the Company, and Gordon D.
Ewart, who is presently a director of the Company and is a nominee for
reelection. The Company believes that the terms of this loan were comparable to
what it could have negotiated with a commercial lender.

On April 15, 1998, the Company completed its acquisition of the issued and
outstanding capital stock of Divot Golf Corporation, a Florida corporation,
which is wholly-owned by Mr. Cellura. Mr. Cellura serves

<PAGE> 31

as director, Chairman of the Board, and Chief Executive Officer of the Company
and is a nominee for reelection. The purchase price was $500,000, payable
$300,000 in cash and the remainder in a promissory note. The Company previously
delivered to the seller a good-faith, non-refundable deposit of $300,000 in
November 1997 which was applied toward the purchase price. The note is at an
interest rate of 6% and provides for quarterly payments of interest only, with
the first payment of interest on June 30, 1998. The note is to be repaid in full
on or before October 15, 1998. The assets of Divot Golf include its name and
certain patent and licensing rights.

On January 7, 1998, the Company loaned to Mr. Cellura $65,388. This loan is
evidenced by a promissory note which bears interest at the rate of 6% and is
unsecured. The terms of the loan require that it be repaid on or before June 30,
1998. Mr. Cellura did not participate in the Board's decision to approve this
loan. The Company believes that the terms of this loan are commercially
reasonable. The Company has also made advances to Divot Development Corporation,
a Florida corporation, which is wholly-owned by Mr. Cellura in the total
aggregate amount of $31,500. Effective March 31, 1998, these advances have been
offset against certain accruals and payables to Mr. Cellura aggregating $97,000.
See "Employment Contracts" set forth above. After such offset, the Company still
owed certain minimal amounts to Mr. Cellura, which the Company intends to
discharge on or before June 30, 1998.

Mr. Ewart and Mr. Cottrell purchased $510,000 and $75,000 of 1997
Convertible Preferred Stock, respectively, pursuant to a private placement
offering by the Company in December 1997. The Preferred Stock was offered in
units of 15 Preferred Shares, with each such share having a liquidation value of
$1,000 plus 10,000 warrants (exercisable at $1.00 per share for a period of
three years), for the price of $15,000 per unit. The holders of the Preferred
Stock are entitled to 7% cumulative dividends, payable quarterly, which
percentage increases in certain events. The Preferred Stock is convertible
immediately to shares of the Company's Common Stock at $1,000 per share so
converted divided by the "conversion price" which is a formula based on the
lesser of $0.70 or 75% of the average of the closing price during the ten-day
period prior to conversion. Messrs. Ewart and Cottrell were among a number of
investors in the private placement offering and did not receive any terms
different from other investors.

In January 1998, for $85,000, Bradstone Equity Partners purchase 500,000
warrants. Mr. Ewart is a partner in Bradstone Equity Partners. The warrants are
exercisable at a price of $0.20 per share and expire in January 2003.

INFORMATION CONCERNING SOLICITATION AND VOTING

RECORD DATE

April 3, 1998 at midnight has been fixed as the record date for the
determination of shareholders entitled to notice of and to vote at the meeting.
At that date, the Company had outstanding 48,343,526 shares of Common Stock,
$.001 par value ("Common Stock"), and 2,040 shares of Preferred Stock, $.001 par
value ("Preferred Stock"), all of which will be entitled to one vote.

REVOCABILITY OF PROXIES

A proxy for use at the meeting is enclosed. Any shareholder who executes
and delivers a proxy has the right to revoke it at any time before its exercise
by filing with the Company a written instrument revoking it or a duly executed
proxy bearing a later date. The presence of a shareholder at the meeting will
not operate to revoke his proxy. However, a shareholder may revoke a proxy
previously executed by him by attending the meeting and formally electing to
vote in person.

<PAGE> 32

VOTING AND SOLICITATION

The solicitation of proxies is made by and on behalf of the Board of
Directors. The cost of the solicitation will be borne by the Company, including
the reasonable expenses of brokerage firms or other nominees for forwarding
proxy materials to beneficial owners. In addition to solicitation by mail,
proxies may be solicited by telephone, telegraph, facsimile transmission, or
personal contact by certain directors, officers and employees of the Company
without additional compensation.

If the enclosed proxy is executed and returned, the shares represented
thereby will be voted in accordance with any specifications made by the
shareholder. In the absence of any such specification, the returned proxy will
be voted "FOR" Proposals ONE, THREE, FOUR, FIVE, SIX and SEVEN and to elect the
directors as set forth under Proposal TWO.

No business other than that set forth in the accompanying Notice of Annual
Meeting of Shareholders is expected to come before the meeting. Should any other
matter requiring a vote of shareholders properly arise, the persons named in the
enclosed form of proxy will vote such proxy in accordance with the
recommendation of the Board of Directors.

Each share of Common Stock and Preferred Stock is entitled to one vote for
each share held as of the Record Date, and there are no preemptive rights. The
Company's Certificate of Incorporation and By-laws do not provide for cumulative
voting for the election of directors or any other purpose.

QUORUM; ABSTENTIONS; BROKER NONVOTES

Shares representing 33-1/3% of the combined voting power of the 48,343,526
shares of Common Stock and 2,040 Preferred Stock outstanding on the Record Date
must be represented at the meeting to constitute a quorum for conducting
business. In the absence of a quorum, the shareholders present in person or by
proxy, by majority vote and without further notice, may adjourn the meeting from
time to time until a quorum is attained. At any reconvened meeting following
such adjournment at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
notified.

The required quorum for the transaction of business at the meeting is
one-third of the votes eligible to be cast by holders of shares of Common Stock
and Preferred Stock issued and outstanding on the Record Date. Shares that are
voted "FOR" or "AGAINST" a matter are treated as being present at the meeting
for purposes of establishing a quorum and are also treated as shares entitled to
vote at the meeting (the "Votes Cast") with respect to such matter.

The Company will count abstentions for purposes of determining both: (i)
the presence or absence of a quorum for the transaction of business, and (ii)
the total number of Votes Cast with respect to a proposal (other than the
election of directors). Accordingly, abstentions will have the same effect as a
vote against the proposal.

Further, the Company intends to count broker nonvotes for the purpose of
determining the presence or absence of a quorum for the transaction of business,
although broker nonvotes will not be counted for purposes of determining the
number of Votes Cast with respect to the particular proposal on which the broker
has expressly not voted. Thus, a broker nonvote will not affect the outcome of
the voting on a proposal, except to the extent

<PAGE> 33

that a resolution requires the approval of a majority of the issued and
outstanding shares of capital stock, such as Proposals ONE, THREE, FOUR, and
SIX.

DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS

Any shareholder who intends to present a proposal at the next Annual
Meeting of Shareholders anticipated to be held at the end of April 1999 for
inclusion in the proxy statement and form of proxy relating to that meeting is
advised that the proposal must be received by the Company at its principal
executive offices not later than January 7, 1999. The Company will not be
required to include in its proxy statement or form of proxy a shareholder
proposal which is received after that date or which otherwise fails to meet
requirements for shareholder proposals established by regulations of the
Securities and Exchange Commission.

INCORPORATION BY REFERENCE

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by the Company with the Commission may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at the Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade Center,
13th Floor, New York, New York 10048. Copies of such material also may be
obtained from the Public Reference Section of the Commission at Washington,
D.C., at prescribed rates. In addition, the Company's Common Stock is quoted on
the Nasdaq SmallCap Market of The Nasdaq Stock Market (the "Nasdaq SmallCap
Market") and reports, proxy statements and other information filed by the
Company with The Nasdaq Stock Market may be inspected at its offices located at
1735 K Street, N.W., Washington, D.C. 20006-1500.

In addition, the Commission maintains a web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The address of such web site is
http://www.sec.gov.

As part of this Proxy Statement, the Company incorporates the Company's
Forms 8-K and Forms 8-K/A filed with the Commission on May 4, 1998, April 30,
1998, April 15, 1998, April 1, 1998, February 13, 1998, January 12, 1998 (two
filings), November 23, 1997, September 30, 1997, August 1, 1997 and July 31,
1997.

The Company has included as Exhibit "E" hereto a copy of its Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1997.

Upon written request, the Company will provide a copy of the exhibits to
the Annual Report of Form 10-KSB for the fiscal year ended December 31, 1997 to
any shareholder of record or any shareholder who owned Common Stock or Preferred
Stock listed in the name of a bank or broker, as nominee, at the Record Date.
Requests should be addressed to the Company, to Mr. Alan Anastos, Director of
Corporate Communications, Brassie Golf Corporation, One Tampa City Center, 201
North

<PAGE> 34

Franklin Street, Suite 200, Tampa, Florida 33602. Written requests also may be
sent via facsimile to Mr. Anastos at (813) 222-3434.

OTHER MATTERS

The Company knows of no other matters to be submitted at the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy card to vote the shares they represent as
the Board of Directors may recommend.

YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES OF COMMON STOCK
YOU OWN. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN,
DATE, AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY. ANY SHAREHOLDER PRESENT
AT THE MEETING MAY VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING AND
ANY PROXY GIVEN BY A SHAREHOLDER MAY BE REVOKED AT ANY TIME BEFORE IT IS
EXERCISED.

By Order of the Board of Directors

May 6, 1998 JOSEPH R. CELLURA
Chairman and Chief Executive Officer

<PAGE> 35

EXHIBIT A

PROPOSED AMENDMENTS TO THE COMPANY'S CERTIFICATE OF INCORPORATION AND BY-LAWS
RELATING TO CLASSIFICATION OF BOARD OF DIRECTORS

[The Company's Certificate of Incorporation, as amended, would be amended
by adding the following new Article XIII:]

ARTICLE XIII

NUMBER OF DIRECTORS; CLASSIFICATION OF BOARD

Section 1. Number of Directors.

The number of directors shall not be less than three. The exact number of
directors within the limitations specified in the preceding sentence shall be
fixed from time to time pursuant to a resolution adopted by the Board of
Directors or as provided in the By-Laws of the Corporation.

Section 2. Classes of Directors.

The Board of Directors shall be and is divided into three classes: Class I,
Class II and Class III. No one class shall have more than one director more than
any other class. If a fraction is contained in the quotient arrived at by
dividing the authorized number of directors by three, then, if such fraction is
one-third, the extra director shall be a member of Class I, and if such fraction
is two-thirds, one of the extra directors shall be a member of Class I and one
of the extra directors shall be a member of Class II, unless otherwise provided
from time to time by resolution adopted by the Board of Directors.

Section 3. Terms of Office.

Each director shall serve for a term ending on the date of the third annual
meeting following the annual meeting at which such director was elected;
provided, that each initial director in Class I shall serve for a term expiring
at the Corporation's annual meeting held in 1999; each initial director in Class
II shall serve for a term expiring at the Corporation's annual meeting held in
2000; and each initial director in Class III shall serve for a term expiring at
the Corporation's annual meeting held in 2001; provided, further, that the term
of each director shall continue until the election and qualification of his
successor and shall be subject to his earlier death, resignation or removal.

Section 4. Allocation of Directors among Classes in the Event of Increases or
Decreases in the Number of Directors.

In the event of any increase or decrease in the authorized number of
directors, (i) each director then serving as such shall nevertheless continue as
a director of the class of which he is a member until the expiration of his
current term, subject to his earlier death, resignation or removal, and (ii) the
newly created or eliminated

A-1

<PAGE> 36

directorships resulting from such increase or decrease shall be apportioned by
the Board of Directors among the three classes of directors in accordance with
the provisions of Section 2 above. To the extent possible, consistent with the
provisions of Section 2 above, any newly created directorships shall be added to
those classes whose terms of office are to expire at the latest dates following
such allocation, and any newly eliminated directorships shall be subtracted from
those classes whose terms of offices are to expire at the earliest dates
following such allocation, unless otherwise provided from time to time by
resolution adopted by the Board of Directors.

Section 5. Quorum; Action at Meeting.

A majority of the directors at any time in office shall constitute a quorum
for the transaction of business. In the event one or more of the directors shall
be disqualified to vote at any meeting, then the required quorum shall be
reduced by one for each such director so disqualified, provided that in no case
shall less than one-third of the number of directors fixed pursuant to Section 1
above constitute a quorum. In the absence of a quorum at any such meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice other than announcement at the meeting, until a quorum
shall be present. Every act of decision done or made by a majority of the
directors present at a meeting duly held at which a quorum is present shall be
regarded as the act of the Board of Directors unless a greater number is
required by law, by the By-Laws of the Corporation or by this Certificate of
Incorporation.

Section 6. Removal.

Directors of the Corporation may be removed only for cause by the
affirmative vote of the holders of at least two-thirds of the shares of the
capital stock of the Corporation issued and outstanding and entitled to vote.

Section 7. Vacancies.

Unless and until filled by the Shareholders, any vacancy in the Board of
Directors, however occurring, including a vacancy resulting from an enlargement
of the Board, may be filled by vote of a majority of the directors then in
office, although less than a quorum, or by a sole remaining director. A director
elected to fill a vacancy shall be elected to hold office until the next
election of the class for which such director shall have been chosen, subject to
the election and qualification of his successor and to his earlier death,
resignation or removal.

Section 8. Amendments to Article.

Notwithstanding any other provisions of law, this Certificate of
Incorporation or the By-laws of the Corporation, and notwithstanding the fact
that a lesser percentage may be specified by law, the affirmative vote of the
holders of at least eighty percent (80%) of the shares of capital stock of the
Corporation issued and outstanding entitled to vote shall be required to amend,
or repeal, or to adopt any provision inconsistent with, this Article XIII.

[Article II of the Company's By-Laws, as amended, would be deleted in its
entirety, and the following substituted in lieu thereof:]

A-2

<PAGE> 37

ARTICLE II - DIRECTORS

1. General Powers. The business and affairs of the corporation shall be
managed by or under the direction of a Board of Directors, who may exercise all
of the powers of the corporation except as otherwise provided by law, the
Certificate of Incorporation or these By-Laws. In the event of a vacancy in the
Board of Directors, the remaining directors, except as otherwise provided by
law, may exercise the powers of the full Board until the vacancy is filled.

2. Number, Election, and Qualification.

(a) The number of directors shall be elected at the annual meeting of
Shareholders by such Shareholders as have the right to vote on such election.
Directors need not be Shareholders of the corporation.

(b) The Board of Directors shall be and is divided into three classes:
Class I, Class II and Class III. No one class shall have more than one director
more than any other class. If a fraction is contained in the quotient arrived at
by dividing the authorized number of directors by three, then, if such fraction
is one-third, the extra director shall be a member of Class I, and if such
fraction is two-thirds, one of the extra directors shall be a member of Class I
and one of the extra directors shall be a member of Class II, unless otherwise
provided from time to time by resolution adopted by the Board of Directors.

(c) Each director shall serve for a term ending on the date of the
third annual meeting following the annual meeting at which such director was
elected, provided, that each initial director in Class I shall serve for a term
expiring at the Corporation's annual meeting held in 1999; each initial director
in Class II shall serve for a term expiring at the Corporation's annual meeting
held in 2000; and each initial director in Class III shall serve for a term
expiring at the Corporation's annual meeting held in 2001; provided further,
that the term of each director shall continue until the election and
qualification of his successor and shall be subject to his earlier death,
resignation or removal.

3. Increases and Decreases in the Size of the Board. In the event of any
increase or decrease in the authorized number of directors, (i) each director
then serving as such shall nevertheless continue as a director of the class of
which he is a member until the expiration of his current term, subject to his
earlier death, resignation or removal, and (ii) the newly created or eliminated
directorships resulting from such increase or decrease shall be apportioned by
the Board of Directors among the three classes of directors in accordance with
the provisions of Section 2(b) above. To the extent possible, consistent with
the provisions of Section 2(b) above, any newly created directorships shall be
added to those classes whose terms of office are to expire at the latest dates
following such allocation, and any newly eliminated directorships shall be
subtracted from those classes whose terms of offices are to expire at the
earliest date following such allocation, unless otherwise provided from time to
time by resolution adopted by the Board of Directors.

4. Vacancies. Unless and until filled by the Shareholders, any vacancy in
the Board of Directors, however occurring, including a vacancy resulting from an
enlargement of the Board, may be filled by vote of a majority of the directors
then in office, although less than a quorum, or by a sole remaining director. A
director elected to fill a vacancy shall be elected to hold office until the
next election of the class for which such director shall have been chosen,
subject to the election and qualifications of his successors and to his earlier
death, resignation or removal.

A-3

<PAGE> 38

5. Resignation. Any director may resign by delivering his written
resignation to the Corporation at its principal office or to the President or
Secretary. Such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event.

6. Regular Meetings. Regular meetings of the Board of Directors may be held
without notice at such time and place, either within or without the State of
Delaware, as shall be determined from time to time by the Board of Directors,
provided that any director who is absent when such a determination is made shall
be given notice of the determination. A regular meeting of the Board of
Directors may be held without notice immediately after and at the same place as
the annual meeting of Shareholders.

7. Special Meetings. Special meetings of the Board of Directors may be held
at any time and place, within or without the State of Delaware, designated in a
call by the Chairman of the Board, President, two or more directors, or by one
director in the event that there is only a single director in office.

8. Notice of Special Meetings. Notice of any special meeting of directors
shall be given to each director by the Secretary or by the officer or one of the
directors calling the meeting. Notice shall be given to each director in person,
by telephone or by telegram sent to his business or home address at least 48
hours in advance of the meeting, or by written notice mailed to his business or
home address at least 72 hours in advance of the meeting. A notice or waiver of
notice of a meeting of the Board of Directors need not specify the purposes of
the meeting.

9. Meetings by Telephone Conference Calls. Directors or any members of any
committee designated by the directors may participate in a meeting of the Board
of Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation by such means shall constitute
presence in person at such meeting.

10. Quorum. A majority of the directors at any time in office shall
constitute a quorum for the transaction of business. In the event one or more of
the directors shall be disqualified to vote at any meeting, then the required
quorum shall be reduced by one for each such director so disqualified, provided
that in no case shall less than one-third of the number of directors fixed
pursuant to Section 2 above constitute a quorum. In the absence of a quorum at
any such meeting, a majority of the directors present may adjourn the meeting
from time to time without further notice other than announcement at the meeting,
until a quorum shall be present.

11. Action at Meeting. At any meeting of the Board of Directors at which a
quorum is present, the vote of a majority of those present shall be sufficient
to take any action, unless a different vote is specified by law, the Certificate
of Incorporation or these By-Laws.

12. Action by Consent. Any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee of the Board of Directors
may be taken without a meeting, if all members of the Board or committee, as the
case may be consent to the action in writing, and the written comments are filed
with the minutes of proceedings of the Board or committee.

13. Removal. Directors of the Corporation may be removed only for cause by
affirmative vote of the holders of at least two-thirds of the shares of the
capital stock of the Corporation issued and outstanding and entitled to vote.

A-4

<PAGE> 39

14. Committees. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the Corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of a member of a committee, the member or
members of the committee present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member. Any such committees, to the extent
provided in the resolution of the Board of Directors and subject to the
provisions of the General Corporation Law of the State of Delaware, shall have
and may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs for the Corporation and may authorize the
seal of the Corporation to be affixed to all papers which may require it. Each
such committee shall keep minutes and make such reports as the Board of
Directors may from time to time request. Except as the Board of Directors may
otherwise determine, any committee may make rules for the conduct of its
business, but unless otherwise provided by the directors or in such rules, its
business shall be conducted as nearly as possible in the same manner as is
provided in these By-Laws for the Board of Directors.

15. Compensation of Directors. Directors may be paid such compensation for
their services and such reimbursement for expenses of attendance at meetings as
the Board of Directors may from time to time determine. No such payment shall
preclude any director from serving the Corporation or any of its parent or
subsidiary corporations in any other capacity and receiving compensation for
such service.

[The following paragraph would be inserted at the end of Article VI of the
Company's By-Laws, as amended:]

Notwithstanding any other provisions of law, these By-Laws or the
Certificate of Incorporation, and notwithstanding the fact that a lesser
percentage may be specified by law, the affirmative vote of the holders of at
least eighty percent (80%) of the votes which all of the Shareholders would be
entitled to cast at an annual election of directors or class of directors shall
be required to amend or repeal, or to adopt any provision inconsistent with
Article II or this Article VI of these By-Laws.

A-5

<PAGE> 40

EXHIBIT B

PROPOSED AMENDMENT TO ARTICLE I OF THE COMPANY'S
CERTIFICATE OF INCORPORATION

[Article I of the Company's Certificate of Incorporation, as amended, would
be deleted in its entirety, and the following substituted in lieu thereof:]

ARTICLE I

NAME

The name of the Corporation is "Divot Golf Corporation" (the "Corporation").

B-1

<PAGE> 41

EXHIBIT C

PROPOSED AMENDMENT TO ARTICLE FOUR OF THE COMPANY'S
CERTIFICATE OF INCORPORATION

[Article IV of the Company's Certificate of Incorporation, as amended,
would be deleted in its entirety, and the following substituted in lieu
thereof:]

AMENDMENT IF PROPOSALS FOUR AND SIX ARE APPROVED:

ARTICLE IV

CAPITAL STOCK

The total number of shares of stock which the Corporation shall have
authority to issue is Two Hundred One Million (201,000,000) shares, consisting
of Two Hundred Million (200,000,000) shares of Common Stock, par value $0.001
per share (the "Common Stock") and One Million (1,000,000) shares of Preferred
Stock, par value $0.001 per share (the "Preferred Stock"). Upon the date of the
effectiveness of the amendment of this Article (the "Effective Date"), each
fifteen (15) issued and outstanding shares of Common Stock or issued and held in
the treasury of the Corporation shall be converted into one (1) share of Common
Stock. No fractional shares shall be issued pursuant to such conversion. The
Corporation shall pay to each Shareholder who would otherwise be entitled to a
fractional share as a result of such conversion, the cash value of such
fractional share determined by reference to the average of the high and low
closing bid and asked prices of the Common Stock for a period of ten trading
days immediately preceding the Effective Date, as reported in the principal
market for the Company's Common Stock. Each certificate for Common Stock
outstanding or held in treasury on the Effective Date shall thereupon and
thereafter evidence the number of shares of Common Stock, and/or the right to
receive cash into which such shares shall have been converted, and may be
surrendered to the Corporation for cancellation in exchange for new certificates
representing such number of shares and/or cash.

AMENDMENT IF PROPOSAL FOUR IS APPROVED BUT NOT PROPOSAL SIX:

ARTICLE IV

CAPITAL STOCK

C-1

<PAGE> 42

AMENDMENT IF PROPOSAL SIX IS APPROVED BUT NOT PROPOSAL FOUR:

ARTICLE IV

CAPITAL STOCK

The total number of shares of stock which the Corporation shall have
authority to issue is Fifty One Million (51,000,000) shares, consisting of Fifty
Million (50,000,000) shares of Common Stock, par value $0.001 per share (the
"Common Stock") and One Million (1,000,000) shares of Preferred Stock, par value
$0.001 per share (the "Preferred Stock"). Upon the date of the effectiveness of
the amendment of this Article (the "Effective Date"), each fifteen (15) issued
and outstanding shares of Common Stock or issued and held in the treasury of the
Corporation shall be converted into one (1) share of Common Stock. No fractional
shares shall be issued pursuant to such conversion. The Corporation shall pay to
each Shareholder who would otherwise be entitled to a fractional share as a
result of such conversion, the cash value of such fractional share determined by
reference to the average of the high and low closing bid and asked prices of the
Common Stock for a period of ten trading days immediately preceding the
Effective Date, as reported in the principal market for the Company's Common
Stock. Each certificate for Common Stock outstanding or held in treasury on the
Effective Date shall thereupon and thereafter evidence the number of shares of
Common Stock, and/or the right to receive cash into which such shares shall have
been converted, and may be surrendered to the Corporation for cancellation in
exchange for new certificates representing such number of shares and/or cash.

C-2

<PAGE> 43

EXHIBIT D

PROPOSED 1998 STOCK OPTION PLAN

BRASSIE GOLF CORPORATION

1998 STOCK OPTION PLAN

ARTICLE 1

GENERAL

1.1 Purpose. This incentive stock option and non-qualified stock option
plan (the "Plan") is established to promote the interests of BRASSIE GOLF
CORPORATION (the "Corporation") and its Shareholders by enabling the
Corporation, through the granting of stock options, to attract, retain, and
reward executive and other key personnel, directors, consultants, vendors,
suppliers, and other individuals determined to be of special importance to the
Corporation and its subsidiaries, and to provide additional incentive to such
individuals to increase their stock ownership in the Corporation.

1.2 Administration.

1.2.1 The incentive stock option and non-qualified stock option
provisions of the Plan shall be administered by the Board of Directors of the
Corporation or, at the discretion of the Board of Directors by a committee
appointed by the Board of Directors (the "Committee"). The Committee shall
consist of not less than two (2) nor more than five (5) persons; provided,
however, that, in the event that the Corporation becomes subject to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 or any
statute of similar import (the "1934 Act"), the Committee shall consist solely
of those members of the Corporation's Board of Directors who are non-employee
directors (as such term is defined in Rule 16b-3 of the 1934 Act). The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors.

1.2.2 The Committee shall select one of its members as chairman, and
shall hold meetings at such time and places as it may determine. The acts of a
majority of the Committee at which a quorum is present, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be
valid acts of the Committee.

1.2.3 Subject to the provisions of the Plan, the Committee shall have
full authority, in its discretion: (1) to determine the employees of the
Corporation and its subsidiaries to whom stock options shall be granted; (2) to
determine the time or times at which stock options shall be granted; (3) to
determine whether an eligible employee shall be granted an incentive stock
option, a non-qualified stock option or any combination thereof; (4) to
determine the option price of the shares subject to each stock option; (5) to
determine the time or times when each stock option becomes exercisable and the
duration of any stock option period; and (6) to interpret the Plan and the stock
options granted hereunder, and to prescribe, amend and rescind rules and
regulations

D-1

<PAGE> 44

with respect thereto. The interpretation and construction by the Committee of
any provision of the Plan over which it has discretionary authority or of any
option granted hereunder shall be final and conclusive.

1.2.4 No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any stock option
granted hereunder.

1.3 Eligible Individuals. A stock option may be granted to any executive or
other key employee of the Corporation or of a subsidiary (who may or may not be
an officer or member of the Board of Directors), or to any director, consultant,
vendor, supplier, or other individual determined to be of special importance to
the Corporation and its business, with the exception that incentive stock
options may only be granted under the Plan to persons who can qualify for the
benefits of incentive stock options under Section 422 of the Internal Revenue
Code of 1986, as amended.

1.4 Stock Subject to the Plan.

1.4.1 The stock subject to the stock options under the Plan shall be
shares of common capital stock of the Corporation, which shares may be, in whole
or in part, either authorized but unissued shares or issued shares held in the
treasury. The aggregate number of shares that may be issued upon the exercise of
stock options granted under the Plan shall not exceed 22,500,000 shares of
common stock [1,500,000, if Proposal SIX is approved], which limitation shall be
subject to adjustment as provided in Article 4 of the Plan.

1.4.2 If a stock option is surrendered or for any other reason ceases
to be exercisable in whole or in part, the shares of common stock that are
subject to such option, but as to which the option has not been exercised, shall
again become available for offering under the Plan.

ARTICLE 2

TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS

It is intended that those options issued pursuant to this Article 2 shall
constitute incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder, or any statute or regulation of similar import. Any incentive stock
option ("ISO") granted pursuant to the Plan shall be authorized by the Committee
and shall be evidenced by certificates or agreements in such form as the
Committee from time to time shall approve, which certificates or agreements
shall comply with and be subject to the terms and conditions hereinafter
specified.

2.1 Number of Shares. Each ISO shall state the number of shares to which it
pertains.

2.2 Option Price. Each ISO shall state the option price, which price shall
be determined by the Committee in its discretion. In no event, however, shall
such price be less than 100% of the fair market value of the shares of common
stock of the Corporation (determined under Article 4 of the Plan) on the date of
the granting of the ISO; or, in the case of an individual who owns (at the time
the option is granted) more than 10% of the

D-2

<PAGE> 45

total combined voting power of all classes of stock of the Corporation or of a
parent or subsidiary corporation (a "10% Shareholder"), shall such price be less
than 110% of such fair market value.

2.3 Method of Payment. Each ISO shall state the method of payment of the
ISO price upon the exercise of the ISO. The method of payment stated in the ISO
shall include payment (a) in United States dollars in cash or by check, bank
draft or money order payable to the order of the Corporation, or (b) in the
discretion of and in the manner determined by the Committee, by the delivery of
shares of common stock of the Corporation already owned by the optionee, (c) by
any other legally permissible means acceptable to the Committee at the time of
grant of the ISO, or (d) in the discretion of the Committee, through a
combination of (a), (b) and (c) of this paragraph 2.3. If the option price is
paid in whole or in part through the delivery of shares of common stock, the
decision of the Committee with respect to the fair market value of such shares
shall be final and conclusive.

2.4 Term and Exercise of Options. No ISO shall be exercisable either in
whole or in part prior to twelve (12) months from the date it is granted. An ISO
shall become fully exercisable three (3) years from the date it is granted.
Prior to becoming fully exercisable, an ISO shall become exercisable in
cumulative installments based on the number of years from the date the ISO is
granted in accordance with the following chart:

<TABLE>
<CAPTION>
Exercisable Percentage
Number of Years from the of the Number of Shares
Date the ISO is Granted Originally Covered by Option
------------------------ ----------------------------
<S> <C>
Less than one year 0%
1 year but less than 2 years 33-1/3%
2 years but less than 3 years 66-2/3%
3 years or more 100%
</TABLE>

To the extent not exercised, installments shall be exercisable, in whole or
in part, in any subsequent period, but not later than the expiration date of the
option. No ISO shall be exercisable after the expiration of ten (10) years from
the date it is granted; or, in the case of a 10% Shareholder, no ISO shall be
exercisable after the expiration of five (5) years from the date it is granted.

Within the limits described above, the Committee may impose additional
requirements on the exercise of ISOs, including, but without limitation, the
number of shares covered by the ISO that become eligible to be exercised in any
year and the expiration date of the option. Subject to the provisions of the
Plan and any other terms and conditions the Committee deems appropriate, the
Committee in its discretion also may accelerate the time at which an ISO may be
exercised if, under previously established exercise terms, such ISO was not
immediately exercisable in full.

2.5 Additional Limitations on Exercise of Options. An optionee may hold and
exercise more than one ISO, but only on the terms and subject to the
restrictions hereafter set forth. The aggregate fair market value (determined as
of the time an ISO is granted) of the common stock of the Corporation with
respect to which ISOs are exercisable for the first time by any employee in any
calendar year under the Plan and under all other incentive stock option plans of
the Corporation and any parent and subsidiary corporations of the Corporation
(as those terms are defined in Section 424 of the Internal Revenue Code of 1986,
as amended) shall not exceed $100,000.

D-3

<PAGE> 46

2.6 Notice of Grant of Option. Upon the granting of any ISO to an employee,
the Committee shall promptly cause such employee to be notified of the fact that
such ISO has been granted. The date on which the Committee approves the grant of
an ISO shall be considered to be the date on which such ISO is granted.

2.7 Death or Other Termination of Employment.

2.7.1 In the event that an optionee

2.7.1.1 shall cease to be employed by the Corporation or a
subsidiary because of his discharge for dishonesty, or because he violated
any material provision of any employment or other agreement between him and
the Corporation or a subsidiary, or

2.7.1.2 shall voluntarily resign or terminate his employment with
the Corporation or a subsidiary under or followed by such circumstances as
would constitute a breach of any material provision of any employment or
other agreement between him and the Corporation or a subsidiary, or

2.7.1.3 shall have committed an act of dishonesty not discovered
by the Corporation or a subsidiary prior to the cessation of his employment
but that would have resulted in his discharge if discovered prior to such
date, or

2.7.1.4 shall, either before or after cessation of his employment
with the Corporation or a subsidiary, without the written consent of his
employer or former employer, use (except for the benefit of his employer or
former employer) or disclose to any other person any confidential
information relating to the continuation or proposed continuation of his
employer's or former employer's business or any trade secrets of the
Corporation or a subsidiary obtained as a result of or in connection with
such employment, or

2.7.1.5 shall, either before or after the cessation of his
employment with the Corporation or a subsidiary, without the written
consent of his employer or former employer, directly or indirectly, give
advice to, or serve as an employee, director, officer, partner or trustee
of, or in any similar capacity with, or otherwise directly or indirectly
participate in the management, operation, or control of, or have any direct
or indirect financial interest in, any corporation, partnership, or other
organization that directly or indirectly competes in any respect with the
Corporation or its subsidiaries,

then forthwith from the happening of any such event, any ISO then held by him
shall terminate and become void to the extent that it then remains unexercised.

In the event that an optionee shall cease to be employed by the Corporation
or a subsidiary for any reason other than his death or one or more of the
reasons set forth in paragraphs 2.7.1.1 through 2.7.1.5, subject to the
conditions that no option shall be exercisable after the expiration of ten (10)
years from the date it is granted, or, in the case of a 10% Shareholder, five
(5) years from the date it is granted, such optionee shall have the right to
exercise the ISO at any time within three (3) months after such termination of
employment to the extent his right to exercise such ISO had accrued pursuant to
this Article 2 at the date of such termination and had not previously been
exercised; such three-month limit shall be increased to one (1) year for any
optionee who ceases to be employed by the Corporation or a subsidiary because he
is disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended) or who dies during the three-

D-4

<PAGE> 47

month period and the ISO may be exercised within such extended time limit by the
optionee or, in the case of death, the personal representative of the optionee
or by any person or persons who shall have acquired the ISO directly from the
optionee by bequest or inheritance. Whether an authorized leave of absence or
absence for military or governmental service shall constitute termination of
employment for purposes of the Plan shall be determined by the Committee, whose
determination shall be final and conclusive.

2.7.2 In the event that an optionee shall die while in the employ of
the Corporation or a parent or subsidiary corporation and shall not have fully
exercised any ISO, the ISO may be exercised, subject to the conditions that no
ISO shall be exercisable after the expiration of ten (10) years from the date it
is granted, or, in the case of a 10% Shareholder, five (5) years from the date
it is granted, to the extent that the optionee's right to exercise such ISO had
accrued pursuant to this Article 2 at the time of his death and had not
previously been exercised, at any time within one (1) year after the optionee's
death, by the personal representative of the optionee or by any person or
persons who shall have acquired the ISO directly from the optionee by bequest or
inheritance, in the case of death.

2.7.3 No ISO shall be transferable by the optionee otherwise than by
will or the laws of descent and distribution.

2.7.4 During the lifetime of the optionee, the ISO shall be exercisable
only by him and shall not be assignable or transferable and no other person
shall acquire any rights therein.

2.8 Rights as a Shareholder. An optionee shall have no rights as a
Shareholder with respect to any shares covered by his ISO until the date of the
issuance of a stock certificate to him for such shares after exercise of the
ISO. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Article 4.

2.9 Modification, Extension, and Renewal of Options. Subject to the terms
and conditions and within the limitations of the Plan, the Committee may modify,
extend or renew outstanding ISOs granted under the Plan, or accept the surrender
of outstanding ISOs (to the extent not theretofore exercised) and authorize the
granting of new options in substitution therefor (to the extent not theretofore
exercised). The Committee shall not, however, modify any outstanding ISOs so as
to specify a lower option price or accept the surrender of outstanding ISOs and
authorize the granting of new options in substitution therefor specifying a
lower option price. Notwithstanding the foregoing, however, no modification of
an ISO shall, without the consent of the optionee, alter or impair any of the
rights or obligations under any ISO theretofore granted under the Plan.

2.10 Listing and Registration of Shares. Each ISO shall be subject to the
requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the shares
covered thereby upon any securities exchange or under any state or federal laws,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such ISO or
the issuance or purchase of shares thereunder, such ISO may not be exercised
unless and until such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee. Notwithstanding anything in the Plan to the contrary, if the
provisions of this paragraph 2.10 become operative, and if, as a result thereof,
the exercise of an ISO is delayed, then and in that event, the term of the ISO
shall not be affected.

D-5

<PAGE> 48

2.11 Other Provisions. The ISO certificates or agreements authorized under
the Plan shall contain such other provisions, including, without limitation,
restrictions upon the exercise of the ISO, as the Committee shall deem
advisable. Any such certificate or agreement shall contain such limitations and
restrictions upon the exercise of the ISO as shall be necessary in order that
such ISO will be an incentive stock option as defined in Section 422 of the
Internal Revenue Code of 1986, as amended, or to conform to any change in the
law.

ARTICLE 3

TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTIONS

Any non-qualified stock option ("NSO") granted pursuant to the Plan shall
be authorized by the Committee and shall be evidenced by certificates or
agreements in such form as the Committee from time to time shall approve, which
certificates or agreements shall comply with and be subject to the terms and
conditions hereinafter specified.

3.1 Number of Shares. Each NSO shall state the number of shares to which it
pertains.

3.2 Option Price. Each NSO shall state the option price, which price shall
be determined by the Committee in its discretion. In no event, however, shall
such price be less than 100% of the fair market value of the shares of common
stock of the Corporation (determined under Article 4 of the Plan) on the date of
the granting of the NSO.

3.3 Method of Payment. Each NSO shall state the method of payment of the
NSO price upon the exercise of the NSO. The method of payment stated in the NSO
shall include payment (a) in United States dollars in cash or by check, bank
draft or money order payable to the order of the Corporation, or (b) in the
discretion of and in the manner determined by the Committee, by the delivery of
shares of common stock of the Corporation already owned by the optionee, (c) by
any other legally permissible means acceptable to the Committee at the time of
the grant of the NSO, or (d) in the discretion of the Committee, through a
combination of (a), (b) and (c) of this paragraph 3.3. If the option price is
paid in whole or in part through the delivery of shares of common stock, the
decision of the Committee with respect to the fair market value of such shares
shall be final and conclusive.

3.4 Term and Exercise of Options. No NSO shall be exercisable either in
whole or in part prior to twelve (12) months from the date it is granted. An NSO
shall become fully exercisable three (3) years from the date it is granted.
Prior to becoming fully exercisable, an NSO shall become exercisable in
cumulative installments based on the number of years from the date the NSO is
granted in accordance with the following chart:

D-6

<PAGE> 49

<TABLE>
<CAPTION>
Exercisable Percentage
Number of Years from the of the Number of Shares
Date the NSO is Granted Originally Covered by Option
------------------------ ----------------------------
<S> <C>
Less than one year 0%
1 year but less than 2 years 33-1/3%
2 years but less than 3 years 66-2/3%
3 years or more 100%
</TABLE>

To the extent not exercised, installments shall be exercisable, in whole or
in part, in any subsequent period, but not later than the expiration date of the
option. No NSO shall be exercisable after the expiration of ten (10) years from
the date it is granted.

Within the limits described above, the Committee may impose additional
requirements on the exercise of NSOs, including, but without limitation, the
number of shares covered by the NSO that become eligible to be exercised in any
year and the expiration date of the option. Subject to the provisions of the
Plan and any other terms and conditions the Committee deems appropriate, the
Committee in its discretion also may accelerate the time at which an NSO may be
exercised if, under previously established exercise terms, such NSO was not
immediately exercisable in full.

3.5 Notice of Grant of Option. Upon the granting of any NSO , the Committee
shall promptly cause such optionee to be notified of the fact that such NSO has
been granted. The date on which the Committee approves the grant of an NSO shall
be considered to be the date on which such NSO is granted.

3.6 Death or Other Termination of Employment.

3.6.1 In the event that an optionee was an employee of the Corporation
or any subsidiary at the time of the grant of any NSO to him, and thereafter the
optionee

3.6.1.1 shall cease to be employed by the Corporation or a
subsidiary because of his discharge for dishonesty, or because he violated
any material provision of any employment or other agreement between him and
the Corporation or a subsidiary, or

3.6.1.2 shall voluntarily resign or terminate his employment with
the Corporation or a subsidiary under or followed by such circumstances as
would constitute a breach of any material provision of any employment or
other agreement between him and the Corporation or a subsidiary, or

3.6.1.3 shall have committed an act of dishonesty not discovered
by the Corporation or a subsidiary prior to the cessation of his employment
but that would have resulted in his discharge if discovered prior to such
date, or

3.6.1.4 shall, either before or after cessation of his employment
with the Corporation or a subsidiary, without the written consent of his
employer or former employer, use (except for the benefit of his employer or
former employer) or disclose to any other person any confidential
information relating to the continuation or proposed continuation of his
employer's or former employer's business or any trade

D-7

<PAGE> 50

secrets of the Corporation or a subsidiary obtained as a result of or in
connection with such employment, or

3.6.1.5 shall, either before or after the cessation of his
employment with the Corporation or a subsidiary, without the
written consent of his employer or former employer, directly or indirectly,
give advice to, or serve as an employee, director, officer, partner or
trustee of, or in any similar capacity with, or otherwise directly or
indirectly participate in the management, operation, or control of, or have
any direct or indirect financial interest in, any corporation, partnership,
or other organization that directly or indirectly competes in any respect
with the Corporation or its subsidiaries,

then forthwith from the happening of any such event, any NSO then held by him
shall terminate and become void to the extent that it then remains unexercised.

In the event that an optionee shall cease to be employed by the Corporation
or a subsidiary for any reason other than his death or one or more of the
reasons set forth in paragraphs 3.6.1.1 through 3.6.1.5, subject to the
condition that no option shall be exercisable after the expiration of ten (10)
years from the date it is granted, such optionee shall have the right to
exercise the NSO at any time within three (3) months after such termination of
employment to the extent his right to exercise such NSO had accrued pursuant to
this Article 3 at the date of such termination and had not previously been
exercised; such three-month limit shall be increased to one (1) year for any
optionee who ceases to be employed by the Corporation or a subsidiary because he
is disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended) or who dies during the three-month period and the NSO may
be exercised within such extended time limit by the optionee or, in the case of
death, the personal representative of the optionee or by any person or persons
who shall have acquired the NSO directly from the optionee by bequest or
inheritance. Whether an authorized leave of absence or absence for military or
governmental service shall constitute termination of employment for purposes of
the Plan shall be determined by the Committee, whose determination shall be
final and conclusive.

3.6.2 In the event that an optionee shall die while in the employ of
the Corporation or a parent or subsidiary corporation and shall not have fully
exercised any NSO, the NSO may be exercised, subject to the condition that no
NSO shall be exercisable after the expiration of ten (10) years from the date it
is granted, to the extent that the optionee's right to exercise such NSO had
accrued pursuant to this Article 3 at the time of his death and had not
previously been exercised, at any time within one (1) year after the optionee's
death, by the personal representative of the optionee or by any person or
persons who shall have acquired the NSO directly from the optionee by bequest or
inheritance, in the case of death.

3.6.3 No NSO shall be transferable by the optionee otherwise than by
will or the laws of descent and distribution.

3.6.4 During the lifetime of the optionee, the NSO shall be exercisable
only by him and shall not be assignable or transferable and no other person
shall acquire any rights therein.

3.7 Optionees Who Are Not Employees.

3.7.1 In the event that an optionee was not an employee of the
Corporation or any subsidiary at the time of the grant of any NSO to him, and
thereafter the optionee

D-8

<PAGE> 51

3.7.1.1 shall voluntarily terminate his business relationship with
the Corporation or a subsidiary under or followed by such circumstances as
would constitute a breach of any material provision of any contract or
other agreement between him and the Corporation or a subsidiary, or

3.7.1.2 shall have committed an act of dishonesty or other breach
of fiduciary responsibility against the Corporation or a subsidiary,
whether discovered during or after the termination or cessation of his
business relationship with the Corporation or a subsidiary, or

3.7.1.3 shall, either before or after cessation of his business
relationship with the Corporation or a subsidiary, without the written
consent of the Corporation, use (except for the benefit of the Corporation)
or disclose to any other person any confidential information relating to
the continuation or proposed continuation of the Corporation's or any
subsidiary's business or any trade secrets of the Corporation or a
subsidiary obtained as a result of or in connection with such business
relationship, or

3.7.1.4 shall, either before or after the cessation of his
business relationship with the Corporation or a subsidiary, without the
written consent of the Corporation, directly or indirectly, give advice to,
or serve as an employee, director, officer, partner or trustee of, or in
any similar capacity with, or otherwise directly or indirectly participate
in the management, operation, or control of, or have any direct or indirect
financial interest in, any corporation, partnership, or other organization
that directly or indirectly competes in any respect with the Corporation or
its subsidiaries,

then forthwith from the happening of any such event, any NSO then held by him
shall terminate and become void to the extent that it then remains unexercised.

In the event that an optionee's business relationship with the Corporation
or a subsidiary shall cease for any reason other than his death or one or more
of the reasons set forth in paragraphs 3.7.1.1 through 3.7.1.4, subject to the
condition that no option shall be exercisable after the expiration of ten (10)
years from the date it is granted, such optionee shall have the right to
exercise the NSO at any time within three (3) months after such termination of
employment to the extent his right to exercise such NSO had accrued pursuant to
this Article 3 at the date of such termination and had not previously been
exercised; such three-month limit shall be increased to one (1) year for any
optionee whose business relationship with the Corporation or a subsidiary ceases
because he is disabled (within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended) or who dies during the three-month period and
the NSO may be exercised within such extended time limit by the optionee or, in
the case of death, the personal representative of the optionee or by any person
or persons who shall have acquired the NSO directly from the optionee by bequest
or inheritance.

3.7.2 In the event that an optionee shall die during his business
relationship with the Corporation or a subsidiary and shall not have fully
exercised any NSO, the NSO may be exercised, subject to the condition that no
NSO shall be exercisable after the expiration of ten (10) years from the date it
is granted, to the extent that the optionee's right to exercise such NSO had
accrued pursuant to this Article 3 at the time of his death and had not
previously been exercised, at any time within one (1) year after the optionee's
death, by the personal representative of the optionee or by any person or
persons who shall have acquired the NSO directly from the optionee by bequest or
inheritance, in the case of death.

3.7.3 No NSO shall be transferable by the optionee otherwise than by
will or the laws of descent and distribution.

D-9

<PAGE> 52

3.7.4 During the lifetime of the optionee, the NSO shall be exercisable
only by him and shall not be assignable or transferable and no other person
shall acquire any rights therein.

3.8 Rights as a Shareholder. An optionee shall have no rights as a
Shareholder with respect to any shares covered by his NSO until the date of the
issuance of a stock certificate to him for such shares after exercise of the
NSO. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Article 4.

3.9 Modification, Extension, and Renewal of Options. Subject to the terms
and conditions and within the limitations of the Plan, the Committee may modify,
extend, or renew outstanding NSOs granted under the Plan, or accept the
surrender of outstanding NSOs (to the extent not theretofore exercised) and
authorize the granting of new options in substitution therefor (to the extent
not theretofore exercised). The Committee shall not, however, modify any
outstanding NSOs so as to specify a lower option price or accept the surrender
of outstanding NSOs and authorize the granting of new options in substitution
therefor specifying a lower option price. Notwithstanding the foregoing,
however, no modification of an NSO shall, without the consent of the optionee,
alter or impair any of the rights or obligations under any NSO theretofore
granted under the Plan.

3.10 Listing and Registration of Shares. Each NSO shall be subject to the
requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the shares
covered thereby upon any securities exchange or under any state or federal laws,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such NSO or
the issuance or purchase of shares thereunder, such NSO may not be exercised
unless and until such listing, registration, qualification, consent, or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee. Notwithstanding anything in the Plan to the contrary, if the
provisions of this paragraph 3.10 become operative, and if, as a result thereof,
the exercise of an NSO is delayed, then and in that event, the term of the NSO
shall not be affected.

3.11 Other Provisions. The NSO certificates or agreements authorized under
the Plan shall contain such other provisions, including, without limitation,
restrictions upon the exercise of the NSO, as the Committee shall deem
advisable.

ARTICLE 4

MISCELLANEOUS

4.1 Stock Adjustments.

4.1.1 In the event of any increase or decrease in the number of issued
shares of common stock of the Corporation resulting from a stock split or other
division or consolidation of shares or the payment of a stock dividend (but only
on the common stock) or any other increase or decrease in the number of such
shares effected without any receipt of consideration by the Corporation, then,
in any such event, the number of shares of common stock that remain available
under the Plan, the number of shares of common stock covered by each outstanding
option, and the purchase price per share of common stock covered by each
outstanding option shall be proportionately and appropriately adjusted for any
such increase or decrease.

D-10

<PAGE> 53

4.1.2 Subject to any required action by the Shareholders, if any change
occurs in the shares of common stock of the Corporation by reason of any
recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares, or of any similar change affecting the shares of common
stock of the Corporation, then, in any such event, the number and type of shares
covered by each outstanding option, and the purchase price per share of common
stock covered by each outstanding option, shall be proportionately and
appropriately adjusted for any such change. A dissolution or liquidation of the
Corporation shall cause each outstanding option to terminate.

4.1.3 In the event of a change in the common stock of the Corporation
as presently constituted that is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par value
or without par value, the shares resulting from any change shall be deemed to be
shares of common stock within the meaning of the Plan.

4.1.4 To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by, and in the
discretion of, the Committee, whose determination in that respect shall be
final, binding and conclusive; provided, however, that any ISO granted pursuant
to this Plan shall not be adjusted in a manner that causes such ISO to fail to
continue to qualify as an incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended.

4.1.5 Except as hereinabove expressly provided in this paragraph 4.1,
an optionee shall have no rights by reason of any division or consolidation of
shares of stock of any class or the payment of any stock dividend or any other
increase or decrease in number of shares of stock of any class or by reason of
any dissolution, liquidation, merger or consolidation, or spin-off of assets or
stock of another corporation; and any issuance by the Corporation of shares of
stock of any class, securities convertible into shares of stock of any class or
warrants or options for shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of common stock subject to the option.

4.1.6 The grant of any option pursuant to the Plan shall not affect in
any way the right or power of the Corporation to make adjustments,
reclassification, reorganizations or changes of its capital or business
structure or to merge or to consolidate, or to dissolve, to liquidate, to sell,
or to transfer all or any part of its business or assets.

4.2 Fair Market Value of Stock. For purposes of this Plan, the "fair market
value of the shares of the common stock of the Corporation" shall mean the
closing price, on the date of grant of any ISO or NSO (or, if there is no
closing price, then the closing bid price), of the Corporation's common stock as
reported on the Composite Tape, or if not reported thereon, then such price as
reported in the trading reports of the principal securities exchange in the
United States on which such stock is listed, or if such stock is not listed on a
securities exchange in the United States, the mean between the dealer closing
"bid" and "ask" prices on the over-the-counter market as reported by the
National Association of Security Dealers Automated Quotation System (NASDAQ), or
NASDAQ's successor, or if not reported on NASDAQ, the fair market value of such
stock as determined by the Committee in good faith and based on all relevant
factors.

4.2 Term of the Plan. The ISOs and NSOs may be granted pursuant to the
provisions of the Plan from time to time within a period of ten (10) years from
the date the Plan is adopted by the Board of Directors of the Corporation, or
the date the Plan is approved by the Shareholders, whichever is earlier.

D-11

<PAGE> 54

4.3 Amendment of the Plan. The Board of Directors of the Corporation may,
insofar as permitted by law, from time to time, with respect to any shares at
the time not subject to stock options, suspend, discontinue or terminate the
Plan or revise or amend it in any respect whatsoever, except that, without
approval of the Shareholders, no such revision or amendment shall change the
number of shares subject to the Plan, change the designation of the class of
employees eligible to receive stock options, decrease the price at which stock
options may be granted or remove the administration of the Plan from the
Committee. Furthermore, the Plan may not, without the approval of the
Shareholders, be amended in any manner that will cause stock options issued
under it to fail to meet (a) when appropriate, the requirements of incentive
stock options as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, or (b) the requirements of Rule 16b-3 of the 1934 Act.

4.4 Application of Funds. The proceeds received by the Corporation from the
sale of common stock pursuant to stock options will be used for general
corporate purposes.

4.5 No Obligation to Exercise. The granting of any stock option under the
Plan shall impose no obligation upon any optionee to exercise such stock option.

4.6 No Implied Rights to Employees or Others. The existence of the Plan,
and the granting of options under the Plan, shall in no way give any employee or
other optionee the right to continued employment or to any continued business
dealings, give any employee or any other optionee the right to receive any
options or any additional options under the Plan, or otherwise provide any
employee or other optionee any rights not specifically set forth in the Plan or
in any options granted under the Plan.

4.7 Approval of Shareholders. The Plan shall not take effect until approved
by the holders of a majority of the outstanding shares of common stock of the
Corporation, which approval must occur within the period beginning twelve (12)
months before and ending twelve (12) months after the date the Plan is adopted
by the Board of Directors.

DATE PLAN APPROVED BY THE BOARD OF DIRECTORS:
---------------------

DATE PLAN APPROVED BY SHAREHOLDERS:
---------------------

D-12

<PAGE> 55
EXHIBIT E

BRASSIE GOLF CORPORATION

ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1997
<PAGE> 56

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-KSB

[x] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1997.

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________ to
________

COMMISSION FILE NO. 0-24812

BRASSIE GOLF CORPORATION
-----------------------------------------------------------
(Name of small business issuer as specified in its charter)

Delaware 56-1781650
--------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

201 N. Franklin Street, Suite 200, Tampa, Florida
-------------------------------------------------
(Address of principal executive offices)

33602
----------
(Zip Code)

(813) 222-0611
---------------------------
(Issuer's telephone number)

Securities registered pursuant to Section 12(b) of the Exchange Act:
None

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, $.001 Par Value
-----------------------------
(Title of class)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 in response to
Item 405 of Regulation S-B in this form and no disclosure will be contained, to
the best of issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

The issuer's revenues for its most recent fiscal year: $4,093,599.

The aggregate market value at March 25, 1998 of shares of the Common
Stock held by non-affiliates of the issuer was $16,770,066 based upon the
closing price of the Common Stock in the NASDAQ System (as reported by the
National Quotation Bureau, Inc.). Solely for the purpose of this calculation,
shares held by the principal shareholders named in Item 12 hereof, as well as
shares held by directors and officers of the Registrant, have been excluded.
Such exclusion should not be deemed a determination or an admission by the
issuer that such shareholders or individuals are, in fact, affiliates of the
issuer.

On March 25, 1998, there were 48,343,526 shares of the Registrant's
Common Stock $.001 par value and 2,040 shares of the Registrant's Preferred
Stock, $.001 par value outstanding.

Documents Incorporated by Reference
-----------------------------------

Portions of the Proxy Statement for the annual shareholders meeting to be held
May 7, 1998 are incorporated by reference into Part III.

Transitional small business disclosure format Yes [ ] No [X}

<PAGE> 57

BRASSIE GOLF CORPORATION
FORM 10-KSB
YEAR ENDED DECEMBER 31, 1997

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
PART I

ITEM 1. Description of Business..................................................... 3
ITEM 2. Description of Property..................................................... 14
ITEM 3. Legal Proceedings........................................................... 15
ITEM 4. Submission of Matters to a Vote of Security-Holders......................... 17

PART II

ITEM 5. Market for the Common Equity and Related Stockholder Matters................ 17
ITEM 6. Management's Discussion and Analysis........................................ 18
ITEM 7. Financial Statements........................................................ 24
ITEM 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure....................................... 41

PART III

ITEM 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of The Exchange Act......................... 42
ITEM 10. Executive Compensation...................................................... 42
ITEM 11. Security Ownership of Certain Beneficial Owners and Management.............. 42
ITEM 12. Certain Relationships and Related Transactions.............................. 42
ITEM 13. Exhibits, List and Reports on Form 8-K...................................... 42

SIGNATURES..................................................................................... 51
</TABLE>

<PAGE> 58

PART I

ITEM 1. DESCRIPTION OF BUSINESS

A. CORPORATE HISTORY

Brassie Golf Corporation, a Delaware corporation (the "Company"),
together with its predecessors and subsidiaries, has engaged, since August 1988,
in the acquisition, design, construction, operation and management of private,
semi-private and daily-fee (i.e., "public") golf courses in the United States
and the sale of golf-related consumer products.

The Company was incorporated in Delaware on November 12, 1991
under the name "Longview Golf Corporation" as a holding company to acquire
majority interests in two corporations (one of which is now an operating
subsidiary of the Company), each of which was then developing a golf course. On
November 14, 1991, the Company entered into an Agreement and Plan of
Reorganization (the "Reorganization") with the shareholders of both The Gauntlet
at St. James, Inc. (a North Carolina corporation formerly known as Longview Golf
Corporation) ("GSJ") and The Gauntlet at Laurel Valley, Inc. (formerly known as
Laurel Valley Golf Corporation) ("GLV") pursuant to which the Company acquired
all of the outstanding shares of GSJ and GLV except those shares owned,
respectively, by Canadian PT Limited Partnership (a limited partnership
comprising three pension funds and referred to herein as "PT Partnership") and
Edmonton Pipe Industry Pension Trust Fund (referred to herein as the "EPI
Pension Fund").

On September 18, 1992, the Company changed its name from "Longview
Golf Corporation" to "Brassie Golf Holdings, Ltd." On March 29, 1993, the
Company changed its name from "Brassie Golf Holdings, Ltd." to "Brassie Golf
Corporation" and increased its authorized capital to 25,000,000 shares of Common
Stock, $.001 par value per share ("Common Stock"), and 1,000,000 shares of
Preferred Stock, $.001 par value per share ("Preferred Stock"). On July 18,
1994, the Company increased the number of authorized shares of Common Stock to
50,000,000 shares.

REORGANIZATION WITH HALE IRWIN GOLF SERVICES, INC. On May 16,
1994, the Company acquired 100% of the capital stock of Hale Irwin Golf
Services, Inc. ("HIGSI"), an international golf course design, development and
management company based in St. Louis, Missouri, in exchange for 1,250,000
shares of the Company's Common Stock in a stock-for-stock reorganization (the
"Reorganization"). HIGSI, a Missouri corporation incorporated on October 28,
1986, was founded by Hale S. Irwin, a golf course designer, PGA TOUR
professional and Life Member of the Professional Golf Association of America,
and Richard J. Stahlhuth, a golf course owner and developer. HIGSI had two
operating divisions -- Hale Irwin Golf Design (the "Design Division") and Hale
Irwin Golf Management (the "Management Division"). On September 10, 1994,
HIGSI's operations were combined with the Company's and the Company's principal
executive office was moved from Southport, North Carolina to St. Louis,
Missouri. Messrs. Irwin and Stahlhuth became members of the Board of Directors
of the Company. Mr. Irwin was the President of the Design Division until August
19, 1996, at which time he tendered his resignation as a Director and Officer of
the Company. Mr. Stahlhuth was President of the Company until January 17, 1995,
at which time he tendered his resignation as a Director and Officer of the
Company.

<PAGE> 59

On May 16, 1997, Mr. Irwin's employment agreement with the Company
expired. The Company and Mr. Irwin chose not to renew the agreement and all
design contracts were sold by the Company to Mr. Irwin's new design company. See
Item 1.b. "Golf Course Design Services."

MERGER AND REORGANIZATION WITH SUMMIT GOLF CORPORATION. On June
30, 1995, the Company acquired all the issued and outstanding shares of Summit
Golf Corporation, a Florida corporation ("Summit"), through the consummation of
an Agreement of Merger and Reorganization (the "Agreement") whereby the
Company's newly incorporated Florida subsidiary, Brasmit Golf Corporation
("Brasmit"), merged with Summit, thereby simultaneously vesting Summit
shareholders with the right to exchange their Summit shares for 1,875,000 newly
issued common shares, $.001 par value (the "Common Stock") of the Company, which
as a result were then issued. Copies of the Agreement, Amendment No.1 thereto,
and a Pre-Closing Agreement in connection with the transaction were filed as
Exhibits 2.1, 2.2 and 2.3 respectively to the Company's Form 8-K filed July 6,
1995 and are incorporated herein by reference. Additional consideration paid by
the Company comprised 375,000 shares of newly issued subordinated redeemable
preferred stock with a par value of $.001 per share (each share has a stated
value of $10.00 and is convertible into five shares of Common Stock; the
"Preferred Stock"), 500,000 five-year warrants exercisable at $2.50 per share
for the first three (3) years and $3.25 per share for the next two years,
$275,854 cash, and $224,146 in promissory notes. The Company's Certificate of
Designations, Preferences and Rights of Junior Non-Cumulative Redeemable
Convertible Preferred Stock setting the qualities of the Preferred Stock was
filed as an Exhibit to the Company's report on Form 10-Q filed November 14, 1995
and is incorporated herein by reference.

Pursuant to the Articles of Merger filed pursuant to the
Agreement, Brasmit was the surviving corporation and its acquired assets include
(1) all the shares of Club Operations and Property Management, Inc. ("COPM"), a
Florida corporation based in Tallahassee which provided consulting services to
or managed, on the effective date of the merger, a portfolio of 44 facilities,
including 39 private, semi-private and daily-fee golf courses in 14 states
throughout the U.S. and five courses in Mexico; (2) all of Summit's previously
acquired assets of Resort Golf Clubs International, Inc. ("RGCI") including the
RGCI 1995 Marketing Plan which the Company intended eventually to develop and
implement in connection with its interval membership and golf villa programs;
and (3) Summit Golf Properties, Inc., an inactive Delaware corporation.

Following the merger on June 30, 1995, William Horne, Tom
Richardson and Lance McNeill were nominated and elected as Directors at the
Company's Annual Meeting of Shareholders and appointed Officers of the Company
with the following responsibilities:

William E. Horne - President and Chief Executive Officer
Thomas K. Richardson - Senior Vice President - Operations and Chief
Operating Officer
Lance McNeill - Senior Vice President - Acquisitions & Development

Gary A. Nacht resigned as interim President and was appointed
Executive Vice President of the Company and acted as its Chief Financial Officer
until his resignation in all capacities on January 30, 1996.

<PAGE> 60

To fund the cash portion of the transaction, the Company utilized
a portion of the proceeds received from a subsidiary's debt repayment which
repayment was funded by surplus proceeds from the subsidiary's May 1995
refinancing of its NationsBank first mortgage on its golf course in Southport,
North Carolina. (See Item 1.c.1. "The Company's Golf Courses - The Gauntlet at
St. James").

Effective September 4, 1995, the Company's St. Louis, Missouri and
Southport, North Carolina corporate offices were, simultaneously with COPM's
move from Tallahassee, relocated to leased premises at the Company's new
corporate headquarters in Tampa, Florida. (See Item 2. "Description of Property"
for information regarding the Company's office facilities.)

In connection with the purchase of the shares and assets described
above, the Company entered into employment agreements (the "Employment
Agreements") with Mr. Horne and Mr. Richardson. Copies of the Employment
Agreements were filed as Exhibits 2.4 and 2.5 respectively to the Company's Form
8-K filed July 6, 1995 and are incorporated herein by reference. The Employment
Agreements contained non-competition provisions and provisions for the
reimbursement of expenses, an automobile allowance, disability and other
customary benefits and are further described hereafter (See Item 12. "Certain
Relationships and Related Transactions.") Each of the Employment Agreements
were terminated during the year ended December 31, 1997.

In connection with Mr. Horne's termination, the Company purchased
all preferred stock held by Mr. Horne for $211,000.

B. GENERAL.

The Company's principal business has historically been the
ownership, development and operation of golf courses. During the year ended
December 31, 1997, the Company sold one of its golf courses, its design
business ("HIGSI"), Summit, and transferred operating control of its two
minority owned golf courses over to its partner, EPI Pension Fund. Until its
disposition of HIGSI and Summit, the Company also provided golf course design
and management services to others in exchange for design and management fees.
During the year ended December 31, 1997, the design and management service
subsidiaries were sold and revenues for each are included through their
respective sale dates.

On June 2, 1997, Joseph R. Cellura was appointed Chairman of the
Board and Chief Executive Officer of the Company.

On September 2, 1997, Clifford F. Bagnall was appointed Chief
Operating Officer and Secretary of the Company.

On December 1, 1997, Jeremiah M. Daly became President of the
Company and was elected to the Board of Directors.

Messrs. Cellura, Bagnall and Daly all entered into long-term
employment agreements with the Company. Copies of the Employment Agreements are
attached as Exhibit 10.61, 10.62, and 10.66, respectively.

<PAGE> 61

OWNERSHIP AND OPERATION OF GOLF COURSES.

The Company's business plan was to expand, by acquisition and
development, its portfolio of golf courses primarily by capitalizing on the
present and projected need for quality golf courses in markets where management
believed (i) demand exceeded supply and (ii) buying power, integrated operating
systems and national account management can generate significant economies of
scale. The Company, through its subsidiaries, currently holds ownership
interests in three operating golf courses which are located in South Carolina
and Virginia (see Item 1.c. "The Company's Golf Courses"). All of the courses in
which the Company has an ownership interest are open to the general public for
daily-fee play at normal greens fees ranging from $15.00 to $60.00 per round
(including cart fees) depending upon the time of year, location of the course
and competitive conditions. For a more complete description of the Company's
current facilities, see Item 1.c. "The Company's Golf Courses."

Sale of Resident Memberships. As more fully described below, by
agreement with the developer of the residential development contiguous to the
St. James golf course, initial membership fees were paid to the Company, on
behalf of the purchasing resident, by the developer upon the closing of each lot
sale. These "resident" members are entitled to preferential tee times generally
unavailable to the daily-fee player from other facilities. The bylaws of the
residential development at St. James limit the number of "resident" memberships
(and certain "resident" privileges) that may be sold to and/or activated by lot
owners. The Company sold The Gauntlet at St. James Golf Course on November 13,
1997, and all resident memberships terminated going forward. See Item 1.c.1.
"The Company's Golf Courses -- The Gauntlet at St. James" for a further
discussion on the limitation of the sale of such "resident" memberships.

Competitive Advantage. The Company's management seeks to provide
high quality golf play, superior pro shop equipment and clothing lines and
friendly service. Quality golf play is achieved by striving for the highest
standards of course maintenance while utilizing golf course designs by P.B. Dye
(son of golf course architect Pete Dye).

In connection with its due diligence and market evaluation
activities for prospective acquisition and development opportunities, the
Company typically performs a market analysis of both the location and the
resident and tourist population, an examination of all existing facilities,
equipment and inventory, a review of an up-to-date property survey and Phase I
Environmental Audit, an examination of permits, variances and required approvals
for the development and/or operation of the golf course, an investigation of the
seller's or developer's financial history, an inspection of infrastructure and
improvements, which includes roads, utility services, sewer, water and easements
and an analysis of administrative changes and/or capital improvements required
to bring the facility in line with the Company's level of service and
operational quality.

The Company estimates that in connection with due diligence,
market evaluation and deposit expenditures, it has incurred expenses of
approximately $230,000 and $281,000 for the years ended December 31, 1997 and
1996, respectively. The Company aggressively pursued opportunities to acquire
and/or develop golf courses and other predevelopment opportunities during both
years.

<PAGE> 62

Competition with the Company's Golf Course Operations. The
Company's courses face substantial competition for the business of the local and
tourist golfer. Competitors for daily-fee play include other public and private
golf courses within each course's region. For each of the Company's courses,
there are numerous competitive courses within close proximity. For example, the
Myrtle Beach area has approximately one hundred 18-hole courses within a
ninety-minute drive.

Courses competitive with those of the Company generally have
on-site pro shops. Such shops, together with sporting goods stores and clothing
stores within each course's market vicinity, are the Company's principal
competitors with respect to product sales.

Seasonality. In operating its courses, the Company's revenues are
directly affected by the seasonal tourist trade, the weather, and the effects of
the local economy. For example, play often increases during the autumn and
spring months at its courses located in South Carolina, may cease during the
winter months at its course located in Virginia, and decreases at all courses
during unseasonably hot weather.

Under the terms of the Agreement and Plan of Reorganization
between the Company and the former shareholders of HIGSI, the Company was
granted the exclusive right to use the following trade names: "Hale Irwin Golf
Services," "Hale Irwin Golf Management" and "Hale Irwin Golf Design." The
Company's right to use these names expired on May 16, 1997, and therefore the
Company will no longer use Mr. Irwin's name in connection with its business.

Government Regulation Relating to the Environment. Two of the
three golf courses in which the Company has an ownership interest were developed
by the Company. During the construction of golf courses the Company must be
concerned with protecting land designated as "wetlands" and other development
and land use restrictions. Because Phase I environmental audits and permits for
the development sites have been procured in the past by the developers, the
Company has not been required to expend substantial funds on an annual basis in
complying with federal, state and local provisions relating to the environment.
There can be no assurance, however, that future compliance expenditures incurred
by the Company will not be substantial, or that necessary permits and/or
licenses will be granted.

Additionally, operations at the Company's golf courses involve the
use and storage of various hazardous materials such as herbicides, pesticides,
fertilizers, motor oil and gasoline. Various federal, state and local laws,
ordinances and regulations control the storage, use and discharge of such
materials. The Company believes that it is in substantial compliance with all
such laws, ordinances and regulations applicable to its storage and use of such
materials and does not currently incur substantial sums relating to compliance.
However, property owners and users are generally

<PAGE> 63

responsible for all environmental conditions present on such property and for
any discharge of any hazardous substances thereon, regardless of knowledge or
responsibility therefor. Consequently, there can be no assurance that the
Company will not in the future incur substantial sums in connection with any
such condition or future discharge.

GOLF COURSE DESIGN SERVICES.

The Company derived revenue from the design of golf courses for
others through its wholly-owned golf course design division, HIGSI. Hale Irwin
previously served as president of the Company's Design Division and was
primarily responsible for the golf course design projects undertaken by the
Company.

On May 16, 1997, Mr. Irwin's three-year employment agreement with
the Company expired. Such employment agreement governed Mr. Irwin's employment
as president of HIGSI, which was purchased by the Company on May 16, 1994. Mr.
Irwin informed the Company that he did not intend to renew the employment
agreement upon its expiration in order to pursue golf course design
independently. In addition, the Company and Mr. Irwin reached an agreement
whereby the Company sold HIGSI to Mr. Irwin for a portion of the earnings to be
received on design contracts the Company was then currently negotiating with
clients, as well as a percentage of revenues on future design contracts procured
by the Company. As HIGSI has been less profitable than anticipated since its
acquisition by the Company in May 1994, the Company believes this agreement will
improve the financial results of the Company compared to previous years. The
Company derived $110,000 in total revenues from its golf course design services
in 1997.

GOLF COURSE MANAGEMENT SERVICES.

The Company also derived revenue through Brassie Golf Management
Services, Inc. ("BGMS") and COPM (subsidiaries of the Company and collectively
referred to as the "Management Division") from operations relating to the
day-to-day management of golf courses for others. As of July 15, 1997, the
Management Division was sold.

EMPLOYEES.

As of December 31, 1997, the Company and its subsidiaries had 43
employees and consultants. As of March 15, 1998, total employees had increased
to 46. No employees of the Company are members of any union or collective
bargaining agreement.

C. THE COMPANY'S GOLF COURSES.

As of December 31, 1997, the Company had ownership interests in
three golf courses: The Gauntlet at Curtis Park, The Gauntlet at Laurel Valley,
and The Gauntlet at Myrtle West. The Company's fourth golf course, The Gauntlet
at St. James, was sold on November 13, 1997.

In the late fall of 1995, the Company engaged in discussions with
its three pension fund partners, EPI Pension Fund, UA Canadian Pipeline Industry
National Pension Plan ("UA Pension Fund") and Canadian Limited PT Partnership
("PT Partnership") (the "Pension Funds") in the four courses in which the
Company had ownership interests ("The Gauntlet Courses") with a view to modeling
a future joint venture and reorganizing existing relationships to enhance the
Company's cash flows and profitability. During February 1996, the parties
established their mutual intentions and on February 21, 1996, the parties
memorialized their intentions in a document captioned an "agreement in
principle" (the "AIP"). In the second quarter of 1996, the Company reached an
agreement with two of its pension fund partners, UA Pension Fund and PT
Partnership, relating to two of the golf courses, The Gauntlet at Curtis Park
and The Gauntlet at St. James, respectively. However, the Company was unable to
reach a satisfactory agreement with EPI Pension Fund with respect to the other
two golf courses, The Gauntlet at Laurel Valley and The Gauntlet at Myrtle
Beach. Certain provisions of the AIP contemplate alternative ownership scenarios
whereby the Pension Funds would assume primary responsibility for The Gauntlet
Courses. These alternative ownership scenarios have been implemented for The
Gauntlet at Laurel Valley and The Gauntlet at Myrtle West (see Item 3, "Legal
Proceedings").

<PAGE> 64

The Gauntlet at Curtis Park is owned through a wholly-owned
subsidiary of the Company. The Gauntlet at Laurel Valley and The Gauntlet at
Myrtle West are each owned through separate subsidiaries (the "GLV and GMW
Subsidiaries").

The GLV and GMW Subsidiaries are parties to and the subject of
pending litigation between the Company and EPI Pension Fund. As a result of a
preliminary injunction granted by the Circuit Court in and for Hillsborough
County, Florida on July 12, 1996, the Company transferred 45% of the outstanding
equity in both of the GLV and GMW Subsidiaries to EPI Pension Fund. As a result
of this transfer, the Company's ownership was reduced to, as described above,
30% of the outstanding equity in each of these two subsidiaries. For further
discussion of the Company's pending litigation with EPI Pension Fund see Item 3.
"Legal Proceedings." Through this reorganization, EPI Pension Fund has increased
its ownership interest in and financial commitment to these two golf courses
and, as a result, the Company significantly reduced all short and long term
obligations associated with the ownership of these two golf courses.

1. THE GAUNTLET AT ST. JAMES,
BRUNSWICK COUNTY, SOUTHPORT, NORTH CAROLINA

The Gauntlet at St. James (formerly known as Longview Country
Club) was sold on November 13, 1997 and is a 200 acre, 18-hole, daily-fee golf
course located in the St. James Plantation real estate development in Southport,
North Carolina, which is 30 miles south of Wilmington, North Carolina and 35
miles north of Myrtle Beach, South Carolina. The golf course was designed by
P.B. Dye. Amenities include a 16,000 square foot clubhouse (including the golf
pro shop, restaurant, bar, snack bar and cart storage), a swimming pool and two
tennis courts with a separate tennis pro shop. The Gauntlet at St. James was
owned by a subsidiary of the Company, The Gauntlet at St. James, Inc. ("GSJ"), a
North Carolina corporation. Through November 13, 1997, the Company owned 80%,
and PT Partnership owned 20%, of the outstanding equity shares of GSJ as
follows:

<PAGE> 65

<TABLE>
<CAPTION>
Voting Non-Voting Percent of
Common Stock Common Stock Outstanding
------------ ------------ -----------
<S> <C> <C> <C>
PT Partnership 7,200 12,800 20%
The Company 28,800 51,200 80%
------ ------ ---
36,000 64,000 100%
</TABLE>

The GSJ Shareholders' Agreement provides PT Partnership with
certain powers and safeguards with respect to GSJ, including, without
limitation, control over certain expenditures (checks over $5,000 must be
co-signed by a representative of PT Partnership who acts as Secretary of GSJ),
the ability to appoint a majority of directors to the Board of Directors of GSJ
upon written notice to the Company, the ability to purchase the Company's GSJ
shares for fair market value in the event that PT Partnership determines its
investment to be "at risk" (after giving the Company notice of the condition
causing PT Partnership to believe the project is at risk and the Company's
failure to cure the default cited in the notice), a right of first refusal on
all sales of GSJ shares by the Company, certain buy-out provisions in the event
either shareholder receives a third-party offer to purchase its holdings, and
upon exercising its right to appoint a majority of the Board of Directors, the
requirement that at least two directors nominated by PT Partnership must vote in
favor of any resolution passed by the Board of Directors. Reference is made to
the GSJ Shareholders Agreement and Amendments where such provisions are set
forth in full.

Full service play at The Gauntlet at St. James began in October
1991. The residential community, which is adjacent to the golf course, is owned
and being developed by Homer E. Wright, Jr., Inc. ("Wright"), an unaffiliated
entity. For each residential lot or multi-family dwelling unit sold, up to a
maximum of 900, GSJ receives a $5,000 mandatory resident membership fee from the
developer. This membership fee entitles such buyer to membership at The Gauntlet
at St. James, the association in which residents are granted memberships. For
the periods ended November 13, 1997 and December 31, 1996, there were 66 and 96
lots or units sold, respectively, in connection with which the Company received
a resident membership fee. The number of buyers entitled to activate their
memberships at The Gauntlet at St. James is at any given time limited to 485.

At such time as The Gauntlet at St. James has at least 485 active
resident members, its Bylaws provide that its membership may have an option to
purchase the golf course and certain related facilities at the then fair market
value. In addition, Wright, the developer, holds a twenty-five year right of
first refusal to purchase the golf course and certain related facilities on the
same terms as a third-party offeror. In addition, Wright is entitled to a
commission of 5% in the event the golf course is sold (within twenty-five years
from opening). For more information with respect to such provisions, see the
Bylaws of The Gauntlet at St. James and the Purchase Agreement between Wright
and GSJ, dated as of September 8, 1990.

The Gauntlet at St. James serves two client bases: (a) golf
vacationers primarily during the months of September through December and
February through May; and (b) local players throughout the year. The Company
estimates that it receives approximately 60% of its annual revenues at this golf
course from the Myrtle Beach tourist trade with the balance of revenues from

<PAGE> 66

the local resident population. During the period ended November 13, 1997 29,796
rounds were played compared to 37,387 rounds played in 1996.

2. THE GAUNTLET AT LAUREL VALLEY,
GREENVILLE COUNTY, TIGERVILLE, SOUTH CAROLINA

The Gauntlet at Laurel Valley is a 165 acre, 18-hole, daily-fee
golf course located near Greenville, South Carolina and 22 miles from
Spartanburg, South Carolina. The course was designed by P.B. Dye. The Gauntlet
at Laurel Valley includes a 4,500 square foot clubhouse with restaurant, pro
shop, members' lounge and underground cart storage facility. The course was
built in conjunction with a planned residential real estate development. The
Company has a 30% ownership interest in The Gauntlet at Laurel Valley, Inc.
("GLV"), a South Carolina corporation. EPI Pension Fund owns the remaining 70%
of the outstanding equity shares of GLV as follows:

<TABLE>
<CAPTION>
Voting Non-Voting Percent of
Common Stock Common Stock Outstanding
------------ ------------ -----------
<S> <C> <C> <C>
EPI Pension Fund 7,000 6,720 70%
The Company 3,000 2,880 30%
------- ----- ---
10,000 9,600 100%
</TABLE>

The Shareholders' Agreement between the Company and EPI Pension
Fund, dated as of October 30, 1991 (the "GLV Shareholders' Agreement"),
provides EPI Pension Fund with certain rights with respect to GLV, including,
without limitation, control over all expenditures over $5,000 (checks over such
amounts must be co-signed by a representative of EPI Pension Fund who acts as
Secretary of GLV), equal representation on the Board of Directors of GLV (with a
director selected jointly by the Company and EPI Pension Fund to break any
ties), the ability to purchase the Company's shares in GLV for fair market value
in the event that EPI Pension Fund determines its investment to be "at risk" and
the Company fails to cure the default cited in the notice, and certain forced
buy-out provisions in the event either shareholder receives a third-party offer
to purchase its holdings. Reference is made to the GLV Shareholders' Agreement
where such provisions are set forth in full.

Full service play commenced in April 1993. There are approximately 425
residential lots adjacent to this facility to be developed by the residential
developer. Based on the transfer of ownership to EPI Pension Fund, the lack of
control by the Company of the golf course and the lack of development to date,
the Company does not expect any proceeds from the sale of lots in the future. In
addition, during the year ended December 31, 1997, the Company charged off
approximately $523,000 of accounts receivable deemed uncollectible by the
Company related to the Laurel Valley development.

<PAGE> 67

The Gauntlet at Laurel Valley draws its golfing clientele
primarily from the Greenville/Spartanburg metropolitan area.

3. THE GAUNTLET AT CURTIS PARK,
STAFFORD COUNTY, VIRGINIA

The Gauntlet at Curtis Park, Inc. ("GCP") has a lease agreement
with the Board of Supervisors of Stafford County, Virginia to lease, through the
year 2026 (with two renewal options of 6 years each), land for the development,
construction and operation of an 18-hole golf course with room and permission to
expand to 27 holes (subject to market conditions) within Curtis Memorial Park,
Stafford County, Virginia (the "Lease"). The Lease requires the Company to pay
rental payments equaling the greater of $25,000 or 5% of net revenues (excluding
revenues from certain membership sales) for each of the years remaining in the
initial 33-year lease term. Rental payments are not to exceed 7 1/2% and 11% of
net revenues, respectively, for each year of the two renewal terms. Amenities
include an 8,500 square foot clubhouse which includes an adjacent golf teaching
center, driving range, practice putting green and parking facilities. The golf
course was designed by P.B. Dye and opened for public play in June 1995.

In 1994, the Company entered into a Shareholders' Agreement
concerning GCP with UA Canadian Pipeline Industry National Pension Plan ("UA
Pension Fund") of which the Company owned 80% and UA Pension Fund owned 20% of
the outstanding equity shares of GCP. On September 13, 1996, the Company
purchased the remaining 20% of GCP from UA Pension Fund for $50,000. At the same
time, the Company paid down the $1,600,000 second mortgage loan held by UA
Pension Fund. The remaining loan balance was purchased by, and assigned to, A &
E Capital Funding, Inc. (see Item 12. "Certain Relationships and Related
Transactions") thereby completely terminating UA Pension Fund's interest in GCP.

<PAGE> 68

On October 30, 1997, GCP completed a refinancing of the
NationsBank loan on the golf course with a loan and mortgage of $3,280,000 with
Washington Mortgage Financial Group, Ltd. The proceeds of the loan paid off the
first mortgage of approximately $2,200,000 outstanding on that date. In
addition, the proceeds were used to paydown $400,000 on a second mortgage held
by A&E Capital. Certain reserves totaling $104,688 were held out of proceeds by
the lender for capital improvements to the golf course and clubhouse. These
amounts are expected to be expended in the first six months of 1998. The balance
of proceeds were used for working capital purposes for the Company.

Terms of the loan provide for a fixed interest rate of 8.37% for a
period of 10 years, amortized over 20 years. Monthly payments total $26,125,
including principal and interest. In addition, the loan provides that a capital
replacement reserve be established through the year with monthly payments of
$5,331.

GCP seeks to draw golfing clientele from, and sell memberships to,
the residents of the surrounding areas, which include the Washington, D.C.
metropolitan area and the suburbs of Richmond, Virginia. The Curtis Park golf
course has no contiguous or adjacent residential community and therefore there
is no developer with whom GCP has an agreement regarding imposition of mandatory
residential membership fees as a condition of its sale of lots. During the years
ended December 31, 1997 and 1996, 37,982 and 31,167 rounds were played,
respectively.

4. THE GAUNTLET AT MYRTLE WEST,
HORRY COUNTY, NORTH MYRTLE BEACH, SOUTH CAROLINA

The Gauntlet at Myrtle West is a 196 acre, 18-hole, daily-fee golf
course located in North Myrtle Beach, South Carolina. The course was designed by
Tom Jackson. The Gauntlet at Myrtle West includes an 8,000 square foot clubhouse
with restaurant, pro shop, members' lounge and a 6,600 square foot underground
cart storage facility. The course, which was previously known as The Myrtle West
Golf and Country Club, was purchased by The Gauntlet at Myrtle West, Inc.
("GMW"), a South Carolina corporation, on December 30, 1993. The Company owns
30% and EPI Pension Fund owns 70% of the outstanding equity shares of GMW as
follows:
<TABLE>
<CAPTION>

Voting Non-Voting Percent of
Common Stock Common Stock Outstanding
<S> <C> <C> <C>
EPI Pension Fund 7,000 6,720 70%
The Company 3,000 2,880 30%
------ ----- ---
10,000 9,600 100%
</TABLE>

<PAGE> 69

The Shareholders' Agreement between the Company and EPI Pension
Fund (the "GMW Shareholders' Agreement"), provides EPI Pension Fund with certain
rights with respect to GMW, including, without limitation, approval over
expenditures that are in excess of $5,000 or outside the annual budget (which
requires the consent of both the President and the Secretary/Treasurer, an EPI
Pension Fund representative) of GMW, equal representation on the Board of
Directors of GMW (with a director selected jointly by EPI Pension Fund and the
Company to break any deadlocks), the ability to purchase the Company's shares in
GMW for fair market value in the event EPI Pension Fund determines its
investment to be "at risk" and the Company fails to cure the default cited in
the notice, and certain forced buy-out provisions in the event either
shareholder receives a third-party offer to purchase its holdings. Reference is
made to the GMW Shareholders' Agreement where such provisions are set forth in
full.

The shares of the Company's Common Stock issued to the North
Myrtle Beach Golf Club, Inc. ("the MW Seller") in connection with the Company's
acquisition of GMW from the MW Seller, were, under certain circumstances,
guaranteed by the Company to have a value in the event of a public sale of
$350,000. On December 11, 1995, MW Seller filed a Complaint against GMW and the
Company, alleging an inability to sell the Company's Common Stock. GMW and the
Company dispute the claim and, as described in Item 3. "Legal Proceedings," have
filed an Answer and will vigorously oppose the action.

The Company took possession of, and commenced operations at, The
Gauntlet at Myrtle West on December 30, 1993. The golf course draws its
clientele predominantly from the Myrtle Beach area golf market. There is no
residential development contiguous to GMW, nor is there a developer from whom
the Company will receive automatic membership fees. The Company wrote down the
remaining investment in the GMW based on EPI Pension Fund control and
anticipated ability to generate proceeds from the GMW.

ITEM 2. DESCRIPTION OF PROPERTY

The Company's principal business office is located at One Tampa
City Center, 201 North Franklin Street, Suite 200, Tampa, Florida 33602.
Effective December 16, 1997, the Company took occupancy of 8,932 square feet of
newly leased office space at the above address (the "Premises"). A five-year
lease ending December 16, 2002 provides for rent on a monthly basis, and for
each of the ensuing years of the term, the Company has agreed to pay annual base
rents of $133,980, $142,910, $151,844, $160,776, and $169,708, respectively. The
landlord's operating expenses for services provided to the Company and other
lessees of the building that accommodates the Premises are estimated, paid
monthly as additional rent, and adjusted annually according to the lease. The
Company may not sublet the Premises or assign the lease (unless to a qualified
and approved affiliate) without the consent of the landlord. The lease contains
other such customary provisions including a force majeure clause and
indemnities.

On July 15, 1997, the Company leased 4,140 square feet at Suite
2550 in the same building for a term of 37 months. The lease provides for
monthly rental of $4,830 during the first twelve (12) months, $5,175 for months
14 through 25, and $5,520 for months 26 through 37. As a result of the

<PAGE> 70

Company's need for additional space, the Company sublet Suite 2550 beginning
January 1, 1998 for the remaining 32 months of the lease term for $5,520 per
month. On December 31, 1997, the Company executed an agreement to terminate its
lease dated September 1, 1995 at 5806-A Breckenridge Parkway, Tampa, Florida
33610 and made full settlement with the landlord for a settlement payment of
$76,253. All remaining liabilities are eliminated.

The office space occupied by the Company is sufficient for the
conduct of the Company's business therein.

In December 1996 the Company, through a wholly-owned subsidiary,
Divot Properties WGV, Inc. ("Divot WGV"), purchased for $810,617 approximately
4.25 acres described as Southeast Parcel 2 of the St. Johns Planned Unit
Development located in St. Johns County, Florida, as well as certain license
rights. The land is located within the World Golf Village ("WGV") development
which is currently being developed within the 6,300 acre St. Johns planned
community. The World Golf Village resort, located approximately 15 miles south
of Jacksonville, Florida, upon completion, will be home to the World Golf Hall
of Fame Museum, the World Golf Village Resort Hotel and Conference Center, three
18-hole championship golf courses, PGA Tour Productions, a PGA Tour Golf
Academy, and other amenities. The license rights entitle the Company, for a
period of twenty-five years, to use the World Golf Village name and logos in
connection with the promotion and operation of certain service enterprises, and
the marketing of certain consumer products related to the World Golf Village.

At December 31, 1997, the Company had made a deposit of $500,000
on another parcel of property located within the World Golf Village, described
as Parcel 11. The Company acquired this parcel, again through Divot WGV, for
$1,850,000, on January 16, 1998. Such property is to be used for the
development of the World Golf Village Spa and 32 bungalows at WGV.

For a complete description of all other properties owned or leased
by the Company, see Item 1.c. "Business -- The Company's Golf Courses."

ITEM 3. LEGAL PROCEEDINGS

<PAGE> 71

On August 10, 1995, the Company and its subsidiary, The Gauntlet
at Myrtle West, Inc. ("GMW"), received from North Myrtle Beach Golf Club, Inc.
("MW Seller") a "Notice of Default Under Indemnity Agreement and Guaranty" dated
December 28, 1993 in connection with MW Seller's alleged inability to realize
$350,000 or any proceeds through its attempts at a public sale of its 102,010
shares of the Company's Common Stock. The stock was issued to MW Seller and the
Indemnity Agreement and Guaranty (the "Guaranty") was entered into by the
Company and GMW as part consideration for the December 28, 1993 sale to GMW of
certain of MW Seller's assets, inclusive of certain golf course lands and
improvements in Myrtle Beach, S.C. The obligations under the Guaranty are
secured by a third mortgage and security agreement over the golf course. The
Company has disputed the claim that its shares held by MW Seller have no value
and on February 12, 1996 filed an Answer to the December 11, 1995 Complaint and
Third Mortgage Foreclosure proceedings filed by MW Seller under Civil Action No.
5-CR26.3462 in The Court of Common Pleas, County of Horry, State of South
Carolina. The Company denies liability and states that MW Seller's failure to
sell the stock as required by the Guaranty discharges the Company's and GMW's
obligations. The Company believes its maximum liability exposure will be the
shortfall, if any, from $350,000 and the sale proceeds at the time MW Seller's
102,010 Company shares are sold or should have been sold. The Company has
recorded in its Consolidated Financial Statements a reserve for its estimated
maximum liability for this case.

In connection with the Company's February 21, 1996 Agreement in
Principle ("AIP") with its three Pension Fund Partners (see introduction to Item
1.c. "The Company's Golf Courses" for further discussion of the AIP and see
Exhibit 10.47), definitive agreements were reached during the second quarter of
1996 with regards to two of the Company's four golf courses. However, the
Company's efforts to interpret the AIP and negotiate with EPI Pension Fund
regarding the two other courses were unsuccessful. On May 31, 1996, EPI Pension
Fund commenced an action claiming breach of contract, specific performance, a
constructive trust and temporary and permanent injunctive relief. At a hearing
conducted on July 12, 1996 in the Circuit Court in and for Hillsborough County,
Florida, the court issued a preliminary injunction which required the Company to
transfer to EPI Pension Fund 45% of the outstanding equity in the Company's GLV
and GMW subsidiaries whereby

<PAGE> 72

the Company now holds 30% of the outstanding equity in each of these two
subsidiaries and EPI Pension Fund holds 70%. The Company filed an appeal brief
to this preliminary injunction on August 14, 1996 in the 2nd District Court of
Appeals for the 13th Judicial District in and for Hillsborough County, Florida.
The District Court denied this appeal on February 11, 1997. The Company entered
into a settlement agreement with the EPI Pension Fund on October 15, 1997, which
purported to resolve all outstanding issues between the Company and the EPI
Pension Fund. The Company has failed to perform all of its obligations under the
settlement. On February 10, 1998, the Circuit Court entered an order directing
the Company to perform fully all of its obligations under the Settlement
Agreement prior to February 24, 1998. At a hearing on March 26, 1998 the
Company offered partial performance under the Settlement Agreement which was
taken under advisement by the Circuit Court and opposing counsel and will be
ruled upon at a hearing to be scheduled in the future.

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

No matters were submitted to a vote of the security holders during
the fourth quarter of 1997.

PART II

ITEM 5. MARKET FOR THE COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

From August 6, 1993 through July 17, 1996, the Company's Common
Stock traded on the Toronto Stock Exchange (the "TSE") under the trading symbol
"TEE." The Company voluntarily delisted from the TSE.

The following table sets forth the high and low closing prices on
the TSE for each quarter from January 1, 1996 through the Company's voluntary
request to delist from the TSE on July 17, 1996 (all such prices are in Canadian
dollars):

<TABLE>
<CAPTION>
Closing Prices
--------------
Period Ended High Low
- - ------------ ----- -----
<S> <C> <C>
March 30, 1996 $3.60 $2.10
June 30, 1996 2.25 1.05
July 17, 1996 1.25 .68
</TABLE>

Since November 22, 1994, trading of the Company's Common Stock has
been quoted on the National Association of Securities Dealers, Inc. Automated
Quotation ("Nasdaq") SmallCap Market. The following table sets forth, for the
periods indicated, the quarterly range of the high and

<PAGE> 73
low closing prices of the Common Stock as reported by the Nasdaq SmallCap Market
(all such prices are in U.S. dollars):

<TABLE>
<CAPTION>
Closing Prices
--------------
Quarter Ended High Low
- - ------------- ---- -----
<S> <C> <C>
March 31, 1996 $2.69 $1.50
June 30, 1996 1.69 .88
September 30, 1996 1.00 .25
December 31, 1996 .50 .25
March 31, 1997 .69 .25
June 30, 1997 .44 .25
September 30, 1997 .37 .19
December 31, 1997 .63 .13
</TABLE>

On March 25, 1998, the closing market price for the Company's
Common Stock on the Nasdaq SmallCap Market was $.37 per share.

As of March 25, 1998, there were approximately 3,000 holders of
record of the Company's Common Stock and 22 holders of record of the Company's
Preferred Stock.

No dividend has been declared or paid by the Company since
inception on the Company's Common Stock. The Company does not anticipate that
any dividends will be declared or paid in the future on the Company's Common
Stock.

As of December 31, 1997, the Company sold 1,920 shares of its 1997
Convertible Preferred Stock ("1997 Preferred"). The 1997 Preferred was sold
solely to accredited investors pursuant to a private placement offering in
reliance upon Section 4(2) of the Securities Act of 1933, as amended. Proceeds
from the private placement of the 1997 Preferred equaled $1,920,000, less fees
of $165,000. The 1997 Preferred was offered in units of 15 preferred shares,
with each such share having a liquidation value of $1,000, plus 10,000 warrants
(exercisable at $1.00 per share for a period of three years) for a price of
$15,000 per unit. The holders of the 1997 Preferred are entitled to 7%
cumulative dividends payable quarterly which percentage increases in certain
events. The Company does not anticipate paying any dividends in the foreseeable
future. The 1997 Preferred is convertible immediately to shares of the Company's
Common Stock at $1,000 per share so converted divided by the "conversion price"
which is a formula based on the lesser of $0.70 or 75% of the average of the
closing price during the ten-day period prior to conversion. Subsequent to
December 31, 1997, the Company sold 120 shares of its 1997 Preferred to similar
investors.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis should be read in conjunction
with the Consolidated Financial Statements included herein for the years ended
December 31, 1997 and 1996.

Brassie Golf Corporation (the "Company") owns and operates golf
courses, is engaged in the development and marketing of golf-related businesses,
and holds licensing rights in the United States and internationally.

The Company holds certain licensing rights affiliated with the World
Golf Village, which is expected to be a premier tourism, business, and golf
destination in America; the World Golf Village is currently being developed
south of Jacksonville, Florida. The Company also owns land intended for future
development at the World Golf Village. In addition, the Company's portfolio
includes a wholly-owned subsidiary that leases a golf course in Virginia and
minority interests in two golf courses in South Carolina. The Company sold its
interest in a fourth golf course, the Gauntlet at St. James, located in
Southport, North Carolina, in November 1997.

The following table shows the number of full months each golf course
was operating under the Company's ownership during the respective periods:

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
% OWNERSHIP DECEMBER 31, DECEMBER 31,
AS OF 12/31/97 1997 1996
-------------- ------------ ------------
<S> <C> <C> <C> <C>
Curtis Park (opened for play June 1995).... 100% 12 12
(opened for play October
St. James 1991).......................... 100% 10 12
Laurel Valley (opened for play April 1993)... 30% 12 12
Myrtle West (acquired December 30, 1993)... 30% 12 12
</TABLE>

In addition, the Company recently entered into a letter of intent to
acquire Lady Fairway Golf, one of the nation's leading manufacturers of women's
golf shoes and accessories. This is the first of several planned acquisitions of
companies in the golf consumer products market.

The Company is seeking to secure additional licensing rights for a
variety of products and services specific to the World Golf Village. The Company
has also been actively engaged in the development of management and hospitality
businesses to be located at the World Golf Village.

As of December 31, 1997, the Company's total assets were approximately
$7,974,000 and the Company's total debt, including capitalized leases, was
approximately $4,292,000.

18
<PAGE> 74

RESULTS OF OPERATIONS

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

REVENUES

The Company derives its revenues primarily from golf revenues (including
greens fees, range fees and cart fees), management and design fees, resident
membership fees, membership sales and annual dues, proshop revenue and food and
beverage revenue. The period-to-period change in each of the revenues categories
is as follows:

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, INCREASE
1997 1996 (DECREASE)
------------ ------------ -----------
<S> <C> <C> <C>
Golf Revenues................................ $1,833,010 $1,878,273 $ (45,263)
Management and Design Fees................... 809,660 1,785,818 (976,158)
Resident Membership Fees, Membership Sales
and Annual Dues............................ 699,733 774,594 (74,861)
Food & Beverage Revenues..................... 485,737 508,911 (23,174)
Proshop Revenues............................. 259,099 277,188 (18,089)
Other Income................................. 6,360 7,118 (758)
---------- ---------- -----------
Totals....................................... $4,093,599 $5,231,902 $(1,138,303)
========== ========== ===========
</TABLE>

In the aggregate, the Company generated $4,093,599 in revenues during the
year ended December 31, 1997, compared to $5,231,902 in the year ended December
31, 1996, a decrease of $1,138,303. The decrease primarily consists of a
$692,866 decrease in management revenues related to the sale of the management
division in July 1997, a $157,226 decrease in design revenues related to the
sale of the design division in August 1997, and a $141,000 decrease related to
the construction management division which had no operations in 1997. In
addition, as a result of the sale of St. James in November 1997, corresponding
decreases of $228,457, $50,249, $59,916, and $44,134 occurred for golf revenue,
resident membership fees, membership sales and annual dues, food and beverage
revenue, and proshop revenue, respectively. These decreases were offset in part
by an increase of $221,156 in total revenues for Curtis Park.

COSTS AND EXPENSES

The Company's total operating expenses decreased from $11,056,005 during
the year ended December 31, 1996 to $6,660,207 during the year ended December
31, 1997, a decrease of $4,395,798. The decrease is largely attributable to the
writedown of goodwill by $4,050,000 in 1996, reduced expenses of $763,568 as a
result of the sale of the management division in July 1997, reduced expenses of
$424,062 as a result of the sale of the design division in August 1997 and
reduced expenses of $171,412 related to the construction management division
which had no operations in 1997. In addition, a reduction of $153,450 in
operating expenses resulted from the sale of St. James in November 1997 and a
reduction of $171,669 resulted from a related decrease in amortization and
depreciation expense. These items were offset in part by a $307,161 increase in
bad debt expense and a $708,421 increase in other general and administrative
costs. These increased costs were in conjunction with writing off the
uncollectible receivables of the Company, other legal and accounting fees, and
costs and other professional fees associated with preparing the new business
plan of the Company. Marketing costs increased by $135,329 in 1997 in an effort
to enhance investor relations and to more effectively market the business of the
Company. Finally, expenses associated with the operations of the golf course at
Curtis Park were $146,734 higher than in the previous year.

The Company incurred a write down of goodwill of $-0- and $4,050,000
related to the Summit merger as of December 31, 1997 and 1996. The write down in
1996 was a result of management's evaluation of the future value of goodwill on
the Company's financial statements at year end.

Golf course operations include the compensation and benefits costs of
course personnel and related payroll taxes, golf cart leases, equipment rental
and maintenance, clubhouse repairs and

19
<PAGE> 75

upkeep, insurance, utilities, chemicals, seed and fertilizers, water, supplies
and other miscellaneous costs typically incurred in the operation of a golf
course.

General and administrative expenses include management and administrative
compensation, related payroll taxes and benefits, professional fees, including
legal and accounting and other consultants, telephone, utilities, insurance,
other taxes, allowance for doubtful accounts receivable, fixed asset valuation
adjustments, travel, meals and entertainment and office expenses, including
rent.

Interest expense decreased to $683,755 during the year ended December 31,
1997 from $2,316,301 during the year ended December 31, 1996. This $1,632,546
decrease was primarily due to a one-time charge to interest expense in 1996 of
$1,400,000 related to the discount on convertible debentures. In addition, the
contractual interest expense on the debentures and lower principal balances on
certain debt, partially related to the payoff of loans due to the sale of the
St. James property in November 1997, resulted in an additional decrease of
$146,896. The prime rate decreased from 8.65% at December 31, 1996 to 8.50% at
December 31, 1997.

As a result of the 30,082,268 warrants issued in connection with the
issuance of new debentures, the Company recorded $892,709 in amortization
expense related to the debt discount on convertible debentures in 1997.

The loss on equity investment in subsidiaries decreased from $966,579
during the year ended December 31, 1996 to $116,318 during the year ended
December 31, 1997. This $850,261 decrease results primarily from a substantial
writedown of the Company's investment in the Gauntlet at Laurel Valley and the
Gauntlet at Myrtle West subsidiaries in 1996 due to a redetermination of the net
realizable value of the Company's ownership interests in these entities at that
time. Due to the recurring losses and working capital deficiencies of the
entities, the Company in 1997 again redetermined the net realizable value of the
Company's investment in the entities, which the company found to be zero, and
wrote down the investment value by $116,318 to reflect that redetermination as
of December 31, 1997.

For the year ended December 31, 1997, the Company recorded a loss on sale
of subsidiaries of $1,826,164. The Company recorded a $1,931,875 loss on the
sale of the golf course at St. James and a $19,289 loss on the sale of Hale
Irwin Golf Services which were offset by a $125,000 gain on the sale of Brassie
Golf Management Services, Inc. and Summit Golf Corporation. No gains or losses
on the sale of subsidiaries were recorded in 1996 as no subsidiaries were sold
during the year.

Interest and other income decreased to $98,520 during the year ended
December 31, 1997 from $659,266 during the year ended December 31, 1996. This
$560,746 decrease resulted primarily from a one-time gain of $580,000 related to
proceeds received in 1996 from a settlement of claims in connection with a
disposition of securities held by the Company's foreign subsidiary.

The provision for income taxes of $110,000 in 1996 was a result of foreign
income taxes due as a result of the $580,000 gain from the former disposition of
securities mentioned above. No provision for income taxes was necessary in 1997
due to the losses incurred by the Company.

NET LOSS

For the year ended December 31, 1997, the Company had a net loss of
$5,987,034, compared to the net loss of $8,625,732 at December 31, 1996. This
$2,638,698 decrease in loss from prior year is the net result of the items
explained above.

INFLATION

Inflation has not had a material effect on the Company's operations during
the years ended December 31, 1997 and 1996.

20
<PAGE> 76

LIQUIDITY AND CAPITAL RESOURCES

Historically, golf revenues, resident membership fees, membership sales and
annual dues, proshop revenue, food and beverage revenue and management and
design fees have been the principal source of funds to pay the operating
expenses of the Company. To fund acquisitions, capital improvements, and a
portion of working capital needs, the Company had to rely upon long-term
borrowing and equity financing.

DEFICIENCY IN WORKING CAPITAL

The Company had a deficit in working capital in the amount of $98,529 as of
December 31, 1997, compared to a working capital deficit of $404,785 as of
December 31, 1996. The improvement in the working capital deficiency was
primarily attributable to the effects of proceeds received from the issuance of
preferred stock through a private placement, the sales of the management
division of the Company and the golf course at St. James, and the loan
refinancing related to the golf course at Curtis Park which has been offset in
part by a loss from operations, purchases of long-term assets, deposits toward
business acquisitions and other long-term assets, and a paydown of long-term
debt. The availability of cash and short-term investments as of December 31,
1997 is $188,285, of which $135,019 is restricted for certain expenditures
primarily relating to improvements and repairs at the Curtis Park golf course.

The Company is not generating sufficient revenues from its operations to
fund its activities and therefore is dependent on additional financing from
external sources. This fact raises substantial doubt about the Company's ability
to continue as a going concern. The Company secured $1.92 million of capital in
a private placement transaction in December 1997. The Company expects to raise
additional amounts from private placements in 1998. If the Company is successful
in raising additional capital in 1998, management believes that the Company will
have adequate resources to continue to meet its current debt obligations, fund
capital improvements and expand and develop its businesses. There is no
assurance that such additional funding will be completed and the inability to
obtain such financing would have a material adverse effect on the Company.

The Company has taken measures to maintain controls on operating costs in
1998 as part of a continuing effort to become profitable. Management intends to
take further steps to improve the Company's liquidity and reduce debt, both
short and long term.

As noted above, the Company concluded on a private placement offering in
December 1997 of 7% Cumulative Convertible Preferred Stock ("Preferred Stock")
for $1.92 million, less associated costs of $165,000 to secure such funding. The
Preferred Stock was offered for a price of $15,000 per unit. One hundred
twenty-eight units (128) were sold. Each unit was made up of 15 Preferred Shares
and 10,000 warrants. Each preferred share has a liquidation value of $1,000 and
each warrant is exercisable immediately for a period of 3 years to purchase one
share of common stock for $1.00 each.

During March 1996, the Company issued $5.5 million in six percent
convertible debentures to finance the operations for the Company. During 1996,
the holders of the debentures converted $2,034,262 of the debt into 6,350,564
shares which equated to $2,496,785 in equity, net of financing fees. Through
March 1, 1997, these debentures were convertible into shares of common stock at
discounts ranging from 15%-35% of its current market value. The Company recorded
$1.4 million in interest during 1996 to reflect the discounts upon conversion of
the Company's common stock. As of December 31, 1996, $3,465,738 of convertible
debentures were outstanding.

From January through October 1997, the holders of the debentures converted
$1,195,743 of the debt into 4,972,107 shares which equated to $1,573,308 in
equity, net of financing fees. During November 1997, the remaining $2,269,995
plus accrued interest of outstanding debentures were transferred to new
debenture holders in a third party transaction. Simultaneously, the Company

21
<PAGE> 77

retired the 1996 debenture agreements and replaced them with new debenture
agreements containing new terms.

From November through December 1997, $1,259,346 of the debentures'
principal had been converted into 8,460,888 shares of common stock, which
equated to $1,863,442 in equity, net of financing fees. As of December 31, 1997,
$1,010,649 of convertible debentures were outstanding.

In connection with the sale of the debenture agreements issued in November
of 1997, the Company issued (1) warrants to purchase 15,041,134 shares of common
stock of the Company at the lesser of $0.17 per share or 70% of the average
closing bid price of the common stock during the last five trading days prior to
exercise, (2) warrants to purchase 15,041,134 shares of common stock of the
Company at the lesser of $0.34 per share or 70% of the average closing bid price
of the common stock during the last five trading days prior to exercise and (3)
1,672,128 shares of common stock. The warrants are exercisable for a period of
three years from the date of issuance.

USES OF FUNDS

From the proceeds obtained through the private placement of preferred
stock, the sale of businesses, and the loan refinancing for Curtis Park, the
Company has positioned itself to execute the new business plan of the Company.
The Company has made a $300,000 deposit toward the acquisition of certain assets
from Divot Golf Corporation that will enable the Company to obtain certain
additional development rights and license agreements at the World Golf Village
and concentrate on golf-related consumer products. The Company also made a
$100,000 deposit toward the acquisition of Lady Fairway Golf, a leading
manufacturer of women's golf shoes and accessories.

In addition, the Company paid $75,000 in cash and 3,000,000 shares of
common stock to purchase certain assets of Divot Spa WGV, Inc., including
licensing and developmental rights on Parcel 11-A of the World Golf Village, the
Spa Tournament Championship development program, and the spa products and
catalogs. In a related transaction, the Company deposited $500,000 toward the
purchase of a parcel of land at the World Golf Village upon which the Company
plans to construct a health spa which will charge a daily fee to visitors of the
World Golf Village and the Golf Hall of Fame located within the Village; the
Company also plans to sell health and spa related consumer products at this
location. The Company expended approximately $215,000 toward the development of
management and hospitality services at the World Golf Village project and
satisfied other short-term and long-term debt and working capital obligations.

DECREASE IN DEBT

Total debt decreased from $10,073,122 at December 31, 1996 to $4,291,574 at
December 31, 1997. Of this $5,781,548 decrease, $3,053,981 is attributed to the
St. James golf course which was sold in November 1997, $2,455,089 is attributed
to the conversion of debt to equity related to debentures issued by the Company,
and $446,291 is attributed to other debt repayments. These decreases were offset
by $440,000 in net proceeds from refinancing the loan on the Curtis Park golf
course after retiring the previous first and second mortgages on the property.

FINANCIAL COMMITMENTS

The Company has current commitments for improvements and repairs at The
Gauntlet at Curtis Park totalling $104,688. Cash has been restricted under the
loan agreement to cover these expenditures. The Company intends to seek
financing for these capital expenditures from outside

22
<PAGE> 78

financing sources, although there is no assurance that such financing will be
available or, if available, will be on terms acceptable to the Company.

As a result of its letter of intent to acquire Lady Fairway Golf signed in
December 1997, the Company has a commitment to fund the purchase and to close
the transaction. The Company also has commitments for future minimum lease
payments under operating and capital leases and has commitments to its executive
officers through employment agreements.

SHAREHOLDERS' EQUITY

During the year ended December 31, 1997, the Company's shareholders' equity
increased from $1,843,291 to $2,590,885. This $747,594 increase was primarily a
result of the issuance of 15,085,123 common shares and 30,082,268 warrants in
connection with the convertible debentures for $4,999,815 and proceeds from the
private placement of preferred stock for $1,920,000 less fees of $165,000,
offset by a net loss of $5,987,034.

WARRANT EXERCISES

As of December 31, 1997, warrants to purchase 33,550,268 shares of the
Company's common stock were outstanding as follows:

<TABLE>
<CAPTION>
# WARRANTS ISSUED EXPIRATION DATE EXERCISE PRICE
- - ----------------- ------------------- --------------
<C> <S> <C>
100,000 September 28, 1998 $2.40
238,000 November 17, 1998 $2.40
50,000 December 5, 1998 $1.00
150,000 June 30, 1999 $2.00
1,400,000 June 30, 2000 $2.45-$3.25
250,000 September 28, 2000 $2.40
15,041,134 November 18, 2000 $0.17*
15,041,134 November 18, 2000 $0.34*
1,280,000 December 3, 2000 $1.00**
----------
33,550,268
==========
</TABLE>

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

* Or 70% of the average closing bid price of the common stock during the last
five trading days prior to conversion, whichever is less.
** Or 75% of the average closing bid price of the common stock during the last
ten trading days prior to conversion, whichever is less.

PROCEEDS FROM DEVELOPER'S RESIDENT LOT SALES

By agreement with the developer of the residential real estate development
contiguous to the Gauntlet at St. James golf course constructed by the Company,
initial membership fees were paid to the Company by the developer on behalf of
the purchasing resident upon the closing of each lot sale pursuant to negotiated
or assumed agreements. During the years ended December 31, 1997 and 1996, 65 and
96 lots were sold, respectively, by the developer at St. James, the proceeds of
which increased cash by $325,000 and $480,000 in 1997 and 1996, respectively. As
a result of the sale of the St. James golf course in November 1997, the Company
expects to receive no further proceeds from the sale of residential lots as
those rights are now held by the buyer of the golf course.

23
<PAGE> 79
ITEM 7. FINANCIAL STATEMENTS

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders
Brassie Golf Corporation

We have audited the accompanying consolidated balance sheet of Brassie Golf
Corporation and subsidiaries as of December 31, 1997 and the related
consolidated statements of operations, shareholders' equity and cash flows for
the years ended December 31, 1997 and 1996. 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 audits 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.

As discussed in Note 10 to the consolidated financial statements, the
Company changed its method of accounting for two previously majority-owned
subsidiaries.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Brassie Golf Corporation and subsidiaries at December 31, 1997 and the
consolidated results of their operations and their cash flows for the years
ended December 31, 1997 and 1996 in conformity with generally accepted
accounting principles.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As more fully
described in Note 1, the Company has incurred recurring operating losses and has
a working capital deficiency. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. The consolidated financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of this
uncertainty.

[ERNST & YOUNG LLP]
ERNST & YOUNG LLP

Raleigh, North Carolina
January 12, 1998

24
<PAGE> 80

BRASSIE GOLF CORPORATION

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 1997

<TABLE>

<S> <C>

ASSETS

Current assets:

Cash...................................................... $ 53,266
Cash -- restricted........................................ 135,019
Trade accounts receivable, net of allowance for doubtful
accounts of $150,800................................... 352,018
Accounts receivable from related parties.................. 160,543
Inventories............................................... 31,611
Prepaid expenses and other current assets................. 1,038,588
-----------
Total current assets.............................. 1,771,045
Property and equipment at cost:
Land and land improvements................................ 2,789,069
Depreciable golf course improvements...................... 828,681
Buildings................................................. 1,426,369
Furniture, machinery and equipment........................ 986,642
-----------
6,030,761

Less accumulated depreciation and amortization.............. 742,956
-----------
5,287,805

Intangible assets, net of accumulated amortization of
$270,000.................................................. 583,400
Goodwill.................................................... 331,250
-----------
Total assets...................................... $ 7,973,500
===========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued expenses..................... $ 772,460
Accrued interest payable.................................. 32,751
Income tax payable........................................ 181,793
Current portion of long-term debt......................... 757,023
Current maturities of capital lease obligations........... 21,510
Accrued discount on convertible debentures................ 104,037
-----------
Total current liabilities......................... 1,869,574

Long-term debt, less current portion........................ 3,477,256
Long-term capital lease obligations, less current portion... 35,785

Commitments and Contingencies
Shareholders' equity:

Convertible Preferred Stock, $.001 par value; 1,000,000
shares authorized; 283,170 shares issued and
outstanding (aggregate liquidation
preference of $1,920,000).............................. 283
Common Stock, $.001 par value; 50,000,000 shares

authorized; 42,632,503 shares issued and outstanding... 42,633
Additional paid-in capital................................ 32,043,966
Accumulated deficit....................................... (29,176,276)
Less cost of Convertible Preferred Stock held in treasury,
281,250 shares......................................... (210,937)
Foreign currency translation adjustment................... (108,784)
-----------
Total shareholders' equity........................ 2,590,885
-----------
Total liabilities and shareholders' equity........ $ 7,973,500
===========
</TABLE>

See accompanying notes.

25
<PAGE> 81

BRASSIE GOLF CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31,

--------------------------
1997 1996
----------- ------------
<S> <C> <C>
Operating revenues:

Golf revenues............................................. $ 1,833,010 $ 1,878,273
Food and beverage revenues................................ 485,737 508,911
Proshop revenues.......................................... 259,099 277,188
Membership sales and dues................................. 372,233 294,594
Resident membership fees.................................. 327,500 480,000
Management and design fees................................ 809,660 1,785,818
Other..................................................... 6,360 7,118
----------- ------------
Total operating revenues.......................... 4,093,599 5,231,902
Operating expenses:
Golf course operations.................................... 1,293,975 1,328,564
Cost of food and beverage sales........................... 195,869 203,660
Cost of proshop sales..................................... 193,886 173,812
Advertising expense....................................... 313,351 216,254
Management and design expenses............................ 701,191 1,553,821
General and administrative expenses....................... 3,090,713 2,487,003
Depreciation and amortization expense..................... 871,222 1,042,891
Write down of goodwill.................................... -- 4,050,000
----------- ------------
Total operating expenses.......................... 6,660,207 11,056,005
----------- ------------
Operating loss.............................................. (2,566,608) (5,824,103)
Other income (expense):
Interest expense -- contractual........................... (683,755) (916,301)
Interest expense -- discount on convertible debentures.... -- (1,400,000)
Amortization of debt discount on convertible debentures... (892,709) --
Loss on equity investment in subsidiaries................. (116,318) (966,579)
Loss on sale of subsidiaries.............................. (1,826,164) --
Bad debt recoveries....................................... -- 510,000
Interest income........................................... 98,520 149,266
----------- ------------
Loss before minority interest............................. (5,987,034) (8,447,717)
Minority interest expense................................. -- (68,015)
----------- ------------
Loss before income taxes.................................. (5,987,034) (8,515,732)
Provision for income taxes................................ -- (110,000)
----------- ------------
Net loss.................................................... $(5,987,034) $ (8,625,732)
=========== ============
Basic and diluted loss per common share..................... $ (.22) $ (.43)
=========== ============
Weighted average number of common shares outstanding........ 29,724,100 20,005,900
=========== ============
</TABLE>

See accompanying notes.

26
<PAGE> 82

BRASSIE GOLF CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>

CONVERTIBLE

CONVERTIBLE PREFERRED

COMMON STOCK PREFERRED STOCK ADDITIONAL TREASURY STOCK
-------------------- ----------------- PAID-IN ACCUMULATED --------------------

SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT SHARES AMOUNT

---------- ------- -------- ------ ----------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995....... 17,678,066 $17,678 375,000 $375 $21,857,456 $(13,893,582) -- $ --
Net loss........................... -- -- -- -- -- (8,625,732) -- --
Issuance of Common Stock in
connection with conversion of

convertible debentures............ 6,350,564 6,351 -- -- 2,490,434 -- -- --
Issuance of Common Stock in lieu of
compensation...................... 50,000 50 -- -- 58,545 -- -- --
Unrealized gain on investments..... -- -- -- -- -- -- -- --
Translation of foreign currency
financial statements.............. -- -- -- -- -- -- -- --
---------- ------- -------- ---- ----------- ------------ -------- ---------
Balance at December 31, 1996....... 24,078,630 $24,079 375,000 $375 $24,406,435 $(22,519,314) -- $ --
========== ======= ======== ==== =========== ============ ======== =========
Net loss........................... -- -- -- -- -- (5,987,034) -- --
Conversion of Preferred Stock
to Common Stock................... 468,750 469 (93,750) (94) (375) -- -- --
Repurchase of Preferred Stock...... -- -- -- -- -- -- (281,250) (210,937)
Issuance of Preferred Shares in
connection with a private

placement......................... -- -- 1,920 2 1,754,998 -- -- --
Preferred Stock Dividend
-- conversion discount............ -- -- -- -- 669,928 (669,928) -- --
Issuance of Common Stock
in connection with conversion

of convertible debentures......... 13,432,995 13,433 -- -- 3,423,317 -- -- --
Issuance of 30,082,268 warrants
in connection with convertible

debentures........................ -- -- -- -- 1,203,291 -- -- --
Issuance of Common Stock
in connection with the convertible

debenture agreement............... 1,652,128 1,652 -- -- 308,122 -- -- --
Issuance of Common Stock
in connection with the purchase of

Divot Spa WGV, Inc................ 3,000,000 3,000 -- -- 278,250 -- -- --
Unrealized gain on investments..... -- -- -- -- -- -- -- --
Translation of foreign currency
financial statements.............. -- -- -- -- -- -- -- --
---------- ------- -------- ---- ----------- ------------ -------- ---------
Balance at December 31, 1997....... 42,632,503 $42,633 283,170 $283 $32,043,966 $(29,176,276) (281,250) $(210,937)
========== ======= ======== ==== =========== ============ ======== =========

FOREIGN UNREALIZED
CURRENCY GAIN (LOSS)

TRANSLATION ON
ADJUSTMENT INVESTMENTS TOTAL

----------- ----------- ----------
<S> <C> <C> <C>
Balance at December 31, 1995....... $(259,664) $(593) $7,721,670
Net loss........................... -- -- (8,625,732)
Issuance of Common Stock in
connection with conversion of

convertible debentures............ -- -- 2,496,785
Issuance of Common Stock in lieu of
compensation...................... -- -- 58,595
Unrealized gain on investments..... -- 356 356
Translation of foreign currency
financial statements.............. 191,617 -- 191,617
--------- ----- ----------
Balance at December 31, 1996....... $ (68,047) $(237) $1,843,291
========= ===== ==========
Net loss........................... -- -- (5,987,034)
Conversion of Preferred Stock
to Common Stock................... -- -- --
Repurchase of Preferred Stock...... -- -- (210,937)
Issuance of Preferred Shares in
connection with a private

placement......................... -- -- 1,755,000
Preferred Stock Dividend
-- conversion discount............ -- -- --
Issuance of Common Stock
in connection with conversion

of convertible debentures......... -- -- 3,436,750
Issuance of 30,082,268 warrants
in connection with convertible

debentures........................ -- -- 1,203,291
Issuance of Common Stock
in connection with the convertible

debenture agreement............... -- -- 309,774
Issuance of Common Stock
in connection with the purchase of

Divot Spa WGV, Inc................ -- -- 281,250
Unrealized gain on investments..... -- 237 237
Translation of foreign currency
financial statements.............. (40,737) -- (40,737)
--------- ----- ----------
Balance at December 31, 1997....... $(108,784) $ -- $2,590,885
========= ===== ==========
</TABLE>

See accompanying notes.

27
<PAGE> 83

BRASSIE GOLF CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31,

---------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss.................................................... $ (5,987,034) $ (8,625,732)

Adjustments to reconcile net loss to net cash used in operating activities:

Loss on sales of subsidiaries............................. 1,826,164 --
Amortization of debt discount............................. 892,709 --
Loss on equity investments in subsidiaries................ 116,318 966,579
Depreciation.............................................. 520,959 535,293
Amortization.............................................. 350,263 507,598
Writedown of goodwill..................................... -- 4,050,000
Bad debt expense.......................................... 372,161 65,000
Loss on sale of marketable equity securities.............. 21,404 182
Trade accounts receivable................................. (197,388) 66,826
Accounts receivable from related parties.................. (10,543) 107,258
Inventories and other current assets...................... (953,044) (55,202)
Accounts payable and accrued expenses..................... 280,744 (368,480)
Accrued interest payable.................................. 103,774 1,024,133
Income tax payable........................................ (15,919) 197,712
------------ ------------
Net cash used in operating activities....................... (2,679,432) (1,528,833)
INVESTING ACTIVITIES
Payments for intangible assets.............................. (260,006) (571,293)
Purchases of property and equipment, net.................... (366,612) (698,630)
Change in restricted cash................................... (135,019) --
Additional investments in subsidiaries...................... 33,682 (486,770)
Proceeds from sale of marketable equity securities.......... 18,271 --
Proceeds from sale of subsidiaries.......................... 3,550,000 --
------------ ------------
Net cash provided by (used in) investing activities......... 2,840,316 (1,756,693)
FINANCING ACTIVITIES
Additions to long-term borrowings........................... 3,417,480 5,480,388
Payments on long-term borrowings and capital leases......... (4,540,608) (4,836,509)
Issuance of common stock.................................... -- 2,555,380
Payments on loans from officers and shareholders............ (1,293,895) 648,121
Proceeds from sales of convertible preferred stock.......... 1,920,000 --
Payment for stock issuance costs............................ (165,000) --
Payments made to retire preferred stock..................... (210,937) --
------------ ------------
Net cash (used in) provided by financing activities......... (872,960) 3,847,380
Effect of foreign currency exchange rate changes on cash.... (40,737) 191,617
------------ ------------
(Decrease) Increase in cash................................. (752,813) 753,471
Cash at beginning of year................................... 806,079 52,608
------------ ------------
Cash at end of year......................................... $ 53,266 $ 806,079
------------ ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid during the period for interest.................... $ 580,581 $ 938,071
============ ============
</TABLE>

See accompanying notes.

28
<PAGE> 84
BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1997

1. BUSINESS OF THE COMPANY, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING

POLICIES

Brassie Golf Corporation ("the Company") owns and operates golf courses and
is engaged in the development, licensing and marketing of golf-related
businesses. The Company also holds certain exclusive licensing rights in the
United States and internationally.

As of December 31, 1997, the Company has a net working capital deficiency
of $98,529. The Company is not generating sufficient revenues from its
operations to fund its activities and therefore is dependent on additional
financing from external sources. Such factors raise substantial doubt about the
Company's ability to continue as a going concern. The Company secured $1.9
million of funding in a private placement transaction in December 1997. The
Company expects to raise additional amounts from private placements in 1998. If
the Company is successful in raising additional equity capital in 1998,
management believes that the Company will have adequate resources to continue to
meet its current debt obligation, fund capital improvements and expand and
develop its businesses. There is no assurance that such additional funding will
be completed and the inability to obtain such financing would have a material
adverse effect on the Company.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and all wholly and majority-owned subsidiaries. All material intercompany
accounts and transactions are eliminated in consolidation. The subsidiaries and
related percentage of ownership by the Company at December 31, 1997 are as
follows:

OWNERSHIP PERCENTAGE

AT
DECEMBER 31,

---------------------
COMPANY NAME ABBREVIATION 1997 1996
- - ------------ ------------ --------- ---------
<S> <C> <C> <C>
The Gauntlet at St. James, Inc. .................. St. James 100% 80%
The Gauntlet at Curtis Park, Inc. ................ Curtis Park 100 100
Brassie Golf Management Services, Inc. ........... BGMS -- 100
Summit Golf Corporation........................... Summit -- 100
Hale Irwin Golf Services, Inc. ................... HIGSI -- 100
Brassie Construction Management Services, Inc. ... BCMS 100 100
Amalgamated Equity Golf (a British Columbia
Corporation).................................... Amalgamated 100 100
Divot Properties WGV, Inc. ....................... Properties 100 100
</TABLE>

Minority interest expense in 1996 represents the 20% interest in the St.
James golf course owned by a related entity. The Company received the remaining
20% Minority interest in St. James as part of the sale of the golf course in
1997 (see Note 9, "Disposition of Assets").

The Company's 30% investments in The Gauntlet at Laurel Valley, Inc., a
golf course located in Greenville, S.C., and The Gauntlet at Myrtle West, Inc.,
a golf course located in Myrtle Beach, S.C., are accounted for using the equity
method (See Note 10 "Change in Reporting Entity").

Property and Equipment

Property and equipment is recorded at cost. Costs relating to the
acquisition and development of golf courses, including the cost of real estate,
related legal fees, construction costs, interest, and other direct costs
associated with the development of the golf courses are capitalized as part of
the cost of the course. Depreciable golf course improvements are comprised
primarily of irrigation

29
<PAGE> 85

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

systems, cart paths, bridges, and other land improvements. Depreciation on
property and equipment begins when the assets are placed into service and is
charged to operations over the estimated useful lives of the assets (5 to 20
years), utilizing the straight-line method for financial reporting purposes and
accelerated methods for tax purposes. All other costs are charged to expense as
incurred.

Intangible Assets

Intangible assets consist primarily of financing costs and licensing fees.
Costs incurred in obtaining long-term debt obligations are capitalized at cost
and amortized over the lives of the respective loans. Significant additions to
financing costs during 1997 resulted primarily from costs incurred to obtain
financing on more favorable terms.

Goodwill

The Company initially records goodwill at its cost and amortizes the cost
over the estimated useful life of the asset. At the end of each accounting
period, the Company reviews the carrying value of the goodwill for possible
impairment. The Company's policy for the valuation of goodwill is to calculate
the undiscounted projected future cash flows expected to be generated over the
life of the goodwill. This amount is then compared to the carrying value of the
goodwill to determine if the asset is impaired.

The Company has classified, as goodwill, the cost in excess of the fair
value of the net assets of SPA, which was acquired through a purchase
transaction during 1997 (see Note 8, "Acquisitions", for further discussion).
Goodwill is being amortized on a straight-line basis over 15 years. Amortization
charged to continuing operations amounted to $18,092 and $255,226 in 1997 and
1996, respectively.

During 1996, the Company recorded a goodwill writedown of $4,050,000 on
Summit, leaving a remaining balance of $626,245, net of accumulated
amortization, at December 31, 1996 which reflects estimated future discounted
cash flows. The writedown is included in the accompanying statement of
operations for the year ended December 31, 1996.

In July 1997, the Company sold its golf course management division,
consisting of Brassie Golf Management Services. Inc. and Summit. The Company's
remaining goodwill associated with the Summit was written off in connection with
the sale (See Note 9, "Disposition of Assets").

Restricted Cash

Restricted cash represents escrow accounts of Curtis Park and Saint James
on behalf of certain lending institutions pursuant to loan and sale agreements,
respectively. Such amounts are to be recorded as expense when earned over the
terms of the agreements and are recoverable by the Company upon occurrence of
certain events specified in the respective escrow agreements.

Cash and Cash Equivalents

The Company considers highly liquid, short-term investments with a maturity
of three months or less when purchased to be cash equivalents.

Marketable Equity Securities

The Company's marketable equity securities are classified as
available-for-sale and carried at fair value. The ending balance of
shareholders' equity has been adjusted to reflect the net unrealized holding
gain or loss on securities classified as available-for-sale.

30
<PAGE> 86

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

During 1997, the Company sold all of its marketable equity securities. Net
realized gains, determined by specific identification, were not material.

The Company maintains cash and short-term investments with various
financial institutions. These financial institutions are located in different
areas of the U.S. and Canada, and Company policy is designed to limit exposure
to any one institution. The Company performs periodic evaluations of the
relative credit standing of those financial institutions utilized in the
Company's investment strategy.

Inventories

Inventories are stated at the lower of cost or market as determined using
the specific identification method.

Inventory at December 31, 1997 consists of:

<TABLE>

<S> <C>
Proshop merchandise......................................... $ 27,415
Food and beverage inventory................................. 4,196

--------
$ 31,611

========
</TABLE>

Revenues

Revenues of the Company include daily golf fees, proshop merchandise sales
and food and beverage sales. Golf fees include revenue generated from green
fees, cart fees and range fees. Revenues also include sales of memberships and
annual dues charged to members and golf course management and design fees.

Golf fees, proshop merchandise sales and food and beverage sales are
recognized when received. Annual membership dues are recognized and earned
ratably over a twelve-month period. Membership dues collected in advance are
deferred as "unearned income" and recognized over the period of prepayment.
Membership fees that are non-refundable are recognized by the Company when
received. Golf course management and design fees are recognized as services are
performed.

As part of an agreement with the developer of the residential lots, the
Company receives $5,000 in membership fees for each residential lot sold in the
immediate area of the St. James golf course through November 23, 1997 (See Note
9, "Disposition of Assets").

Stock Based Compensation

On January 1, 1996, the company adopted Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), which
requires companies to recognize as expense the fair value of all stock-based
awards on the date of grant, or continue to apply the provisions of Accounting
Principles Board Opinion No. 25 ("APB 25") and provide pro forma net income and
pro forma earnings per share disclosures for employee stock option grants as if
the fair-value-based method defined in SFAS 123 had been applied. The Company
has elected to continue to apply the provisions of APB 25 and provide the pro
forma disclosure provisions of SFAS 123 (See Note 7, "Stock Options").

Advertising Expense

The cost of advertising is expensed as incurred. The Company incurred
$313,000 and $216,000 in advertising costs during the years ended December 31,
1997 and 1996, respectively.

31
<PAGE> 87

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Use of Estimates

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Concentration of Credit Risk

The Company's primary financial instrument subject to potential
concentration of credit risk is trade accounts receivable which are unsecured.
The Company provides an allowance for doubtful accounts based on its analysis of
potentially uncollectible accounts. The Company's trade receivables arise
principally from its golf course management operations. As of December 31, 1997,
the Company had no significant concentrations of credit risk with any individual
customers.

Foreign and Domestic Operations

Net (loss) income from the Company's foreign subsidiary (Amalgamated) was
approximately $(201,000) and $339,000 for the years ended December 31, 1997 and
1996, respectively. Net loss from domestic operations was approximately
$5,786,000 and $8,965,000, respectively, for the same periods.

Translation of Foreign Currencies

Foreign currency transactions and financial statements of Amalgamated are
translated from the local currency, Canadian dollars, into U.S. dollars at the
current exchange rates except for revenues, costs and expenses which are
translated at average exchange rates. Adjustments resulting from translations of
financial statements are reflected as a separate component of shareholders'
equity.

Net Loss Per Share

In 1997, the Financial Accounting Standards Board issued Statement No. 128,
Earnings per Share. Statement 128 replaced the calculation of primary and fully
diluted earnings per share with basic and diluted earnings per share. Unlike
primary earnings per share, basic earnings per share excludes any dilutive
effects of options, warrants and convertible securities. Diluted earnings per
share is very similar to the previously reported fully diluted earnings per
share. All earnings per share amounts for all periods have been presented, and
where appropriate, restated to conform to the Statement 128 requirements. Stock
options, warrants and the five percent convertible debentures are considered
anti-dilutive and therefore have not been included in the computation.

Long Lived Assets

In 1996, the Company adopted FASB Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of.
Under the provisions of the Statement, impairment losses are recognized when
expected future cash flows are less than the assets' carrying value.
Accordingly, when indicators of impairment are present, the Company evaluates
the carrying value of property and equipment and intangibles in relation to the
operating performance and future undiscounted cash flows of the underlying
business. The Company adjusts the net book value of the underlying assets if the
sum of expected future cash flows is less than book value. Based on the
application of the Statement, goodwill was adjusted to its estimated fair value
which resulted in a write-down of $4,050,000 in 1996.

32
<PAGE> 88

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Fair Value of Debt

The Company estimates that the fair value of notes payable approximates the
carrying value based upon its effective current borrowing rate for debt with
similar terms and remaining maturities. Disclosure about fair value of financial
instruments is based upon information available to management as of December 31,
1997. Although management is not aware of any factors that would significantly
affect the fair value of amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date.

Impact of Recently Issued Accounting Standards

In 1997, the FASB issued Statements No. 130, "Reporting Comprehensive
Income" ("SFAS 130") and No. 131, "Disclosures About Statements of an
Enterprise and Related Information" ("SFAS 131"), which are both effective for
fiscal years beginning after December 15, 1997. SFAS 130 addresses reporting
amounts of other comprehensive income and SFAS 131 addresses reporting segment
information. The Company does not believe that the adoption of these new
standards will have a material impact on its financial statements.

2. LONG-TERM DEBT

Long-term debt with financial institutions and other third parties at
December 31, 1997 consists of the following:

<TABLE>

<S> <C>
Loan to Curtis Park from bank, payable in monthly payments

of $26,124, which includes principal and interest
beginning December 1, 1997 with remaining principal and
interest due October 1, 2007; collateralized by leasehold
interest in land and land improvements. Interest is
payable monthly at 8.37% per annum........................ $3,276,753
Unsecured convertible 5% debentures due December 31, 1998,
unless converted into common stock, interest payable
quarterly and incrementally based upon conversions with
the balance due, if any, at maturity, net of unamortized
discount of $620,356...................................... 390,293
Unsecured operating term loan from bank, with interest at
10.75%, payable in monthly installments of $16,723, which
includes principal and interest, through January 1999..... 220,366
Other notes payable......................................... 346,867
----------
4,234,279

Less current portion........................................ 757,023
----------
$3,477,256

==========
</TABLE>

Principal maturities of all the indebtedness detailed above during each of
the following five years and thereafter are as follows:

<TABLE>

<S> <C>
1998........................................................ $ 757,023
1999........................................................ 77,455
2000........................................................ 242,850
2001........................................................ 47,422
2002........................................................ 51,607
Thereafter.................................................. 3,057,922
----------
$4,234,279

==========
</TABLE>

CONVERTIBLE DEBENTURE EXCHANGE

During March 1996, the Company issued $5.5 million in six percent
convertible debentures to finance the operations of the Company. During 1996,
the holders of the debentures converted $2,034,262 of the debt into 6,350,564
shares which equated to $2,496,785 in equity, net of financing fees. Through
March 1, 1998, the six percent debentures were convertible into shares of common
stock at discounts ranging from 15%-35% of its current market value. The Company
recorded $1.4 million in interest expense during 1996 to reflect the discounts
upon conversion of the

33
<PAGE> 89

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company's common stock. As of December 31, 1996, $3,465,738 of convertible
debentures were outstanding.

From January through October 1997, the holders of the debentures converted
$1,195,743 of the debt into 4,972,107 shares which equated to $1,573,308 in
equity, net of financing fees. During November 1997, the remaining $2,269,995 of
outstanding debentures were transferred to new debenture holders in a third
party transaction. Simultaneously, the Company retired the 1996 debenture
agreements and replaced them with new debenture agreements containing new terms.

The new debentures are payable on December 31, 1998. Through December 31,
1998, the holders of the debentures are entitled to convert the debentures into
common stock of the Company at a conversion price equal to the lesser of (1)
$0.17 per share or (2) 70% of the average closing bid of the common stock during
the last five trading days prior to conversion. The debentures accrue interest,
payable quarterly commencing March 1, 1998, at a rate of 5% per annum. If the
Company does not file a Registration Statement with the SEC to register
securities in a public offering within 120 days from November 18, 1997, the
interest rate shall increase to 18% per annum. If the Effective Date of the
Registration Statement has not occurred by the 180th day after November 18,
1997, then the interest rate shall further increase to 24% per annum until the
Effective Date. The accrued interest is convertible into common stock of the
Company at the same conversion price as the debenture principal. In any event,
each holder cannot as a result of such conversions beneficially own more than
4.99% of the then outstanding common stock. In the event that the debenture
holder proposes to convert all or any portion of the principal and interest at a
conversion price of less than $0.05, the Company shall have the option to redeem
all or any part of the amount proposed to be converted at a redemption price of
125% of the amount of the principal and interest proposed to be converted. In
conjunction with these debenture agreements, the Company incurred issuance costs
totaling $27,000. These issuance costs are being amortized as a component of
interest expense over the term of the debentures.

In connection with the sale of the debenture agreements, the Company issued
(1) warrants to purchase 15,041,134 shares of common stock of the Company at the
lesser of $0.17 per share of 70% of the average closing bid price of the common
stock during the last five trading days prior to exercise, (2) warrants to
purchase 15,041,134 shares of common stock of the Company at the lesser of $0.34
per share of 70% of the average closing bid price of the common stock during the
last five trading days prior to exercise and (3) 1,672,128 shares of common
stock. The warrants are exercisable for a period of three years from the date of
issuance. The estimated value of these warrants and common stock, $1,513,065,
has been recorded as additional paid-in capital.

3. LEASES

The Company leases certain equipment used in the daily operations of the
Company under capital leases which are included in furniture, machinery and
equipment. Leased equipment under capital leases included in furniture,
machinery and equipment at December 31, 1997 consists of the following:

<TABLE>

<S> <C>
Equipment................................................... $69,683
Less accumulated amortization............................... 5,203

-------
$64,480

=======
</TABLE>

34
<PAGE> 90

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The accumulated amortization with respect to these capitalized leases is
included in "accumulated depreciation and amortization" in the accompanying
balance sheet. Amortization expense is included in depreciation and amortization
expense in the accompanying statement of operations.

Future minimum lease payments, by year and in the aggregate, under capital
leases, consist of the following at December 31, 1997:

<TABLE>

<S> <C>
1998........................................................ $ 28,228
1999........................................................ 25,236
2000........................................................ 16,148

--------
Total minimum lease payments................................ 69,612
Amounts representing interest............................... (12,317)
--------
57,295

Less current portion........................................ (21,510)
--------
$ 35,785

========
</TABLE>

The Company also rents certain facilities, land and equipment under
operating leases which expire at various times through 2027. Total rent expense
for the Company was approximately $283,200 and $207,500, for the years ended
December 31, 1997 and 1996, respectively.

Future minimum lease payments, by year and in the aggregate, under
operating leases consist of the following at December 31, 1997:

<TABLE>

<S> <C>
1998........................................................ $ 272,200
1999........................................................ 284,674
2000........................................................ 242,428
2001........................................................ 187,356
2002........................................................ 180,566
Thereafter.................................................. 600,000
----------
$1,767,224

==========
</TABLE>

4. RELATED PARTY TRANSACTIONS

The Company funded expenses on behalf of certain entities affiliated
through common ownership. Accounts receivable from related parties were $160,543
at December 31, 1997. The Company expects payment of the amount outstanding at
December 31, 1997 within the next twelve months; accordingly, the amounts are
classified as short-term assets.

The Company provided management services to related parties resulting in
approximately $77,000 and $190,000 in management fee revenue for the years ended
December 31, 1997 and 1996, respectively.

5. INCOME TAXES

Under Financial Accounting Standards Board Statement No. 109, "Accounting
for Income Taxes," the liability method is used in accounting for income taxes.
Under this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse.

Deferred income taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income

35
<PAGE> 91

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

tax purposes. Significant components of the Company's deferred tax liabilities
and assets at December 31, 1997 are as follows:

<TABLE>

<S> <C>
Deferred tax liabilities:

Tax over book depreciation and amortization............... $ --
-----------
$ --
===========
Deferred tax assets:

Book over tax depreciation and amortization............... $ 130,000
Net operating loss carryforwards.......................... 4,400,000
Bad debt allowance........................................ 60,000
Other..................................................... 4,700
-----------
Total deferred tax assets................................... 4,594,700
Valuation allowance for deferred tax assets................. (4,594,700)
-----------
Net deferred tax assets..................................... --
===========
Net deferred taxes.......................................... $ --
===========
</TABLE>

At December 31, 1997 the Company has a net operating loss carryforward of
$11,000,000 which will begin to expire in the year 2007. The tax benefits of
these items are reflected in the above table of deferred tax assets and
liabilities. U.S. tax rules impose limitations on the use of net operating
losses following certain changes in ownership. If a change were to occur, the
limitation could reduce the amount of these benefits that would be available to
offset future taxable income each year, starting with the year of ownership
change.

The reconciliation of income tax attributable to continuing operations
computed at the U.S. federal statutory tax rates to income tax expense is:

DECEMBER 31,

--------------------------
1997 1996
----------- -----------
<S> <C> <C>
Income tax benefit at U.S. statutory rate.............. $(2,040,000) $(2,895,000)
Amortization and write-off of goodwill................. -- 1,722,000
State tax benefit, net................................. (360,000) (492,000)
Equity income.......................................... 47,000 326,000
Interest expense for which no tax benefit was

provided............................................. 357,000 648,000
Impact of foreign losses for which a current tax
benefit is not available............................. 80,000 --
Impact of sale of stock in subsidiaries................ 460,000 --
Other items............................................ 141,000 438,300
Change in valuation allowance.......................... 1,315,000 252,700
Foreign tax............................................ -- 110,000
----------- -----------
Tax expense............................................ $ -- $ 110,000
=========== ===========
</TABLE>

36
<PAGE> 92

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. SHAREHOLDERS' EQUITY

During 1996, the Company issued 50,000 shares of common stock with a value
of $58,595 in lieu of compensation for consulting services performed. The value
of the issued stock was based on the fair market value of the Company's common
stock on the date that the consulting services were performed and reflects the
value of services received. The Company recognized $58,595 in compensation
expense related to the transaction.

During December 1997, the Company closed on a private placement offering of
7% Cumulative Convertible Preferred Stock ("Preferred Stock") for $1.92 million.
The Preferred Stock was offered in units of 15 Preferred Shares, with each such
share having a liquidation value of $1,000, and 10,000 warrants, for a price of
$15,000 per unit.

The holders of the Preferred Stock are entitled to a cash dividend equal to
$70 per share payable quarterly commencing April 1, 1998, although the Company
has the option to utilize shares of its common stock, under certain conditions,
to satisfy the dividend requirement. If the Company has not filed a Registration
Statement with the SEC to register securities in a public offering within 180
days of issuance, the Preferred Stock shall accrue dividends at an annual rate
of $180 per share. The purchaser has the right to convert the Preferred Stock
immediately into a number of shares of the Company's common stock equal to
$1,000 per share converted divided by the Conversion Price. The Conversion Price
means the lesser of (1) $0.70 or (2) 75% of the average of the closing bid price
of a share of the Company's common stock during the ten trading days prior to
such conversion provided that the holder can not as a result of such conversion
beneficially own more than 4.99% of the then outstanding common stock. In the
event the Conversion Price falls below $0.50, the Company may redeem, at $1,250
per share plus any accrued but unpaid dividends, all (but not any part) of
shares proposed to be converted. In conjunction with the discount allowed on the
conversion of the Preferred Stock into common stock, the Company has recorded
dividends of $669,928. The Preferred Stock does not carry any voting rights. As
of December 31, 1997, 128 units of Preferred Stock had been sold while no
conversions of shares of the Company's common stock had taken place.

In connection with the sale and issuance of the Preferred Stock, the
Company issued warrants, exercisable immediately, to purchase 1,280,000 shares
of common stock of the Company at $1.00 per share for a period of three years
from the date of issuance. The Company incurred approximately $165,000 in
additional costs related to the issuance of the Preferred Stock, which are
offset against additional paid-in capital in the consolidated statements of
shareholders' equity.

As of December 31, 1997, warrants to purchase 33,550,268 shares of the
Company's common stock were outstanding. These warrants have exercise prices
ranging from $.17 to $3.25 per share; 100,000 warrants expire September 28, 1998
(exercise price equals $2.40 per share); 238,000 warrants expire November 17,
1998 (exercise price equals $2.40 per share); 50,000 warrants expire December 5,
1998; (exercise price equals $1.00 per share); 150,000 warrants expire June 30,
1999 (exercise price equals $2.00 per share); 1,400,000 warrants expire June 30,
2000 (exercise prices range from $2.40 to $3.25 per share), 250,000 warrants
expire September 28, 2000 (exercise price equals $2.40 per share); 15,041,134
warrants expire November 18, 2000 (exercise price equals the lesser of $0.17 per
share or 70% of the average closing bid of the common stock during the last five
trading days prior to conversion); 15,041,134 warrants expire November 18, 2000
(exercise price equals the lesser of $0.34 per share or 70% of the average
closing bid of the common stock during the last five trading days prior to
conversion); and 1,280,000 warrants expire December 3, 2000 (exercise price
equals $1.00 per share).

37
<PAGE> 93

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Loss per Share

The following table sets forth the computation of basic and diluted
earnings per share in accordance with Statement No. 128, Earnings per Share:

DECEMBER 31

--------------------------
1997 1996
----------- -----------
<S> <C> <C>
Numerator:

Net loss............................................. $(5,987,034) $(8,625,732)
Preferred stock dividends -- conversion discount..... (669,928) --
----------- -----------
Numerator for basic and dilutive earnings per share--

income available to common stockholders........... $(6,656,962) $(8,625,732)

Denominator:

Denominator for basic and diluted earnings per

share -- weighted-average shares.................. 29,724,100 20,005,900
----------- -----------
Basic and diluted loss per share..................... $ (.22) $ (.43)
=========== ===========
</TABLE>

The following number of potentially convertible shares of common stock
related to convertible preferred stock, convertible debentures, warrants, and
stock options are as follows at December 31, 1997:

<TABLE>

<S> <C>
For conversion of convertible preferred stock.......... 4,873,096
For conversion of convertible debentures............... 5,944,994
Outstanding warrants................................... 33,550,268
Outstanding stock options.............................. 594,261
Possible future issuance under stock option plan....... 905,739
----------
Total shares potentially convertible................. 45,868,358

==========
</TABLE>

As of December 31, 1997, the Company had only 7,367,497 common shares
available to be issued.

7. STOCK OPTIONS

On June 3, 1994, the Board of Directors and the stockholders of the Company
adopted the Brassie Golf Corporation 1994 Stock Option and Restricted Stock
Purchase Plan (the "Stock Option Plan") as an incentive for key employees. The
purchase price for any Stock Awards and the exercise price for any Options may
not be less than the fair market value for the common stock on the date of
grant. Unless otherwise agreed between the grantee and the Company, the Stock
Awards and Options expire 90 days after termination of the grantee's
relationship with the

38
<PAGE> 94

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company. Because no options were issued during the years ended December 31, 1997
and 1996, no pro forma disclosures are required under SFAS 123.

Options Outstanding, Common Stock

OPTIONS OUTSTANDING

SHARES --------------------------
AVAILABLE NUMBER PRICE
FOR GRANT OF SHARES PER SHARE

--------- --------- --------------
<S> <C> <C> <C>
Balances at December 31, 1995......................... 217,475 1,282,525 $2.00 to $3.80
Options granted..................................... -- -- --
Options canceled.................................... 47,000 (47,000) --
Options exercised................................... -- -- --
--------- --------- --------------
Balances at December 31, 1996......................... 264,475 1,235,525 $2.00 to $3.80
--------- --------- --------------
Options granted..................................... -- -- --
Options canceled.................................... 641,264 (641,264) --
Options exercised................................... -- -- --
--------- --------- --------------
Balances at December 31, 1997......................... 905,739 594,261 $2.00 to $3.80
========= ========= ==============
</TABLE>

8. ACQUISITIONS

On December 26, 1997, the Company acquired from a related party certain
licensing and development rights on Parcel 11-A of the World Golf Village, the
Spa Tournament Championship development program, and the Spa Products and
Catalog from Divot Spa WGV, Inc., for approximately $356,000. The purchase price
of which approximately $331,000 and $25,000 has been allocated to goodwill and
licensing fees, respectively, consisted of 3,000,000 shares of the Company's
common stock and cash of $75,000. No expense was recorded during 1997 in
connection with this goodwill. The goodwill will be amortized using the straight
line method over a period of 15 years.

On December 28, 1997, the Company executed a letter of intent with Lady
Fairway Golf to purchase 100% of the outstanding stock of Lady Fairway Golf. In
connection with this agreement, the Company paid a nonrefundable deposit of
$100,000 which is included in the other assets of the Company's consolidated
balance sheet at December 31, 1997. The Company contemplates closing this
transaction in the first quarter 1998.

39
<PAGE> 95

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. DISPOSITION OF ASSETS

During the year ended December 31, 1997, the Company disposed of three
subsidiaries and substantially all of the assets of St. James in three separate
transactions for an aggregate amount of approximately $3,800,000 ($3,550,000 in
cash and $250,000 in accounts receivable). In addition, the Company is entitled
to receive a certain percentage of future contract revenue of Hale Irwin Golf
Services, Inc. The Company recognized a loss of $1,826,164 in connection with
the disposition of these subsidiaries. This loss is reflected in the statement
of operations. The operating results of the subsidiaries were included in the
consolidated statements of operations of the Company from the dates of
acquisition through the dates of disposition. The proceeds from the sale and
related gain (loss) are recorded as follows:

PROCEEDS
FROM SALE GAIN/(LOSS)

---------- -----------
<S> <C> <C>

Brassie Golf Management Services, Inc. and Summit Golf

Corporation............................................... $ 850,000 $ 125,000
The Gauntlet at St. James................................... 2,950,000 (1,931,875)
Hale Irwin Golf Services, Inc............................... -- (19,289)
---------- -----------
$3,800,000 $(1,826,164)

========== ===========
</TABLE>

10. CHANGE IN REPORTING ENTITY

In 1995, the Company consolidated two 75% owned subsidiaries, The Gauntlet
at Laurel Valley and The Gauntlet at Myrtle West in accordance with Financial
Accounting Standards Board Statement 94. In 1996, the Company transferred 45% of
the ownership interest in the subsidiaries to the minority shareholder to comply
with a mandatory injunction issued by the 13th Circuit Court of Hillsborough
County of Florida. Accordingly, the financial statements for 1996 have been
restated to reflect the Company's ownership in the subsidiaries under the equity
method of accounting. In 1996, the Company recognized a loss of $310,888 on the
transference of the interest in the subsidiaries. The Company's interest in the
net losses of these entities is recorded at 75% up until the date of
transference and at 30% thereafter.

Due to the recurring operating losses and working capital deficiencies of
the entities, the Company assessed the net realizable value of these investments
at December 31, 1996 to be -0-. Therefore, on the Company's assessment, a
write-down of $116,318 and $505,691 was recorded in 1997 and 1996, respectively
to reflect the net realizable value of these investments. The write-down is
included in the loss on equity investment in subsidiaries line item on the
Company's 1997 and 1996 statement of operations.

The components of the line item, Loss on equity investment in subsidiaries,
as reported in the consolidated statements of operations are as follows:

1996 1997

-------- --------
<S> <C> <C>
Pro rata share of net loss.................................. $310,888 $ --
Write-down to carrying value ............................... 505,691 116,318
Reserve for ongoing litigation.............................. 150,000 --
-------- --------
Loss on equity investment in subsidiaries................... $966,579 $116,318
======== ========
</TABLE>

40
<PAGE> 96

BRASSIE GOLF CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. COMMITMENTS AND CONTINGENCIES

The Company has employment agreements with its executive officers, the
terms of which expire at various times through September 3, 2004. Such
agreements provide for minimum salary levels, as well as for incentive bonuses
which are payable if specified management goals are attained. Minimum
commitments for future salaries, excluding bonuses, by year and in the aggregate
consist of the following at December 31, 1997:

<TABLE>

<S> <C>
1998........................................................ $ 650,000
1999........................................................ 650,000
2000........................................................ 591,667
2001........................................................ 475,000
2002........................................................ 454,167
Thereafter.................................................. 375,000
----------
$3,195,834

==========
</TABLE>

The Company, in the ordinary course of business, is the subject of, or
party to, various pending or threatened claims and litigation. In the opinion of
management, settlement of such claims and litigation will not have a material
effect on the Company's operations or financial position.

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

NONE

41
<PAGE> 97

PART III

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

Information incorporated by reference from the Company's Proxy
Statement, under captions "Proposal Two" and "Compliance with Section 16 of the
Securities Exchange Act of 1934"

ITEM 10. EXECUTIVE COMPENSATION

Information incorporated by reference from the Company's Proxy
Statement, under caption "Executive Compensation"

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information incorporated by reference from the Company's Proxy
Statement, under caption "Beneficial Owners and Management"

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information incorporated by reference from the Company's Proxy
Statement, under caption "Certain Relationships and Related Transactions"

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a)(1) and (2) List of Financial Statements

The following consolidated financial statements of Brassie Golf
Corporation and subsidiaries are included in Item 7:

Consolidated Balance Sheet - December 31, 1997

Consolidated Statements of Operations - Years ended December 31, 1997
and 1996

Consolidated Statements of Shareholders' Equity - Years ended
December 31, 1997 and 1996

Consolidated Statements of Cash Flows - Years ended December 31, 1997
and 1996

Notes to Consolidated Financial Statements

No other schedule for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are
required under the related instructions or are applicable and therefore
have been omitted.

42
<PAGE> 98

(3) Exhibits

The exhibits listed below which are marked with a page number
reference were filed with a prior registration statement filed under the
Securities Act or in a periodic report filed under the Exchange Act and are
incorporated herein by this reference. The exhibits listed below which are not
marked with a page number reference are filed with this Form 10-KSB.

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT/ITEM DOCUMENT/DESCRIPTION PAGE
NUMBER
<S> <C> <C>
2.1 Agreement and Plan of Reorganization effective as of November 14, 1991 by (A)
and among Longview Golf Corporation (the "Company"), Eliga Corporation
("Eliga") and Gutta Percha, Inc. ("GPI")

2.2 Arrangement Agreement dated as of March 26, 1993 between Equity (A)
Preservation Corp. ("Equity"), the Company and 440888 B.C. Ltd. and the
Information Circular distributed to shareholders in connection with the
arrangement contemplated by such Arrangement Agreement (the "Arrangement").

2.3 Final Order of the Supreme Court of British Columbia, dated May 17, 1993, (B)
relating to the fairness of the Arrangement.

2.4 Agreement of Purchase and Sale, dated as of December 23, 1993, by and (B)
between North Myrtle Beach Golf Club, Inc. ("MW Seller"), the Company and
The Gauntlet at Myrtle West, Inc. ("GMW"), and the material Exhibits thereto.

2.5 Purchase and Sale Agreement, dated as of April 12, 1994, between Wedgefield (B)
Limited Partnership ("Wedgefield LP"), the Company and The Gauntlet at
Wedgefield, Inc. ("GWF"), and the material Exhibits thereto.

2.6 Purchase and Sale Agreement, dated as of April 12, 1994,
between Palisades Golf Partners ("Palisades GP"), the (B)
Company and The Gauntlet at Palisades, Inc.
("GPS"), and the material Exhibits thereto.

2.7 Purchase and Sale Agreement, dated as of April 12, 1994, between Northshore (B)
Golf Partners, Ltd. ("Northshore GP"), the Company and The Gauntlet at
Northshore, Inc. ("GNS"), and the material Exhibits thereto.

2.8 Agreement and Plan of Reorganization dated as of May 16, 1994, between the (B)
Company and the shareholders of Hale Irwin Golf Services, Inc., and the
material Exhibits thereto.

3.1 Certificate of Incorporation of the Company, as amended. (A)

3.2 By-laws of the Company. (A)
</TABLE>

43
<PAGE> 99

<TABLE>
<CAPTION>
EXHIBIT/ITEM DOCUMENT/DESCRIPTION PAGE
NUMBER
<S> <C> <C>
3.3 Amendment to the Certificate of Incorporation of the Company filed July 18, (B)
1994.

4.1 Escrow Agreement dated as of July 23, 1993 between The Toronto Stock (A)
Exchange, the Company, Montreal Trust Company of Canada and the individuals
listed on Schedule A thereto.

4.2 Certificate of Designations, Preferences and Rights of 1997 Convertible
Preferred Stock of the Company dated December 29, 1997.

4.3 Certificate of Designations, Preferences and Rights of 10,500 Shares of 1997
Convertible Preferred Stock of the Company dated January 13, 1998.

10.1 Shareholders Agreement between Eliga, Canadian PT Limited Partnership ("PT (A)
Partnership"), Rizzo Inc., and Longview Golf Corporation ("GSJ") dated as of
October 1, 1990.

10.2 Bylaws of Longview Country Club dated November 14, 1990. (A)

10.3 Purchase Agreement between Homer E. Wright, Jr. and GSJ dated as of (A)
September 8, 1990.

10.4 Loan Agreement between NCNB National Bank of North Carolina (A)
("NationsBank") and GSJ dated as of October 1, 1990; Promissory Note made
by GSJ in favor of NationsBank dated October 1, 1990; Deed of Trust and
Security Agreement between GSJ and NationsBank dated October 1, 1990.

10.5 Loan Agreement between GSJ and PT Partnership dated October 1, 1990; (A)
Promissory Note made by GSJ to PT Partnership dated October 1, 1990; and
Future Advance Deed of Trust, Assignment and Security Agreement made by
GSJ dated October 1, 1990.

10.6 Shareholders Agreement between Eliga, Edmonton Pipe Industry Pension Trust (A)
Fund (the "EPI Pension Fund"), EPI and Laurel Valley Golf Corporation
("GLV") dated as of October 30, 1991.

10.7 Loan Agreement between GLV and NationsBank dated as of October 30, 1991; (A)
Promissory Note made by GLV in favor of NationsBank dated October 30,
1991; and Mortgage of Real Property and Security Agreement between GLV and
NationsBank dated as of October 30, 1991.

10.8 Loan Agreement between GLV and EPI Pension Fund dated as of October 30, (A)
1991; Promissory Note made by GLV to EPI Pension Fund; and second
mortgage and Security Agreement between GLV and EPI Pension Fund dated as
of October 30, 1991.

10.9 Joint Venture Agreement dated as of May 11, 1993 between Laurel Development (A)
Corporation ("LDC"), Foothills Development, Inc. ("Foothills") and Partners in
Progress X.

10.10 Loan Agreement dated as of July 6, 1993 between Amalgamated Equity Golf (A)
Corp. and Foothills.

10.11 Project Management Agreement dated June 1, 1993 between LDC and PMI. (A)
</TABLE>

44
<PAGE> 100

<TABLE>
<CAPTION>
EXHIBIT/ITEM DOCUMENT/DESCRIPTION PAGE
NUMBER
<S> <C> <C>
10.12 Subscription, Assignment and Assumption Agreement dated as of November 23, (A)
1993 between Amalco and Project 93 Management Ltd. ("Project 93") including
Promissory Note made by Project 93 in favor of Amalco.

10.13 Lease Agreement, as amended, between the Company and the Board of (B)
Supervisors of Stafford County, Virginia dated as of November 23, 1993.

10.14 Shareholders' Agreement between the Company, UA Canadian Pipeline Industry (B)
National Pension Plan ("UA Pension Fund") and The Gauntlet at Curtis Park,
Inc. ("GCP") dated April 19, 1994 and Amendment thereto dated May 13, 1994.

10.15 Loan Agreement between GCP and NationsBank dated as of April 19, 1994; (B)
Promissory Note made by GCP in favor of NationsBank dated April 19, 1994;
and Credit Line Deed of Trust and Security Agreement between GCP and
NationsBank dated as of April 19, 1994.

10.16 Guaranty Agreement between the Company, NationsBank and GCP dated as of (B)
April 19, 1994; Pledge Agreement between the Company and NationsBank dated
as of April 19, 1994; Amending Agreement between the Company, PT
Partnership, GSJ and NationsBank dated as of April 19, 1994 (amending GSJ
Shareholders' Agreement to permit the stock pledge); Amending Agreement
between the Company, EPI Pension Fund, GLV and NationsBank dated as of
April 19, 1994 (amending GLV Shareholders' Agreement to permit the stock
pledge).

10.17 Loan Agreement between GCP and UA Pension Fund dated April 19, 1994; (B)
Promissory Note made by GCP to UA Pension Fund dated April 19, 1994; and
Second Lien Credit Line Deed of Trust and Security Agreement, dated April 19,
1994, between GCP and UA Pension Fund.

10.18 Shareholders' Agreement, dated February 25, 1994, between (B)
the Company, Edmonton Pipe Industry Pension Trust Fund
("EPI Pension Fund") and GMW.

10.19 Indemnity Agreement and Guaranty, dated December 28, 1993, MW Seller, (B)
GMW and the Company; Third Mortgage of Real Property and Security
Agreement, dated December 28, 1993 by GMW to MW Seller.

10.20 Loan Agreement, dated as of December 28, 1993, by and between GMW and (B)
NationsBank; Promissory Note made by GMW to NationsBank dated December
28, 1993; Mortgage of Real Property and Security Agreement, dated December
28, 1993, by GMW to NationsBank.

10.21 Mortgage Purchase and Subscription Agreement, effective as of February 28, (B)
1994, between the Company, EPI Pension Fund and GMW.
</TABLE>

45
<PAGE> 101

<TABLE>
<CAPTION>
EXHIBIT/ITEM DOCUMENT/DESCRIPTION PAGE
NUMBER
<S> <C> <C>
10.22 Loan Agreement, dated December 28, 1993, between the Company and GMW; (B)
Promissory Note made by GMW to the Company dated December 28, 1993;
Second Mortgage of Real Property and Security Agreement, dated December 28,
1993, by GMW to the Company.

10.23 Intercreditor Agreement, dated December 28, 1993, by and among NationsBank, (B)
the Company, GMW and MW Seller; Assignment and Assumption of
Intercreditor Agreement, dated February 28, 1994, between NationsBank, the
Company, EPI Pension Fund, GMW and MW Seller.

10.24 Subordinated Convertible Note, dated as of April 12, 1994 from the Company to (B)
Warren J. Stanchina, as Trustee; Promissory Mortgage Note dated April 12,
1994 from the Company, GNS, GPS and GWF to Warren J. Stanchina, as
Trustee.

10.25 Indemnity Agreement, dated April 12, 1994, between Wedgefield LP, GWF and (B)
the Company; Indemnity Agreement, dated April 12, 1994, between Palisades
GP, GPS and the Company; Indemnity Agreement, dated April 12, 1994,
between Northshore GP, GNS and the Company; Wedgefield Second Mortgage
Deed and Security Agreement dated as of April 12, 1994 by GWF in favor of
Warren Stanchina, as Trustee; Palisades Second Mortgage Deed and Security
Agreement dated as of April 12, 1994 by GPS in favor of Warren Stanchina, as
Trustee; Second Deed of Trust and Security Agreement dated as of April 12,
1994 by GNS in favor of Warren Stanchina, as Trustee.

10.26 Assumption Agreement, dated April 28, 1994, between BancFlorida, a Federal (B)
Savings Bank ("BancFlorida"), GWF and GPS; Mortgage, Security Agreement,
and Assignment of Rents, dated April 21, 1989, by Wedgefield LP in favor of
BancFlorida; Mortgage Note, dated April 21, 1989, from Wedgefield LP to
BancFlorida.

10.27 Assumption Agreement, dated April 28, 1994, between BancFlorida, GPS and (B)
GWF; Mortgage, Security Agreement, and Assignment of Rents, dated December
8, 1989, by Palisades GP in favor of BancFlorida; Mortgage Note, dated
December 8, 1989, from Palisades GP to BancFlorida.

10.28 Agreement Relating to Construction, Maintenance and Operation of Golf Course (B)
and Country Club, dated October 18, 1989, between Palisades Golf Club Limited
Partnership and Canam Palisades, Ltd.

10.29 Promissory Note, dated April 12, 1994, from GAS to Hermann Flachsmann; (B)
Deed of Trust, Security Agreement, Financing Statement, and Assignment of
Rental dated April 12, 1994 by GAS to Wolfgang Dueren, as Trustee.

10.30 Cooperation Agreement Relating to the Sale of Residential Property and (B)
Operation of a Golf Course and Country Club, dated April 12, 1994, by and
between Northshore LP and GAS.
</TABLE>

46
<PAGE> 102

<TABLE>
<CAPTION>
EXHIBIT/ITEM DOCUMENT/DESCRIPTION PAGE
NUMBER
<S> <C> <C>
10.31 Brassie Golf Corporation 1994 Stock Option and Restricted Stock Purchase Plan. (B)

10.32 Exclusive Personal Service Contract between the Company and Dye, Inc. dated (C)
March 3, 1993.

10.33 Loan Agreement, dated as of April 24, 1991, between Eliga (D)
and the Company and Promissory Note dated September 15,
1991 in the amount of $780,000.

10.34 Employment Agreement, dated as of May 16, 1994, between the Company and (B)
Richard J. Stahlhuth; Employment Agreement, dated as of May 16, 1994,
between the Company and Hale S. Irwin.

10.35 Employment Agreement, dated as of June 30, 1994, between the Company and (B)
Gary A. Nacht.

10.36 Warrant Agreement, dated March 15, 1994, between the Company and The (B)
Travers Financial Corporation; Warrant Agreement, dated March 15, 1994,
between the Company and Theo Kraumanis.

10.37 Form of Warrant Agreement between the Company and the signatories thereto (E)
dated July 28, 1993.

10.38 Form of Warrant Agreement between the Company and the signatories thereto (F)
dated March 29, 1993.

10.39 Form of Warrant Issued to the Summit Shareholders dated June 30, 1995. (G)

10.40 Form of Warrant and Registration Rights Agreement Issued to Financial Advisor (G)
dated June 30, 1995.

10.41 1995 GSJ Partnership Loan Agreement and Promissory Note dated June 19, (G)
1995.

10.42 GSJ Loan Agreement with Canadian PT Limited Partnership, 1995 GSJ Deed of (G)
Trust and Security Agreement and Promissory Note dated October 1, 1995.

10.43 1995 Deed of Trust and Security Agreement, Promissory Note and 1995 GSJ (G)
NationsBank Loan Agreement dated June 19, 1995.

10.44 Amended and Restated GCP Promissory Note, First Amendment to GCP Loan (G)
Agreement, First Amendment to Credit Line Deed of Trust and Security
Agreement and Restatement of Guaranty Agreement dated May 5, 1995.

10.45 Office Lease between Breckenridge VIII Investment Corporation, Lessor, and (G)
Brassie Golf Corporation, Lessee, dated June 22, 1995.

10.46 Consulting Agreement between the Company and Fantor Consulting Ltd. (Allen (G)
Jefferson) dated January 1, 1996.
</TABLE>

47
<PAGE> 103

<TABLE>
<CAPTION>
EXHIBIT/ITEM DOCUMENT/DESCRIPTION PAGE
NUMBER
<S> <C> <C>
10.47 Agreement in Principle dated February 21, 1996 between the Company, Gordon (H)
Ewart, the Company's four golf course subsidiaries and the Company's three
pension fund partners.

10.48 Form of $5.5 million 6% Convertible Debenture issued by the Company on (I)
March 19, 1997.

10.49 Form of Letter Agreement dated September 6, 1996 Amending Terms of (J)
Company's $5.5 million 6% Convertible Debenture.

10.50 Sale of Certain Note Secured by Junior Security dated November 14, 1996 (K)
between UA Pension Fund, A & E Capital Funding, Inc., GCP, and the
Company selling and assigning the second mortgage loan on The Gauntlet at
Curtis Park from UA Pension Fund to A & E Capital.

10.51 Agreement for Sale and Purchase dated June 25, 1996 between Divot (K)
Development Corporation and SJH Partnership, Ltd. concerning Southeast Parcel
2 of the St. Johns Development.

10.52 Amendment to Agreement for Sale and Purchase dated December 11, 1996 (K)
between SJH Partnership, Ltd. and Divot Properties WGV, Inc. concerning
Southeast Parcel 2 of the St. Johns Development.

10.53 Assignment and Assumption of Purchase Agreement dated December 11, 1996 (K)
between Divot Development Corporation and Divot Properties WGV, Inc.
concerning Southeast Parcel 2 of the St. Johns Development.

10.54 Letter Agreement dated January 31, 1997 between Flurina Development S.A. and (K)
the Company amending the terms of the Company's Convertible Debenture held
by Flurina.

10.55 Letter Agreement dated February 5, 1997 between Pyramid Investments, LLC (K)
and the Company amending the terms of the Company's Convertible Debenture
held by Pyramid.

10.56 Letter Agreement dated January 29, 1997 between Infinity Investors Ltd. and the (K)
Company concerning converting a portion of the Infinity debenture and the
payoff of the Infinity debenture.

10.57 Assignment of Debenture dated February 5, 1997 between Infinity Investors Ltd. (K)
and Pyramid Investments, LLC assigning to Pyramid the Company's debenture
held by Infinity.

10.58 Form of Warrant issued to Infinity Investors Ltd. dated January 31, 1997. (K)

10.59 Form of Warrant Agreement between the Company and Pyramid Investments, (K)
LLC dated February 5, 1997.

10.60 Sublease Agreement dated as of January 1, 1998 between Churchill Capital
Corporation and the Company, and Consent of Landlord.

10.61 Amended and Restated Employment Agreement dated September 3, 1997 between the
Company and Joseph R. Cellura.

10.62 Employment Agreement dated September 2, 1997 between the Company and
Clifford F. Bagnall.

10.63 Purchase and Sale Agreement dated October of 1997 by and among the Company,
Divot Spa WGV, Inc. and Robert N. Gewant

10.64 Cross Creek/Brassie Stock Agreement dated November 13, 1997 between the Company
and Lance McNeill; General Release by Lance McNeill; Resignation of Lance McNeill;
and Indemnification Agreement between the Company and Lance McNeill.

10.65 Form of Convertible Debenture Agreement dated November 18, 1997 between the Company
and the signatories thereto, Convertible Note and Warrant.

10.66 Employment Agreement dated December 1, 1997 between the Company and Jeremiah M. Daly.

10.67 Form of Private Placement Purchase Agreement dated December 3, 1997 between the Company
and the signatories thereto, with form of Warrant to purchase shares of the Company's
Common Stock.

10.68 Letter Agreement dated December 5, 1997 between the Company and Mr. and
Mrs. William E. Horne, et. al., and Stock Purchase Agreement; Resignation of
William E. Horne; General Release by William E. Horne; and Indemnification Agreement
between the Company and William E. Horne.

10.69 Agreement of Lease dated December 16, 1997 between Tampa City Center Associates and the
Company.

10.70 Form of Mortgage and Security Agreement dated January of 1998 given by Divot Properties
WGV, Inc.; Promissory Note in the principal amount of $1,500,000 given by Divot Properties
WGV, Inc.; Assignment of Net Sales Proceeds; and Continuing Guaranty.

10.71 Form of Private Placement Purchase Agreement dated January of 1998 between the Company and
the signatories thereto.

10.72 Loan Agreement dated as of October 30, 1997 between The Gauntlet at Curtis Park, Inc., the
Company and Washington Mortgage Financial Group, Ltd.

21.1 Subsidiaries of the Company. (B)
</TABLE>

48
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<TABLE>
<CAPTION>
EXHIBIT/ITEM DOCUMENT/DESCRIPTION PAGE
NUMBER
<S> <C> <C>
27 Financial Data Schedule (For SEC Use Only)
</TABLE>

(A) Incorporated by reference from the Company's Form 10, file No. 0-23056,
filed on December 13, 1993.

(B) Incorporated by reference from the Company's Form 10, file No. 0-24812,
filed on September 15, 1994.

(C) Incorporated by reference from the Company's Form 10, file No. 0-23056,
filed on December 13, 1993 (Exhibit 10.14 thereto).

(D) Incorporated by reference from the Company's Form 10, file No. 0-23056,
filed on December 13, 1993 (Exhibit 10.15 thereto).

(E) Incorporated by reference from the Company's Form 10, file No. 0-23056,
filed on December 13, 1993 (Exhibit 10.16 thereto).

(F) Incorporated by reference from the Company's Form 10, file No. 0-23056,
filed on December 13, 1993 (Exhibit 10.17 thereto).

(G) Incorporated by reference from the Company's Form 10-K, file No.
0-24812, filed on April 15, 1996.

(H) Incorporated by reference from the Company's Form 8-K, file No.
0-24812, filed on August 30, 1996.

(I) Incorporated by reference from the Company's Form 10-QSB, file No.
0-24812, filed on May 15, 1996.

(J) Incorporated by reference from the Company's Form 10-QSB, file No.
0-24812, filed on October 30, 1996.

(K) Incorporated by reference from the Company's Form 10-KSB, file No.
0-24812, filed on April 14, 1997.

49
<PAGE> 105

(b) Reports on Form 8-K

Dated February 13, 1998
Dated January 12, 1998
Dated January 12, 1998
Dated November 23, 1997
Dated September 30, 1997
Dated August 1, 1997
Dated July 31, 1997

50
<PAGE> 106

SIGNATURES

In accordance with Sections 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.

BRASSIE GOLF CORPORATION

By: /s/ Joseph R. Cellura
-----------------------
Chief Executive Officer

Dated: March 30, 1998

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.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- - --------- ----- ----
<S> <C> <C>
/s/ Joseph R. Cellura Director March 30, 1998
- - -------------------------------
Joseph R. Cellura

/s/ Gordon D. Ewart Director March 30, 1998
- - -----------------------------
Gordon D. Ewart

/s/ Clifford F. Bagnall Director March 30, 1998
- - -------------------------------
Clifford F. Bagnall

/s/ Jeremiah M. Daly Director March 30, 1998
- - ------------------------------
Jeremiah M. Daly

/s/ James A. McNulty Chief Financial Officer March 30, 1998
- - ------------------------------
James A. McNulty
</TABLE>

<PAGE> 107
APPENDIX
BRASSIE GOLF CORPORATION

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL SHAREHOLDERS'
MEETING

The undersigned shareholder of BRASSIE GOLF CORPORATION, a Delaware
corporation (the "Company"), revoking all prior proxies, hereby appoints Joseph
R. Cellura, Clifford F. Bagnall and Jeremiah M. Daly, or any of them, as the
attorneys and proxies of the undersigned, with full power of substitution and
revocation, to vote all the shares of stock of the Company that the undersigned
may be entitled to vote at the annual shareholders' meeting of the Company to be
held in the Metropolitan Suite at The Four Seasons Hotel, 57 East 57th Street,
New York, New York 10022, on Thursday, May 28, 1998, at 10:00 a.m., local time,
and at any adjournment or adjournments thereof, with all powers that the
undersigned would possess if personally present, upon the following matters as
more fully described in the accompanying Notice of Annual Meeting and Proxy
Statement, receipt of which is hereby acknowledged:

(1) Proposal to approve amendments to the Company's Certificate of Incorporation
and By-laws providing for the classification of the Board of Directors into
three (3) classes, with members of each class serving for staggered terms.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(2) Election of five (5) Directors serving the staggered terms as outlined
below, provided the proposed amendments to the Company's Certificate of
Incorporation and By-laws providing for a classified Board of Directors
(Proposal 1 above) are adopted; if the proposed amendments are not adopted,
all five (5) Directors will be elected for a one-year term:

[ ] FOR all nominees and terms listed below (except as marked to the
contrary):

Clifford F. Bagnall, 3 years; Joseph R. Cellura, 3 years;
Preston H. Cottrell, 2 years;
Jeremiah M. Daly, 2 years; Gordon D. Ewart, 1 year

(To withhold authority to vote for any individual nominee, strike a line
through the nominee's name above.)

[ ] WITHHOLD authority to vote from all nominees listed above

(3) Proposal to approve an amendment to the Company's Certificate of
Incorporation to change the Company's name to "Divot Golf Corporation."

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(4) Proposal to approve an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock,
par value $.001, from 50 million to 200 million shares.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(5) Proposal to approve the Company's 1998 Stock Option Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(6) Proposal to approve an amendment to the Company's Certificate of
Incorporation to effect a reverse stock split of the Company's Common Stock
on a 1 for 15 ratio.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(7) Proposal to approve the appointment of Ernst & Young L.L.P., Certified
Public Accountants, as the auditors for the ensuing year and to authorize
the Directors to fix the remuneration to be paid to the auditors.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(8) In their discretion upon such other matters as may properly come before the
meeting.

WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS YOU SPECIFY. IF NO
CONTRARY SPECIFICATION IS MADE, IT WILL BE VOTED FOR PROPOSALS (1) THROUGH
(7), INCLUSIVE.

DATED this day of
----------

----------------------, 1998.

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

PLEASE SIGN NAME OR NAMES
EXACTLY AS THEY APPEAR ON STOCK
CERTIFICATE. WHEN SIGNING AS
ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR
GUARDIAN, GIVE FULL TITLE. IF
MORE THAN ONE TRUSTEE OR
PERSONAL REPRESENTATIVE, ALL
MUST SIGN. ALL JOINT OWNERS MUST
SIGN.