Confidential and Proprietary Information s1

CONFIDENTIAL AND PROPRIETARY INFORMATION

Business Proposal for TOPGUN VENTURES

Headquarters Location

110 Broadway Suite 380 San Antonio, Texas 78205 1.210.299.4376

[email protected] [email protected]

January 8, 1998 No part of this document may be communicated to another individual or entity, reproduced, transmitted, transcribed, stored in a retrieval system, or translated into any language (natural or computer), in any form or by any means without the prior written permission of TOPGUN Ventures.

Confidential TOPGUN Ventures 1998 2 TABLE OF CONTENTS Executive Summary...... 3 Introduction...... 4 Figure (1) diagrams the businesses of TOPGUN Ventures...... 5 TOPGUN Properties...... 6 Alamo Crockett Palace...... 6 Figure (2) Lease Summary/Rent Roll...... 7 The American Fighter Aces Association Museum...... 8 The Wings of Freedom Foundation...... 10 TOPGUN Food Service...... 12 TOPGUN Stuff...... 12 TOPGUN Entertainment...... 13 Entertainment Center Description...... 14 The Virtual Fighter Experience...... 15 TOPGUN Simulation Development...... 16 Market Analysis...... 17 Location: San Antonio...... 18 Sponsorship Opportunities...... 20 FINANCIALS...... 21 Alamo Crockett Palace Balance Sheet...... 22 Alamo Crockett Palace Income Statement...... 23 Wings of Freedom Foundation Balance Sheet...... 24 Wings of Freedom Foundation Income Statement...... 25 TOPGUN Food Service Balance Sheet...... 26 TOPGUN Food Service Income Statement...... 27 TOPGUN Stuff Balance Sheet...... 28 TOPGUN Stuff Income Statement...... 29 TOPGUN Entertainment Balance Sheet...... 30 TOPGUN Entertainment Income Statement...... 31 TOPGUN Simulation Development Balance Sheet...... 32 TOPGUN Simulation Development Income Statement...... 33 APPENDIX...... 34

Confidential TOPGUN Ventures 1998 3 Executive Summary

TOPGUN Ventures serves as the holding company for several associated firms, each of which is formed as a Limited Liability Corporation (LLC). Each firm will have certain responsibilities, often used in direct support of other members of the holding company. Each firm will be described in more detail within this document. The principal place of business for these firms will be San Antonio, Texas. The historical sites of San Antonio, combined with 300+ sunny – 73 degree average ambient days, numerous golf courses, two world-class theme parks, professional sports, and a myriad of cultural events, make this city consistently one of the top ten tourist and convention destinations in the United States. Last year, more than seven million people visited the River Walk and over three million visited the Alamo, with a collective economic impact in excess of $3 billion. The different initial firms held by TOPGUN Ventures will be: TOPGUN Properties Charter Acquire and Funds manage all $5.0 million estimate ReturnNeeded (5 $13.0 million $10.0 million -est yr total, Alamo CharterCrocket Manage Funds and $3.3 million (mostly ReturnNeeded (5 operate $3.0 million debt) $1.2 million yr total, Aces adjacent Wings of properties CharterFreedom FundsFoundati $1.7 million on ReturnNeeded (5 $7.5 million $2.5 million yr total, TOPGUN CharterFood Manage and Funds operate all $1.4 million ReturnNeeded (5 $11.2 million $3.3 million yr total, TOPGUN CharterStuff Manage and Funds operate all $0.6 million ReturnNeeded (5 retail and $3.7 million $1.1 million yr total, internet services TOPGUN CharterEntertain Manager and Fundsment operate all $4.1 million ReturnNeeded (5 entertainment $15.4 million $4.6 million yr total, services (simulators, TOPGUN etc, annual Simulatio Charter thereafter)Design Funds develop and to be ReturnNeeded (5 manufacture toprovided be yr total, all interactive provided Confidential TOPGUN Ventures 1998 4 Confidential TOPGUN Ventures 1998 5 Introduction

TOPGUN Ventures is seeking corporate partners for profitable, unique and aggressive business/education opportunities -- beginning in San Antonio, Texas. This document represents an early-phase, investment and sponsorship capital search, to launch a cohesive and synergistic group of aviation and aerospace businesses -- all poised to strategically capture a sustained growth niche in the $50 billion plus entertainment and museum markets. San Antonio, now the eighth largest city in the United States and the top tourist destination in the state of Texas, is consistently ranked as one of the top tourist and convention destinations in the U.S., and in the world (Cante Nast Globetrotters Survey). This makes it a uniquely opportune city for TOPGUN Ventures to launch its initial highly profitable aviation/edu-tainment oriented businesses. TOPGUN Ventures work because of the several million visitors that are drawn annually to this culturally diverse and historically rich city; additionally TOP GUN Ventures works because San Antonio is the number one military aviation city in the world! To date, San Antonio has not marketed this vast historical aviation heritage and rich military legacy to it’s millions of yearly visitors. TOPGUN Ventures will specifically address the long standing lack of military aviation recognition in San Antonio by capitalizing upon the keen interest local and visiting people have in aviation and aerospace technology.

 In 1996, an estimated 75 million people visited Science Museums and Technology Centers in the United States. By comparison, an estimated 87 million spectators attended professional basketball, football and baseball games the same year.  The movie “TOP GUN” is one of the most successful Hollywood productions of all-time. The movie “Apollo 13” was the second most successful movie in the summer of 1995, with $300 million at the box office.  The combined yearly attendance of the National Air and Space Museum, Cape Kennedy, The Johnson Space Center, and Space Camp in Huntsville is 13.9 million. Were these NASA facilities operated under a single entity, it would be the second largest themed provider in the entire United States, surpassed only by Disney, and followed by both Universal Studio Parks’ attendance, at just over 11 million visitors a year.  The Johnson Space Center’s new $75 million Visitor Center opened a few years ago, and in December, 1996, the $45 million Apollo/Saturn V Museum was dedicated at Cape Kennedy. This combined investment of $120 million clearly demonstrates the financial community’s willingness to invest in pure historic space/aviation themed projects. Association of Science-Technology Centers(ASTC)

This interest is especially true of the unique fighter aircraft -- “warbirds”. The “warbirds”, memorabilia and stories surrounding the most distinguished of the fighter pilots -- the American Fighter Aces – will be represented here in their museum, representing one of the last bastions of real American heroes left in our country today!

Confidential TOPGUN Ventures 1998 6 TOPGUN Ventures is the holding company for TOPGUN Properties -- Alamo Crockett Palace and Wings of Freedom, TOPGUN Food Services, TOPGUN Stuff, TOPGUN Entertainment and TOPGUN Simulation Development companies. Each represents a Limited Liability Company (LLC) with a strong return-on-investment (ROI) potential.

Figure (1) diagrams the businesses that will be detailed in the following chapters:

TOPGUN Ventures

TOPGUN TOPGUN TOPGUN TOPGUN TOPGUN Simulation Entertainment Stuff Food Services Properties Development

Simulator LBE Retail Food Court City Walk Clubs, Design Operations Shops, etc

Simulator Web Site Full Service Manufacturer Alamo Crocket Palace Simulator Marketing Catering Sales

Food American Motion Fighter Aces Theater Retail

Sims Museum

Wings of Vintage Freedom Aircraft

TOPGUN Food Academy

Retail TOPGUN Challenge Figure (1) Sims

Confidential TOPGUN Ventures 1998 7 TOPGUN Properties

TOPGUN Properties (TGP) charter is to acquire and manage all commercial real estate properties to be used by TOPGUN Ventures. Duties would include seeking and exercising all respective leases and/or purchase options, managing all master leases, exercising purchase options when/where applicable, meeting all federal, state and local tax mandates and expenses, managing all tenant revenues and applicable building operating expenses. TGP will initially manage Alamo Crockett Palace operations, including all existing leases. The principal tenant is The American Fighter Aces Museum. Other TOPGUN Ventures businesses will also lease space in support of museum operations (retail, food and interactive entertainment). TGP plans to acquire the Nolan Building. Its principal tenant will be The Wings of Freedom Foundation (Wings), which will house its collection of 20 fighter aircraft and operate the TOPGUN Academy and TOPGUN Challenge. As in the Crockett Building, other TOPGUN Ventures businesses will also lease space in the NOLAN building to support Wings (retail, food and interactive entertainment).

Alamo Crockett Palace Alamo Crockett Palace (ACP) as the principal “Sub-lessor” of the Crockett/Palace Building, will manage the building until ownership is transferred to TGP. The American Fighter Aces Association (AFAA) has a 50 year lease with an option for first-right-of-refusal to purchase the building at fair market value. ACP may exercise their right to purchase within the terms of the contract from the Master Lessor if AFAA chooses to decline upon an ACP purchase bid. In exchange for a minimum annual gross income from ticket sales (admission to the Museum) of $125,000, AFAA will pay 20% of gate revenues for rent. ACP has agreed to cover the costs of the Association and Museum relocation from Mesa, Arizona to San Antonio at a cost not to exceed $150,000. One hundred percent (100%) of all gate revenues will be used to repay all funds used for leasehold improvement for the museum area. The cost of building renovation has been proposed by more than one contractor at a price not to exceed $2.5 million.

Confidential TOPGUN Ventures 1998 8 Lease Summary/Rent Roll

Square Lease Lease Current Current Date of Monthly Monthly Expense Percentage Renewal Tenant Feet Begin Date Expiration Rent Rate/sf Increase Rent Rate /sf Escalations Rent Options

Alamo Plaza Gifts 975 09/01/93 08/31/96 $3,061.50 $3.14 Sep-97 $3,159.00 $3.24 Retail Expense Stop None None $3.25

Alamo Plaza Shirts 2,040 04/01/95 03/31/05 $6,000.00 $2.94 Apr-98 $6,180.00 $3.03 Retail Expense Stop None One 5-Year Option Apr-99 $6,356.40 $3.12 $3.25 Apr-00 $6,556.37 $3.21 Apr-01 $6,753.07 $3.31 Apr-02 $6,955.07 $3.41 Apr-03 $7,164.34 $3.51 Apr-04 $7,379.27 $3.62

Hyatt Regency 4,500 11/01/95 01/01/99 $4,500.00 $1.00 Taxes & Insurance 5% of Food Two 3-Year Options Base Year 1995 and Beverage

Sosa, Bromley** 26,623 05/01/90 06/30/96 $35,166.52 $1.32 Office Expense Stop None Month to month $3.45

Ramiro Perez 2,697 02/01/97 01/31/02 $4,746.72 $1.76 Retail Expense Stop Two 10-Year Options Base Year 1997 36,835 $53,474.74 $1.45 Notes: **Sosa, Bromley is expected to vacate the premises when the Burns building is ready for occupancy; projected date is May 1, 1998. Figure (2)

Confidential TOPGUN Ventures 1998 9 The American Fighter Aces Association Museum The American Fighter Aces Association (AFAA) is a 501c(3) tax exempt organization representing all of America’s 1,445 “fighter” Aces -- those most distinguished of the fighter pilots -- having destroyed five or more enemy planes in air-to-air combat. The American Fighter Aces Museum will sublease approximately 22,200 in the building known as 321 Alamo Plaza, located directly across from the Alamo. They will showcase their exploits in a very dramatic and cogent venue. Day-to-day operations will be AFAA’s complete responsibility (see BULLETIN in APPENDIX). The Museum will employ various interactive stations in addition to the varied static displays representing all of the major wars of this century. Stations will include a themed theater reenacting the Schweinfurt Raid Briefing, multiple remote display VCR’s, a 16 person group simulation, and individual virtual reality cockpits.

The purpose and objectives of The American Fighter Ace’s Museum are: “To foster and perpetuate the American Fighter Aces Museum as a medium of informing and educating the public on the important role that American fighter aces have played in the history of military aviation in our country. To create a permanent home for the ace’s memorabilia and give future generations a motivational and educational showcase exemplified by their daring exploits.”

Confidential TOPGUN Ventures 1998 10 The American Fighter Aces Museum resides very much on “hallowed ground”, resting on the very site of the western-most, outer Alamo Wall. It is just a few yards removed from Travis’s and Bowie’s original Alamo “headquarters”. Conjecture spawns the belief that some of the Battle of the Alamo took place within the confines of this very property. It is befitting of the “Aces” -- the most celebrated and distinguished of our American “fighter” aviator legends – that they utilize the immediate area of the world-renown Alamo shrine -- an icon to courage and freedom everywhere!

Confidential TOPGUN Ventures 1998 11 The Wings of Freedom Foundation The Wings of Freedom Foundation (Wings) is a tax exempt, 501c(3) corporation designed to house the fighter plane collection. It’s primary function is to educate both young and old about the evolution of military aircraft and other aeronautical technologies. Twenty to twenty-five of the finest American, allied and enemy fighter aircraft in the world will be showcased, representing aviation from its earliest roots at the turn of the century to the present. Many of the aircraft that the aces flew will be on display, allowing for an up-close and hands-on experience.

Confidential TOPGUN Ventures 1998 12 Numerous recent reports, from researchers and educators, nationally and internationally, state that youth of the United States have fallen behind in technical subjects -- especially mathematics and the sciences. Consequently, these students avoid higher education courses which would otherwise prepare them for technical careers. Consequently, many high-tech industries are forced to recruit technologically competent employees from outside the US. Wings will provide a complete automated and interactive control center, situation room, control tower and team “challenge courses”, where middle school and high school students can learn and apply math and science skills. TOPGUN Academy and TOPGUN Flight Challenge will incorporate a supportive atmosphere for discovery, experimentation and learning by utilizing many interactive media forms. In these courses, students will develop a greater appreciation for technical subjects through hands-on applications of their classroom-taught skills. This will help many take the first step on their journey to higher learning in math, science and the engineering courses.

“The students benefit from total immersion in a hands-on program that cannot be replicated in a classroom. It helps them to develop a sense of teamwork while accomplishing a task -- the resources are amazing!” Marlenn Maicki, Science Teacher, Detroit Country Day School

A survey taken of U.S. SPACE CAMP graduates shows a positive impact with students citing their SPACE CAMP experience as “ . . . a changing force in their lives”

• 93 % of graduates take more science classes • 91% of graduates take more math classes • 74% of graduates learned about career options U.S. Space Camp Group Information Bulletin

The Wings of Freedom Foundation will help individual students and our city and nation collectively to determine our respective position in the world economy in the 21st Century.

Confidential TOPGUN Ventures 1998 13 TOPGUN Food Service

TOPGUN Food Service (TGF) will provide full-service retail food requirements for TOPGUN Ventures. Full and quick service restaurants, TOPGUN Pizza, catering and all other snack and full-line concessions will be under its control. TOPGUN Food Service will utilize a comprehensive Quality, Service and Cleanliness (QSC) program which will be patterned after several successful national-chain restaurants. Kris Lundeen will direct the development of the programs to be used in all retail and catering. Educated as a food chemist and microbiologist, Mr. Lundeen has 14 years experience in restaurant management. He has received several regional operational recognition awards. As a State Certified Food Handler’s Instructor, he’s readily able to insure that all training meets State Certification Requirements by providing fundamental food preparation, handling and hygiene instruction. Championing service, quality preparation, tasty cuisine and a diversity of menu selections representing a great value for the dollar, will form the basis for TGF operations. TGF will incorporate significant aviation themes into all of its food venues.

TOPGUN Stuff

TOPGUN Stuff (TGS) is a little odd for a company name, yet it describes well the vast assortment of military aviation/aerospace “stuff” available. TGS will be the full-service provider meeting all the retail merchandise needs for all TOPGUN Venture businesses. TGS will provide all point-of-sale merchandising, retail equipment and inventory. Every aspect of training will focus on customer service and product knowledge. Inventory levels will be monitored daily and weekly for reporting and ordering purposes. With the annual San Antonio tourist industry economic impact of over $3 billion, one can surmise that much of this money is spent on local merchandise in the “tourist sector”. This venue will, by virtue of its prime tourist location and particular theme, become a major profit center. TGS, by contract, will be the exclusive retailer and distributor of licensed Ace’s memorabilia in the world! As awareness of these “heroes” grows, demand for exclusive licensed collectibles and clothing, bearing the Ace’s logo, trademarked name and individual Ace’s signatures will also grow dramatically. Collectors from around the world, both veteran and new, will recognize the tremendous uniqueness, intrinsic value and investment opportunity for these one-of-a-kind items -- desiring to acquire these valuable pieces of nostalgic military aviation history. TGS will also market its diverse product line in a compelling catalog format on the internet: www.topgun.com. TGS will again be the exclusive carrier of licensed ace’s “ACEWEAR”, memorabilia, and prints in the world. With tens of millions of potential buyers now “surfing the net”, this venue too offers another immense profit center.

Confidential TOPGUN Ventures 1998 14 TOPGUN Entertainment

There is a spirit in every man, woman, and child that wishes to be anything, anywhere, any time. This spirit sometimes seeks satisfaction in the make-believe world of entertainment. Today, the entertainment industry is beginning to apply the best that modern technology has to offer, to create realistic make-believe, or Virtual Reality Adventures. An enjoyable, entertaining VR adventure invites the individual "player" to interact with a realistic, computer-generated world in which he or she is "immersed". Virtual Reality Adventures combine 3-D animation, multiphonic surround sound and an interactive computer-generated environment. The focal point is you, the player, interacting with this total immersion environment as if it were a real event. You, the player, will actually participate in the event. You fly the airplane, drive the race car, participate in the shoot-out, or climb the mountain. You actually feel the excitement and the rush. All of your senses are involved. TOPGUN Entertainment (TGE) will be the newest entry in the rapidly expanding marketplace for “out-of-home” entertainment. Entertainment centers built specifically for out-of-home entertainment purposes are being called “Location-Based Entertainment” centers or LBE’s. Many of the existing and proposed LBE’s incorporate some, if not all of the entertainment attractions that will be utilized by TGE except, of course, the “Virtual Fighter (see page 17 for a detailed description of the VF). TGE management strongly believes there is a dynamic synergism regarding the advent of high- tech LBE’s. More than a handful of very well capitalized and successful companies have set their sights on developing, owning and operating high-tech oriented LBE’s. TGE Centers will constantly strive to bring to the general public the most up-to-date Virtual Reality (VR) and simulation entertainment configurations. Most of the entertainment offerings at a TGE center are designed to be a challenging and high-energy experience. The entertainment attractions will, for the most part, be highly immersive and interactive. These types of entertainment attractions are part of what the consumer of today demands: high- tech and high stimulation. TGE will offer a wide range of entertainment attractions built to appeal to a broad segment of the out-of-home entertainment market which will include both local residents as well as tourists. The TGE centers can be successful as free-standing destination locations, as anchor tenants for malls, or as entertainment venues for museums and other high- traffic areas. TGE management contemplates that the TGE centers will occupy from 7,500 - 15,000 square feet depending on the location and the local demographics. TGE strategy is based on management’s belief that LBE’s of this type represent an emerging and important new marketing opportunity in the out-of-home entertainment industry. Products driving LBE expansion are software-driven attractions, most of which were developed in the last ten years. They share three characteristics: They are as exciting and powerful as the best theme park rides, they can be built into limited real estate space, and they can create an entirely new ride experience by merely re-programming the software. These 3 common threads are what give LBE’s their potential to be economically viable in an already crowded entertainment marketplace.

Confidential TOPGUN Ventures 1998 15 TGE centers can offer the general public a shared emotional experience among it’s participants. The blending of “high-tech” with “high-touch” is a continuation of the Disneyland experience where both parents and children enjoyed their rides together. TGE centers can bring the entire family together for a few quality hours of interactive and immersive entertainment experiences. It is our belief, that TGE centers will be the antidote to video arcades. At video arcades the entertainment experience is only enjoyed by those generations of Americans brought up by Pong and Pac Man. At TGE all ages and walks of life can participate together in a wide array of high- tech entertainment attractions. TOPGUN Entertainment (TGE) will apply space age technologies to create and offer the very best VRA to the general public. TGE's relationship with Top Gun Simulation Development, the designers and constructors of the Virtual Fighter, will form the basis for an outstanding thematic center. This center will feature the state of the art in flight simulation technologies available to the general public.

Entertainment Center Description TGE Centers feature an exciting and inviting appearance highlighting the multi-venue entertainment and educational complex. Exterior video and graphics with glimpses of the virtual reality, simulation and other interactive experiences await inside. Experiences inside can be changed at any time to appeal to the demographics of visitors at different times of the day or season. Outside the centers, potential customers and passersby can observe actual activities, or watch full-color large screen monitors displaying game graphics and experience highlights. This entices new customers with the excitement from the point-of-view of actual players inside. Because TGE's are multi-venue attractions, visitors can choose from a variety of virtual reality simulator and interactive experiences, in addition to the conventional SoftPlay, arcade, and redemption activities. Another experience in the multi-venue TGE center is a complete motion-based simulator experience. Passengers step into a larger fantasy transport vehicle and are taken on thrill rides from roller coasters to pre-historic explorations and intergalactic journeys. Located near the registration area, TOPGUN and Aces signature merchandise will be strategically displayed using exterior enhancements. Located just beyond the entrance-way, each TGE Center includes a themed food service area, designed as the perfect place for players to congregate and discuss their experiences afterward. Thoroughly trained and highly knowledgeable TGE staff dressed in themed uniforms, will welcome all guests sell boarding passes and assist passengers through their virtual reality journeys and simulation experiences. All new TOPGUN "pilots" will be briefed and trained in the Preflight Control Center, while experienced pilots bypass this area and proceed directly to their gate when their flight is announced. TOPGUN pilots will enjoy a completely interactive simulator ride. Using the latest technology, visitors immerse themselves in a motion-based simulator experience where they are in control of the motion of their vehicle. Rides will include jet fighters and race cars, and in the future, spaceships and other exciting vehicles. TOPGUN pilots maneuver their simulators through a

Confidential TOPGUN Ventures 1998 16 variety of land, sea and air adventures. State-of-the-art real-time 3-D graphics are unlike any other entertainment experience in today’s market. After the flight experience, pilots are ushered to a debriefing area. This themed debriefing center is where pilots discuss their experience with each other and are shown how well they performed. Upon leaving their entertainment experience, visitors are offered another opportunity to purchase a wide range of useful and uniquely designed, signature TOPGUN AND ACES products, so they can tell the world about their total TOPGUN experience. TGE Centers represent a completely integrated and well thought out multi-venue entertainment concept in a relatively small location. Appealing to all age groups, each center offers multi- entertainment experiences, education, and value-added premiums and incentives. TOPGUN guests will return to the center again and again and again.

The Virtual Fighter Experience The featured entertainment attraction for all TGE Centers will be the Virtual Fighter virtual reality motion simulator. The Virtual Fighter is a real motion-based fighter jet simulator that was available only to military personnel a few short years ago. The Virtual Fighter technology combines 3-D computer generated animation, multiphonic sound and an interactive capability. Customer ‘pilots’ can take off from runways or aircraft carriers, fly formation or engage in dogfights. The Virtual Fighter currently has one dozen scenarios. Many experienced pilots have been known to break into a sweat during the heat of simulated battles. There is also a non- combat experience for those who prefer to just fly over various terrain. When a customer ‘pilot’ arrives, he goes first to the Flight Check-In Counter and enters his flight plans in the log book. In this same lobby area guests can gaze at airplane memorabilia and history or watch other customer ‘pilots’ from the Flight Viewing Area. The next step is to enter the Flight Training Center which is the instructional area for both experienced and new pilots. After a 7 to 8 minute training video, the pilots are moved to the Briefing Room where they will meet with the Flight Director and determine the flight plan for each guest. The guests are given a Mission Objectives’ board which gives the guest his flight number and a map showing the location of key points or targets. After leaving the Briefing Room, the pilots enter into the Hanger where the Virtual Fighter machines appear ready for flight. The Flight Director gives his final briefing and the pilots are ready for take-off. Once inside the cockpit, the guest/pilots discover that they can communicate with each other via the microphone and speaker-equipped radio system. This radio system is one of the key elements that supports the interactivity during this entertainment experience. If the guest has chosen a Combat Mission they go off to fight bad guys (either computer controlled, or flown by friends in other simulators) with a host of bullets, missiles and bombs. If the guest has chosen a Non-Combat experience he can gracefully fly over terrain miles from the Combat Mission. At the end of the Flight the guests enter a Debriefing Room where they can discuss their flight with flight members and the Flight Director. Scores which have been recorded during flight will

Confidential TOPGUN Ventures 1998 17 be distributed to the guests. These scores will be entered into the ‘log book’ and will be used to determine winners of various contests that TGE will offer. The exceptionally high-quality computer-generated images created by TOPGUN Simulation Development exclusively for use by the Virtual Fighter makes it stand head-and-shoulder above other virtual reality motion-based simulators. The realtime interactive capability of the Virtual Fighter also sets it apart from the pack. The Virtual Fighter can be interactive at each location or it can be linked up to TGE centers in other parts of the world. In 1994 the manufacturer of the Virtual Fighter (TOPGUN Simulation Development) linked, via phone lines, two Virtual Fighters TOPGUN Simulation Development -- one in Las Vegas, Nevada and the other in Tokyo, Japan! The link-up went off without a hitch. This interactive capability is completely new and totally unique to the entertainment market.

TOPGUN Simulation Development

TOPGUN Simulation and Development (TGS) was formed by Greg Gustin. After winning critical acclaim for contributions to the fields of military flight simulation, graphics technology and virtual reality. Mr. Gustin decided to pursue opportunities in the world's commercial, rather than military markets. Opportunities for sales to the military customers are decreasing, while markets for interactive entertainment are just starting to take off. TGS will offer a series of superior graphics based products to the emerging interactive entertainment industry. The marriage of superior imaging technologies with the simulated fantasies of "virtual reality" comprise the world of business opportunities for TGS. The company currently builds fighter jet simulators for use and enjoyment by the general public. TGS has drawn upon many years of experience building fighter jet simulators for the armed services to create high fidelity, commercial flight simulator called the Virtual Fighter. Specifications for this product were shaped by on-site market research. TGS opened its own entertainment facility in May 1993 in Orlando Florida for the purpose obtaining input from the public that was used to develop the Virtual Fighter. TGS is selling Virtual Fighter simulators for incorporation in a variety of "themed" entertainment attractions around the world. The company's primary business focus is to provide the highest value virtual reality products to this marketplace. The interim product is built to such a high standard that even the Pentagon rented it for NATO's 37th Annual Defense Readiness Group's Symposium on Training. There, the system was described by Lt. Col. Dave Bartlett, Director of Operations for the Defense Military Simulation and Modeling Office, "... as the finest example of training technology in America today..."

Confidential TOPGUN Ventures 1998 18 Market Analysis

According to Amusement Business, June, 1997 issue, several industry experts, point to one dramatic industry trend with corporations’ increasing use of theming and themed attraction at trade shows, conventions and promotional functions. In this issue, Peter Chernack, Chairman and President of The Themed Entertainment Association, stated: “Themed entertainment is now being included in more and more types of developments – malls and resorts to name a couple. Themed entertainment is being included everywhere. . . . It is the orchestration with all the talents working together that is the foundation of a successful project.”. Another trend includes more frequent marriage of these educational and amusement elements. In the case of edu- tainment, some experts, including Landmark Entertainment Group Chief Executive Officer Gary Goddard, argue that “ . . . the amusement world is increasingly moving toward the educational arena -- museums, science centers, etc. rather than the other way around . . . . A case can be made nonetheless for the current and potential growth of thinking-folks’ games, rides and attractions. When you talk about the truly major draws, you are talking about those things that are pure entertainment – both exciting and emotional”. An example of this would be TOPGUN Entertainment’s interactive group simulators and immersive virtual reality motion cockpits, and The Wings of Freedom’s themed, interactive Situation/Control Rooms and Control Tower networked with the simulators. Goddard also states: “Mixed media fits today’s amusement-consuming generation, which grew up on MTV, on-line computers, beepers and cell phones. Kids are living in a multi-media world and mixed-media entertainment is great fun. It makes sense. I think you’ll see more technology-driven attractions and more spectacles . . . .”. Eric Schwartzman, a themed entertainment and film industries consultant, stated in the 1997 issue of Amusement Business: “ . . . from an operator’s standpoint, what is significant about an educational experience are the marketing opportunities. With edu-tainment, operators can market to schools and increase attendance Monday through Friday during school hours if there is, in fact, educational value in the experience. . . . For museums, visceral thrill are just what the doctor ordered. They’ve traditionally had boring, static exhibits – push a button and a light goes on or a tape plays. When you can make that learning fun and entertaining, that’s a big plus.”. Critical to TOPGUN Entertainment’s success, will be the ability to do what the industry leaders have been saying. They say that the pervasiveness of technology in the home means entertainment venues have to provide an experience which cannot easily be duplicated in the home. Our TOPGUN Entertainment interactive experiences, while high-tech, will be popular because they cannot be duplicated at home. Although Microsoft’s “Flight Simulator ‘98” is one of the country’s top selling home PC interactive software packages, it cannot deliver the “reality” experience that TOPGUN Entertainment can deliver. What these PC games will do is prepare an ocean of “couch PC game players” for the next, natural evolution of thematic excitement, and TOPGUN Entertainment will be ready!

Confidential TOPGUN Ventures 1998 19 Location: San Antonio

San Antonio is a city of diverse beauty and multi-cultural charm. As one of the oldest cities in the country, it enjoys a unique melding of the wild frontier past, with the present challenges of recently surpassing Dallas as the eighth largest city in the nation. “TNT -- Travel ‘n Tourism”, is an economic boom for the nation, and San Antonio is ground zero! Nationwide, the tourism industry is forecast to double in size in the next decade. Along with telecommunications and information technology, travel and tourism is poised to be one of three components of the 21st century service-led economy. One of nine jobs nationally is directly or indirectly generated by the industry, and as tourism gains momentum nationwide, San Antonio is at the forefront. The historical sites of San Antonio, combined with 300+ sunny, moderately temperate days, world-class theme parks, and a myriad of cultural events, make this city consistently one of the nation’s top ten places to visit. Seven million people visited the River Walk in San Antonio last year, with three million visiting the Alamo, helping to create a collective, local economic impact in excess of $3 billion. Relative to Las Vegas or Orlando, this may seem small, but unique to San Antonio, is the fact that the majority of tourists “reside” in a five block area, creating a very dense marketing opportunity for those who are in this “tourist corridor”. The American Fighter Aces Museum is at the very heart of the tourist and convention action!

Confidential TOPGUN Ventures 1998 20 San Antonio is more than the “River Walk” and the “Alamo City” -- it is a rich historical aviation city -- the real “Fightertown”! San Antonio is the birthplace of military aviation and continues the honor today of being the oldest military aviation city in the world. With five active Air Force and Army bases in close proximity, the city continues its unique heritage and one-of-a- kind legacies today. Both The American Fighter Aces Museum and The Wings of Freedom Foundation are now serendipitously poised to remedy 90 years of lackluster military aviation recognition. Now, not only will Texas and San Antonio get what has long been “over-due”, these TOPGUN Venture businesses will capitalize upon this “sleeping giant” in a most dramatic way! Letters from a former United States President, Governor of Texas, and the Mayor all readily endorse the move of The American Fighter Aces Museum to San Antonio, recognizing the Alamo City as the home of military aviation:

Confidential TOPGUN Ventures 1998 21 Sponsorship Opportunities

Spending on sponsorship of sports, music, arts, events and causes by North American companies will exceed $6 billion in 1998. Worldwide spending is in excess of $15 billion. Sponsorship has realized record growth because it is tailor-made for the marketing environment of the ‘90’s. It offers companies a way to cut through media clutter and replace bogus commercial messages with meaningful alliances. 1998 IEG Sponsorship Report John Ulkman, Publisher of the 1998 IEG Sponsorship Sourcebook cites: “Sports, arts and causes are the world’s universal calling card . . . as the planet becomes smaller through satellite TV and more inter-dependent through global problems like the environment, a calling card that transcends language, politics and prejudices is crucial.” According to the 1997 Sponsorship Report, the average yearly sponsorship increase over the past four years was 20 percent. The biggest growth occurred from ‘96 -’97, which showed a 30 percent increase: • Average sponsorship revenue was $533,000, with 38 percent “in-kind”. • Sponsorship revenues averaged 36% of budgets. • Renewal rates from ‘96-’97 averaged an impressive 88 percent.

The American Fighter Aces Museum and The Wings of Freedom Foundation, both tax exempt, 501(c)(3) corporations, offer very cohesive quality aviation venues that are one-of-a-kind compelling market opportunities. It is befitting the aces, being the most celebrated of the American fighter pilots, that this immediate area of the world-renown Alamo shrine -- an icon of courage and freedom -- become their future home. Both are one-of-a-kind! These two sponsorship venues offer tremendous corporate-character relevancy. As one considers the characteristics represented by the 189 men who died defending their freedoms at the Alamo, and the 1,445 men of the American Fighter Aces, many of whom died defending our freedom -- feeling of pride, hope and faith swell within all who thoughtfully consider such. It is our opinion, that once recognized, corporate sponsors will readily embrace these two concepts with all their dramatic imagery. The American Fighter Aces Museum and The Wings of Freedom Foundation have an established affinity with those who both reside and visit San Antonio. The vision of their respective “mission” is clear and relevant to the city and as a culture. Reflecting the passion and personality -- from the earliest mission days on the wild Mexican frontier, to “Tejas” citadel, to what San Antonio is today -- an exquisite melding of the past and present -- not to be duplicated elsewhere. This sponsorship opportunity is befitting of any organization which desires a permanent, high- traffic, compelling presence, espousing relevant corporate characteristics, cultural diversity and historical authenticity.

Confidential TOPGUN Ventures 1998 22 FINANCIALS

Confidential TOPGUN Ventures 1998 23 Alamo Crockett Palace Balance Sheet

Balance Sheet 1998 1999 2000 2001 2002

Cash $144,088 $144,088 $796,394 $1,814,009 $3,026,404 Fixed Assets 195,000 195,000 195,000 195,000 195,000 Leasehold 2,650,000 2,650,000 2,650,000 2,650,000 2,650,000 Accumulated Depr/Amort (19,500) (58,500) (97,500) (136,500) (175,500) Net Fixed Assets 2,825,500 2,786,500 2,747,500 2,708,500 2,669,500

Total Assets $2,969,588 $2,930,588 $3,543,894 $4,522,509 $5,695,904

Contributed Capital $985,413 $985,413 $985,413 $985,413 $985,413 Earnings Current Year 441,592 1,550,670 1,484,831 978,615 1,173,395 Interest Payments (275,916) (253,695) (93,378) 0 0 Cumulative 165,676 1,462,651 2,854,105 3,832,720 5,006,115 Debt Initial 2,299,298 2,299,298 2,299,298 2,299,298 2,299,298 Retirement (185,176) (1,335,975) (778,147) 0 0 Cumulative (185,176) (1,521,151) (2,299,298) (2,299,298) (2,299,298) Net 2,114,122 778,147 0 0 0 fees (295,624) (295,624) (295,624) (295,624) (295,624) Total Equity $2,969,588 $2,930,588 $3,543,894 $4,522,509 $5,695,904

Statement of Cash Flows 1998 1999 2000 2001 2002

Net Profit $441,592 $1,550,670 $1,484,831 $978,615 $1,173,395 Plus: 19,500 39,000 39,000 39,000 39,000 Depreciation/Amortization Cash Generated from 461,092 1,589,670 1,523,831 1,017,615 1,212,395 Operations Purchase of Fixed Assets (195,000) Contribution of Total Capital 3,284,712 Infrastructure Costs (2,650,000) Loan Payments (461,092) (1,589,670) (871,525) 0 0 Fees (295,624) Net Change in Cash 144,088 0 652,306 1,017,615 1,212,395 Cash at Beginning of Period 144,088 144,088 796,394 1,814,009

Cash at End of Period $144,088 $144,088 $796,394 $1,814,009 $3,026,404

Confidential TOPGUN Ventures 1998 24 Alamo Crockett Palace Income Statement

Museum Gate Revenues 350,000 1,285,200 991,220 336,000 378,000 Rent Revenues 158,352 462,247 521,462 575,690 631,994 Existing Leases Subtotal 154,748 207,530 210,460 213,430 218,100

Rent per Year 210,000 420,000 420,000 420,000 420,000 Taxes (property) (6,950) (20,851) (20,851) (20,851) (20,851) Insurance (6,950) (20,851) (20,851) (20,851) (20,851) Janitorial (6,950) (20,851) (20,851) (20,851) (20,851) Total Rent Costs 189,149 357,447 357,447 357,447 357,447

Staff Costs per Year 45,000 45,000 45,000 45,000 45,000

Maintenance 5,000 12,000 12,000 12,000 12,000 Insurance 5,000 12,000 12,000 12,000 12,000 Marketing and Promotions 500 1,200 1,200 1,200 1,200 Legal 2,500 6,000 6,000 6,000 6,000 Telephone 2,500 6,000 6,000 6,000 6,000 Accounting 5,000 12,000 12,000 12,000 12,000 Total Indirect Costs 20,500 49,200 49,200 49,200 49,200

Gross Profits 408,450 1,503,330 1,271,495 673,473 776,447 Master lease % rents 9,152 39,470 47,664 55,858 64,052 Fees to Aces 38,206 74,190 0 0 0 Net Operating Income 361,092 1,389,670 1,223,831 617,615 712,395 Depreciation/Amortization 19,500 39,000 39,000 39,000 39,000 Sponsors 100,000 200,000 300,000 400,000 500,000 Net Operating Income 441,592 1,550,670 1,484,831 978,615 1,173,395

Confidential TOPGUN Ventures 1998 25 Wings of Freedom Foundation Balance Sheet

Balance Sheet 1998 1999 2000 2001 2002

Cash $120,177 $1,211,421 $2,930,974 $5,044,318 $7,544,549 Fixed Assets 370,000 370,000 370,000 370,000 370,000 Leasehold 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Accumulated Depr/Amort (37,000) (111,000) (185,000) (259,000) (333,000) Net Fixed Assets 1,333,000 1,259,000 1,185,000 1,111,000 1,037,000

Total Assets $1,453,177 $2,470,421 $4,115,974 $6,155,318 $8,581,549

Contributed Capital $1,121,819 $1,121,819 $1,121,819 $1,121,819 $1,121,819 Earnings Current Year 345,497 1,281,950 1,645,553 2,039,344 2,426,231 Interest Payments (66,305) (28,361) 0 0 0 Cumulative 279,192 1,532,781 3,178,334 5,217,678 7,643,909 Debt Initial 552,538 552,538 552,538 552,538 552,538 Retirement (316,192) (236,345) 0 0 0 Cumulative (316,192) (552,538) (552,538) (552,538) (552,538) Net 236,345 0 0 0 0 fees (184,179) (184,179) (184,179) (184,179) (184,179) Total Equity $1,453,177 $2,470,421 $4,115,974 $6,155,318 $8,581,549

Net Profit $345,497 $1,281,950 $1,645,553 $2,039,344 $2,426,231 Plus: 37,000 74,000 74,000 74,000 74,000 Depreciation/Amortization Cash Generated from 382,497 1,355,950 1,719,553 2,113,344 2,500,231 Operations Purchase of Fixed Assets (370,000) Contribution of Total Capital 1,674,356 Infrastructure Costs (1,000,000) Loan Payments (382,497) (264,707) 0 0 0 Fees (184,179) Net Change in Cash 120,177 1,091,244 1,719,553 2,113,344 2,500,231 Cash at Beginning of Period 120,177 1,211,421 2,930,974 5,044,318

Cash at End of Period $120,177 $1,211,421 $2,930,974 $5,044,318 $7,544,549

Confidential TOPGUN Ventures 1998 26 Wings of Freedom Foundation Income Statement

Museum Gate Revenues 437,500 1,285,200 1,470,000 1,680,000 1,890,000 Rent Revenues 346,203 816,937 895,740 979,530 1,056,418

Rent per Year 288,000 576,000 576,000 576,000 576,000 Taxes (property) 38,375 38,375 38,375 38,375 38,375 Insurance 23,025 23,025 23,025 23,025 23,025 Janitorial 19,187 19,187 19,187 19,187 19,187 Total Rent Costs 368,586 656,586 656,586 656,586 656,586

Staff Costs per Year 60,620 145,600 145,600 145,600 145,600

Maintenance 18,000 36,000 36,000 36,000 36,000 Insurance 12,000 24,000 24,000 24,000 24,000 Marketing and Promotions 12,000 24,000 24,000 24,000 24,000 Legal 12,000 24,000 24,000 24,000 24,000 Telephone 6,000 12,000 12,000 12,000 12,000 Accounting 12,000 24,000 24,000 24,000 24,000 Total Indirect Costs 72,000 144,000 144,000 144,000 144,000

Net Operating Income 282,497 1,155,950 1,419,553 1,713,344 2,000,231 Depreciation/Amortization 37,000 74,000 74,000 74,000 74,000 Sponsor 100,000 200,000 300,000 400,000 500,000 Net Operating Income 345,497 1,281,950 1,645,553 2,039,344 2,426,231

Confidential TOPGUN Ventures 1998 27 TOPGUN Food Service Balance Sheet

Balance Sheet 1998 1999 2000 2001 2002

Cash $814,165 $2,644,864 $4,996,762 $7,869,857 $11,202,000 Fixed Assets 522,700 522,700 522,700 522,700 522,700 Leasehold 260,000 260,000 260,000 260,000 260,000 Accumulated Depr/Amort (52,270) (156,810) (261,350) (365,890) (470,430) Net Fixed Assets 730,430 625,890 521,350 416,810 312,270

Total Assets $1,544,595 $3,270,754 $5,518,112 $8,286,667 $11,514,270

Contributed Capital $1,388,830 $1,388,830 $1,388,830 $1,388,830 $1,388,830 Earnings Current Year 239,095 1,726,159 2,247,357 2,768,555 3,227,603 Interest Payments 0 0 0 0 0 Cumulative 239,095 1,965,254 4,212,612 6,981,167 10,208,770 Debt Initial 0 0 0 0 0 Retirement 0 0 0 0 0 Cumulative 0 0 0 0 0 Net 0 0 0 0 0 fees (83,330) (83,330) (83,330) (83,330) (83,330) Total Equity $1,544,595 $3,270,754 $5,518,112 $8,286,667 $11,514,270

Net Profit $239,095 $1,726,159 $2,247,357 $2,768,555 $3,227,603 Plus: 52,270 104,540 104,540 104,540 104,540 Depreciation/Amortization Cash Generated from 291,365 1,830,699 2,351,897 2,873,095 3,332,143 Operations Purchase of Fixed Assets (522,700) Contribution of Total Capital 1,388,830 Infrastructure Costs (260,000) Loan Payments 0 0 0 0 0 Fees (83,330) Net Change in Cash 814,165 1,830,699 2,351,897 2,873,095 3,332,143 Cash at Beginning of Period 814,165 2,644,864 4,996,762 7,869,857

Cash at End of Period $814,165 $2,644,864 $4,996,762 $7,869,857 $11,202,000

Confidential TOPGUN Ventures 1998 28 TOPGUN Food Service Income Statement

Annual Revenues ACP 281,900 1,469,500 1,811,400 2,153,300 2,495,200

COGS 140,668 730,450 869,020 1,007,590 1,175,280

Gross Profits 73,970 546,440 749,770 953,100 1,127,310 Percentage Rents 7,397 54,644 74,977 95,310 112,731 Royalty to Aces 2,819 14,695 18,114 21,533 24,952 Net Operating Income 71,151 531,745 731,656 931,567 1,102,358 ACP

Annual Revenues NOLAN 753,167 3,445,000 4,044,000 4,643,000 5,242,000

COGS 363,532 1,638,180 1,885,380 2,132,580 2,419,716

Gross Profits 252,901 1,476,220 1,828,020 2,179,820 2,491,684 Percentage Rents 25,290 147,622 182,802 217,982 249,168

Net Operating Income 227,611 1,328,598 1,645,218 1,961,838 2,242,516 NOLAN

Sponsor 0 25,000 50,000 75,000 100,000 Net Combined Income 298,762 1,860,343 2,376,874 2,893,405 3,344,874

Depreciation/Amortization 52,270 52,270 52,270 52,270 52,270

Confidential TOPGUN Ventures 1998 29 TOPGUN Stuff Balance Sheet

Balance Sheet 1998 1999 2000 2001 2002

Cash $398,348 $985,268 $1,739,253 $2,660,303 $3,722,228 Fixed Assets 260,000 260,000 260,000 260,000 260,000 Leasehold 85,000 85,000 85,000 85,000 85,000 Accumulated Depr/Amort (26,000) (78,000) (130,000) (182,000) (234,000) Net Fixed Assets 319,000 267,000 215,000 163,000 111,000

Total Assets $717,348 $1,252,268 $1,954,253 $2,823,303 $3,833,228

Contributed Capital $638,298 $638,298 $638,298 $638,298 $638,298 Earnings Current Year 117,348 534,920 701,985 869,050 1,009,925 Interest Payments 0 0 0 0 0 Cumulative 117,348 652,268 1,354,253 2,223,303 3,233,228 Debt Initial 0 0 0 0 0 Retirement 0 0 0 0 0 Cumulative 0 0 0 0 0 Net 0 0 0 0 0 fees (38,298) (38,298) (38,298) (38,298) (38,298) Total Equity $717,348 $1,252,268 $1,954,253 $2,823,303 $3,833,228

Net Profit $117,348 $534,920 $701,985 $869,050 $1,009,925 Plus: 26,000 52,000 52,000 52,000 52,000 Depreciation/Amortization Cash Generated from 143,348 586,920 753,985 921,050 1,061,925 Operations Purchase of Fixed Assets (260,000) Contribution of Total Capital 638,298 Infrastructure Costs (85,000) Loan Payments 0 0 0 0 0 Fees (38,298) Net Change in Cash 398,348 586,920 753,985 921,050 1,061,925 Cash at Beginning of Period 398,348 985,268 1,739,253 2,660,303

Cash at End of Period $398,348 $985,268 $1,739,253 $2,660,303 $3,722,228

Confidential TOPGUN Ventures 1998 30 TOPGUN Stuff Income Statement

Annual Revenue 225,000 540,000 630,000 720,000 810,000

Rent per Year 18,000 36,000 36,000 36,000 36,000 Taxes (property) 600 1,200 1,200 1,200 1,200 Insurance 675 1,350 1,350 1,350 1,350 Janitorial 675 1,350 1,350 1,350 1,350 Total Rent Costs 19,950 39,900 39,900 39,900 39,900

COGS 90,000 216,000 252,000 288,000 324,000 Staff Costs per Year 29,100 87,400 87,400 87,400 87,400 Aces royalty logo 5,400 12,960 15,120 17,280 19,440 Aces royalty other 1,575 3,780 4,410 5,040 5,670 Total Direct Costs 126,075 320,140 358,930 397,720 436,510

Maintenance 3,000 3,000 3,000 3,000 3,000 Insurance 3,000 3,000 3,000 3,000 3,000 Marketing and Promotions 3,000 3,000 3,000 3,000 3,000 Legal 3,000 6,000 6,000 6,000 6,000 Telephone 3,000 6,000 6,000 6,000 6,000 Accounting 3,500 7,000 7,000 7,000 7,000 Total Indirect 18,500 28,000 28,000 28,000 28,000

Gross Profits 60,475 151,960 203,170 254,380 305,590 Percentage Rents 6,048 15,196 20,317 25,438 30,559 Royalty to Aces 6,975 16,740 19,530 22,320 25,110 Net Operating Income 47,453 120,024 163,323 206,622 249,921

Annual Revenue 310,000 1,116,000 1,302,000 1,488,000 1,674,000

COGS 127,100 457,560 533,820 610,080 686,340 Staff Costs per Year 29,100 116,500 116,500 116,500 145,600 Total Direct Costs 156,200 574,060 650,320 726,580 831,940

Gross Profits 106,550 435,440 545,180 654,920 735,560 Percentage Rents 10,655 43,544 54,518 65,492 73,556 Net Operating Income 95,895 391,896 490,662 589,428 662,004 Sponsors 0 75,000 100,000 125,000 150,000 Combined Net Income 143,348 586,920 753,985 921,050 1,061,925 Depreciation/Amortization 26,000 52,000 52,000 52,000 52,000 Net Operating Income 117,348 534,920 701,985 869,050 1,009,925

Confidential TOPGUN Ventures 1998 31 Confidential TOPGUN Ventures 1998 32 TOPGUN Entertainment Balance Sheet

Balance Sheet 1998 1999 2000 2001 2002

Cash $1,016,439 $3,644,033 $6,915,448 $10,830,681 $15,434,628 Fixed Assets 3,045,000 3,045,000 3,045,000 3,045,000 3,045,000 Leasehold 150,000 150,000 150,000 150,000 150,000 Accumulated Depr/Amort (304,500) (913,500) (1,522,500) (2,131,500) (2,740,500) Net Fixed Assets 2,890,500 2,281,500 1,672,500 1,063,500 454,500

Total Assets $3,906,939 $5,925,533 $8,587,948 $11,894,181 $15,889,128

Contributed Capital $4,052,424 $4,052,424 $4,052,424 $4,052,424 $4,052,424 Earnings Current Year 219,233 2,018,595 2,662,414 3,306,234 3,994,947 Interest Payments 0 0 0 0 0 Cumulative 219,233 2,237,828 4,900,242 8,206,476 12,201,423 Debt Initial 0 0 0 0 0 Retirement 0 0 0 0 0 Cumulative 0 0 0 0 0 Net 0 0 0 0 0 fees (364,718) (364,718) (364,718) (364,718) (364,718) Total Equity $3,906,939 $5,925,533 $8,587,948 $11,894,181 $15,889,128

Net Profit $219,233 $2,018,595 $2,662,414 $3,306,234 $3,994,947 Plus: 304,500 609,000 609,000 609,000 609,000 Depreciation/Amortization Cash Generated from 523,733 2,627,595 3,271,414 3,915,234 4,603,947 Operations Purchase of Fixed Assets (3,045,000) Contribution of Total Capital 4,052,424 Infrastructure Costs (150,000) Loan Payments 0 0 0 0 0 Fees (364,718) Net Change in Cash 1,016,439 2,627,595 3,271,414 3,915,234 4,603,947 Cash at Beginning of Period 1,016,439 3,644,033 6,915,448 10,830,681

Cash at End of Period $1,016,439 $3,644,033 $6,915,448 $10,830,681 $15,434,628

Confidential TOPGUN Ventures 1998 33 TOPGUN Entertainment Income Statement

Annual Revenue ACP 408,333 1,937,500 2,325,000 2,712,500 3,100,000

Staff Costs per Year 99,763 448,934 498,816 598,579 648,461 Total Direct Costs 99,763 448,934 498,816 598,579 648,461

Gross Profits 171,070 1,194,066 1,531,684 1,819,421 2,157,039 Percentage Rents 17,107 119,407 153,168 181,942 215,704 Royalty to Aces 4,083 19,375 23,250 27,125 31,000

Net Operating Income ACP 149,880 1,055,284 1,355,266 1,610,354 1,910,335

Annual Revenue Nolan 836,458 2,557,500 2,983,750 3,410,000 3,836,250

Staff Costs per Year 149,645 498,816 598,579 648,461 698,342 Total Direct Costs 149,645 498,816 598,579 648,461 698,342

Gross Profits 415,393 1,691,456 2,017,943 2,394,311 2,770,680 Percentage Rents 41,539 169,146 201,794 239,431 277,068

Net Operating NOLAN 373,853 1,522,310 1,816,149 2,154,880 2,493,612 Sponsors 0 50,000 100,000 150,000 200,000 Combined Net Income 523,733 2,627,595 3,271,414 3,915,234 4,603,947 Depreciation/Amortization 304,500 609,000 609,000 609,000 609,000 Net Operating Income 219,233 2,018,595 2,662,414 3,306,234 3,994,947

Confidential TOPGUN Ventures 1998 34 TOPGUN Simulation Development Balance Sheet

To Be Provided

Confidential TOPGUN Ventures 1998 35 TOPGUN Simulation Development Income Statement

To Be Provided

Confidential TOPGUN Ventures 1998 36 APPENDIX

Confidential TOPGUN Ventures 1998 37