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This Agreement ("Agreement") is entered into as of this tenth day of October, 2000, by and between the PEBBLE BEACH COMPANY ("PBC"), a California general partnership including its successors and assigns, and the DEL MONTE FOREST PROPERTY OWNERS ("DMFPO"), a California not-for-profit Corporation, including its successors and assigns.

A. PBC is proposing a development project in Del Monte Forest ("PROJECT"), which will include additional hotel rooms, golf cottages, golf course, club house, driving range, employee housing, relocation of an existing equestrian center, the rezoning of certain property to open space use and road circulation improvements.

B. PBC seeks the public support and endorsement of the DMFPO for "Measure A", a PBC sponsored Initiative in Monterey County that will make various changes to the Del Monte Forest Land Use Plan. The election to determine if "Measure A" will pass is scheduled for November 7, 2000.

C. DMFPO is willing to provide the requested endorsements and support provided PBC agrees to certain conditions ("CONDITIONS"), which are set forth hereinafter.

WHEREFORE, the parties agree as follows:

1. CONDITIONS. PBC agrees to the following conditions:

a. The maximum number of additional hotel rooms built by PBC on land currently owned by PBC in the Del Monte Forest will not exceed 210 units. These rooms will be 58 rooms at the Lodge, 91 at the Inn at Spanish Bay, 24 Golf Suites at Spyglass Hill and an additional 37 rooms that could be divided between the Lodge and the Inn at Spanish Bay on an as needed basis.

b. The existing Equestrian Center will not be taken out of operation by PBC or materially reduced in scope of operation until a new Equestrian Center on land currently owned by PBC is fully operational at a scope of operation that is not less than that of the existing facility and also includes a covered arena. Beach access for the trails will be preserved. This condition will only take effect if and to the extent PBC obtains a vested right to construct the new Equestrian Center on land currently owned by PBC. However until the vested rights are obtained or denied, the Equestrian Center will not be taken out of operation or materially reduced in scope by PBC.

c. Attached hereto as Exhibit A is a map generally illustrating the final "build-out" (i.e. zoning) in the Del Monte Forest for RESIDENTIAL, COMMERCIAL, VISITOR-SERVING, OPEN SPACE AND RECREATIONAL areas on the property that the Company presently owns.

d. PBC agrees to complete construction of the road improvements for the Highway One Gate entering and exiting the Del Monte Forest, as identified on a portion of the plans submitted to CalTrans by PBC as Alternative 4C-1, as soon as practicable after final approvals for such improvements have been received from CalTrans and any other necessary government agencies. The Company's development plans shall include responses to reasonable concerns of traffic safety and traffic volume especially in the areas at the Lodge and the Inn at Spanish Bay.

Agreement between PBC and DMFPO
October 10, 2000
Page 2 of 3 Pages

2. SUPPORT. DMFPO agrees to publicly endorse and support the INITIATIVE , as evidenced by DMFPO Board of Director approval of this AGREEMENT and by formal resolution of the board.

3. EFFECTIVE DATE. This AGREEMENT will become effective upon approval of the DMFPO board of directors and the CEO of PBC.

4. CONDITION AFFECTING VALIDITY OF AGREEMENT. In the event that "Measure A" fails to pass as a result of the outcome of the election on November 7, 2000, or "Measure A" is not certified by the California Coastal Commission, or PBC fails to obtain a vested right to construct the new golf course and hotel rooms substantially as requested in PBC's application, this AGREEMENT will be considered void and invalid. In the event that this AGREEMENT is rendered void and invalid because PBC fails to obtain a vested right to construct the new golf course and hotel rooms substantially as requested in PBC's application, and the existing equestrian center is displaced by another PBC project, then Condition 1.b. of this AGREEMENT will remain a valid obligation.

5. NO THIRD PARTY BENEFICIARY INTENDED. This AGREEMENT is made solely for the benefit of the parties to this AGREEMENT and their respective successors and assigns and no other person or entity shall have or acquire any right or benefit by virtue of this AGREEMENT.

6. AMENDMENTS. Amendments to this AGREEMENT are permitted only with the written consent of both parties.

7. CONTROLLING LAW AND CONSTRUCTION. The interpretation and performance of the AGREEMENT shall be governed by the laws of the State of California. This AGREEMENT contains the entire agreement between the parties with respect to the issues recited hereinbefore.