<PAGE>

                              AGREEMENT AND RELEASE


     THIS AGREEMENT AND RELEASE is made as of November 29, 1999, by and among
KSL Golf Holdings, Inc. ("Seller"), Fairway Acquisition Company ("Buyer"),
Apollo Real Estate Investment Fund IV, L.P. ("Apollo") and Fairways Golf
Corporation, formerly known as KSL Fairways Golf Corporation (the "Company").


                                   WITNESSETH

     WHEREAS, Seller and Apollo entered into that certain Stock Purchase
Agreement dated as of August 9, 1999 (the "Agreement"), pursuant to which Seller
agreed to sell to Apollo all of the stock (the "Stock") owned by Seller in the
Company;

     WHEREAS, pursuant to that certain Assignment and Assumption Agreement dated
September 29, 1999, Apollo assigned to Buyer all of Apollo's rights, interests
and obligations described in the Agreement;

     WHEREAS, Apollo delivered to Seller on September 29, 1999 a notice (the
"Notice") alleging that Seller and the Company failed to provide Apollo
materials relevant to the existence and terms of certain membership rights in
the golf course properties owned and/or operated by the Company and its
Subsidiaries (as defined in the Agreement);

     WHEREAS, Buyer proceeded to purchase all of the Stock from Seller on
September 30, 1999, reserving its right to pursue a claim against Seller for the
alleged non-disclosure described in the Notice of September 29, 1999 and
reserving the right to claim indemnification from Seller pursuant to the
Agreement for damages resulting from such alleged non-disclosure;

     WHEREAS, Seller believes that it properly disclosed to Apollo the existence
of all memberships in the golf courses owned and/or operated by the Company and
its Subsidiaries, but, to avoid the expense, uncertainty and commitment of time
required by litigation to defend its disclosure, Seller desires to settle all
claims pertaining to the existence of memberships which entitle the holders
thereof (based upon a one-time payment or based upon no payment) to use all or a
portion of the facilities owned by the Company or its Subsidiaries without
paying any additional membership fees or dues (collectively, "Lifetime
Memberships"), entered into by, or binding upon, the Company or the
Subsidiaries; and Buyer has agreed to such settlement.


                                    AGREEMENT

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:


<PAGE>


     1. PAYMENT OF CONSIDERATION. In consideration of the Release set forth in
paragraph 4 below, Seller agrees to deliver the sum of Two Million Dollars
($2,000,000) in immediately available funds to the Buyer, which amount shall not
apply towards any limit of Losses (as defined in the Agreement) set forth in
Section 9.06(c) of the Agreement, nor shall such amount be considered Losses
applicable to the loss threshold described in Section 9.06(a) of the Agreement,
satisfaction of which threshold is a condition precedent to an indemnification
claim by Buyer under Article 9 of the Agreement.

     2. REPRESENTATIONS AND WARRANTIES BY THE SELLER. The Seller hereby
represents and warrants to the Buyer, Apollo and the Company that SCHEDULE A
attached hereto sets forth a true, correct and complete list of all Lifetime
Memberships entered into by, or binding upon, the Company or the Subsidiaries as
of September 30, 1999.

     3. REPRESENTATIONS AND WARRANTIES BY THE BUYER AND APOLLO. To the
"knowledge" (as defined below) of the Buyer and Apollo, there are no Lifetime
Memberships entered into by, or binding upon, the Company or the Subsidiaries as
of September 30, 1999 except as set forth on SCHEDULE A. "Knowledge" refers only
to the current actual knowledge, without inquiry, of the Designated Employees
(as hereinafter defined) of the Buyer or Apollo, as the case may be, and shall
not be construed, by imputation or otherwise, to refer to the knowledge of any
other partner in, or officer, director, shareholder or employee of (or affiliate
of any partner in), the Buyer, Apollo, or any subsidiary thereof, or to impose
upon such Designated Employees any duty to investigate the matter to which such
actual knowledge, or the absence thereof, pertains. As used herein, the term
"Designated Employees" shall refer to Rick Koenigsberger, Arnold Rosenstein,
James K. Sartain, William Stine and Ronald LaVoie.

     4. RELEASE BY APOLLO, THE BUYER AND THE COMPANY. Apollo, Buyer and the
Company, on their own behalf and on behalf of the Subsidiaries and their
respective representatives, successors and assigns, hereby remise, release and
forever discharge Seller, its affiliates and subsidiaries and their past and
present stockholders, directors, officers, employees, agents, representatives
and counsel, jointly and severally, from any and all demands, actions, causes of
action, suits, damages, claims, and liabilities of whatever kind or nature,
known or unknown, suspected or unsuspected, accrued or unaccrued, whether in
law, equity or otherwise (collectively, "Damages"), which relate to the
existence or terms of any Lifetime Memberships (including, without limitation,
refundability, reciprocal playing privileges, etc.), other than (i) amounts
payable by the Seller to the Buyer in accordance with Section 1.04 of the
Agreement (nor shall the foregoing release affect the calculation of deferred
income for purposes of determining Closing Date Net Working Capital (as defined
in the Agreement)) and (ii) Damages resulting from a breach of the
representations and warranties set forth in Section 2 above to the extent such
Damages exceed Seven Hundred Fifty Thousand Dollars ($750,000) in the aggregate.
Any such Damages described in this paragraph 4 may not be considered as Losses
for the purpose of the Agreement, including, without limitation, any claim for
indemnification for Losses pursuant to Article 9.01 of the Agreement.


                                        2
<PAGE>


     5. INDEMNIFICATION BY SELLER. Seller hereby indemnifies and holds
harmless, Buyer, Apollo and the Company and their respective affiliates,
officers, directors, employees, agents and successors and assigns
(collectively, the "Buyer Parties") from and against all Damages arising from
any breach of the representations and warranties made in Section 2 hereof,
provided however, that no claim may be made against the Seller except with
respect to Damages exceeding individually or in the aggregate Seven Hundred
and Fifty Thousand Dollars ($750,000) and Seller shall be liable only for
such Damages in excess of Seven Hundred and Fifty Thousand Dollars ($750,000)
in the aggregate. The parties agree that the process for enforcing such
indemnification obligations shall be governed by the provisions and the
procedures set forth in Sections 9.03 and 9.04 of the Agreement, which shall
be deemed incorporated herein.

     6. BINDING EFFECT. This Agreement and Release shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

     7. SEVERABILITY. Any term or provision of this Agreement and Release that
is invalid, illegal or unenforceable by any law or public policy in any
situation in any jurisdiction shall not affect the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction and all other terms and provisions of this Agreement and Release
shall nonetheless remain in full force and effect.

     8. HEADINGS AND RECITALS. The section headings and recitals contained in
this Agreement and Release are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement and Release.

     9. GOVERNING LAW. This Agreement and Release shall be governed by and
construed in accordance with the laws of the State of Delaware, excluding any
conflicts of laws, rule or principle that may refer the governance, construction
or interpretation of this Agreement and Release to the laws of another state.

     10. COUNTERPARTS. This Agreement and Release may be executed in multiple
counterparts, each of which may be deemed an original and all of which together
shall constitute one and the same instrument.

     11. SURVIVAL. All representations and warranties made by Seller in this
agreement shall survive only through and including April 1, 2001 and all claims
for indemnification by any Buyer Party(ies) pursuant to paragraph 5 hereof shall
thereafter be forever barred if a written claim is not made with respect thereto
by April 1, 2001.

                                      * * *


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<PAGE>



         IN WITNESS WHEREOF, the parties have executed this Agreement and
Release as of the date first written above.

                             KSL GOLF HOLDINGS, INC.


                             By:
                                  --------------------------
                                  Steven F. Elliott
                                  Vice President

                             FAIRWAY ACQUISITION COMPANY


                             By:
                                  --------------------------
                                  Arnold Rosenstein
                                  Chairman

                             FAIRWAYS GOLF CORPORATION


                             By:
                                  --------------------------
                                  Arnold Rosenstein
                                  Chairman


                             APOLLO REAL ESTATE INVESTMENT FUND IV, L.P.

                             By:  Apollo Real Estate Advisors IV, L.P., its
                                  General Partner

                                  By:  Apollo Real Estate Capital Advisors IV,
                                       Inc., its General Partner


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


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