FIRST AMENDMENT
TO THE
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
GOLF TRUST OF AMERICA, L.P.
February 1, 1998
This First Amendment to the First Amended and Restated Agreement of
Limited Partnership of Golf Trust of America, L.P. (this "First Amendment")
is dated as of February 1, 1998 and amends the First Amended and Restated
Agreement of Limited Partnership of Golf Trust of America, L.P., dated as of
February 12, 1997 (the "Partnership Agreement") by and among GTA GP, Inc., a
Maryland corporation (in its capacity as general partner, the "General
Partner"), and each of the Limited Partners signatory thereto. The General
Partner, with the consent of the Limited Partners signatory hereto (together
with the General Partner, the "Parties"), issues this First Amendment
pursuant to Section 11.01 of the Partnership Agreement. Capitalized terms
used, but not defined, in this First Amendment shall have the meanings set
forth in the Partnership Agreement.
THE PARTIES ENTER THIS AGREEMENT on the basis of the following facts,
understandings and intentions:
(i) As of the dated hereof, there are 4,867,272 Partnership Units
("OP Units") outstanding held by Limited Partners other than GTA LP.
(ii) The Limited Partners signatory hereto hold in the aggregate
3,738,556 OP Units, which number is at least two-thirds (2/3) of the
outstanding OP Units referred to in paragraph (i), above.
(iii) The Parties desire to amend the Partnership Agreement to clarify
the date on which Redemption Right of newly issued OP Units is first
exercisable, to simplify the creation of additional classes of OP Units, to
simplify the process by which the Partnership commits to maintain
indebtedness for the benefit of certain Limited Partners, and to clarify the
distributions payable to GTA GP and GTA LP on newly issued OP Units.
NOW THEREFORE WITNESSETH, the Parties do hereby agree as follows:
SECTION A. ADDITIONAL CLASSES OF OP UNITS. Section 4.02 of the
Partnership Agreement is hereby amended by adding the following Section
4.02(a)(iii):
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(iii) Description of Additional Classes or Series. The General
Partner shall record on EXHIBIT D the name of any additional class or
series of Partnership Interests together with the terms and
conditions, designations, preferences and relative, participating,
optional or other special rights, powers and duties (collectively,
together with all associated provisions, "Rights and Duties") of the
holders thereof. In the event of any conflict between (A) the Rights
and Duties of an additional class of Partnership Interests
established pursuant to this Section 4.02 and recorded in EXHIBIT D
and (B) the Rights and Duties of Limited Partners generally under
this Agreement, EXHIBIT D shall govern the Rights and Duties of such
additional class of Limited Partner.
SECTION B. MAINTENANCE OF INDEBTEDNESS. Section 6.11 of the Partnership
Agreement is hereby amended in its entirety to read as follows:
6.11 MAINTENANCE OF INDEBTEDNESS. The General Partner may
commit the Partnership to maintain such amount of indebtedness for
such period of time for the benefit of any Limited Partner as it
shall determine in its sole and absolute discretion without the
consent of any Limited Partner. The General Partner may record such
commitment on EXHIBIT E or in a separate agreement and may provide
that such commitment may not be amended or rescinded without the
consent of the Limited Partner for whose benefit the commitment is
made.
SECTION C. DISTRIBUTIONS TO GTA GP AND GTA LP ON CERTAIN NEWLY ACQUIRED
PARTNERSHIP UNITS. Section 5.02 of the Partnership Agreement is hereby amended
by adding the following Section 5.02(c):
(c) Notwithstanding the proviso of Section 5.02(a), the
cash distribution payable to GTA GP and GTA LP in respect of
Partnership Interests corresponding to newly issued REIT Shares (as
contemplated by to Section 4.02(a)(ii)) shall not be reduced if such
reduction would cause the distribution on such Partnership Interests
to be less than the aggregate dividends payable by the Company on
such REIT Shares.
SECTION D. EXERCISE OF REDEMPTION RIGHTS.
1. The first sentence of Section 8.05 of the Partnership Agreement is
hereby amended in its entirety to read as follows:
(a) Subject to Sections 8.05(b)-(h), on or after the
date which is the later of (i) one (1) year after the Effective Date
with respect to such Partnership Units or (ii) such date as shall be
agreed to by such
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Limited Partner prior to the issuance of such Partnership Units and set
forth by the General Partner on EXHIBIT F, each Limited Partner (other
than GTA LP) shall have the right (the "Redemption Right") to require
the Partnership to redeem on a Specified Redemption Date all or a
portion of the Partnership Units held by such Limited Partner at a
redemption price equal to and in the form of the Redemption Amount;
provided that if any REIT Shares are to be issued, either their issuance
shall have been registered pursuant to a registration statement declared
effective under the Securities Act of 1933, as amended (the "Securities
Act") or their resale by such Limited Partner shall have been registered
pursuant to such a registration statement.
2. The definition of "Effective Date" in Article I of the Partnership
Agreement is hereby amended in its entirety to read as follows:
"EFFECTIVE DATE", for purposes of Section 8.05 only, means for
any given Partnership Unit the date on which such Partnership Unit
was initially issued by the Partnership, and otherwise means the date
of the closing of the Initial Offering.
SECTION E. EXHIBITS. The Partnership Agreement is hereby amended by
adding the following exhibits after Exhibit C:
1. Exhibit D, entitled "Additional Classes and Series of Partnership
Interest." Exhibit D shall initially include the following entry:
a. ADDITIONAL CLASS OF PARTNERSHIP INTERESTS. There is hereby
created Class B Limited Partnership Interests in the Partnership.
The Class B Limited Partnership Interests shall have the same
redemption rights as set forth in Section 8.05 of the Partnership
Agreement. Class B Limited Partnership Units shall not be entitled
to any distributions of cash as set forth in Section 5.02 of the
Partnership Agreement. No income or losses shall be allocated to the
holders of the Class B Limited Partnership Units.
2. Exhibit E, entitled "Maintenance of Indebtedness." Exhibit E shall
initially include the following entry:
1. NORTHGATE. In addition to any other indebtedness
outstanding pursuant to Section 6.11 of this Agreement, for a period
of ten years following February 12, 1997, the Partnership shall
maintain indebtedness (the "Required Northgate Indebtedness") in an
amount equal to the lesser of approximately: (A) $4,300,000 or (B)
the aggregate negative capital account balances of the contributor of
Northgate Country
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Club (the "Northgate Partner") at the time of the contribution of such
Golf Course (the "Initial Northgate Negative Capital Account"); and the
Northgate Partner shall be permitted to guaranty such indebtedness. The
Required Northgate Indebtedness shall be reduced to the extent that the
Northgate Partner (or its partners, if the Northgate Partner distributes
its Partnership Units to its partners) redeem in whole or in part, their
Partnership Units in exchange for REIT Shares, redeem their Partnership
Units in full for cash or otherwise dispose of their Partnership Units
or dies (the Partnership Units that are so redeemed, disposed of, or
held by transferees of deceased holders are referred to as "Northgate
Stepped-Up Basis Units"). In such a case, the Required Northgate
Indebtedness shall be reduced by an amount equal to the original
Required Northgate Indebtedness prior to any reduction multiplied by a
fraction equal to (i) the Initial Northgate Negative Capital Account,
minus the aggregate negative capital account balances associated with
the Northgate Stepped-Up Basis Units redeemed or transferred immediately
prior to the reduction of the Required Northgate Indebtedness, divided
by (ii) the Initial Northgate Negative Capital Account. If the
Partnership fails to maintain such level of debt, then the Partnership
shall pay to the Northgate Partner (or its partners, if the Northgate
Partner distributes its Partnership Units to its partners) the amount of
federal and state income taxes (together with interest and penalties) of
that Partner, which are associated with the reduction in debt. To the
extent at the end of the ten (10) year period the Partnership has debt
not otherwise guaranteed, the Partnership, to the extent permitted by
the lender, will permit the Northgate Partner (or its partners, if the
Northgate Partner distributes its Partnership Units to its partners) to
guarantee such debt (or to enter into reimbursement agreements with the
Partnership or any Affiliate of the Partnership to whom such debt is
recourse, if any); provided, however, that nothing contained herein
shall prevent the Partnership or any such affiliate from incurring,
retiring, repaying, or prepaying such debt at any time after such ten
year period.
2. EMERALD DUNES. In addition to any other indebtedness
outstanding pursuant to Section 6.11 of the Agreement, for a period
of ten years following February 1, 1998, the Partnership shall
maintain indebtedness (the "Required Emerald Dunes Indebtedness") in
an amount equal to the lesser of approximately: (A) $13,000,000 or
(B) the aggregate negative capital account balances of the
contributor of Emerald Dunes (the "Emerald Dunes Partner") at the
time of the contribution of such Golf Course (the "Initial Emerald
Dunes Negative Capital Account"). The Required Emerald Dunes
Indebtedness may be reduced to the extent that: (i) such reduction is
required pursuant to the terms of the loan documents evidencing the
Required Emerald Dunes Indebtedness as of February 1,
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1998; or (ii) the Emerald Dunes Partner redeems in whole or in part, its
Partnership Units in exchange for REIT Shares, redeems its Partnership
Units or otherwise disposes of its Partnership Units (the Partnership
Units that are so redeemed, or disposed of are referred to as "Emerald
Dunes Stepped-Up Basis Units"). In such a case, the Required Emerald
Dunes Indebtedness may be reduced by an amount equal to the original
Required Emerald Dunes Indebtedness prior to any reduction multiplied by
a fraction equal to (i) the Initial Emerald Dunes Negative Capital
Account, minus the aggregate negative capital account balances
associated with the Emerald Dunes Stepped-Up Basis Units redeemed or
transferred immediately prior to the reduction of the Required Emerald
Dunes Indebtedness, divided by (ii) the Initial Emerald Dunes Negative
Capital Account. The Partnership shall also take no action which would
cause the Required Emerald Dunes Indebtedness to be recharacterized as a
"recourse liability" (rather than a "nonrecourse liability") pursuant to
Section 752 of the Code and the Treasury Regulations promulgated
thereunder. If the Partnership fails to maintain such level of the
Required Emerald Dunes Indebtedness or causes such debt to be
recharacterized as a recourse liability, as aforesaid, then the
Partnership shall pay to the Emerald Dunes Partner the amount of federal
and state income taxes (together with interest and penalties) of that
Partner, which are associated with such reduction or recharacterization
or the Required Emerald Dunes Indebtedness. To the extent that, at the
end of the ten (10) year period the Partnership has debt not otherwise
guaranteed, the Partnership, to the extent permitted by the lender, will
permit the Emerald Dunes Partner (at its option) to guarantee such debt
(or to enter into reimbursement agreements with the Partnership or any
Affiliate of the Partnership to whom such debt is recourse, if any);
provided, however, that nothing contained herein shall prevent the
Partnership or any such affiliate from incurring, retiring, repaying or
prepaying the Required Emerald Dunes Indebtedness at any time after such
ten year period.
3. Exhibit F, entitled "Schedule of Dates on which Certain Limited
Partners may first exercise their Redemption Right of certain Partnership
Units." Exhibit F shall initially include the following entries:
Name and address of partners Partnership units issued Redemption Date
---------------------------- ------------------------ ---------------
Golf Legends Ltd., Inc. 1,532,352 2/12/98*
Seaside Resorts Ltd., Inc. 806,456 2/12/98*
Heritage Golf Club, Ltd., Inc. 801,561 2/12/98*
Legends of Virginia LC 598,187 2/12/98*
Northgate 189,854 2/12/98
Olde Atlanta Golf Club
Limited Partnership 72,246 2/12/98
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Bright's Creek
Development Company, LLC 105,950 2/12/98
Xxxxx X. Xxxx 12,500 2/12/98*
W. Xxxxxxx Xxxxx, XX 12,500 2/12/98*
Xxxxx Xxxxxxxxxx 3,750 2/12/98
Golf Host Resorts, Inc. 274,039 2/12/98
Xxxx X. Xxxxxxxx, Xx.
Xxxxx Xxxxxxxx
Raintree Country Club, Inc. 121,529 2/12/98
Eagle Watch Golf Club
Limited Partnership 70,158 9/30/98
Properties of the Country, Inc. 19,231 10/17/98
Granite Golf Group, Inc. 24,424 11/25/98
Stonehenge Golf Development, LLC 169,811 12/19/98
Mystic Creek Golf Club,
Limited Partnership 52,724 1/16/99
Okeechobee Championship Golf, Inc. 227,526 2/1/99
* Additionally, at the IPO, Messrs. Xxxxx, Xxxxx and Dick entered
into lock-Up agreements with the underwriters to the effect that
neither they, nor any of their affiliates, may dispose of any
securities "convertible into, exercisable for or exchangeable for
shares of Common Stock" without the prior written consent of
Xxxxxxxxx, Xxxxxxxx & Company LLC for 30 months after February 6,
1997; PROVIDED that up to 50% of such securities may be disposed of
beginning 18 months after February 6, 1997.
4. Each such exhibit may be revised by the General Partner according to
the terms of the Partnership Agreement, as amended. Notwithstanding the
foregoing, none of such exhibits may be amended with respect to a Limited
Partner (e.g. by changing the date on which a Limited Partner's OP Units may be
redeemed pursuant to EXHIBIT F or changing the Partnership's commitment to
maintain a certain level of indebtedness pursuant to EXHIBIT E) absent the
written consent of such Limited Partner.
SECTION F. MISCELLANEOUS. This First Amendment may be executed in one or
more counterparts, each of which shall, for all purposes, be deemed an original
and all of such counterparts, taken together, shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the Parties have caused this First Amendment to be
executed as of the date first written above.
General Partner
GTA GP, INC.,
A MARYLAND CORPORATION
[signature page follows]
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By: /s/ W. Xxxxxxx Xxxxx, XX
-----------------------------------
Its: President and CEO
Limited Partners
GOLF LEGENDS, LTD.,
A SOUTH CAROLINA CORPORATION
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
---------------------------------
Its: President
----------------------------------
HERITAGE GOLF CLUB, LTD.,
A SOUTH CAROLINA CORPORATION
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
---------------------------------
Its: President
----------------------------------
SEASIDE RESORTS, LTD.,
A NORTH CAROLINA CORPORATION
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
---------------------------------
Its: President
----------------------------------
LEGENDS OF VIRGINIA, LC
A VIRGINIA LIMITED LIABILITY COMPANY
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
---------------------------------
Its: Manager
----------------------------------
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