Exhibit 10.1
------------------------------------------------------------------------------
GOLF TRUST OF AMERICA, INC.,
GOLF TRUST OF AMERICA, L.P.,
GTA GP, INC.
GTA LP, INC.
and
AEW TARGETED SECURITIES FUND, L.P.
---------------------
STOCK PURCHASE AGREEMENT
---------------------
9.25% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF
GOLF TRUST OF AMERICA, INC.
Dated as of April 2, 1999
------------------------------------------------------------------------------
TABLE OF CONTENTS
SECTION PAGE
1. Agreement to Sell and Purchase the Shares........................1
2. Closing of Sale of Shares........................................1
3. Pre-Closing Conditions...........................................3
3.1. Conditions to the Obligations of the Purchaser...................3
(a) Opinion of Counsel..........................................3
(b) Registration Rights Agreement...............................3
(c) Management Rights Letter....................................3
(d) Ownership Limit Waiver Letter...............................3
(e) Closing Certificates........................................3
(f) Listing of Shares...........................................3
(g) Prospectus...................................................3
(h) Effectiveness of Articles Supplementary......................4
(i) Amended Partnership Agreement................................4
(j) Resolutions..................................................4
(k) HSR Act.......................................................4
(l) No SEC Stop Orders...........................................4
(m) Related Matters...............................................4
3.2. Conditions to the Obligations of the REIT Parties................4
(a) Related Matters.............................................5
(b) Closing Certificates........................................5
(c) Ownership Limit Waiver Representation Letter................5
(d) AMEX Approval................................................5
(e) No Objection from the NASD..................................5
(f) No SEC Stop Orders..........................................5
4. Representations and Warranties, Covenants, Etc. of the REIT Parties5
4.1. Organization and Qualification; Authority.......................5
4.2. Licenses........................................................7
4.3. Corporate, Partnership and Governmental Authorization,
No Contravention ...............................................7
4.4. Validity and Binding Effect.....................................8
4.5. Capitalization..................................................9
4.6. Litigation, Defaults............................................9
4.7. Public Reports; No Material Adverse Change.....................10
4.8. Broker's or Finder's Commissions...............................11
4.9. Investment Company Act, Public Utility Holding Company;
U.S. Entity ...................................................11
4.10. ERISA Requirements.............................................11
4.11. Tax Matters....................................................11
4.12. Material Commitments...........................................12
4.13. REOC Status....................................................12
4.14. Environmental..................................................12
4.15. No Adverse U.S. Legislation, Action or Decision................13
4.16. AMEX Listing...................................................14
4.17. Registration of Preferred Stock and Common Stock...............14
4.18. Affiliate Status...............................................14
4.19. Ownership Limitation...........................................14
5. Representations and Warranties, Covenants, Etc. of the Purchaser .....15
5.1. Authority, Enforceability......................................15
5.2. Broker's or Finder's Commissions...............................15
5.3. ERISA Matters..................................................15
6. Definitions...........................................................15
7. Miscellaneous.........................................................20
7.1. Indemnification, Expenses, Etc.................................20
7.2. Survival.......................................................21
7.3. Attorney's Fees................................................22
7.4. Entire Agreement; Amendment and Waiver.........................22
7.5. Notices, Etc...................................................22
7.6. Successors and Assigns.........................................23
7.7. Descriptive Headings...........................................23
7.8. Satisfaction Requirement.......................................23
7.9. GOVERNING LAW..................................................23
7.10. Expenses.......................................................23
7.11. Counterparts...................................................23
7.12. Invalid Provisions.............................................23
EXHIBITS
EXHIBIT A -- Form of Articles Supplementary
EXHIBIT B -- Names and Denominations for Recipients of Shares
EXHIBIT C -- Form of Opinion of O'Melveny & ▇▇▇▇▇ LLP and ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ & Ingersoll, LLP
EXHIBIT D -- Form of Registration Rights Agreement
EXHIBIT E -- Form of Management Rights Letters
EXHIBIT F -- Form of Ownership Limit Waiver Letter
EXHIBIT G -- Closing Certificate of REIT
EXHIBIT H -- Closing Certificate of Purchaser
EXHIBIT I -- Form of Certificate as to Certain REOC Matters
EXHIBIT J -- List of REIT Properties
EXHIBIT K -- REIT Board of Director Resolutions
EXHIBIT L -- Certificate A to O'Melveny & ▇▇▇▇▇ LLP Legal Opinion
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of April 2, 1999 by and between Golf
Trust of America, Inc., a Maryland corporation (the "REIT"), Golf Trust of
America, L.P., a Delaware limited partnership (the "Operating Partnership"), GTA
GP, Inc., a Maryland corporation ("GTA GP"), GTA LP, Inc., a Maryland
corporation ("GTA LP" and collectively with the REIT, the Operating Partnership
and GTA GP, the "REIT Parties") and AEW Targeted Securities Fund, L.P. (the
"Purchaser"). Unless otherwise defined, capitalized terms used in this Agreement
are defined in Section 6; references to an "Exhibit" are, unless otherwise
specified, to an Exhibit attached to this Agreement; references to a "Section"
are, unless otherwise specified, to a section of this Agreement.
In consideration of the mutual covenants and agreements set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the REIT Parties and the Purchaser respectively
agree, as follows:
1. AGREEMENT TO SELL AND PURCHASE THE SHARES.
1.1. At the Closing provided for in Section 2, subject to the terms
and conditions of this Agreement, the REIT will issue and sell to the Purchaser
and the Purchaser will purchase from the REIT, 800,000 shares (the "Shares") of
the REIT's 9.25% Series A Cumulative Convertible Preferred Stock, par value $.01
per share (the "Preferred Stock"), having the rights, restrictions, privileges
and preferences set forth in the form of Articles Supplementary attached as
EXHIBIT A hereto. The Shares will be issued to the Purchaser pursuant to the
REIT's Shelf Registration Statement and upon receipt by the Purchaser will,
together with the Common Stock into which they are convertible, be registered
under the Securities Act.
1.2. The cash purchase price (the "Purchase Price") for the Shares
is set forth on the signature page hereto.
2. CLOSING OF SALE OF SHARES. (a) The purchase and delivery of the Shares
to be purchased by the Purchaser shall take place at the offices of Battle
▇▇▇▇▇▇ LLP, ▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at a closing (the "Closing")
on April 2, 1999 or at such other place or on such other date as the Purchaser
and the REIT may mutually agree (such date on which the Closing shall have
actually occurred, the "Closing Date"). At the Closing, the REIT will deliver or
cause to be delivered to the Purchaser the Shares to be purchased by it against
payment of the Purchase Price. Payment of the Purchase Price by the Purchaser
shall be by wire transfer of immediately available funds to the following
account: NationsBank, Myrtle Beach, ABA: ▇▇▇▇▇▇▇▇▇, Beneficiary: Golf Trust of
America, L.P., Acct. #: 763439908, or to such other account(s) as may be
designated by the REIT to the Purchaser in writing at least one business day
prior to the Closing. If at the Closing (i) the REIT fails to tender to the
Purchaser any of the Shares to be purchased as provided in this Section 2 or
(ii) the Purchaser
fails to tender the cash Purchase Price for the Shares to the REIT, the
Purchaser or the REIT, as the case may be, shall, at its election, be relieved
of all further obligations under this Agreement, without thereby waiving any
other rights each may have by reason of such failure or such non-fulfillment.
(b) The REIT will contribute the net proceeds from the sale of the
Shares to GTA GP and GTA LP, which, in turn, will contribute such net proceeds
to the Operating Partnership in exchange for Series A Preferred Units of limited
partnership interest in the Operating Partnership ("Preferred OP Units") in
number and with rights and preferences identical to the Preferred Stock. The
Operating Partnership will use the net proceeds primarily to reduce borrowings
under its line of credit, including, without limitation, borrowings incurred in
connection with the Palm Desert Country Club, located in Palm Desert, California
and the Brentwood Golf and Country Club located in Detroit Michigan.
(c) The REIT shall, upon the irrevocable release of the wire
transfer referred to in Section 2(a), cause its transfer agent to deliver one or
more certificates representing the Shares to the Purchaser at the Closing
registered in the names (and in the denominations) set forth in EXHIBIT B.
(d) The REIT has prepared and filed with the Commission in
accordance with the provisions of the Securities Act and the Rules and
Regulations, a registration statement on Form S-3 under the Securities Act,
Commission No. 333-56251 (the "Initial Registration Statement"), including a
base prospectus. No amendments to the Initial Registration Statement have been
required or filed prior to the date hereof. The Initial Registration Statement
has become effective under the Securities Act. The Company also has filed, or
will file, with the Commission pursuant to Rule 424(b) under the Securities Act,
a prospectus supplement relating to the offering of the Shares pursuant to Rule
415 of the Securities Act.
The term "Shelf Registration Statement" as used in this Agreement
means the Initial Registration Statement (including all financial schedules and
exhibits), as amended at the time it became effective and as may be supplemented
or amended prior to the execution of this Agreement together with any
Incorporated Documents (as defined below). The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Shelf Registration
Statement at the time it was declared effective (the "Base Prospectus") together
with the prospectus supplement relating to the offering of the Shares under Rule
415 of the Securities Act dated the date hereof in the form first filed with the
Commission on or after the date hereof (the "Prospectus Supplement"). Any
reference in this Agreement to the Initial Registration Statement, the Shelf
Registration Statement, the Base Prospectus, or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Securities Act, as of the date of the Initial
Registration Statement, the Shelf Registration Statement or the Prospectus, as
the case may be, and any reference to any amendment or supplement to the Initial
Registration Statement, the
-2-
Shelf Registration Statement or the Prospectus shall be deemed to refer to and
include any documents filed after such date under the 1934 Act which, upon
filing, are incorporated by reference therein, as required by paragraph (b) of
Item 12 of Form S-3. As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the Initial
Registration Statement, the Shelf Registration Statement, the Prospectus, or any
amendment or supplement thereto.
3. PRE-CLOSING CONDITIONS.
3.1. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The Purchaser's
obligation to purchase and pay for the Shares to be sold to it at the Closing is
subject to the fulfillment prior to or at the Closing of the following
deliveries, any or all of which may be waived in writing at the option of the
Purchaser:
(a) OPINION OF COUNSEL. The Purchaser shall have received from
REIT Counsel their opinion substantially in the form set forth in EXHIBIT C,
addressed to the Purchaser, dated the Closing Date.
(b) REGISTRATION RIGHTS AGREEMENT. The REIT and the Purchaser
shall have duly entered into the Registration Rights Agreement in the form of
EXHIBIT D and the Purchaser shall have received a fully-executed counterpart of
the Registration Rights Agreement and such agreement shall be in full force and
effect.
(c) MANAGEMENT RIGHTS LETTER. The REIT and the Purchaser shall
have duly entered into the Management Rights Letter substantially in the form of
EXHIBIT E, the Purchaser shall have received a fully-executed counterpart of the
Management Rights Letter and such agreement shall be in full force and effect.
(d) OWNERSHIP LIMIT WAIVER LETTER. The REIT shall have duly
executed and delivered to the Purchaser an Ownership Limit Waiver Letter
substantially in the form of EXHIBIT F, and such letter shall be in full force
and effect.
(e) CLOSING CERTIFICATES. The Purchaser shall have received a
certificate, dated the Closing Date, from the Secretary (or Assistant Secretary)
of the REIT, substantially in the form of EXHIBIT G.
(f) LISTING OF SHARES. At the Closing, the REIT shall have
delivered to the Purchaser a letter from the American Stock Exchange (the
"AMEX") confirming the approval by the AMEX for the listing of the shares of
Common Stock into which the Preferred Stock is convertible.
(g) PROSPECTUS. At the Closing, the REIT shall deliver to the
Purchaser the Prospectus, dated the date hereof.
-3-
(h) EFFECTIVENESS OF ARTICLES SUPPLEMENTARY. The Articles
Supplementary shall have been duly adopted by the REIT and shall have been duly
filed with the State Department of Assessments and Taxation of the State of
Maryland and shall be in full force and effect. The Purchaser shall have
received a certified copy of the Articles Supplementary, as filed with the State
Department of Assessments and Taxation of the State of Maryland.
(i) AMENDED PARTNERSHIP AGREEMENT. GTA GP shall have duly
prepared or updated, as applicable, exhibits to the Agreement of Limited
Partnership of the Operating Partnership so as validly to designate and to
reflect the issuance of the Preferred OP Units to GTA GP and GTA LP (the
"Preferred OP Unit Amendment"), and a certified copy of the Preferred OP Unit
Amendment shall be delivered to the Purchaser.
(j) RESOLUTIONS. At the Closing, the REIT shall deliver to the
Purchaser a certified copy of the resolutions of the REIT's Board of Directors
by which the REIT (i) exempted the Purchaser and certain other persons from the
applicability of Title 3, Subtitle 6 of the Maryland General Corporate Law and
(ii) authorized the execution, delivery and performance of the Managements
Rights Letter. These resolutions shall be certified in the Closing Certificate
of the REIT, pursuant to Paragraph (e) of this Section 3.1. In addition, the
REIT covenants that the Board of Directors of REIT shall, no later than 30 days
after the Closing, pass resolutions stating that the adopted resolutions
described in clause (i) above shall be made irrevocable with respect to the
Purchaser, its affiliates and associates.
(k) HSR ACT. Any waiting period applicable to the consummation
of the transactions contemplated hereby under the HSR Act shall have expired or
been terminated, and no action shall have been instituted by the United States
Department of Justice or the United States Federal Trade Commission challenging
or seeking to enjoin the consummation of the transactions contemplated hereby,
which action has not been withdrawn or terminated.
(l) NO SEC STOP ORDERS. No stop order affecting the
effectiveness of the Shelf Registration Statement or the use of the Prospectus
or applicable to the sale of the Shares hereunder shall have been issued by the
Commission or by any state securities authority and no proceeding for that
purpose shall have been instituted.
(m) RELATED MATTERS. At the Closing, the Purchaser shall have
been issued and received the Shares in exchange of the Purchase Price paid
pursuant to this Agreement.
3.2. CONDITIONS TO THE OBLIGATIONS OF THE REIT PARTIES. The REIT and
the Operating Partnership's obligations to issue the Shares and the Preferred OP
Units at the Closing is subject to the fulfillment prior to or at the Closing of
the following conditions, any or all of which may be waived in writing at the
option of the REIT or Operating Partnership:
-4-
(a) RELATED MATTERS. At the Closing, the REIT shall have
received payment in full for the Shares issued pursuant to this Agreement.
(b) CLOSING CERTIFICATES. The REIT shall have received a
certificate, dated the Closing Date, from the Secretary (or Assistant Secretary)
of the General Partner of the Purchaser, substantially in the form of EXHIBIT H.
(c) OWNERSHIP LIMIT WAIVER REPRESENTATION LETTER. No later
than the Closing Date, the REIT shall have received a representation letter,
meeting the criteria of Article V, Section 2(f) of the REIT's Charter.
(d) AMEX APPROVAL. AMEX shall have approved the listing of the
shares of Common Stock into which the Preferred Stock is convertible, subject
only to official notice of issuance.
(e) NO OBJECTION FROM THE NASD. BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
as placement agent, shall have received a letter from the National Association
of Securities Dealers, Inc. or its subsidiary NASD Regulation,
Inc.(collectively, the "NASD") confirming that the NASD has decided to raise no
objection to the fairness and reasonableness of the terms and conditions of the
subject offering.
(f) NO SEC STOP ORDERS. No stop order affecting the
effectiveness of the Shelf Registration Statement or the use of the Prospectus
or applicable to the sale of the Shares hereunder shall have been issued by the
Commission or by any state securities authority and no proceeding for that
purpose shall have been instituted.
4. REPRESENTATIONS AND WARRANTIES, COVENANTS, ETC. OF THE REIT PARTIES.
The REIT Parties, jointly and severally, hereby represent and warrant to, and
agree with, the Purchaser, subject to such exceptions as are specifically set
forth in the Schedules attached hereto (which "Schedules" shall be deemed to be
part of this Agreement), as follows:
4.1. ORGANIZATION AND QUALIFICATION; AUTHORITY.
(a) Each of the REIT and its Subsidiaries, whether wholly or
indirectly owned, (i) is a corporation duly incorporated, or a partnership,
limited partnership or limited liability company duly formed, and is validly
existing and in good standing under the laws of its jurisdiction of its
incorporation or formation; (ii) has full corporate, partnership or limited
liability company power and authority to own and lease its respective properties
and carry on its respective business as presently conducted; and (iii) is duly
qualified, registered or licensed as a foreign corporation, partnership, limited
partnership or limited liability company to do business and is in good standing
in each jurisdiction in which the ownership or leasing of its respective
properties or the character of its present operations makes such qualification,
-5-
registration or licensing necessary, except where the failure so to qualify or
be in good standing does not and would not reasonably be expected to have a
Material Adverse Effect on the REIT and the Subsidiaries on a consolidated
basis. The REIT has heretofore made available to Purchaser's Counsel (i) true,
complete and correct copies of the Articles of Incorporation, the Articles
Supplementary, and the by-laws or equivalent document of the REIT, GTA GP and
GTA LP each as amended and restated to date and as presently in effect or to be
in effect immediately upon the Closing (collectively, the "Charter Documents")
and (ii) true, correct and complete copies of the certificate of limited
partnership and agreement of limited partnership of the Operating Partnership,
each as amended and restated on this date and as presently in effect or to be in
effect immediately upon the Closing (collectively, the "Partnership Documents").
(b) Schedule 4.1(b) sets forth the name of each Subsidiary of
the REIT and the Operating Partnership (whether owned directly or indirectly
through one or more intermediaries). All of the outstanding shares of capital
stock of, or other equity interest in, each of the Subsidiaries owned by the
REIT or the Operating Partnership are duly authorized, validly issued, fully
paid and nonassessable, and are owned, directly or indirectly, by the REIT or
the Operating Partnership free and clear of all Liens, except as set forth in
Schedule 4.1(b) and were issued in compliance with all applicable federal and
state securities laws. Except as set forth in Schedule 4.1(b), there are no
existing options, warrants, calls, subscriptions, convertible securities or
other rights, agreements or commitments which obligate the REIT or any of the
Subsidiaries to issue, transfer or sell any shares of capital stock or equity
interests in any of the Subsidiaries.
(c) The Preferred Stock and Preferred OP Units to be issued
pursuant to this Agreement have been duly authorized for issuance by all
necessary corporate and partnership action on the part of the REIT and the
Operating Partnership, as the case may be, and when the Preferred Stock is
issued by the REIT and the Preferred OP Units issued by the Operating
Partnership, each will be duly and validly issued and fully paid and, in the
case of the Preferred Stock, nonassessable. When issued and delivered against
payment therefor as provided herein, the Purchaser will receive good and
marketable title to such Preferred Stock and GTA GP and GTA LP will each receive
good and marketable title to the Preferred OP Units, as the case may be, free
and clear of all Liens, security interests, pledges, charges, encumbrances,
shareholders' agreements and voting trusts or claims, preemptive rights or
rights of interest of any nature whatsoever, subject to any rights of the
Purchaser hereunder and under the Registration Rights Agreement, and except for
those resulting from any action taken by the Purchaser. A sufficient number of
shares of Common Stock to be issued by the REIT upon the conversion of the
Preferred Stock have been duly reserved by the REIT out of its authorized shares
of Common Stock for issuance pursuant to duly adopted resolutions and such
shares of Common Stock have been approved for listing on the AMEX. The shares of
Common Stock issuable upon conversion of the Preferred Stock in accordance with
the provisions of the Articles Supplementary will, upon issuance of such
conversion, be duly and validly issued, fully paid and nonassessable.
-6-
(d) The Articles Supplementary have been duly authorized by
all necessary corporate acts on the part of the REIT such that no further
actions are required for the due and valid issuance of Preferred Stock in
accordance herewith and therewith. The Articles Supplementary will have been
duly filed with the State Department of Assessments and Taxation of the State of
Maryland in full compliance with Maryland law.
(e) The Preferred OP Unit Amendment has been duly authorized
by all necessary partnership acts on the part of the Operating Partnership such
that no further actions are required for the creation and due and valid issuance
of the Preferred OP Units in accordance herewith. The Preferred OP Unit
Amendment has been duly prepared by GTA GP on behalf of the Operating
Partnership and such Preferred OP Unit Amendment is enforceable against the
Operating Partnership in accordance with its terms.
(f) Neither the issue and sale of Preferred Stock nor the
issue and sale of the Preferred OP Units hereunder will give any stockholder in
the REIT or any partner in the Operating Partnership the right to demand payment
for shares or partnership interests, as the case may be, under applicable law or
give rise to any preemptive or similar rights.
4.2. LICENSES. Each of the REIT and the Subsidiaries holds all
licenses, franchises, permits, consents, registrations, certificates and other
approvals (individually, a "License" and collectively, "Licenses") required for
the conduct of its business as presently conducted, and operates in substantial
compliance therewith, except where the failure to hold any such License or to
operate in compliance therewith would not reasonably be expected to have a
Material Adverse Effect on the REIT and the Subsidiaries on a consolidated
basis. Each of the REIT and each of the Subsidiaries are in compliance with all
applicable laws, regulations, orders and decrees, except in each case where the
failure so to comply would not reasonably be expected to have a Material Adverse
Effect on the REIT and the Subsidiaries on a consolidated basis, or a Material
Adverse Effect on the ability of the REIT Parties to perform on a timely basis
any obligation that each has or will have under any Transaction Document to
which it is a party.
4.3. CORPORATE, PARTNERSHIP AND GOVERNMENTAL AUTHORIZATION, NO
CONTRAVENTION.
(a) The execution, delivery and performance by the applicable
REIT Party of the Transaction Documents, as the case may be, and the issuance
and sale to (and the purchase hereunder by) the Purchaser of the Shares and GTA
GP and GTA LP of the Preferred OP Units pursuant to this Agreement (a) are
within the REIT's corporate powers and the Operating Partnership's partnership
powers; (b) have been duly authorized by all necessary action on the part of the
REIT and the Operating Partnership; (c) do not contravene or constitute a
default under or violation of or do not or will not result in the creation or
imposition of any Lien on any asset of the REIT or any of its Subsidiaries; and
(d) do not
-7-
contravene, constitute a default under, violate and will not result in violation
of (i) any provision of applicable law or regulation of any Governmental
Authority, (ii) the Charter Documents, Partnership Documents or similar
documents of any Subsidiary, (iii) any agreement (or require the consent of any
Person under any agreement that has not been made or obtained) to which the
REIT, the Operating Partnership or any of the other Subsidiaries are a party
including, without limitation, the participating leases to which the Operating
Partnership or any other Subsidiary is a party, or (iv) any judgment,
injunction, order, decree or other instrument binding upon the REIT, the
Operating Partnership, any of the other Subsidiaries or any of their respective
properties, except where such contravention, default or violation or creation or
imposition of Liens in this Section 4.3 would not reasonably be expected to have
a Material Adverse Effect on the REIT and the Subsidiaries on a consolidated
basis. The REIT does not have any shareholder rights plan or other "poison
pill;" PROVIDED, HOWEVER, that the REIT may adopt one after the date of this
Agreement. The REIT has opted out of Subtitle 7 of Title 3 of the Maryland
General Corporation Law and its Board of Directors has duly adopted a resolution
exempting all Persons, including the Purchaser, from the applicability of
Subtitle 6 thereof, a copy of which has been provided to Purchaser's counsel.
(b) None of the Charter Documents or the Partnership Documents
have been modified or amended since the date such documents were delivered to
the Purchaser by the REIT other than the filing of the Articles Supplementary
with the Maryland State Department of Assessments and Taxation, the preparation
of the Preferred OP Unit Amendments and routine changes to the ledger of
partnership interest (attached as Exhibit A to the agreement of limited
partnership of the Operating Partnership, as amended from time to time) in
connection with the redemption of 2,000 units of limited partnership interest in
the Operating Partnership.
(c) The REIT has duly applied for and obtained all approvals,
orders, licenses, consents and other authorizations (collectively, the
"Approvals") from each federal, state and local government and governmental
agency, department or body, or pursuant to any agreement to which any REIT Party
is a party or to which it or any of its respective assets is subject, which may
be required in connection with this Agreement and the other Transaction
Documents, including, without limitation, any rule or regulation of AMEX.
4.4. VALIDITY AND BINDING EFFECT. Each of the Transaction Documents,
when executed and delivered, will be duly executed and delivered by each of the
REIT Parties that is a party thereto, and will be a valid and binding agreement
of each of the REIT Parties that is a party thereto, enforceable against each of
the REIT Parties that is a party thereto in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or affecting creditors' rights generally (including, without
limitation, fraudulent conveyance laws) and by general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible
-8-
unavailability of specific performance or injunctive relief, regardless of
whether considered in a proceeding in equity or at law.
4.5. CAPITALIZATION.
(a) As of the date of this Agreement, the REIT had authorized
100,000,000 shares of capital stock, 90,000,000 of which are designated as
Common Stock, and, upon the Closing, upon the filing of the Articles
Supplementary, 10,000,000 shares of Preferred Stock. Upon the Closing there will
be 7,682,956 shares of Common Stock issued and outstanding and 800,000 shares of
Preferred Stock issued and outstanding.
(b) As of the date of this Agreement, the Operating
Partnership has issued and outstanding 12,961,894 common units of limited
partnership interest and, upon the Closing and by virtue of the use of proceeds
as described in Section 2(b) hereof, 800,000 Preferred OP Units.
(c) GTA GP is the sole general partner of the Operating
Partnership and owns a 0.2% partnership interest therein and GTA LP owns a
59.08% common limited partnership interest of the Operating Partnership. Upon
the Closing, GTA GP will be the sole general partner and will own a 0.2%
partnership interest in the Operating Partnership and 0% of the Preferred OP
Units and GTA LP will own a 59.08% common limited partnership interest in the
Operating Partnership and 100% of the Preferred Units. GTA GP and GTA LP are
wholly-owned subsidiaries of the REIT.
(d) Except as disclosed in the SEC Filings, there are no
outstanding subscriptions, options, warrants, rights, convertible or
exchangeable securities or other agreements or commitments of any character
obligating the REIT or the Subsidiaries to issue any securities. There are no
voting trusts or other agreements or understandings in favor of any person other
than the REIT (or its Board of Directors) or the Subsidiaries to which the REIT
or the Subsidiaries are a party with respect to the voting of the Capital Stock
or partnership interests of the REIT or the Subsidiaries, as the case may be.
4.6. LITIGATION, DEFAULTS. Except as set forth on Schedule 4.6,
there is no action, suit, proceeding or investigation, as to which notice has
been served on any REIT Party, pending or, to the knowledge of the REIT,
threatened against or affecting the REIT or any of the Subsidiaries, or any
properties of any of the foregoing, before or by any court or arbitrator or any
governmental body, agency or official which (individually or in the aggregate)
could reasonably be expected to (i) have a Material Adverse Effect on the REIT
and the Subsidiaries on a consolidated basis, or (ii) impair the ability of the
REIT or the Operating Partnership to perform fully any material obligation which
the REIT or the Operating Partnership has or will have under any Transaction
Document. Neither the REIT nor any Subsidiary is in violation of, or in default
under (and there does not exist any event or condition which, after notice or
lapse of time or both, would constitute such a default under),
-9-
any term of its Charter Documents, Partnership Documents or similar documents of
any Subsidiary or of any term of any agreement, instrument, judgment, decree,
order, statute, injunction, governmental regulation, rule or ordinance
(including without limitation, those relating to zoning, city planning or
similar matters) applicable to the REIT or any Subsidiary or to which the REIT
or any Subsidiary is bound, or to any properties of the REIT and any Subsidiary,
except in each case to the extent that such violations or defaults, individually
or in the aggregate, would not reasonably be expected to (a) affect the validity
of any Transaction Document, (b) have a Material Adverse Effect on the REIT and
any Subsidiary on a consolidated basis, or (c) impair the ability of any REIT
Party to perform fully any material obligation which such REIT Party has or will
have under any Transaction Document.
4.7. PUBLIC REPORTS; NO MATERIAL ADVERSE CHANGE. (a) The Shelf
Registration Statement complies as to form in all material respects with the
requirements of the Securities Act and the 1934 Act and does not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary, in order to make the statements made, in light
of the circumstances under which they were made not misleading. The REIT has
made all of the SEC Filings required to be made by it since June 1, 1997. Except
as disclosed in the SEC Filings, there has been since December 31, 1998 no
adverse change in the condition (financial or other), assets, business, or
results of operations of the REIT or any of the Subsidiaries which could
reasonably be expected to have a Material Adverse Effect on the REIT and the
Subsidiaries on a consolidated basis. Except as for matters reflected or
reserved against in the balance sheet included in the REIT's most recent 10-K as
filed with the Commission, and except as disclosed in the SEC Filings (in each
case as filed with the Commission since the date of filing of the REIT's most
recent 10-K), since the date of such balance sheet there has been no material
obligation or material liability (contingent or otherwise) incurred by the REIT
or any of the Subsidiaries, except liabilities or obligations which were
incurred in the ordinary course of business. The documents listed on Part IV,
Item 14 of the REIT's 10-K for the year ended December 31, 1998 have been
compiled in compliance with Item 601 of Regulation S-K of the Securities Act.
(b) The financial statements of the REIT included in or
incorporated by reference in the Shelf Registration Statement comply as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed or summary statements) and fairly present in all material respects the
consolidated financial position of the REIT and the Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
-10-
(c) As of the date hereof, to the knowledge of the REIT and
the Operating Partnership there are not any material liabilities, contingent or
otherwise, of the REIT and the Operating Partnership, that have not been
disclosed in the financial statements (including the notes thereto) referred to
above or otherwise disclosed in the SEC Filings or other items provided to the
Purchaser.
4.8. BROKER'S OR FINDER'S COMMISSIONS. Except as disclosed in the
Prospectus, all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by the REIT directly with the
Purchaser without the intervention of any person other than BancBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ on behalf of the REIT in such manner as to give rise to any valid claim
by any Person against the Purchaser for a finder's fee, brokerage commission or
similar payment.
4.9. INVESTMENT COMPANY ACT, PUBLIC UTILITY HOLDING COMPANY; U.S.
ENTITY. The REIT (i) is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"), (ii) is not an
"investment company" for purposes of ▇▇▇▇▇▇▇ ▇▇(▇)(▇) ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇, (▇▇▇) is
not and will not become a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended, (iv) is
not and will not be headquartered or organized in any jurisdiction outside the
United States of America or (v) does not directly or indirectly conduct
activities or own assets in any foreign jurisdiction.
4.10. ERISA REQUIREMENTS. At or promptly following the Closing and
annually thereafter within 30 days of the end of the REIT's annual valuation
period (or 30 days after the Purchaser's request, if later), but only if
requested by the Purchaser with respect to such annual valuation period, the
Purchaser shall receive from the REIT a certificate substantially in the form of
EXHIBIT I certifying certain information which the Purchaser reasonably
determines to be necessary to conclude whether the REIT is a "real estate
operating company" within the meaning of 29 C.F.R. Section 2510.3-101(e) (the
"Plan Assets Regulation") and otherwise satisfactory in substance and form to
the Purchaser to enable the Purchaser to make such a conclusion; PROVIDED
HOWEVER, that the REIT shall not be required to certify as to any information
that is not factually correct when the certificate is delivered.
4.11. TAX MATTERS.
(a) The REIT has been, for each year ending on and after
December 31, 1997 and on or before the date hereof, organized and operated in
conformity with the requirements for qualification and taxation as a "real
estate investment trust" under Sections 856 through 860 of the Internal Revenue
Code of 1986, as amended (the "Code") and the Treasury Regulations promulgated
thereunder. The REIT does not intend and has not taken any action or failed to
take any action which would reasonably be expected to, alone or in conjunction
with any other factors, result in the loss of its status as a real estate
investment trust for federal income tax purposes.
-11-
(b) To the knowledge of the REIT, the REIT is not currently a
"pension-held REIT" within the meaning of Code Section 856(h)(3)(D) and the
Treasury Regulations promulgated thereunder.
(c) The Operating Partnership and each of the other
Subsidiaries that is eligible to be classified as a partnership for federal
income tax purposes is so classified and taxed.
(d) The REIT will use reasonable efforts not to take any
action or not to permit any action to be taken (to the extent the action is
within the control of the REIT) that would cause any of the representations set
forth in this Section 4.11 to be incorrect or incomplete if made as of any date
following the Closing. This however does not prohibit the REIT from revoking its
election to be taxed as a real estate instrument trust except in accordance with
the voting procedures set forth in its charter. In the event of the taking or
proposed taking of any action that to the REIT's knowledge would cause the
representation set forth in Section 4.11(b) to be incorrect if made as of any
date following the Closing, the REIT shall use reasonable efforts to notify the
Purchaser prior to the taking of such action.
4.12. MATERIAL COMMITMENTS. Schedule 4.12 sets forth a complete and
accurate list of all material contracts, options, commitments, letters of intent
or similar written understandings made or entered into by the REIT or any of the
Subsidiaries in writing as of the date hereof (x) in the future to enter into
any material lease, or (y) in the future to sell, mortgage, pledge, hypothecate
any of the REIT, Operating Partnership or any other Subsidiary's property or to
otherwise enter into a material transaction in respect of the ownership or
financing of any property, excluding however, in each case such commitments,
letters of intent or similar written understandings which do not bind any party
thereto. The REIT has previously made available to the Purchaser for its review
at the REIT's office a true and complete copy of each such commitment, letter of
intent or other understanding.
4.13. REOC STATUS. The REIT makes the same factual representations
to the Purchaser as those contained in the Form of REOC Certificate, attached
hereto as EXHIBIT I and in Certificate A attached to the legal opinion of
O'Melveny & ▇▇▇▇▇ LLP, which is attached hereto as EXHIBIT L.
4.14. ENVIRONMENTAL. (a) Except as may be specifically disclosed in
the SEC Filings or in environmental reports obtained by the REIT and made
available to the Purchaser (the "Environmental Reports"), the REIT and the
Operating Partnership have not at any time, and, to the actual knowledge of the
REIT and the Operating Partnership, no other party has at any time, handled,
buried, stored, retained, refined, transported, processed, manufactured,
generated, produced, spilled, allowed to seep, leak, escape or ▇▇▇▇▇, or be
pumped, poured, emitted, emptied, discharged, injected, dumped, transferred or
otherwise disposed of or dealt with, Hazardous Materials on, to or from the
Properties. The REIT and the Operating
-12-
Partnership do not intend to use the Properties or any subsequently acquired
properties for the purpose of handling, burying, storing, retaining, refining,
transporting, processing, manufacturing, generating, producing, spilling,
seeping, leaking, escaping, leaching, pumping, pouring, emitting, emptying,
discharging, injecting, dumping, transferring or otherwise disposing of or
dealing with Hazardous Materials, except for such Hazardous Materials as may be
customarily required in golf course operations, stored and used in the
quantities customary for such uses and in compliance in all material respects
with any and all applicable, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws") and except in each case for such non-compliance as cannot
reasonably be expected to cause a material Adverse Effect.
(b) Except as disclosed in the SEC Filings or the
Environmental Reports, to the knowledge of the REIT or the Operating
Partnership, there has been no material seepage, leak, escape, ▇▇▇▇▇, discharge,
injection, release, emission, spill, pumping, pouring, emptying or dumping of
Hazardous Materials into waters on or adjacent to the Properties or onto lands
from which such hazardous or toxic waste of substances might seep, flow or drain
into such waters.
(c) Except as disclosed in the SEC Filings or the
Environmental Reports, neither the REIT nor the Operating Partnership has
received a specific, written notice of any occurrence or circumstance which,
with notice or passage of time or both, would give rise to, any material claim
under or pursuant to any Environmental Law pertaining to hazardous or toxic
waste or substances on or originating from the Properties or arising out of the
conduct of any such party, including, without limitation, pursuant to any
Environmental Law.
4.15. NO ADVERSE U.S. LEGISLATION, ACTION OR DECISION. To the
knowledge of the REIT Parties, no legislation, order, rule, ruling or regulation
has been enacted or made by or on behalf of any governmental body, department or
agency of the United States, nor has any decision of any court of competent
jurisdiction within the United States been rendered which would, in the REIT
Parties' reasonable judgment, have a Material Adverse Effect on the REIT and the
Subsidiaries on a consolidated basis. There is no action, suit, investigation or
proceeding pending or to the knowledge of the REIT Parties, threatened, against
or affecting any REIT Party, any of its respective properties or rights, or any
of its respective Affiliates, associates, officers or directors, before any
court, arbitrator or administrative or governmental body which (i) seeks to
restrain, enjoin, prevent the consummation of or otherwise affect the
transactions contemplated by this Agreement and the other Transaction Documents,
or (ii) questions the validity or legality of any such transactions or seeks to
recover damages or to obtain other relief in connection with any such
transactions, and there shall be no valid basis for any such action, proceeding
or investigation.
-13-
4.16. AMEX LISTING. The listing of shares of the Common Stock on the
AMEX has not been terminated, nor has the REIT been notified that such listing
may be terminated or that any termination is contemplated.
4.17. REGISTRATION OF PREFERRED STOCK AND COMMON STOCK.
(a) The shares of Preferred Stock and the Common Stock, into
which the Preferred Stock is convertible, have been duly registered under the
Securities Act by the Shelf Registration Statement and such Shelf Registration
Statement has been prepared by the REIT in conformity with the requirements of
the Securities Act and the rules and regulations (the "Rules and Regulations")
of the Commission thereunder and has been filed with the Commission under the
Securities Act and has been declared effective by the Commission pursuant to
such act and the Rules and Regulations. The REIT and the sale of the Shares
pursuant to this Agreement meet the requirements for using Form S-3 under the
Securities Act.
(b) No stop order affecting the effectiveness of the Shelf
Registration Statement or any part thereof has been issued and no proceeding for
that purpose has been instituted or, to the knowledge of the REIT, threatened by
the Commission or the securities authority of any state or any jurisdiction.
(c) Except as set forth on Schedule 4.17(c), since the
respective dates as of which information is given in the Shelf Registration
Statement, as it may be amended or supplemented, there has not been any material
adverse change or any development involving a prospective material adverse
change in or affecting the condition, financial or otherwise, of the REIT or the
Operating Partnership or the funds from operations, business affairs, management
or business prospects of the REIT or the Operating Partnership, whether or not
occurring in the ordinary course of business, and there has not been any
material transaction entered into by the REIT or the Operating Partnership other
than transactions in the ordinary course of business and changes and
transactions contemplated by the Shelf Registration Statement, as it may be
amended or supplemented. Neither the REIT nor the Operating Partnership have any
material contingent obligations which are not disclosed in the Shelf
Registration Statement, as it may be amended or supplemented.
4.18. AFFILIATE STATUS. To the best of the REIT's knowledge, the
Purchaser is not, and the REIT will not take the position that the Purchaser is,
an "affiliate" of the REIT as that term is defined in Securities Act Rule
144(a)(1) either currently or upon the sale and issuance of the Shares
hereunder.
4.19. OWNERSHIP LIMITATION. The REIT hereby agrees that following
the Closing it will not amend, modify, rescind or revoke any of the resolutions
referred to in Section 3.1(j) herein, without the prior written consent of the
Purchaser.
-14-
5. REPRESENTATIONS AND WARRANTIES, COVENANTS, ETC. OF THE PURCHASER. The
Purchaser hereby represents and warrants that:
5.1. AUTHORITY, ENFORCEABILITY. The Purchaser has full power and
authority and has taken all action necessary to authorize it to enter into and
perform its obligations under the Transaction Documents to which the Purchaser
is a party and all other documents or instruments contemplated hereby. The
Transaction Documents to which the Purchaser is a party are legal, valid and
binding obligations of the Purchaser and are enforceable in accordance with
their terms.
5.2. BROKER'S OR FINDER'S COMMISSIONS. Except as disclosed in the
Prospectus, all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Purchaser directly with the REIT
without the intervention of any person on behalf of Purchaser (other than
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇), in such manner as to give rise to any valid
claim by any Person against the REIT for a finder's fee, brokerage commission or
similar payment. The Purchaser acknowledges that the REIT has informed it that
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ did not participate in the drafting of the
Prospectus Supplement or the accompanying Prospectus and is not responsible for
any of their content.
5.3. ERISA MATTERS. None of the assets used by Purchaser to purchase
the Shares include "plan assets" within the meaning of Department of Labor
Regulation Section 2510.3-101.
6. DEFINITIONS. As used herein the following terms have the following
respective meanings:
"1934 ACT," means the Securities Exchange Act of 1934, and the rules
and regulations of the Commission promulgated thereunder, as from time to time
amended.
"1940 ACT" has the meaning ascribed thereto in Section 4.9 hereof.
"AFFILIATE," except as otherwise defined in this Agreement, means
with respect to any Person any other Person directly or indirectly controlling
or controlled by or under common control with such first Person or any of its
Subsidiaries; PROVIDED, HOWEVER, that, for purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by agreement or otherwise.
"AGREEMENT" means this Stock Purchase Agreement, as amended,
modified or supplemented from time to time, together with any exhibits,
schedules, appendices or other attachments thereto.
-15-
"AMEX" has the meaning ascribed thereto in Section 3.1(f) hereto.
"APPROVALS" has the meaning ascribed thereto in Section 4.3(c)
hereof.
"ARTICLES OF INCORPORATION" means the Articles of Incorporation of
the REIT, as amended and restated to date and in effect upon the Closing.
"BASE PROSPECTUS" has the meaning ascribed thereto in Section 2(d)
hereof.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participation, rights in or other equivalents (however
designated) of such Person's capital stock, and any rights (other than debt
securities convertible into capital stock), warrant or options exchangeable for
or convertible into such capital stock.
"CHARTER DOCUMENTS" has the meaning ascribed thereto in Section
4.1(a) hereof.
"CLOSING" has the meaning ascribed thereto in Section 2 hereof.
"CLOSING DATE" has the meaning ascribed thereto in Section 2 hereof.
"CODE" has the meaning ascribed thereto in Section 4.11(a) hereof.
"COMMISSION" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"COMMON STOCK" means the common stock, par value $0.01 per share, of
the REIT.
"DTC" has the meaning ascribed thereto in Section 2(c) hereof.
"EMPLOYEE BENEFIT PLANS" means each and all "EMPLOYEE BENEFIT PLANS"
as defined in Section 3(3) of ERISA maintained or contributed to by a party
hereto or in which a party hereto participates or participated and which
provides benefits to employees of the REIT or any of its Subsidiaries, including
(i) any such plans that are "EMPLOYEE WELFARE BENEFIT PLANS" as defined in
Section 3(l) of ERISA, including retiree medical and life insurance plans, and
(ii) any such plans that constitute "EMPLOYEE PENSION BENEFIT PLANS" as defined
in Section 3(2) of ERISA.
"ENVIRONMENTAL LAWS" has the meaning ascribed thereto in Section
4.14(a) hereof.
"ENVIRONMENTAL REPORTS" has the meaning ascribed thereto in Section
4.14(a) hereof.
-16-
"ERISA" means the Employee Retirement Income Security Act of 1974,
and the rules and regulations thereunder, as amended from time to time.
"GENERAL PARTNER'S CERTIFICATE" means a certificate executed on
behalf of the Purchaser by its general partner.
"GOVERNMENTAL AUTHORITY" means any governmental or
quasi-governmental authority including, without limitation, any federal, state,
territorial, county, municipal or other governmental or quasi-governmental
agency, board, branch, bureau, commission, court, department or other
instrumentality or political unit or subdivision, whether domestic or foreign.
"GTA GP" means GTA GP, Inc., a Maryland corporation.
"GTA LP" means GTA LP, Inc., a Maryland corporation.
"HAZARDOUS MATERIALS" shall have the meanings set forth in the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
▇▇.▇▇. 1251 et seq, as amended, and the regulations thereunder, Solid Waste
Disposal Act, 42 U.S.C. ▇▇.▇▇. 6901 et seq., as amended, including amendments
under Resource Conservation and Recovery Act, and the regulations thereunder,
and Federal Water Pollution Control Act, 33 U.S.C. ▇▇.▇▇. 1251 et seq., as
amended, and regulations thereunder, and the regulations thereunder, and such
terms shall also include asbestos, petroleum products, radon, radioactive
materials, lead paint, UFFI and any other regulated substances under any Law.
"INCORPORATED DOCUMENTS" has the meaning ascribed thereto in
Section 2(d) hereof.
"INDEMNIFIED PARTY" means either a REIT Indemnified Party or a
Purchaser Indemnified Party, as the context requires.
"INDEMNIFYING PARTY" has the meaning ascribed thereto in Section
8.1(c) hereof.
"INITIAL REGISTRATION STATEMENT" has the meaning ascribed thereto
in Section 2(d) hereof.
"KNOWLEDGE OF THE REIT" or "knowledge of the REIT Parties" means
the actual knowledge of W. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
"LICENSE" or "LICENSES" has the meaning ascribed thereto in Section
4.2 hereof.
"LIEN" means any mortgage, lien (statutory or otherwise), charge,
pledge, hypothecation, conditional sales agreement, adverse claim, title
retention agreement or other
-17-
security interest, encumbrance or other title defect in or on any interest or
title of any vendor, lessor, lender or other secured party to or of such Person
under any conditional sale, trust receipt or other title retention agreement
with respect to any Property or asset of such Person.
"LOSSES" has the meaning ascribed thereto in Section 8.1(a) hereof.
"MANAGEMENT RIGHTS LETTER" mean the Management Rights Letter by and
between the Purchaser and the REIT.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
condition (financial or otherwise), assets, business or results of operation of
the REIT and the Subsidiaries on a consolidated basis.
"NASD" has the meaning ascribed thereto in Section 3.2(e) hereof.
"OFFICER'S CERTIFICATE" means a certificate executed on behalf of
the REIT by the Chief Financial Officer of the REIT.
"OPERATING PARTNERSHIP" means Golf Trust of America, L.P., a
Delaware limited partnership.
"PARTNERSHIP DOCUMENTS" has the meaning ascribed thereto in Section
4.1(a).
"PERSON" means any individual, corporation, limited or general
partnership, limited liability company, joint venture, association, joint stock
company, trust, unincorporated organization, or government or any agency or
political subdivision thereof.
"PLAN ASSETS REGULATION" has the meaning set forth in Section 4.10
hereof.
"PREFERRED OP UNITS" has the meaning ascribed thereto in Section
2(b) hereof.
"PREFERRED OP UNIT AMENDMENT" has the meaning ascribed thereto in
Section 3.1(i).
"PREFERRED STOCK" has the meaning ascribed thereto in Section 1.1
hereof.
"PROPERTY" shall mean, each of the golf course properties listed on
EXHIBIT J attached to this Agreement including the applicable real property and
all personal property and intangibles related thereto, and "Properties" shall
mean all such golf course properties collectively, including all of the real
property, personal property and intangibles.
"PROSPECTUS" has the meaning ascribed thereto in Section 2(d)
hereof.
-18-
"PROSPECTUS SUPPLEMENT" has the meaning ascribed thereto in Section
2(d) hereof.
"PURCHASE PRICE" has the meaning ascribed thereto in Section 1.2
hereof.
"PURCHASER" has the meaning ascribed thereto in the introduction
hereof.
"PURCHASER'S COUNSEL" means Battle ▇▇▇▇▇▇ LLP.
"PURCHASER INDEMNIFIED PARTY" or "PURCHASER INDEMNIFIED PARTIES"
has the meaning ascribed thereto in Section 7.1(a) hereof.
"REGISTRATION RIGHT AGREEMENT" means the registration rights
agreement by and between the REIT and the Purchaser, as amended or supplemented
from time to time in accordance with the terms thereof.
"REIT" mean Golf Trust of America, Inc., a Maryland corporation.
"REIT COUNSEL" means O'Melveny & ▇▇▇▇▇ LLP.
"REIT INDEMNIFIED PARTY" has the meaning ascribed thereto in
Section 8.1(b) hereof.
"RULES AND REGULATIONS" has the meaning ascribed thereto in Section
4.17(a) hereof.
"SEC FILINGS" means official filings made by the REIT filed with
the Commission in accordance with the Securities Act and the 1934 Act with
respect to events occurring, or periods ending on or after February 12, 1997 and
includes the Shelf Registration Statement and the Prospectus.
"SECURITIES ACT" means the Securities Act of 1933, and the rules and
regulations of the Commission promulgated thereunder, as from time to time
amended.
"SCHEDULES" shall have the meaning ascribed thereto in Section 4
hereto.
"SHARES" has the meaning ascribed thereto in Section 1.1 hereof.
"SHELF REGISTRATION STATEMENT" has the meaning ascribed thereto in
Section 2(d) hereof.
"SUBSIDIARIES" means subsidiary corporations, partnerships, limited
-19-
partnerships, joint ventures and limited liability companies which are directly
or indirectly and wholly or majority owned by the REIT, including, unless the
context requires otherwise, the Operating Partnership.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, the
Articles Supplementary, the Preferred OP Unit Amendment, the Registration Rights
Agreement, the Ownership Limit Waiver Letter, the Management Rights Letter and
any and all agreements, certificates, instruments and other documents of the
REIT or the Purchaser required thereby or executed and delivered pursuant
hereto.
7. MISCELLANEOUS.
7.1. INDEMNIFICATION, EXPENSES, ETC.
(a) In addition to any and all obligations of the REIT Parties
to indemnify the Purchaser hereunder or under the other Transaction Documents,
the REIT Parties hereby agree, jointly and severally, without limitation as to
time, to indemnify and hold harmless the Purchaser, its Affiliates and the
employees, officers, directors, trustees, direct and indirect partners, members,
agents and investment advisors of the Purchaser and its Affiliates
(individually, a "Purchaser Indemnified Party" and, collectively the "Purchaser
Indemnified Parties") from and against any and all losses, claims, damages
(including incidental and consequential damages), liabilities, costs (including
the costs of preparation and reasonable attorneys' fees, but in no event more
than one counsel (other than local counsel) and reasonable expenses (including
expenses of investigation), whether or not involving a third party claim
(collectively, "Losses") incurred or suffered by a Purchaser Indemnified Party
in connection with or arising out of any breach by a REIT Party of any warranty
or representation made by a REIT Party in this Agreement, any breach by a REIT
Party of any covenants made by a REIT Party in this Agreement or in the
Transaction Documents and for any claims by any Person against the Purchaser for
any finder's fee, brokerage commission or similar payment in connection with the
transaction contemplated hereby; PROVIDED HOWEVER, that no REIT Party shall be
liable for any Losses resulting from action on the part of any Purchaser
Indemnified Party which is finally determined in such proceeding to be an act of
gross negligence, recklessness or willful misconduct by such Purchaser
Indemnified Party. The REIT Parties agree, jointly and severally, as promptly as
practicable to reimburse any Purchaser Indemnified Party for all such Losses
incurred pursuant to this Section 7.1(a) as they are incurred or suffered by
such Purchaser Indemnified Party following the receipt of a reasonably detailed
invoice setting forth the amount of such Losses.
(b) In addition to any and all obligations of the Purchaser to
indemnify the REIT Parties hereunder or under the other Transaction Documents,
the Purchaser agrees, without limitation as to time, to indemnify and hold
harmless the REIT Parties, their Affiliates, and the employees, officers,
directors, trustees, direct and indirect partners, members and agents of the
REIT Parties and their Affiliates (individually, a "REIT Indemnified Party" and
-20-
collectively the "REIT Indemnified Parties") from and against any and all
Losses, incurred or suffered by a REIT Indemnified Party in connection with or
arising out of any breach by the Purchaser of any warranty or representation
made by the Purchaser in this Agreement; PROVIDED, HOWEVER, that the Purchaser
shall not be liable for any Losses resulting from action on the part of any REIT
Indemnified Party which is determined in such proceeding to be an act of gross
negligence, recklessness, or willful misconduct by such REIT Indemnified Party.
The Purchaser agrees as promptly as practicable to reimburse any REIT
Indemnified Party for all such Losses incurred pursuant to this Section 7.1(b)
as they are incurred or suffered by such REIT Indemnified Party following the
receipt of a reasonably detailed invoice setting forth the amount of such
Losses.
(c) If any Indemnified Party is entitled to indemnification
hereunder, such Indemnified Party or its representative shall give prompt
written notice to the REIT Parties or the Purchaser, as the case may be (each,
for purposes of this Section 8.1(c), an "Indemnifying Party") of any claim or of
the commencement of any proceeding against such Indemnified Party brought by any
third party with respect to which such Indemnified Party seeks indemnification
pursuant hereto; PROVIDED, HOWEVER, that the failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from any obligation
or liability except to the extent the Indemnifying Party is prejudiced by such
failure. The Indemnifying Party shall have the right, exercisable by giving
written notice to an Indemnified Party promptly after the receipt of written
notice from such Indemnified Party of such claim or proceeding, to assume, at
the expense of the Indemnifying Party, the defense of any such claim or
proceeding with counsel reasonably satisfactory to such Indemnified Party. The
Indemnified Party or Indemnified Parties will not be subject to any liability
for any settlement made without its or their consent (but such consent will not
be unreasonably withheld). The Indemnifying Party shall not consent to entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof and the giving by claimant or plaintiff to such
Indemnified Party or Parties of a release, in form and substance satisfactory to
the Indemnified Party or Parties, from all liability in respect of such claim,
litigation or proceeding.
7.2. SURVIVAL. (a) All representations, warranties, covenants and
agreements contained in this Agreement or in any certificate delivered pursuant
to this Agreement shall survive the Closing notwithstanding any investigation
conducted with respect thereto. The right to indemnification, payment of Losses
or other remedy based on such representations, warranties, covenants, and
obligations will not be affected by any investigation conducted with respect to,
or any knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warrant, covenant, or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Losses, or other remedy based on such
representations, warranties, covenants, and obligations.
-21-
(b) TIME LIMITATIONS. None of the REIT Parties shall have any
liability (for indemnification or otherwise) with respect to any representation
or warranty other than those set forth in Sections 4.1(c), 4.11 and 4.13 unless
on or before the date which is 2 years after the Closing Date, any of the REIT
Parties is given notice asserting a claim with respect thereto and specifying
the factual basis of that claim in reasonable detail to the extent then known by
Purchaser; a claim with respect to Sections 4.1(c), 4.11 and 4.13 may be made at
any time. Purchaser shall have no liability (for indemnification or otherwise)
with respect to any representation or warranty other than as to Section 5.3
unless on or before the date which is 2 years after such Closing Date, Purchaser
is given notice of a claim with respect thereto and specifying the factual basis
of that claim in reasonable detail to the extent then known by the REIT Parties.
A claim with respect to Section 5.3 may be made at any time.
7.3. ATTORNEY'S FEES. If any action or proceeding is commenced by
any REIT Party or Purchaser to enforce their rights under this Agreement, or to
collect damages as a result of the breach of any of the provisions of this
Agreement, the prevailing party in such action or proceeding, including any
bankruptcy, insolvency or appellate proceedings, shall be entitled to recover
all reasonable costs and expenses actually incurred, including, without
limitation, reasonable attorneys' fees and court costs actually incurred, in
addition to any other relief awarded. The determination of who is the prevailing
party shall be decided by the court or courts, including any appellate court, in
which such matter is tried, heard or decided.
7.4. ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement and the
other Transaction Documents and all documents delivered in connection herewith
or therewith embody the entire agreement and understanding between the Purchaser
and the REIT Parties and supersede all prior agreements and understandings
relating to the subject matter hereof. This Agreement may be amended, modified
or supplemented, and waivers or consents to departures from the provisions
hereof may be given, provided that the same are in writing and signed by the
Purchaser and each of the REIT Parties.
7.5. NOTICES, ETC. Except as otherwise provided in this Agreement,
notices and other communications under this Agreement shall be in writing and
shall be sent by facsimile, with receipt confirmed, or delivered or mailed by
registered or certified mail, return receipt requested, or by a nationally
recognized overnight courier, postage prepaid, addressed, (a) if to the
Purchaser, at the address set forth on the Purchaser's signature page hereto or
such other address as the Purchaser shall have furnished to the REIT in writing,
or (b) if to any other holder of any Shares, at such address as such other
holder shall have furnished to the REIT in writing, or, until any such other
holder so furnishes to the REIT an address, then to and at the address of the
last holder of such Shares who has furnished an address to the REIT, or (c) if
to any REIT Party, at the address set forth at the beginning of this Agreement,
to the attention of President, or at such other address, or to the attention of
such other officer, as the REIT shall have furnished to the Purchaser and each
such other holder in writing.
-22-
7.6. SUCCESSORS AND ASSIGNS. Whenever in this Agreement any of the
parties hereto are referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of the respective parties which are contained in this Agreement
shall bind and inure to the benefit of the successors and assigns of all other
parties. Except as otherwise provided herein, the terms and provisions of this
Agreement and the other Transaction Documents shall inure to the benefit of and
shall be binding upon any assignee of the Purchaser, and in the event of such
assignment, the rights and privileges herein conferred upon the Purchaser shall
automatically extend to and be vested in, and become an obligation of, such
assignee, all subject to the terms and conditions hereof.
7.7. DESCRIPTIVE HEADINGS. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
7.8. SATISFACTION REQUIREMENT. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to a particular party, the determination
of such satisfaction shall be made by such party, as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
7.9. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY THE LAW
OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW.
7.10. EXPENSES. The REIT will pay at the Closing (or on such later
date as one or more invoices may be submitted to the REIT) the expenses of
Purchaser reasonably and actually incurred in connection with this Agreement and
consummation of the transactions contemplated hereby.
7.11. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
7.12. INVALID PROVISIONS. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future law, and if
the rights or obligations of any party to this Agreement will not be materially
and adversely affected thereby, (a) such provision will be fully severable, (b)
this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added
-23-
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
[SIGNATURE PAGE TO IMMEDIATELY FOLLOW]
-24-
SECURITIES PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be duly executed as of the date first set forth above.
GOLF TRUST OF AMERICA, INC., a
Maryland corporation
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
---------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
Title: President and Chief
Executive Officer
GTA GP, Inc., a Maryland corporation
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
---------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
Title: President and Chief
Executive Officer
GTA LP, Inc., a Maryland corporation
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
---------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
Title: President and Chief
Executive Officer
GOLF TRUST OF AMERICA, L.P., a
Delaware limited partnership
By: GTA GP, Inc., its general partner
Copies of notices to.:
O'Melveny & ▇▇▇▇▇ LLP By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ---------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. Title: President and Chief
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-25-
SECURITIES PURCHASE AGREEMENT PURCHASER SIGNATURE PAGE
Accepted and agreed as of the Number and Manner of Payment
dated first written above of Purchase Price of Shares to be Purchased:
800,000 Shares of 9.25% Series A Cumulative
Convertible Preferred Stock of Golf Trust of
America, Inc.
AEW TARGETED SECURITIES FUND, L.P.
Purchase Price: $20,000,000
By: AEW TSF, L.L.C. its General Partner
By: AEW TSF, INC., its Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Address: AEW Targeted Securities Fund, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: AEW, TSF, L.L.C
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Nominee (name in which the Shares to be
registered, if different than the name of Purchaser)
----------------------------------------
(Nominee's Name)
COPIES OF NOTICE TO:
Tax I.D. Number: ▇▇-▇▇▇-▇▇▇▇ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
(if acquired in the name of a General Counsel
nominee, the taxpayer I.D. AEW Capital Management, Inc.
number of such nominee) ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Battle ▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
