Exhibit 10.2
GOLF TRUST OF AMERICA
February 14, 2001
Mr. Xxxxx Xxxxx
The Legends Group
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
CONFIDENTIALITY AND STANDSTILL AGREEMENT
Ladies and Gentlemen:
In connection with that certain Purchase Agreement among our respective
affiliates, Legends Golf Holding LLC and Golf Trust of America, L.P., dated as
of the date hereof (the "Purchase Agreement") pursuant to which you seek to
acquire certain assets of Golf Trust of America, Inc. (the "Company") as set
forth in the Purchase Agreement in accordance with the terms thereof or other
possible transaction as permitted herein (any such potential acquisition (the
"Transaction")), you have requested that we or our representatives furnish you
or your representatives with certain information relating to the Company or the
Transaction. All such information (whether written or oral) furnished (whether
before or after the date hereof) by us or our directors, officers, employees,
affiliates, representatives (including, without limitation, financial advisors,
attorneys and accountants) or agents (collectively, "our Representatives") to
you or your directors, officers, employees, affiliates, representatives
(including, without limitation, financial advisors, attorneys and accountants)
or agents or your potential sources of financing for the Transaction
(collectively, "your Representatives") and all analyses, compilations,
forecasts, studies or other documents prepared by you or your Representatives in
connection with your or their review of, or your interest in, the Transaction
which contain or reflect any such information is hereinafter referred to as the
"Information." The term Information will not, however, include information which
(i) is or becomes publicly available other than as a result of a disclosure by
you or your Representatives in violation of this letter agreement or other
obligation of confidentiality or (ii) is or becomes available to you on a
nonconfidential basis from a source (other than us or our Representatives) not
known by you to be prohibited from disclosing such information to you by a
legal, contractual or fiduciary obligation. Nothing herein shall waive any
fiduciary duty Xx. Xxxxx may have to the Company or its shareholders as a Board
member of the Company.
Accordingly, you hereby agree that:
1. You and your Representatives (i) will keep the Information
confidential and will not (except as required by applicable law, regulation or
legal process, and only after compliance with paragraph 3 below), without our
prior written consent, disclose any Information in any manner whatsoever, in
whole or in part, (ii) will not use any Information other than in connection
with the Transaction; provided, however, that you may reveal the Information or
portions thereof to your Representatives (a) who need to know the Information
for the purpose of evaluating the Transaction, (b) who are informed by you of
the confidential nature of the Information and (c) who are directed by you to
treat the Information in a manner consistent with the terms of this letter
agreement. You will be responsible for any breach of this letter agreement by
any of your Representatives.
2. You and your Representatives will not (except as required by
applicable law, regulation or legal process, and only after compliance with
paragraph 3 below where applicable), without our prior written consent, disclose
to any person the fact that the Information exists or has been made available,
that you are considering the Transaction involving the Company, or that
discussions or negotiations are taking or have taken place concerning the
Transaction or involving the Company or any term, condition or other fact
relating to the Transaction or such discussions or negotiations, including,
without limitation, the status thereof or the subject matter of this letter
agreement.
3. In the event that you or any of your Representatives are requested
pursuant to, or required by, applicable law, regulation or legal process to
disclose any of the Information, you will notify us promptly (unless prohibited
by law) so that we may seek an appropriate protective order or other appropriate
remedy or, in our sole discretion, waive compliance with the terms of this
letter agreement (and if we seek such an order, you will provide such
cooperation as we shall reasonably request). In the event that no such
protective order or other remedy is obtained or that the Company waives
compliance with the terms of this letter agreement and that you or any of your
Representatives are nonetheless legally compelled to disclose such Information,
you or your Representatives, as the case may be, will furnish only that portion
of the Information which you are advised by counsel is legally required and will
give the Company written notice (unless prohibited by law) of the Information to
be disclosed as far in advance as practicable and exercise all reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded the Information.
4. If you determine not to proceed with the Transaction, you will
promptly inform our Representative, Banc of America Securities LLC ("BAS"), of
that decision and, in that case, and at any time upon the request of the Company
or any of our Representatives, you will (i) promptly deliver to the Company at
your own expense or, at our request, destroy all copies of the written
Information in your or your Representatives' possession that was delivered to
you by us or on our behalf and (ii) promptly destroy all analyses, compilations,
summaries, studies and other material prepared by you or your Representatives
and based in whole or in part on, or otherwise containing or reflecting any of,
the Information. You will confirm any such destruction to us in writing. Any
oral Information will continue to be subject to the terms of this letter
agreement.
5. You acknowledge that neither we, nor BAS, nor our other
Representatives, nor any of our or their respective officers, directors,
employees, agents or controlling persons within the meaning of Section 20 of the
Securities Exchange Act of 1934 (the "Exchange Act"), make any representation or
warranty, express or implied, as to the accuracy or completeness of the
Information, and you agree that no such person will have any liability relating
to the Information or for any errors therein or omissions therefrom. You further
agree that you are not entitled to rely on the accuracy or completeness of the
Information and that you will be entitled to rely solely on such
representations, warranties, covenants and agreements as may be included in the
Purchase Agreement, or other duly executed agreement by and between the parties
to the Purchase Agreement, with respect to the Transaction, subject to such
limitations and restrictions as may be contained therein.
6. You hereby acknowledge that you are aware, and that you will advise
your Representatives who are informed of the matters that are the subject of
this letter agreement, that the United States securities laws prohibit any
person who has received from the issuer of such securities material, nonpublic
information concerning the matters that are the subject of this letter agreement
from purchasing or selling securities of such issuer or from communicating such
information to any other person when it is reasonably foreseeable that such
other person is likely to purchase or sell such securities in reliance upon such
information.
7. You agree that, for a period of three years from the date of this
letter agreement, neither you nor any of your affiliates (as such term is
defined in Rule 12b-2 of the Exchange Act) will (and neither you nor they will
assist or encourage others to), without the prior written consent of the Company
or its Board of Directors (or of any successor or controlling person thereof):
(i) acquire or agree, offer, seek or propose to acquire (other than pursuant to
an offer or proposal submitted to the Board of Directors of the Company in
writing, (and not by Xxxxx Xxxxx acting as a member of the Board of Directors of
the Company or at a Board of Directors meeting), and approved in writing by the
Board of Directors excluding Xxxxx Xxxxx), or cause to be acquired, directly or
indirectly, by purchase or otherwise, ownership (including, without limitation,
beneficial ownership as defined in Rule 13d-3 of the Exchange Act) of any voting
securities of the Company or any subsidiary thereof, or of any successor to or
person in control of the Company(except upon conversion of currently outstanding
units of limited partnership interest in Golf Trust of America, L.P. or upon
exercise of options in the Company issued to Xx. Xxxxx for his service as a
director of the Company), any of the assets or businesses of the Company or any
subsidiary or division thereof or of any such successor or controlling person or
any bank debt, claims or other obligations of the Company or any rights or
options to acquire (other than those currently owned) such ownership (including
from a third party); (ii) seek or propose to influence or control the management
or policies of the Company or to obtain representation on the Company's Board of
Directors, except to the extent Xxxxx Xxxxx remains a member of the Company's
Board and is acting in accordance with the Business Judgment Rule and with
counsel's advice to avoid any conflicts of interest, or solicit, or participate
in the solicitation by any group other than the Company's Board of Directors of,
any proxies or consents with respect to any securities of the Company or make
any public announcement with respect to any of the foregoing or request
permission to do any of the foregoing; (iii) make any public announcement with
respect to, or submit a proposal for, or offer of (with or without conditions)
(other than as permitted by (i) immediately above in accordance with the
limitations thereof) any extraordinary transaction involving the Company or its
securities or assets; (iv) enter into any discussions, negotiations,
arrangements or understandings with any third party with respect to any of the
foregoing, or otherwise form, join or in any way participate in a
"group" (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended) in connection with any of the foregoing; or (v) participate in any
effort to do any of the foregoing or make any public announcement with respect
to the foregoing. You will promptly advise the Company of any inquiry or
proposal made to you with respect to any of the foregoing. The restriction
imposed on you by this paragraph shall terminate: (i) one hundred twenty (120)
days after a public announcement by the Company's Board of Directors that it has
decided not to submit a plan of liquidation to the Company's stockholders for
approval or, following a stockholder vote on a plan of liquidation, a public
announcement by the Company that the Company's stockholders did not approve a
plan of liquidation by the requisite vote; or (ii) upon termination of the
Purchase Agreement by Legends Golf Holding, LLC as a result of Golf Trust of
America L.P. being in material breach of the Purchase Agreement (after notice
and a reasonable opportunity to cure to the extent provided by the Purchase
Agreement) that will cause irreparable harm to Legends Golf Holding, LLC, Golf
Legends Ltd., Inc. or Legends of Virginia LC, as determined by a final judicial
order by a court of proper jurisdiction.
8. You agree that for a period of three years from the date of this
letter agreement, you will not (i) hire any employee of the Company or any of
its subsidiaries with whom you have had contact or who became known to you in
connection with your consideration of the Transaction without the prior written
consent of the Company, or (ii) directly or indirectly solicit for employment or
hire any former employee of the Company. You also agree that until the earlier
of (a) the consummation of a Transaction between the Company and you or (b)
three years from the date of this letter agreement, you will not, without the
prior written consent of the Company, initiate or maintain contact (except in
the ordinary course of business) with any officer, director, employee, supplier,
distributor, broker, customer, lender, lessee, or borrower of the Company for
the purposes of obtaining information regarding the Company's operations,
assets, prospects or finances. The restriction imposed on you by this paragraph
shall terminate: (i) one hundred twenty (120) days after a public announcement
by the Company's Board of Directors that it has decided not to submit a plan of
liquidation to the Company's stockholder for approval or, following a
stockholder vote on a plan of liquidation, a public announcement by the Company
that the Company's stockholders did not approve a plan of liquidation by the
requisite vote; or (ii) upon termination of the Purchase Agreement by Legends
Golf Holding, LLC as a result of Golf Trust of America L.P. being in material
breach of the Purchase Agreement (after notice and a reasonable opportunity to
cure to the extent provided by the Purchase Agreement) that will cause
irreparable harm to Legends Golf Holding, LLC, Golf Legends Ltd., Inc. or
Legends of Virginia LC, as determined by a final judicial order by a court of
proper jurisdiction.
9. You agree that all (i) communications regarding the Transaction,
(ii) requests for additional information, facility tours or management meetings,
and (iii) discussions or questions regarding procedures with respect to the
Transaction, will be first submitted or directed to Xxxx X. Xxxxx at BAS, W.
Xxxxxxx Xxxxx, XX at the Company or the Company's legal counsel (it being
understood and agreed that nothing contained herein shall prohibit, restrain, or
limit Xx. Xxxxx as a director of the Company from engaging in any discussion
with his fellow directors other than with respect to the Purchase Agreement or
the Transaction, and that all discussions respecting the Purchase Agreement or
the Transaction (and/or related matters) shall be through BAS or Xx. Xxxxx as
Xx. Xxxxx may direct.
10. You acknowledge that remedies at law may be inadequate to protect
us against any actual or threatened breach of this letter agreement by you or by
your Representatives, and, without prejudice to any other rights and remedies
otherwise available to us, you agree to the granting of specific performance and
injunctive or other equitable relief in our favor without proof of actual
damages and you further agree to waive, and to use all reasonable efforts to
cause your Representatives to waive, any requirement for the securing or posting
of any bond in connection with any such remedy. In the event of litigation
relating to this letter agreement, if a court of competent jurisdiction
determines that this letter agreement has been breached by either party or its
Representatives, then the breaching party will reimburse the other party for its
costs and expenses (including, without limitation, reasonable legal fees and
expenses) incurred in connection with all such litigation.
11. You agree that no failure or delay by us or any of our
Representatives in exercising any right hereunder will operate as a waiver
thereof, nor will any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right hereunder.
12. This letter agreement, will be governed by and construed in
accordance wit the laws of the State of Maryland applicable to contracts between
residents of that State and executed in and to be performed entirely within that
State. You agree that you may be served with process at your address set forth
on the first page hereof.
13. This letter agreement, together with Section 7.4 of the Purchase
Agreement, contains the entire agreement between you and us concerning the
confidentiality of the Information, and no provision of this letter agreement
may be waived, amended or modified (except as provided in Section 7.4 of the
Purchase Agreement), in whole or in part, nor any consent given, unless approved
in writing by a duly authorized representative of the Company, which writing
specifically refers to this letter agreement and the provision so amended or
modified or for which such waiver or consent is given. In the event that any
provision of this letter agreement is deemed invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions of this
letter agreement will not in any way be affected or impaired thereby.
Please confirm your agreement to the foregoing by signing and returning
to the undersigned a copy of this letter agreement.
Very truly yours,
Golf Trust of America, Inc.
By: /s/ W. Xxxxxxx Xxxxx, XX
Its: Chief Executive Officer and President
Agreed to and Approved by:
The Legends Group and on behalf
of Xxxxx Xxxxx personally and all of
his affiliates:
By: /s/ Xxxxx X. Xxxxx
Xxxxx Xxxxx
