Exhibit
10.35


 





 


May 6, 2005


 


 


AEW Targeted Securities
Fund, L.P.

World Trade Center East

Two Seaport Lane

Boston, MA 02210-2021


Attn: Mr. Robert G.
Gifford


 


Re:          Golf Trust of America, Inc. — Option
to Acquire Series A Convertible Redeemable
Preferred Stock


 


Gentlemen:


 


As you know, Golf Trust
of America, Inc. (the “Company”) has engaged Houlihan Lokey Howard &
Zukin (“Houlihan”) to assist the Company in its implementation of the Company’s
stockholder approved plan of liquidation or a recapitalization of the
Company.  In the foregoing context, and
in consideration of a more expeditious completion of the Company’s liquidation
process, which the Company expects will allow the Company to maximize the value
received by all of its stockholders, the Company requests that AEW Targeted
Securities Fund, L.P. (“AEW”) confirm by countersigning below AEW’s agreement
to and approval of the terms of this letter agreement (the “Agreement”).


 


1.  Option Agreement.


 


1.1.          AEW hereby grants the Company the
option (the “Option”), exercisable by the Company in the Company’s sole
discretion, to purchase, on or before November 30, 2005 (the “Option
Termination Date”), all 800,000 shares of the Company’s Series A
Cumulative Convertible Redeemable Preferred Stock held by AEW Targeted
Securities Fund, L.P. (“AEW”) including, without limitation, all of AEW’s
rights to Liquidation Preferences (as defined in the Company’s Articles
Supplementary, including, without limitation, Liquidation Preferences in
respect of any accrued and unpaid dividends) payable in respect of such shares
as of the Company’s exercise of the Option (the “Series A Shares”), for a
price of $24,913,888.89 (the “Exercise Price”).


 





















 


1.2           Exercise of the Company’s purchase
rights pursuant to the Option may be made at any time on or before the Option
Termination Date by delivery to AEW in the manner set forth in Section 6
of this Agreement of a duly executed notice of exercise in the form set forth
in Exhibit A hereto (the “Notice”), provided that within three (3) business
days of the date the Notice is delivered to AEW, the Company shall have
delivered to AEW the Exercise Price by wire transfer or cashier’s check of
immediately available funds drawn on a United States bank.


 


1.3           Upon the Company’s exercise of the
Option and payment of the Exercise Price in accordance with the provisions of Section 1.2,
all rights of AEW pursuant to any agreements between AEW and the Company, the
Company’s Articles Supplementary or otherwise shall terminate, and the Series A
Shares shall be authorized and unissued shares of Preferred Stock to which AEW
shall no longer have any ownership rights.


 


2.  Representations and Warranties of AEW.


 


2.1           This Agreement has
been duly authorized, executed and delivered by or on behalf of AEW.


 


2.2           The execution and
delivery by AEW of, and the performance by AEW of its obligations under, this
Agreement shall not contravene (i) any provision of applicable law, or (ii) the
organizational documents of AEW, or (iii) any agreement or other
instrument binding upon AEW or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over AEW, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by AEW of its
obligations under this Agreement.


 


2.3           AEW has, and on the
date that the Company exercises the Option (if the Option is exercised) will
have (i) good and marketable title to the Series A Shares to be sold
by AEW free and clear of all security interests, claims, liens, equities or
other encumbrances known to or arising through AEW (except for encumbrances
arising under this Agreement), and (ii) the legal right and power, and all
authorization and approval required by law, to (A) enter into this Agreement,
and to (B) sell, transfer and deliver the Series A Shares to be sold
by AEW or a security entitlement in respect of the Series A Shares.


 


2.4           Upon delivery to the
Company of certificates representing the Series A Shares to be sold by
AEW, each endorsed to the Company or in blank, by an effective endorsement and
payable therefore by the Company pursuant to this Agreement, the Company will,
assuming the Company does not have notice of any adverse claims thereof,
acquire the Series A Shares to be sold by AEW free and clear of adverse
claims.


 


2.5           AEW has not
transferred (i) any rights or interest in the Series A Shares or (ii) any rights pursuant to its agreements
with the Company (“Contract Rights”).


 


3.  Representations and Warranties of the
Company.


 


3.1           This Agreement has
been duly authorized, executed and delivered by or on behalf of the Company.


 


2





















 


3.2           The execution and
delivery by the Company of, and the performance by the Company of its
obligations under, this Agreement shall not contravene the organizational
documents of the Company, or any agreement or other instrument binding upon the
Company or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under
this Agreement.


 


4. Covenants
and Agreements of AEW.


 


4.1           AEW shall not
transfer the Series A Shares or Contract Rights unless each transferee
receiving the Series A Shares or Contract Rights enters into a binding
written agreement with the Company providing that (i) such transferee
agrees to be bound by the obligations of AEW under this Agreement, and (ii) such
transferee will not subsequently transfer any of the Series A Shares or
Contract Rights without the prior written consent of the Company.


 


4.2           In the event that
AEW exercises any redemption right on or before the Option Termination Date, or
in the event that a transaction involving the Company which would give AEW a
right to liquidation preference payments arises on or before the Option
Termination Date, the aggregate redemption price or liquidation payment, as the
case may be, in respect of the Series A Shares shall be the Exercise
Price.


 


4.3           At such time as the
Company requests AEW’s consent or approval in contemplation of a merger,
acquisition or recapitalization of the Company, a sale of all or substantially
all of the assets of the Company, or any similar transaction requiring its
consent as the holder of the Series A Shares, AEW will approve and consent
to such transaction, and will waive any rights to dissent from the approval of
such a transaction, provided that the Company will pay to AEW the Exercise
Price within three (3) business days of the Company’s exercise of the
Option in accordance with the terms of this Agreement in connection with such
transaction.


 


5.  Governing Law.  This Agreement shall be
deemed to have been executed and delivered within the State of New York, and
the rights and obligations of the parties hereunder shall be construed and
enforced in accordance with, and governed by, the laws of the State of New York
without regard to principles of conflict of laws.  Any action or proceeding arising from or
relating to this Agreement must be brought in New York, and each party
irrevocably submits to the jurisdiction and venue of any such court in any such
action or proceeding.


 


6.  Notices.  All communications pursuant to this Agreement shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:


 


If to the Company:


 


Golf Trust of America, Inc.


10 North Adgers Wharf


Charleston,
South Carolina  29401


Attention:  Mr. W. Bradley Blair, II


President & Chief Executive Officer


 





















 


with
a copy to:


 


O’Melveny &
Myers LLP


275
Battery Street, Suite 2600


San
Francisco, California 94111-3305


Facsimile:  (415) 984-8701


Attention:  Peter T. Healy, Esq.


 


If to AEW:


 


AEW
Targeted Securities Fund, L.P.


World
Trade Center East


Two
Seaport Lane


Boston,
MA 02210-2021


Attention:
Mr. Robert G. Gifford


 


with
a copy to:


 


Goodwin Procter LLP


Exchange
Place


53
State Street


Boston,
MA  02109


Facsimile:  (617) 523-1231


Attention:  Laura C. Hodges Taylor, Esq.


 


Any and all notices or
other communications or deliveries required or permitted to be provided
hereunder shall be in writing and shall be deemed given and effective on the
earliest of (i) the date of transmission, (ii) the business day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (iii) upon actual receipt by the party to whom such
notice is required to be given.  The
address for such notices and communications shall be as set forth above.


 


Any party hereto may
change the address for receipt of communications by giving written notice to
the other party.


 


7.  Successors Assignment.  This
Agreement shall inure to the benefit of and be binding upon the parties hereto,
and to their respective successors, and no other person shall have any right or
obligation hereunder.


 


8.  Partial Unenforceability.  The
invalidity or unenforceability of any section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other section,
paragraph or provision hereof.  If any
section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.


 





















 


9.  Remedies.  The
Company, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement.  AEW agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.


 


10.  Entire Agreement.  This
Agreement constitutes the entire agreement of the Company and AEW with respect
to the matters discussed herein.  Except
as set forth in this Agreement, all other agreements between the parties shall
be in full force and effect and unmodified.


 


11.  Counterparts.  This
Agreement may be executed in several counterparts with the same effect as if
the parties executing the several counterparts had all executed one
counterpart.


 


	
  Thank
  you.

  	
   

  
	
   

  	
   

  
	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  /s/ W.
  Bradley Blair, II

  	
   

  
	
   

  	
   

  
	
   

  	
  W. Bradley
  Blair, II

  
	
   

  	
  Chief Executive
  Officer, President and

  Chairman of the Board of Directors of

  Golf Trust of America, Inc.

  



 


 


	
  AGREED TO AND APPROVED
  BY:

  	
   

  
	
   

  	
   

  
	
  “AEW”

  	
   

  
	
   

  	
   

  
	
  AEW Targeted Securities
  Fund, L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert G. Gifford

  	
   

  
	
  Printed Name:

  	
  Robert G. Gifford

  
	
  Title:  President, AEW TSF, Inc. (1)

  
					



 










(1)                        Mr.
Gifford executed the Option Agreement as President of AEW TSF, Inc., the
Managing Member of AEW TSF, L.L.C., the General Partner of AEW Targeted
Securities Fund, L.P.


 





















 


EXHIBIT A



NOTICE OF EXERCISE


 


	
  To:  AEW Targeted Securities Fund, L.P.

  	
  Date:               ,
  2005

  
	
  World
  Trade Center East

  	
   

  
	
  Two
  Seaport Lane

  	
   

  
	
  Boston,
  MA 02210-2021

  	
   

  
	
  Attn:
  Mr. Robert G. Gifford

  	
   

  



 


The undersigned hereby
elects to exercise the Option granted pursuant to the attached letter agreement
between AEW Targeted Securities Fund, L.P. and Golf Trust of America, Inc.
(the “Agreement”).  Payment of the
Exercise Price shall be made in accordance with the provisions of Section 1.2
of the Agreement.


 


	
   

  	
  By:

  
	
   

  	
  Printed Name:

  
	
   

  	
  Title: