Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - PMI Ventures Ltd. - Exhibit 10.4

EXHIBIT 10.4 

 STOCK OPTION PLAN 

 ARTICLE 1  

  DEFINITIONS AND INTERPRETATION

	1.1 	Definitions  
	 	 	 
	As used herein, unless anything
        in the subject matter or context is inconsistent therewith, the following
        terms shall have the meanings set forth below: 

	 	 	 
	 	(a)	"Administrator" means, initially, the
        secretary of the Company and thereafter shall mean such director or other
        senior officer or employee of the Company as may be designated as Administrator
        by the Board from time to time;

	 	 	 
	 	(b)	"Award Date" means the date on which
        the Board grants a particular Option;

	 	 	 
	 	(c)	"Board" means the board of directors
        of the Company;

	 	 	 
	 	(d)	"Company" means PMI Ventures Ltd. or
        any "affiliate" (as defined under the Company Act, R.S.B.C. 1996,
        c. 62, as amended);

	 	 	 
	 	(e)	“Consultant” means an individual
        or a Consultant Company, other than an Employee or a Director, engaged
        to provide on an ongoing bona fide basis, consulting, technical, management
        or other services to the Company or an affiliate of the Company under
        a written contract, that spends or will spend a significant amount of
        time and attention on the business and affairs of the Company or an affiliate
        of the Company and has a relationship with the Company or an affiliate
        of the Company that enables the individual to be knowledgeable about the
        business and affairs of the Company;

	 	 	 
	 	(f)	“Consultant Company” means
        for an individual consultant, a company or partnership of which the individual
        is an employee, shareholder or partner;

	 	 	 
	 	(g)	"Director" means any individual holding
        the office of director of the Company;

	 	 	 
	 	(h)	“Employee” means an individual
        regularly employed on a full-time or part-time basis by the Company or
        an affiliate of the Company or an individual who, on a regular basis and
        for a minimum amount of time per week, performs services for the Company
        or an affiliate of the Company normally provided by an employee, and for
        the purpose of the Plan includes a Management Company Employee;

	 	 	 
	 	(i)	“Exchange” means the TSX Venture
        Exchange or, if the Shares are no longer listed for trading on the TSX
        Venture Exchange, then such other exchange(s) or quotation systems(s)
        on which the Shares are listed or quoted for trading;

	 	 	 
	 	(j)	"Exercise Notice" means the notice respecting
        the exercise of an Option, in the form set out as Schedule "B" hereto,
        duly executed by the Option Holder;

 

	 	(k)
	"Exercise Period" means
        the period during which a particular Option may be exercised and is the
        period from and including the Award Date through to and including the
        Expiry Date, subject to the provisions of the Plan relating to vesting
        of Options;

	 	 	 
	 	(l)
	"Exercise Price" means the
        price at which an Option may be exercised as determined in accordance
        with paragraph 3.5;

	 	 	 
	 	(m)
	"Expiry Date" means the
        date determined in accordance with paragraph 3.3 and after which a particular
        Option cannot be exercised;

	 	 	 
	 	(n)
	“Management Company
        Employee” means an individual employed by a person providing management
        services to the Company, which are required for the ongoing successful
        operation of the business enterprise of the Company, but excluding a person
        involved in investor relations activities;

	 	 	 
	 	(o)
	"Option" means an option
        to acquire Shares, awarded to a Director, Employee or Consultant pursuant
        to the Plan;

	 	 	 
	 	(p)
	"Option Certificate" means
        the certificate, substantially in the form set out as Schedule "A" hereto,
        evidencing an Option;

	 	 	 
	 	(q)
	"Option Holder" means a
        Director, Employee or Consultant or former Director, Employee or Consultant,
        who holds an unexercised and unexpired Option or, where applicable, the
        Personal Representative of such person;

	 	 	 
	 	(r)
	"Plan" means this PMI Ventures
        Ltd. stock option plan, as amended from time to time;

	 	 	 
	 	(s)
	"Personal Representative"
        means:

	 	 	 
	 	 	(i)
	in the case of a deceased Option Holder,
        the executor or administrator of the deceased duly appointed by a court
        or public authority having jurisdiction to do so, and

	 	 	 
	 	 	(ii)
	in the case of an Option
        Holder who for any reason is unable to manage his or her affairs, the
        person entitled by law to act on behalf of such Option Holder; and

	 	 	 
	 	(t)
	"Share" or "Shares" means,
        as the case may be, one or more common shares without par value in the
        capital of the Company.

	 	 
	1.2 
	Choice of Law 

	 
	The Plan is established
        under and the provisions of the Plan shall be interpreted and construed
        in accordance with the laws of the Province of British Columbia. 

	 	 
	1.3
	Headings 

	 	 
	The headings used herein
        are for convenience only and are not to affect the interpretation of the
        Plan. 

 ARTICLE 2  

  PURPOSE AND PARTICIPATION  

 2.1          
  Purpose 

The purpose of the Plan is to provide the Company with a share-related
  mechanism to attract, retain and motivate qualified Directors, Employees and
  Consultants, to reward such of those Directors, Employees and Consultants as
  may be awarded Options under the Plan by the Board from time to time for their
  contributions toward the long term goals of the Company and to enable and encourage
  such Directors, Employees and Consultants to acquire Shares as long term investments.

 2.2          
  Participation  

 The Board shall, from time to time, in its sole discretion
  determine those Directors, Employees and Consultants, if any, to whom Options
  are to be awarded. If the Board elects to award an Option or to a Director,
  the Board shall, in its sole discretion but subject to paragraph 3.2, determine
  the number of Shares to be acquired on the exercise of such Option. If the Board
  elects to award an Option to an Employee or a Consultant, the number of Shares
  to be acquired on the exercise of such Option, shall be determined by the Board
  in its sole discretion, and in so doing the Board may take into account the
  following criteria: 

  	 	(a)
  	the remuneration paid to the Employee or Consultant as
        at the Award Date in relation to the total remuneration payable by the
        Company to all of its Employees and Consultants as at the Award Date;
	 	 	 
	 	(b)	the length of time that the Employee or Consultant has
        been employed or engaged by the Company; and
	 	 	 
	 	(c)	the quality of work performed by the Employee or Consultant.

 2.3          
  Notification of Award  

 Following the approval by the Board of the awarding of an
  Option, the Administrator shall notify the Option Holder in writing of the award
  and shall enclose with such notice the Option Certificate representing the Option
  so awarded. 

 2.4           
  Copy of Plan  

 Each Option Holder, concurrently with the notice of the award
  of the Option, shall be provided with a copy of the Plan. A copy of any amendment
  to the Plan shall be promptly provided by the Administrator to each Option Holder.

 2.5          
  Limitation  

 The Plan does not give any Option Holder that is a Director
  the right to serve or continue to serve as a Director of the Company nor does
  it give any Option Holder that is an Employee or a Consultant the right to be
  or to continue to be employed or engaged by the Company. 

 ARTICLE 3  

  TERMS AND CONDITIONS OF OPTIONS  

 3.1          
  Board to Allot Shares  

 The Shares to be issued to Option Holders upon the exercise
  of Options shall be allotted and authorized for issuance by the Board prior
  to the exercise thereof. 

 3.2          
  Number of Shares  

 The maximum number of Shares issuable under the Plan, together
  with the number of Shares issuable under 

 outstanding options granted otherwise than under the Plan,
  shall not exceed 2,466,047 Shares of the Company. Additionally, the Company
  shall not grant Options: 

	 	(a)	to any one person in any one year period
        which could, when exercised, result in the issuance of Shares exceeding
        five percent (5%) of the issued and outstanding Shares of the Company;
        or

	 	 	 
	 	(b)	to any one Consultant in any one year
        period which could, when exercised, result in the issuance of Shares exceeding
        two percent (2%) of the issued and outstanding Shares of the Company;
        or

	 	 	 
	 	(c)	to persons employed to undertake investor
        relations activities in any one year period which could, when exercised,
        result in the issuance of Shares exceeding an aggregate of two percent
        (2%) of the issued and outstanding Shares of the Company.

 If any Option expires or otherwise terminates for any reason
  without having been exercised in full, the number of Shares in respect of which
  Option expired or terminated shall again be available for the purposes of the
  Plan. 

 3.3           
  Term of Option  

 Subject to paragraph 3.4, the Expiry Date of an Option shall
  be the date so fixed by the Board at the time the particular Option is awarded,
  provided that such date shall not be later than: 

	(a)	for so long as the Company is classified
        as a venture company or equivalent designation of the Exchange, the fifth
        anniversary of the Award Date of Option; or

	 	 
	(b)	if the classification of the Company
        on the Exchange is upgraded from that of venture company, or the Shares
        are no longer listed on the Exchange, the tenth anniversary of the Award
        Date of the Option.

 3.4            Termination
  of Option  

 An Option Holder may exercise an Option, subject to any applicable
  vesting limitations as contemplated herein, in whole or in part at any time
  or from time to time during the Exercise Period provided that, with respect
  to the exercise of part of an Option, the Board may at any time and from time
  to time fix a minimum or maximum number of Shares in respect of which an Option
  Holder may exercise part of any Option held by such Option Holder. Any Option
  or part thereof not exercised within the Exercise Period shall terminate and
  become null, void and of no effect as of 5:00 p.m. local time in Vancouver,
  British Columbia, on the Expiry Date. The Expiry Date of an Option shall be
  the earlier of the date so fixed by the Board at the time the Option is awarded
  and the date established, if applicable, in sub-paragraphs (a) to (c) below:

	 	(a)	
        Death

         In the event that the Option Holder should die while he or she is
          still a Director (if he or she holds his or her Option as Director)
          or Employee or Consultant (if he or she holds his or her Option as Employee
          or Consultant), the Expiry Date shall be six (6) months from the date
          of death of the Option Holder; or

      

	 	 	 
	 	(b)	
        Ceasing to hold Office

         In the event that the Option Holder holds his or her Option as Director
          of the Company and

      

 

	 	 	such Option Holder ceases to be a Director of the
        Company other than by reason of death, the Expiry Date of the Option shall
        be the 30th day following the date the Option Holder ceases to be a Director
        of the Company unless the Option Holder ceases to be a Director of the
        Company but continues to be engaged by the Company as an Employee, in
        which case the Expiry Date shall remain unchanged, or unless the Option
        Holder ceases to be a Director of the Company as a result of: 

	 	 	 

	 	   	(i)	ceasing to meet the qualifications set forth in section
        114 of the Company Act, R.S.B.C. 1996, c.62, as amended or such
        other qualifications required by the corporate laws in any other jurisdiction
        under which the Company is continued or amalgamated; or

	 	 	 	 
	 	 	(ii)	a resolution having been passed by the members of
        the Company pursuant to subsection 130(3) of the Company Act, R.S.B.C.
        1996, c.62, as amended or an equivalent enactment pursuant to the corporate
        laws in any other jurisdiction under which the Company is continued or
        amalgamated; or

	 	 	 	 
	 	 	(iii)	by order of the British Columbia Securities Commission,
        the Exchange or any regulatory body having jurisdiction to so order,

	 	 	 	 
	 	 	 in which case the Expiry Date shall
        be the date the Option Holder ceases to be a Director of the Company.

	 	 	 	 

	 	(c)	
        Ceasing to be Employed

         In the event that the Option Holder holds his or her Option as an
          Employee or Consultant of the Company and such Option Holder ceases
          to be an Employee or Consultant of the Company other than by reason
          of death, the Expiry Date of the Option shall be the 30th day following
          the date the Option Holder ceases to be an Employee or a Consultant
          of the Company unless the Option Holder ceases to be an Employee or
          Consultant of the Company as a result of:

      

	 	 	 	 
	 	 	(i)	termination for cause, or in the case of a Consultant, breach
      of contract; or
	 	 	 	 
	 	 	(ii)	
        by order of the British Columbia Securities Commission, the Exchange,
          or any regulatory body having jurisdiction to so order;

        

	 	 	 	 
	 	 	in which case the Expiry Date shall be the date
      the Option Holder ceases to be an Employee or Consultant of the Company.

 3.5            Exercise
  Price  

 The Exercise Price shall be that price per share, as determined
  by the Board in its sole discretion as of the Award Date, at which an Option
  Holder may purchase a Share upon the exercise of an Option, shall not be less
  than the closing price of the Company’s shares traded through the facilities
  of the Exchange on the date preceding the Award Date, less any discounts permitted
  by the Exchange, or such other price as may be required by the Exchange. 

 3.6           
  Assignment of Options  

 Options may not be assigned or transferred, provided however
  that the Personal Representative of an Option Holder may, to the extent permitted
  by paragraph 4.1, exercise the Option within the Exercise Period. 

 3.7            Adjustments
   

 If prior to the complete exercise of any Option the Shares
  are consolidated, subdivided, converted, exchanged or reclassified or in any
  way substituted for (collectively the "Event"), an Option, to the extent that
  it has not been exercised, shall be adjusted by the Board in accordance with
  such Event in the manner the Board deems appropriate. No fractional Shares shall
  be issued upon the exercise of the Options and accordingly, if as a result of
  the Event, an Option Holder would become entitled to a fractional share, such
  Option Holder shall have the right to purchase only the next lowest whole number
  of shares and no payment or other adjustment will be made with respect to the
  fractional interest so disregarded. Additionally, no lots of Shares in an amount
  less than 500 Shares shall be issued upon the exercise of the Option unless
  such amount of Shares represents the balance left to be exercised under the
  Option. 

 3.8            Vesting
   

 For so long as the Company is classified as a Tier 2 company
  on the Exchange, all Options granted pursuant to the Plan must contain conditions
  relating to the vesting of the right to exercise an Option granted to any Option
  Holder, which will provide that the right to purchase shares under the Option
  may not be exercised any earlier than the following times (although the Board
  may impose longer vesting periods): 

	 	Date After Which the Shares
	Number of Shares	May be Purchased
	 	 
	One Third	Six Months After Award Date
	 	 
	One Third	One Year Following the Award Date
	 	 
	One Third	Eighteen Months Following the Award Date

 In the event that the classification of the Company on the
  Exchange is upgraded from that of a Tier 2 company, or the Company’s common
  shares are no longer listed on the Exchange, the Board may, in it’s sole
  discretion at the time the Option is granted, but will not be required to, impose
  conditions relating to the vesting of the right to exercise an Option granted
  to any Option Holder. 

 The Option Certificate representing any such Option will disclose
  any vesting conditions. 

 3.9           
  Grants to Employees, Consultants or Management Company Employees  

 In connection with any Option granted to an Employee, a Consultant
  or a Management Company Employee, the Company will be required to represent
  that the proposed Option Holder is a bona fide Employee, Consultant or Management
  Company Employee. 

 ARTICLE 4  

  EXERCISE OF OPTION  

 4.1            Exercise
  of Option  

 An Option may be exercised only by the Option Holder or the
  Personal Representative of any Option Holder. An Option Holder or the Personal
  Representative of any Option Holder may exercise an Option in whole or in part
  at any time or from time to time during the Exercise Period up to 5:00 p.m.
  local time in Vancouver, British Columbia on the Expiry Date by delivering to
  the Administrator an Exercise Notice, the applicable Option Certificate and
  a certified cheque or bank draft payable to the Company in an amount equal to
  the aggregate Exercise Price of the Shares to be purchased pursuant to the exercise
  of the Option. 

 4.2            Issue
  of Share Certificates  

 As soon as practicable following the receipt of the Exercise
  Notice, the Administrator shall cause to be delivered to the Option Holder a
  certificate for the Shares so purchased. If the number of Shares so purchased
  is less than the number of Shares subject to the Option Certificate surrendered,
  the Administrator shall forward a new Option Certificate to the Option Holder
  concurrently with delivery of the aforesaid share certificate for the balance
  of Shares available under the Option. 

 4.3            Condition
  of Issue  

 The issue of Shares by the Company pursuant to the exercise
  of an Option is subject to this Plan and compliance with the laws, rules and
  regulations of all regulatory bodies applicable to the issuance and distribution
  of such Shares and to the listing requirements of any stock exchange or exchanges
  on which the Shares may be listed. The Option Holder agrees to comply with all
  such laws, rules and regulations and agrees to furnish to the Company any information,
  report and/or undertakings required to comply with and to fully cooperate with
  the Company in complying with such laws, rules and regulations. 

 ARTICLE 5 

  ADMINISTRATION  

 5.1            Administration
   

 The Plan shall be administered by the Administrator on the
  instructions of the Board. The Board may make, amend and repeal at any time
  and from time to time such regulations not inconsistent with the Plan as it
  may deem necessary or advisable for the proper administration and operation
  of the Plan and such regulations shall form part of the Plan. The Board may
  delegate to the Administrator or any Director, officer or employee of the Company
  such administrative duties and powers as it may see fit. 

 5.2            Interpretation
   

 The interpretation by the Board of any of the provisions of
  the Plan and any determination by it pursuant thereto shall be final and conclusive
  and shall not be subject to any dispute by any Option Holder. No member of the
  Board or any person acting pursuant to authority delegated by it hereunder shall
  be liable for any action or determination in connection with the Plan made or
  taken in good faith and each member of the Board and each such person shall
  be entitled to indemnification with respect to any such action or determination
  in the manner provided for by the Company. 

 ARTICLE 6  

  AMENDMENT AND TERMINATION  

 6.1            Prospective
  Amendment  

 Subject to applicable regulatory and, if required by any relevant
  law, rule or regulation applicable to the Plan, to shareholder approval, the
  Board may from time to time amend the Plan and the terms and conditions of any
  Option thereafter to be granted and, without limiting the generality of the
  foregoing, may make such amendment for the purpose of meeting any changes in
  any relevant law, rule or regulation applicable to the Plan, any Option or the
  Shares or for any other purpose which may be permitted by all relevant laws,
  rules and regulations provided always that any such amendment shall not alter
  the terms or conditions of any Option or impair any right of any Option Holder
  pursuant to any Option awarded prior to such amendment. 

 6.2            Retrospective
  Amendment  

 Subject to applicable regulatory and, if required by any relevant
  law, rule or regulation applicable to the Plan, to shareholder approval, the
  Board may from time to time retrospectively amend the Plan and, with the consent
  of the affected Option Holders, retrospectively amend the terms and conditions
  of any Options 

 which have been previously granted. For greater certainty,
  the policies of the Exchange currently requires that disinterested shareholder
  approval be obtained for any reduction in the Exercise Price of any Option held
  by an insider of the Company. 

 6.3            Termination
   

 The Board may terminate the Plan at any time provided that
  such termination shall not alter the terms or conditions of any Option or impair
  any right of any Option Holder pursuant to any Option awarded prior to the date
  of such termination and notwithstanding such termination the Company, such Options,
  Option Holders, Directors and Employees and Shares shall continue to be governed
  by the provisions of the Plan. 

 6.4           
  Agreement  

 The Company and every person to whom an Option is awarded
  hereunder shall be bound by and subject to the terms and conditions of the Plan.

 ARTICLE 7  

  APPROVALS REQUIRED FOR PLAN  

 7.1            Approvals
  Required for Plan  

 Prior to its implementation by the Company, the Plan is subject
  to approvals by the shareholders of the Company at general meeting and the Exchange.

 7.2            Substantive
  Amendments to Plan  

Any substantive amendments to the Plan shall be subject to the Company first obtaining the approvals of:

	 	(a)	the shareholders or disinterested shareholders,
        as the case may be, of the Company at general meeting where required by
        the rules and policies of any stock exchange on which the Shares may be
        listed for trading; and

	 	 	 
	 	(b)	any stock exchange on which the Shares may be listed for
      trading.

  SCHEDULE "A"  

  PMI VENTURES LTD.  

  STOCK OPTION PLAN OPTION CERTIFICATE 

 This Certificate is issued pursuant to the provisions of the
  PMI VENTURES LTD. (the "Company") Stock Option Plan (the "Plan") and
  evidences that_____________________ is the holder of an option (the "Option")
  [and applicable stock appreciation rights] to purchase up to ______________________
  common shares (the "Shares") in the capital stock of the Company at a purchase
  price of $_______ per Share. Subject to the provisions of the Plan:

	 	(a)	the Award Date of this Option is ______________________________________
      ; and 
	 	 	 
	 	(b)	the Expiry Date of this Option is  ______________________________________
      . 

The right to purchase shares under the Option will vest in the holder in increments
  over the term of the Option as follows: 

	Date	Cumulative Number of Shares which may be Purchased
	 	

      

    

 This Option may be exercised in accordance with its terms
  at any time and from time to time from and including the Award Date through
  to and including up to 5:00 local time in Vancouver, British Columbia on the
  Expiry Date, by delivery to the Administrator of the Plan an Exercise Notice,
  in the form provided in the Plan, together with this Certificate and a certified
  cheque or bank draft payable to PMI Ventures Ltd. in an amount equal to the
  aggregate of the Exercise Price of the Shares in respect of which this Option
  is being exercised. 

 This Certificate and the Option evidenced hereby is not assignable,
  transferable or negotiable and is subject to the detailed terms and conditions
  contained in the Plan. This Certificate is issued for convenience only and in
  the case of any dispute with regard to any matter in respect hereof, the provisions
  of the Plan and the records of the Company shall prevail. 

 The foregoing Option has been awarded this ___ day of _______________.

 Without prior written consent of the TSX Venture Exchange
  and compliance with all applicable securities legislation, the securities represented
  by this certificate and the shares issuable upon the exercise thereof my not
  be sold, transferred, hypothecated or otherwise traded on or through the facilities
  of the TSX Venture Exchange or otherwise in Canada or to or for the benefit
  of a Canadian resident until _____________________ [ insert date that
  is four months plus one day from the date of grant]. 

[Unless permitted under securities legislation, the holder
  of the securities shall not trade the securities before ‚ insert
  date that is four months plus one day from the date of grant or 12 months plus
  one day if the company is not a qualifying issuer.] THIS LEGEND IS
  NECESSARY ONLY IN LIMITED CIRCUMSTANCES FOR GRANTS TO ASSOCIATED OR IR CONSULTANTS
  UNDER 45-507]  

PMI VENTURES LTD. 
  

   Per: ____________________________________________

 

SCHEDULE "B" 

EXERCISE NOTICE

	TO:	The Administrator, Stock Option Plan
	 	PMI VENTURES LTD.
	 	Suite 1760, 750 West Pender Street
	 	Vancouver, British Columbia V6C 2T8

 1.               Exercise
  of Option 

 The undersigned hereby irrevocably gives notice, pursuant
  to the PMI Venture Ltd. (the "Company") Stock Option Plan (the "Plan"), of the
  exercise of the Option to acquire and hereby subscribes for (cross out inapplicable
  item): 

	(a)	all of the Shares; or
	 	 
	(b)	____________________________of the Shares which are the subject of the
      option certificate attached hereto.

Calculation of total Exercise Price:

	(i)	number of Shares to be acquired on exercise:	 	  shares
	 	 	 	 
	(ii)	times the Exercise Price per Share:	$	 
	 	 	 	 
	 	Total Exercise Price, as enclosed herewith:	$	 

The undersigned tenders herewith a cheque or bank draft (circle
  one) in the amount of $ ,payable to PMI Ventures Ltd. in an amount equal to
  the total Exercise Price of the Shares, as calculated above, and directs the
  Company to issue the share certificate evidencing the Shares in the name of
  the undersigned to be mailed to the undersigned at the following address:

  ________________________________________________________ 

  ________________________________________________________ 

  ________________________________________________________ 

  ________________________________________________________ 

OR: 

The Company is directed to issue the share certificate evidencing
  the Shares in the name of the undersigned for mailing at the following address:

  ________________________________________________________ 

  ________________________________________________________ 

  ________________________________________________________ 

  ________________________________________________________ 

All capitalized terms, unless otherwise defined in this exercise
  notice, will have the meaning provided in the Plan. 

DATED the _____ day of ______________________________________.

	 	 	 
	Witness	 	Signature of Option Holder
	 	 	 
	 	 	 
	Name of Witness (Print)	 	Name of Option Holder (Print)

 AMENDED AND RESTATED STOCK OPTION PLAN 

 ARTICLE 1  

  DEFINITIONS AND INTERPRETATION

1.1           
  Definitions  

 As used herein, unless anything in the subject matter or context
  is inconsistent therewith, the following terms shall have the meanings set forth
  below: 

	 	(a)	"Administrator" means, initially, the
        secretary of the Company and thereafter shall mean such director or other
        senior officer or employee of the Company as may be designated as Administrator
        by the Board from time to time;

	 	 	 
	 	(b)	"Award Date" means the date on which
        the Board grants a particular Option;

	 	 	 
	 	(c)	"Board" means the board of directors
        of the Company;

	 	 	 
	 	(d)	"Company" means PMI Ventures Ltd. or
        any "affiliate" (as defined under the Company Act, R.S.B.C. 1996,
        c. 62, as amended);

	 	 	 
	 	(e)	“Consultant” means an individual
        or a Consultant Company, other than an Employee or a Director, engaged
        to provide on an ongoing bona fide basis, consulting, technical, management
        or other services to the Company or an affiliate of the Company under
        a written contract, that spends or will spend a significant amount of
        time and attention on the business and affairs of the Company or an affiliate
        of the Company and has a relationship with the Company or an affiliate
        of the Company that enables the individual to be knowledgeable about the
        business and affairs of the Company;

	 	 	 
	 	(f)	“Consultant Company” means
        for an individual consultant, a company or partnership of which the individual
        is an employee, shareholder or partner;

	 	 	 
	 	(g)	"Director" means any individual holding
        the office of director of the Company;

	 	 	 
	 	(h)	“Employee” means an individual
        regularly employed on a full-time or part-time basis by the Company or
        an affiliate of the Company or an individual who, on a regular basis and
        for a minimum amount of time per week, performs services for the Company
        or an affiliate of the Company normally provided by an employee, and for
        the purpose of the Plan includes a Management Company Employee;

	 	 	 
	 	(i)	“Exchange” means the TSX Venture
        Exchange or, if the Shares are no longer listed for trading on the TSX
        Venture Exchange, then such other exchange(s) or quotation systems(s)
        on which the Shares are listed or quoted for trading;

	 	 	 
	 	(j)	"Exercise Notice" means the notice respecting
        the exercise of an Option, in the form set out as Schedule "B" hereto,
        duly executed by the Option Holder;

	 	 	 
	 	(k)	"Exercise Period" means the period during
        which a particular Option may be exercised and is the period from and
        including the Award Date through to and including the Expiry Date, subject
        to the provisions of the Plan relating to vesting of Options;

2

	 	(l)	"Exercise Price" means the
        price at which an Option may be exercised as determined in accordance
        with paragraph 3.5;

	 	 	 
	 	(m)	"Expiry Date" means the
        date determined in accordance with paragraph 3.3 and after which a particular
        Option cannot be exercised;

	 	 	 
	 	(n)	“Management Company
        Employee” means an individual employed by a person providing management
        services to the Company, which are required for the ongoing successful
        operation of the business enterprise of the Company, but excluding a person
        involved in investor relations activities;

	 	 	 
	 	(o)	"Option" means an option
        to acquire Shares, awarded to a Director, Employee or Consultant pursuant
        to the Plan;

	 	 	 
	 	(p)	"Option Certificate" means
        the certificate, substantially in the form set out as Schedule "A" hereto,
        evidencing an Option;

	 	 	 
	 	(q)	"Option Holder" means a
        Director, Employee or Consultant or former Director, Employee or Consultant,
        who holds an unexercised and unexpired Option or, where applicable, the
        Personal Representative of such person;

	 	 	 
	 	(r)	"Plan" means this PMI Ventures
        Ltd. stock option plan, as amended from time to time;

	 	 	 
	 	(s)	"Personal Representative"
        means:

	 	 	 
	 	 	(i)
	 in the case of a deceased Option Holder,
        the executor or administrator of the deceased duly appointed by a court
        or public authority having jurisdiction to do so, and

	 	 	 
	 	 	(ii)
	 in the case of an Option
        Holder who for any reason is unable to manage his or her affairs, the
        person entitled by law to act on behalf of such Option Holder; and

	 	 	 
	 	(t)	"Share" or "Shares" means, as the case may be,
      one or more common shares without par value in the capital of the Company.

 1.2            Choice
  of Law  

 The Plan is established under and the provisions of the Plan
  shall be interpreted and construed in accordance with the laws of the Province
  of British Columbia. 

 1.3           
  Headings  

 The headings used herein are for convenience only and are
  not to affect the interpretation of the Plan. 

 ARTICLE 2  

  PURPOSE AND PARTICIPATION

2.1            Purpose
   

 The purpose of the Plan is to provide the Company with a share-related
  mechanism to attract, retain and motivate qualified Directors, Employees and
  Consultants, to reward such of those Directors, Employees and Consultants as
  may be awarded Options under the Plan by the Board from time to time for their
  contributions toward the long term goals of the Company and to enable and encourage
  such Directors, Employees and Consultants to acquire Shares as long term investments.

3

 2.2            Participation
   

 The Board shall, from time to time, in its sole discretion
  determine those Directors, Employees and Consultants, if any, to whom Options
  are to be awarded. If the Board elects to award an Option or to a Director,
  the Board shall, in its sole discretion but subject to paragraph 3.2, determine
  the number of Shares to be acquired on the exercise of such Option. If the Board
  elects to award an Option to an Employee or a Consultant, the number of Shares
  to be acquired on the exercise of such Option, shall be determined by the Board
  in its sole discretion, and in so doing the Board may take into account the
  following criteria: 

	 	(a)	the remuneration paid to the Employee
        or Consultant as at the Award Date in relation to the total remuneration
        payable by the Company to all of its Employees and Consultants as at the
        Award Date;

	 	 	 
	 	(b)	the length of time that the Employee or Consultant has been
      employed or engaged by the Company; and
	 	 	 
	 	(c)	the quality of work performed by the Employee or Consultant.

 2.3            Notification
  of Award  

 Following the approval by the Board of the awarding of an
  Option, the Administrator shall notify the Option Holder in writing of the award
  and shall enclose with such notice the Option Certificate representing the Option
  so awarded. 

 2.4            Copy of
  Plan  

 Each Option Holder, concurrently with the notice of the award
  of the Option, shall be provided with a copy of the Plan. A copy of any amendment
  to the Plan shall be promptly provided by the Administrator to each Option Holder.

 2.5           
  Limitation  

 The Plan does not give any Option Holder that is a Director
  the right to serve or continue to serve as a Director of the Company nor does
  it give any Option Holder that is an Employee or a Consultant the right to be
  or to continue to be employed or engaged by the Company. 

 ARTICLE 3  

  TERMS AND CONDITIONS OF OPTIONS

3.1           
  Board to Allot Shares  

 The Shares to be issued to Option Holders upon the exercise
  of Options shall be allotted and authorized for issuance by the Board prior
  to the exercise thereof. 

 3.2            Number
  of Shares  

 The maximum number of Shares issuable under the Plan, together
  with the number of Shares issuable under outstanding options granted otherwise
  than under the Plan, shall not exceed 2,466,047 Shares of the Company. Additionally,
  the Company shall not grant Options: 

	 	(d)	to any one person in any one year period
        which could, when exercised, result in the issuance of Shares exceeding
        five percent (5%) of the issued and outstanding Shares of the Company;
        or

	 	 	 
	 	(e)	to any one Consultant in any one year
        period which could, when exercised, result in the issuance of Shares exceeding
        two percent (2%) of the issued and outstanding Shares of the Company;
        or

4

	 	(f)	to persons employed to undertake investor relations
        activities in any one year period which could, when exercised, result
        in the issuance of Shares exceeding an aggregate of two percent (2%) of
        the issued and outstanding Shares of the Company.

If any Option expires or otherwise terminates for any reason
  without having been exercised in full, the number of Shares in respect of which
  Option expired or terminated shall again be available for the purposes of the
  Plan. 

 3.3            Term of
  Option  

 Subject to paragraph 3.4, the Expiry Date of an Option shall
  be the date so fixed by the Board at the time the particular Option is awarded,
  provided that such date shall not be later than: 

	 	(a)
 	for so long as the Company is classified
        as a venture company or equivalent designation of the Exchange, the fifth
        anniversary of the Award Date of the Option; or

	 	 	 
	 	(b)	if the classification of the Company
        on the Exchange is upgraded from that of a venture company, or the Shares
        are no longer listed on the Exchange, the tenth anniversary of the Award
        Date of the Option.

 3.4            Termination
  of Option  

 An Option Holder may exercise an Option, subject to any applicable
  vesting limitations as contemplated herein, in whole or in part at any time
  or from time to time during the Exercise Period provided that, with respect
  to the exercise of part of an Option, the Board may at any time and from time
  to time fix a minimum or maximum number of Shares in respect of which an Option
  Holder may exercise part of any Option held by such Option Holder. Any Option
  or part thereof not exercised within the Exercise Period shall terminate and
  become null, void and of no effect as of 5:00 p.m. local time in Vancouver,
  British Columbia, on the Expiry Date. The Expiry Date of an Option shall be
  the earlier of the date so fixed by the Board at the time the Option is awarded
  and the date established, if applicable, in sub-paragraphs (a) to (c) below:

	 	(a)	
        Death

         In the event that the Option Holder should die while he or she is
          still a Director (if he or she holds his or her Option as Director)
          or Employee or Consultant (if he or she holds his or her Option as Employee
          or Consultant), the Expiry Date shall be six (6) months from the date
          of death of the Option Holder; or

      

	 	 	 
	 	(b)	
        Ceasing to hold Office

         In the event that the Option Holder holds his or her Option as Director
          of the Company and such Option Holder ceases to be a Director of the
          Company other than by reason of death, the Expiry Date of the Option
          shall be the 30th day following the date the Option Holder ceases to
          be a Director of the Company unless the Option Holder ceases to be a
          Director of the Company but continues to be engaged by the Company as
          an Employee, in which case the Expiry Date shall remain unchanged, or
          unless the Option Holder ceases to be a Director of the Company as a
          result of:

      

	 	 	 	 
	 	 	(i)
	ceasing to meet the qualifications set
        forth in section 114 of the Company Act, R.S.B.C. 1996, c.62, as
        amended or such other qualifications required by the corporate laws in
        any other jurisdiction under which the Company is continued or

5

	 	 	 	amalgamated; or
	 	 	 	 
	 	 	(ii)	a resolution having been passed by the
        members of the Company pursuant to subsection 130(3) of the Company
        Act, R.S.B.C. 1996, c.62, as amended or an equivalent enactment pursuant
        to the corporate laws in any other jurisdiction under which the Company
        is continued or amalgamated; or

	 	 	 	 
	 	 	(iii)
 	by order of the British Columbia Securities
        Commission, the Exchange or any regulatory body having jurisdiction to
        so order;

      
	 	 	 	 
	 	 	in which case the Expiry Date shall be the date
      the Option Holder ceases to be a Director of the Company.

	 	(c)
   	
        Ceasing to be Employed

         In the event that the Option Holder holds his or her Option as an
          Employee or Consultant of the Company and such Option Holder ceases
          to be an Employee or Consultant of the Company other than by reason
          of death, the Expiry Date of the Option shall be the 30th day following
          the date the Option Holder ceases to be an Employee or a Consultant
          of the Company unless the Option Holder ceases to be an Employee or
          Consultant of the Company as a result of:

      

	 	 	 	 
	 	 	(i)
	termination for cause, or in the case
        of a Consultant, breach of contract; or

	 	 	 	 
	 	 	(ii)
	by order of the British Columbia Securities
        Commission, the Exchange, or any regulatory body having jurisdiction to
        so order;

	 	 	 	 
	 	 	in which case the Expiry Date shall be the date
      the Option Holder ceases to be an Employee or Consultant of the Company.

 3.5            Exercise
  Price  

 The Exercise Price shall be that price per share, as determined
  by the Board in its sole discretion as of the Award Date, at which an Option
  Holder may purchase a Share upon the exercise of an Option, shall not be less
  than the closing price of the Company’s shares traded through the facilities
  of the Exchange on the date preceding the Award Date, less any discounts permitted
  by the Exchange, or such other price as may be required by the Exchange. 

 3.6           
  Assignment of Options  

 Options may not be assigned or transferred, provided however
  that the Personal Representative of an Option Holder may, to the extent permitted
  by paragraph 4.1, exercise the Option within the Exercise Period. 

 3.7            Adjustments
   

 If prior to the complete exercise of any Option the Shares
  are consolidated, subdivided, converted, exchanged or reclassified or in any
  way substituted for (collectively the "Event"), an Option, to the extent that
  it has not been exercised, shall be adjusted by the Board in accordance with
  such Event in the manner the Board deems appropriate. No fractional Shares shall
  be issued upon the exercise of the Options and accordingly, if as a result of
  the Event, an Option Holder would become entitled to a fractional share, such
  Option Holder shall have the right to purchase only the next lowest whole number
  of shares and no payment or other adjustment will be made with respect to the
  fractional interest so disregarded. Additionally, no lots 

6

 of Shares in an amount less than 500 Shares shall be issued
  upon the exercise of the Option unless such amount of Shares represents the
  balance left to be exercised under the Option. 

 3.8            Vesting
   

 For so long as the Company is classified as a Tier 2 company
  on the Exchange, all Options granted pursuant to the Plan must contain conditions
  relating to the vesting of the right to exercise an Option granted to any Option
  Holder, which will provide that the right to purchase shares under the Option
  not be exercised any earlier than the following times (although the Board may
  impose longer vesting periods): 

	 	 	Date After Which the Shares
	 	Number of Shares	May be Purchased
	 	 	 
	 	One Third	Six Months After Award Date
	 	One Third	One Year Following the Award Date
	 	One Third	Eighteen Months Following the Award Date

 In the event that the classification of the Company on the
  Exchange is upgraded from that of a Tier 2 company, or the Company’s common
  shares are no longer listed on the Exchange, the Board may, in it’s sole
  discretion at the time the Option is granted, but will not be required to, impose
  conditions relating to the vesting of the right to exercise an Option granted
  to any Option Holder. 

 The Option Certificate representing any such Option will disclose
  any vesting conditions. 

 3.            Grants
  to Employees, Consultants or Management Company Employees  

 In connection with any Option granted to an Employee, a Consultant
  or a Management Company Employee, the Company will be required to represent
  that the proposed Option Holder is a bona fide Employee, Consultant or Management
  Company Employee. 

 ARTICLE 4 

  EXERCISE OF OPTION  

 4.1            Exercise
  of Option  

 An Option may be exercised only by the Option Holder or the
  Personal Representative of any Option Holder. An Option Holder or the Personal
  Representative of any Option Holder may exercise an Option in whole or in part
  at any time or from time to time during the Exercise Period up to 5:00 p.m.
  local time in Vancouver, British Columbia on the Expiry Date by delivering to
  the Administrator an Exercise Notice, the applicable Option Certificate and
  a certified cheque or bank draft payable to the Company in an amount equal to
  the aggregate Exercise Price of the Shares to be purchased pursuant to the exercise
  of the Option. 

 4.2           
  Issue of Share Certificates  

 As soon as practicable following the receipt of the Exercise
  Notice, the Administrator shall cause to be delivered to the Option Holder a
  certificate for the Shares so purchased. If the number of Shares so purchased
  is less than the number of Shares subject to the Option Certificate surrendered,
  the Administrator shall forward a new Option Certificate to the Option Holder
  concurrently with delivery of the aforesaid share certificate for the balance
  of Shares available under the Option. 

7

 4.3            Condition
  of Issue  

 The issue of Shares by the Company pursuant to the exercise
  of an Option is subject to this Plan and compliance with the laws, rules and
  regulations of all regulatory bodies applicable to the issuance and distribution
  of such Shares and to the listing requirements of any stock exchange or exchanges
  on which the Shares may be listed. The Option Holder agrees to comply with all
  such laws, rules and regulations and agrees to furnish to the Company any information,
  report and/or undertakings required to comply with and to fully cooperate with
  the Company in complying with such laws, rules and regulations. 

 ARTICLE 5

  ADMINISTRATION  

 5.1            Administration
   

 The Plan shall be administered by the Administrator on the
  instructions of the Board. The Board may make, amend and repeal at any time
  and from time to time such regulations not inconsistent with the Plan as it
  may deem necessary or advisable for the proper administration and operation
  of the Plan and such regulations shall form part of the Plan. The Board may
  delegate to the Administrator or any Director, officer or employee of the Company
  such administrative duties and powers as it may see fit. 

 5.2           
  Interpretation  

 The interpretation by the Board of any of the provisions of
  the Plan and any determination by it pursuant thereto shall be final and conclusive
  and shall not be subject to any dispute by any Option Holder. No member of the
  Board or any person acting pursuant to authority delegated by it hereunder shall
  be liable for any action or determination in connection with the Plan made or
  taken in good faith and each member of the Board and each such person shall
  be entitled to indemnification with respect to any such action or determination
  in the manner provided for by the Company. 

 ARTICLE 6  

  AMENDMENT AND TERMINATION 

6.1            Prospective
  Amendment  

 Subject to applicable regulatory and, if required by any relevant
  law, rule or regulation applicable to the Plan, to shareholder approval, the
  Board may from time to time amend the Plan and the terms and conditions of any
  Option thereafter to be granted and, without limiting the generality of the
  foregoing, may make such amendment for the purpose of meeting any changes in
  any relevant law, rule or regulation applicable to the Plan, any Option or the
  Shares or for any other purpose which may be permitted by all relevant laws,
  rules and regulations provided always that any such amendment shall not alter
  the terms or conditions of any Option or impair any right of any Option Holder
  pursuant to any Option awarded prior to such amendment. 

 6.2            Retrospective
  Amendment  

 Subject to applicable regulatory and, if required by any relevant
  law, rule or regulation applicable to the Plan, to shareholder approval, the
  Board may from time to time retrospectively amend the Plan and, with the consent
  of the affected Option Holders, retrospectively amend the terms and conditions
  of any Options which have been previously granted. For greater certainty, the
  policies of the Exchange currently requires that disinterested shareholder approval
  be obtained for any reduction in the Exercise Price of any Option held by an
  insider of the Company. 

 6.3           
  Termination  

 The Board may terminate the Plan at any time provided that
  such termination shall not alter the terms or conditions of any Option or impair
  any right of any Option Holder pursuant to any Option awarded prior to the date
  of such termination and notwithstanding such termination the Company, such Options,
  Option Holders, Directors and Employees and Shares shall continue to be governed
  by the provisions of the Plan. 

8

 6.4            Agreement
   

 The Company and every person to whom an Option is awarded
  hereunder shall be bound by and subject to the terms and conditions of the Plan.

 ARTICLE 7  

  APPROVALS REQUIRED FOR PLAN 

7.1            Approvals
  Required for Plan  

 Prior to its implementation by the Company, the Plan is subject
  to approvals by the shareholders of the Company at general meeting and the Exchange.

 7.2           
  Substantive Amendments to Plan  

 Any substantive amendments to the Plan shall be subject to
  the Company first obtaining the approvals of: 

	 	(a)	the shareholders or disinterested shareholders,
        as the case may be, of the Company at general meeting where required by
        the rules and policies of any stock exchange on which the Shares may be
        listed for trading; and

	 	 	 
	 	(b)	any stock exchange on which the Shares may be listed for
      trading.

 

9

  SCHEDULE "A"  

  PMI VENTURES LTD.  

  STOCK OPTION PLAN OPTION CERTIFICATE 

 This Certificate is issued pursuant to the provisions of the
  PMI VENTURES LTD. (the "Company") Stock Option Plan (the "Plan") and
  evidences that __________________________ is the holder of an option (the "Option")
  [and applicable stock appreciation rights] to purchase up to common shares (the
  "Shares") in the capital stock of the Company at a purchase price of $_______
  per Share. Subject to the provisions of the Plan: 

	 	(a)	the Award Date of this Option is; and
	 	 	 
	 	(b)	the Expiry Date of this Option is

 The right to purchase shares under the Option will vest in the holder in increments
  over the term of the Option as follows: 

	Date	Cumulative Number of Shares which may be Purchased
	 	
 
 

 This Option may be exercised in accordance with its terms
  at any time and from time to time from and including the Award Date through
  to and including up to 5:00 local time in Vancouver, British Columbia on the
  Expiry Date, by delivery to the Administrator of the Plan an Exercise Notice,
  in the form provided in the Plan, together with this Certificate and a certified
  cheque or bank draft payable to PMI Ventures Ltd. in an amount equal to the
  aggregate of the Exercise Price of the Shares in respect of which this Option
  is being exercised. 

 This Certificate and the Option evidenced hereby is not assignable,
  transferable or negotiable and is subject to the detailed terms and conditions
  contained in the Plan. This Certificate is issued for convenience only and in
  the case of any dispute with regard to any matter in respect hereof, the provisions
  of the Plan and the records of the Company shall prevail. 

 The foregoing Option has been awarded this ____ day of ______________________.

 Without prior written consent of the TSX Venture Exchange
  and compliance with all applicable securities legislation, the securities represented
  by this certificate and the shares issuable upon the exercise thereof my not
  be sold, transferred, hypothecated or otherwise traded on or through the facilities
  of the TSX Venture Exchange or otherwise in Canada or to or for the benefit
  of a Canadian resident until _____________________ [ insert date that
  is four months plus one day from the date of grant]. 

Unless permitted under securities legislation, the holder
  of the securities shall not trade the securities before‚ insert
  date that is four months plus one day from the date of grant or 12 months plus
  one day if the company is not a qualifying issuer.] THIS LEGEND IS
  NECESSARY ONLY IN LIMITED CIRCUMSTANCES FOR GRANTS TO ASSOCIATED OR IR
  CONSULTANTS UNDER 45-507]  

PMI VENTURES LTD.
  

  Per: __________________________________________Exhibit
10.1

 

FOURTH
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

(Scott D. Peters)

 

August 29, 2003

 

THIS FOURTH AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of
August 29, 2003 (the “Effective Date”), by and between Golf Trust
of America, Inc., a Maryland corporation (the “Company”), and Scott D.
Peters, an individual (the “Executive”).

 

THE COMPANY AND THE EXECUTIVE ENTER
THIS AGREEMENT on the basis of the following facts,
understandings and intentions:

 

A.                                   The
Executive has been an executive of the Company employed under that certain
Employment Agreement dated as of February 7, 1997, as amended and restated as
of July 25, 1997, and as further amended and restated as of November 8, 1999
(the “Original
Agreement”), which employment commenced on the date of the closing
of the Company’s initial public offering on February 12, 1997 (the “Commencement
Date”).

 

B.                                     The
Executive and the Company agreed to amend the Original Agreement pursuant to an
agreement dated February 25, 2001 (the “Existing Agreement”).

 

C.                                     As
a result of the changed circumstances of the Company since the execution of the
Existing Agreement, including, inter alia, the following: (i) the recent
sale of Sandpiper, Eagle Ridge and Mystic Creek golf courses; (ii) the payoff
of the Company’s credit line; (iii) the accelerated sale by the Company of
certain of its other properties; (iv) the anticipated takeover and operation of
the Innisbrook Resort by the Company, with related changes to the business plan
of the Company related thereto; (v) a reduction in the time and expense of
set-up procedures to facilitate compliance with the disclosure requirements of
being a public company and a corresponding reduction in the Company’s need for
the Executive’s services; (vi) the Executive’s objective to obtain new
employment; (vii) the Executive’s willingness to remain on the Board of
Directors of the Company (the “Board,” which term shall also include the
board of directors or board of trustees of any successor in interest to the
Company) and maintain Executive’s responsibilities as Chief Financial Officer
of the Company for a limited period of time; and (viii) the Company’s desire to
initially retain the Executive as a full-time employee on a temporary basis
and, thereafter, transition the Executive to a modified schedule.

 

D.                                    The
Executive desires to modify the Executive’s employment with the Company in
order to accommodate the changed circumstances and needs of the Company as set
forth in Recital C above.

 

E.                                      The
Company and the Executive desire to amend and restate the Existing Agreement in
its entirety as set forth below.

 

NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the Company and the
Executive agree as follows:

 

 

1.                                       Employment.  The Company hereby agrees to continue to
employ the Executive, and the Executive hereby agrees to continue to be
employed by the Company, on the terms and conditions set forth herein.

 

2.                                       Term.  The term of this Agreement commenced on the
Commencement Date and will terminate one (1) year after the end of the Modified
Schedule (as defined below).  Such term
in its full duration is herein referred to as the “Term.”

 

(a)                                  Initial
Employment Period. The period of the Executive’s employment under this
Agreement from the period beginning on the Effective Date and ending on the
Date of Initial Employment Termination (as defined in Section 5(f) of this
Agreement), is herein referred to as the “Initial Employment Period.”

 

(b)                                 Modified
Schedule.  The period of the
Executive’s employment under this Agreement, consisting of the period following
completion of the Initial Employment Period and ending on the Date of
Termination of  Modified Schedule (as
defined in Section 5.A(c) of this Agreement) is herein referred to as the “Modified
Schedule.”

 

3.                                       Position.

 

(a)                                  Title
and Position.

 

(i)                                     During
the Initial Employment Period, the Executive shall continue to be employed as
an executive officer of the Company with the title of Senior Vice President and
Chief Financial Officer or in such other executive position as the Board may
from time to time determine with the reasonable consent of the Executive.  In the performance of the Executive’s duties
as an officer, the Executive shall be subject to the direction of the Board and
the President and shall not be required to take direction from or report to any
other person unless otherwise directed by the Board or the President.  The Executive’s duties and authority shall
be commensurate with the Executive’s title and position with the Company.

 

(ii)                                  During
the Modified Schedule, the Executive shall continue to be employed as an
executive officer of the Company with the title of  Chief Financial Officer (or in such other executive position as
the Board may from time to time determine with the reasonable consent of the
Executive) and shall maintain the Executive’s responsibilities as Chief
Financial Officer of the Company, including, inter alia, the following:
managing investor relations; coordinating the outside auditor needs of the
Company and certification requirements; providing litigation support;
coordinating the preparation of the budgets for the golf courses owned by the
Company (directly or indirectly), including, without limitation, the Innisbrook
Resort; conducting performance reviews of employees; maintaining primary
responsibility for the contents and the filing of all public reports (regular
and periodic) with the Securities and Exchange Commission; maintaining primary
responsibility for the contents of all earnings releases; executing all public
reports (and all certifications required thereby) as the principal accounting
and financial officer of the Company; coordinating and participating in all
earnings releases and analyst calls; coordinating at the request of the Audit
Committee all information required by the Audit Committee; supervising the
Company’s Controller and site personnel; maintaining relationships with any
lenders under any new credit facilities of the Company,

 

2

 

including the execution of all certifications to the lenders; assisting
the Company with the formation of a liquidating trust, as the President may
request; and advising the Company (and its affiliates) on various special
projects of the Company as requested by the Company from time to time.

 

(iii)                               During
the Term and thereafter for so long as the Executive is elected by the
Company’s stockholders (or other appropriate body), the Executive hereby agrees
to serve as a member of the Board.  The
Executive understands that the Executive’s position as a member of the Board is
subject to nomination by the Board.

 

(b)                                 Place
of Employment.

 

(i)                                     During
the Initial Employment Period, the Executive shall perform the services and
duties required by this Agreement at the Company’s place of business in
Charleston, South Carolina, or at such other location as the President of the
Company shall determine; provided, however, that the Company may
require the Executive to travel to other locations on the Company’s business.

 

(ii)                                  At
all times during the Modified Schedule, the Executive may perform the services
and duties required by this Agreement at the Company’s place of business in
Charleston, South Carolina, or at such other location as the Executive shall
determine in the Executive’s reasonable discretion, subject to the requirement
that the Executive shall at all times comply with applicable law and the
policies and procedures of the Company.

 

(c)                                  Duties.

 

(i)                                     During
the Initial Employment Period, the Executive shall devote commercially reasonable
efforts and substantially full working time and attention to the promotion and
advancement of the Company and its welfare. 
During the Initial Employment Period, the Executive shall serve the
Company faithfully and to the best of the Executive’s ability, and shall
perform such services and duties in connection with the business, affairs and
operations of the Company as may be assigned or delegated to him from time to
time by or under, and in accordance with, the authority and direction of the
Board.  During the Initial Employment
Period, the Company shall retain the right to direct and control the means and
methods by which the Executive performs the above services.

 

(ii)                                  During
the Modified Schedule, the Executive shall continue to be employed by the
Company but shall have no authority to bind the Company by contract or
otherwise, except as set forth in Section 3(a)(ii) above or as specifically
directed by the President of the Company in each instance.  During the Modified Schedule, the Executive
shall perform the Executive’s duties at the general discretion of the Company,
but the Executive shall determine, in consultation with, and with the approval
of, the President of the Company, the manner and means by which the Executive’s
services and duties are accomplished, subject to the requirement that the
Executive shall at all times comply with applicable law and the policies and
procedures of the Company.

 

(d)                                 Other
Activities.  Except with the prior
written approval of the Board (which the Board may grant or withhold in its
sole and absolute discretion) and except as may be

 

3

 

set forth in Section 9 of this Agreement, the Executive, during the
Term, shall not (i) accept any other employment (except during the Modified
Schedule), or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that (a) is currently
competitive with the Company, or (b) may become competitive with, or that might
place the Executive in a competing position to, that of the Company or any of
its affiliates.  Notwithstanding the
foregoing, the Company agrees that the Executive (or affiliates of the
Executive) shall be permitted (i) to undertake the activities set forth in Section
9, and (ii) to make any other passive personal investment that is not in a
business activity competitive with the Company.

 

4.                                       Compensation
and Related Matters.

 

(a)                                  Compensation.

 

(i)                                     Salary.  During the Initial Employment Period, the
Company shall pay the Executive a salary at a rate of Two Hundred Three
Thousand Two Hundred Dollars ($203,200) per year.  All salary shall be paid according to the standard payroll
practices of the Company (regarding timing of payments, standard employee
deductions, income tax withholdings, social security deductions, etc.) as may
be in place from time to time.

 

(ii)                                  Compensation
During Modified Schedule.  In lieu
of the salary set forth in Section 4(a)(i) above, during the Modified
Schedule the Company shall compensate the Executive as follows: (A) the Company
shall pay the Executive an amount equal to Twelve Thousand Dollars ($12,000.00)
per calendar quarter (prorated for partial quarter services), and (B) if in any
calendar quarter the Company requires more than eighty (80) hours of the
Executive’s services, the Company shall pay the Executive an additional amount
equal to One Hundred Fifty Dollars ($150.00) per hour; provided, however, that the
maximum amount to be paid to the Executive under this paragraph (B) shall not
exceed One Thousand Two Hundred Dollars ($1,200.00) per day.  Compensation payable by the Company under
this Section 4(a)(ii) shall be paid to Executive on a semi-monthly or other
regular basis as determined by the Company from time to time, subject to
receipt of regular invoices for extra hours of services and business expenses
provided for hereafter.

 

(b)                                 Business
Expenses.  During the Initial
Employment Period, the Modified Schedule and any subsequent time while serving
on the Company’s Board of Directors, the Company shall reimburse the Executive
for personal expenditures incurred in connection with the conduct of the
Company’s business upon presentation of sufficient evidence of such
expenditures as may be required by the Company’s policies as in place from time
to time.

 

(c)                                  Benefits;
Employment Taxes.

 

(i)                                     During
the Initial Employment Period, the Executive shall be entitled to participate
in any benefit plans that are made generally available to executive officers of
the Company from time to time, including, without limitation, any deferred
compensation, health, dental, life insurance, long-term disability insurance,
retirement, pension or 401(k) savings plan. 
Nothing in this Section 4(c) is intended, or shall be construed, to
require the Company to institute or to continue any, or any particular, plan or
benefit.  During the Initial

 

4

 

Employment Period, the Executive shall be entitled to fringe benefits
as may be determined or granted from time-to-time by the Board or by the
President acting under the authority of the Board; provided, however, that the
Company shall provide the fringe benefits authorized by the Board on April 25,
1997 (which resolution is attached to this Agreement as Exhibit A) and
shall not reduce or modify those benefits in a manner adverse to the Executive
without the written consent of the Executive. 
During the Initial Employment Period, the Executive shall be entitled to
four (4) weeks (i.e., twenty (20) business days) of paid vacation time
in each calendar year on a pro-rated basis. 
During the Initial Employment Period, the Executive shall be entitled to
all paid Company holidays.

 

(ii)                                  During
the Modified Schedule, the Executive shall not be entitled to receive any
vacation or illness payments, or to participate in any plans, arrangements or
distributions by the Company pertaining to any bonus, stock option, profit
sharing, insurance or similar benefits for the Company’s employees, except as
set forth in Section 4(c)(iii) of this Agreement.

 

(iii)                               Limited
Continuation of Health Benefits. 
Notwithstanding any of the foregoing, during the Modified Schedule the
Executive shall be entitled to health, optical and dental insurance plans that
are generally available to executive officers of the Company (the “Health and
Dental Plans”) until the earlier to occur of: (A) the date the
Executive obtains alternative coverage, (B) the date the Executive is no longer
eligible for coverage under the terms and conditions of the Health and Dental
Plans, or (C) the expiration or termination of the Modified Schedule.

 

(d)                                 Directors
and Officers Insurance; Indemnification. 
For so long as the Executive serves as a director or officer of the
Company during the Term, the Company shall maintain directors and officers
insurance to insure the Executive to the same extent as the other directors or
officers are insured, respectively.

 

4.A                             Milestone
Payments and Interest; Release.

 

(a)                                  Milestone
Payments.  The Executive hereby
agrees that the Executive has been paid the Performance Milestone Payment and
related interest thereon provided for in Section 4.A(b)(i)(A) of the Existing
Agreement and earned the right to payment of the Performance Milestone Payment
and related interest thereon provided for in Section 4.A(b)(i)(B) of the
Existing Agreement (such latter milestone payment, the “Remaining Earned Milestone Payment”).  Subject to Sections 4.A(b) and 6(d) below,
in consideration of the Executive’s performance of the Executive’s obligations
owed to the Company under this Agreement and in full satisfaction of any and
all obligations of the Company to pay Milestone Payments to the Executive under
Section 4.A(b) of the Existing Agreement, the Executive and the Company hereby
agree that the Company shall pay to the Executive one fourth of the Remaining
Earned Milestone Payment on September 30, 2003 and one fourth of the Remaining
Earned Milestone Payment upon the sale of Company golf course assets after the
Effective Date, whereby the Company receives more than One Million Two Hundred
Thousand Dollars ($1,200,000) of net cash proceeds.  The remaining one half of the Remaining Earned Milestone Payment
shall be paid to the Executive upon the sale of Company golf course assets after
the Effective Date, whereby the Company receives more than Two Million Five
Hundred Thousand Dollars ($2,500,000) of net cash proceeds, and such

 

5

 

receipts are not subject to holdback, claw-backs or any escrow or other
limitations.  The Remaining Earned
Milestone Payment shall be paid as provided for above by the Company to the
Executive by check or wire transfer. 
The Executive and the Company agree that the Remaining Earned Milestone
Payment represents full and final payment of any and all obligations of the
Company to the Executive under Section 4.A(b) of the Existing Agreement.

 

(b)                                 Notwithstanding
the provisions of Section 4A(b)(iii) of the Existing Agreement, commencing
October 1, 2003, interest on the unpaid portion of the Remaining Earned
Milestone Payment shall be five percent (5%) per annum.

 

(c)                                  Release.  In consideration of and in full satisfaction
of any and all obligations of the Company as aforesaid, the Executive shall
execute and deliver a full release of the Company (and its affiliates) to the
Company in the form attached hereto as Exhibit B.

 

5.                                       Termination
of Initial Employment Period. 
The Executive’s employment during the Initial Employment Period shall be
terminated upon the earlier to occur of:

 

(a)                                  Death.  The Executive’s employment under this
Agreement shall terminate upon the Executive’s death.

 

(b)                                 Disability.  The Executive’s employment under this
Agreement shall terminate upon the Executive’s physical or mental disability or
infirmity which, in the opinion of a competent physician selected by the Board,
renders the Executive unable to perform the Executive’s duties under this
Agreement for more than one hundred twenty (120) days during any one hundred
eighty (180) day period.

 

(c)                                  Employment-At-Will;
Termination by Company for Any Reason. 
The Executive’s employment hereunder is “at will” and may be terminated
by the Company at any time with or without Good Reason by delivery of a written
notice of termination to the Executive (the “Notice of Termination of Initial Employment”).  The Notice of Termination of Initial
Employment shall set forth (i) if the Executive’s employment is terminated by
the Company with Good Reason, a description in reasonable detail of the facts
and circumstances claimed to provide a basis for the termination of the
Executive’s employment with Good Reason, and (ii) the date such termination
shall become effective, which date shall in any event, be at least forty-five
(45) days from the date the Notice of Termination of Initial Employment is delivered
to the Executive.

 

(d)                                 Voluntary
Resignation.  Subject to Section 4.A
above, the Executive may voluntarily resign the Executive’s position and
terminate the Executive’s employment with the Company at any time by delivery
of a written notice of resignation to the Company (the “Notice of Resignation”).  The Notice of Resignation shall set forth
(i) if the Executive resigns with Good Cause, a description in reasonable
detail of the facts and circumstances claimed to provide a basis for the
Executive’s resignation with Good Cause, and (ii)  the date such resignation shall become effective, which date
shall in any event be at least ten (10) days (thirty (30) days in the event of
a resignation with Good Cause following a Change of Control) from the date the
Notice of Resignation is delivered to the Company.

 

(e)                                  Initial
Employment End Date.  September 30,
2003.

 

(f)                                    Date
of Initial Employment Termination. “Date of Initial Employment Termination”
shall mean (i) if the Executive’s employment is terminated by the Executive’s
death, the date of the Executive’s death; (ii) if the Executive’s employment is
terminated by

 

6

 

reason of the Executive’s disability, the date of the opinion of the
physician referred to in Section 5(b), above; (iii) if the Executive’s
employment is terminated by the Company pursuant to Section 5(c) above, the
date specified in the Notice of Termination of Initial Employment; (iv) if the
Executive voluntarily resigns pursuant to Section 5(d) above (but subject to
Section 4.A above), the date specified in the Notice of Resignation; or (v)
September 30, 2003.

 

(g)                                 “Good Reason”
means a finding by the Board that (A) the Executive materially breached any of
the material terms of this Agreement, or (B) the Executive acted with gross
negligence, willful misconduct or fraudulently in the performance of the
Executive’s duties hereunder; provided, however, that if the Board
elects, in its sole discretion, to give Executive a warning and opportunity to
cure the material breach or other conduct that is alleged to constitute Good
Reason and if the Executive does effect such a cure within the cure period
specified by the Board, then such default shall no longer constitute “Good
Reason” under this Agreement.

 

5.A.                          Termination
of Modified Schedule.   The
Executive’s employment during the 
Modified Schedule shall be terminated upon the earlier to occur of:

 

(a)                                  Termination
by the Company for Any Reason.  The
Company may terminate the Executive’s employment during the Modified Schedule
any time with or without Good Reason by delivery of a written notice of
termination to the Executive (the “Notice of Termination of Modified Schedule”).  The Notice of Termination of Modified
Schedule shall set forth the date such termination of the Modified Schedule
shall be effective.

 

(b)                                 Termination
by Executive.  Subject to Section
4.A above, the Executive may terminate the Modified Schedule with Good Cause at
any time by delivery of a written notice of termination to the Company (the “Notice of
Executive Termination of Modified Schedule”).  The Notice of Executive Termination of
Modified Schedule shall set forth (i) a description in reasonable detail of the
facts and circumstances claimed to provide a basis for the termination of the
Modified Schedule with Good Cause, and (ii) the date such termination of the
Modified Schedule shall be effective, which date shall in any event be at least
thirty (30) days from the date the Notice of Resignation is delivered to the
Company in the event of a Termination of Modified Schedule with Good Cause
following a Change of Control.

 

(i)                                     “Good Cause”
means the occurrence, without the express written consent of the Executive, of
any of the following events, unless in the case of (A) and (B) immediately
below, such event is substantially corrected by the Company within forty-five
(45) days following written notification by the Executive to the Company that
the Executive intends to terminate the Executive’s employment or the Modified
Schedule under this Agreement because of such event:

 

(A)                              any
reduction or diminution in the compensation, benefits or responsibilities of
the Executive, except as provided for under this Agreement;

 

(B)                                any
material breach or material default by the Company under any material provision
of this Agreement; or

 

(D)                               any
Change in Control (as defined below).

 

7

 

(ii)                                  For
the purposes of this Agreement, “Change in Control” means the occurrence of
any of the following events after the effective date of the first initial
public offering of the Company’s common stock:

 

(A)                              (1)
the stockholders approve a plan relating to the merger of the Company, and such
merger is consummated; or (2) the stockholders adopt a plan relating to the
complete liquidation of the Company (other than the plan approved by the Board
on February 25, 2001 or any amendment thereto), and such plan is substantially
completed.

 

(B)                                a
Person (as defined below) directly or indirectly becomes the “beneficial owner”
(as such term is defined in Rule 13d-3 and Rule 13d-5 under the Securities
Exchange Act of 1934) of more than twenty-five percent (25%) of the total
voting power of the total outstanding voting securities of the Company on a
fully diluted basis; provided, however, that beneficial
ownership of partnership units in Golf Trust of America, L.P. shall not be
considered beneficial ownership of voting securities of the Company;

 

(C)                                a
Person directly or indirectly acquires or agrees to acquire all or
substantially all of the assets and business of the Company (other than
pursuant to a plan of liquidation);

 

(D)                               for
any reason during any period of two (2) consecutive years (not including any
period prior to the date of this Agreement) a majority of the Board is
constituted by individuals other than (1) individuals who were directors
immediately prior to the beginning of such period, and (2) new directors whose
election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors immediately prior to the beginning of the
period or whose election or nomination for election was previously so approved.

 

(c)                                  Date
of Termination of Modified Schedule. “Date of Termination of Modified Schedule”
shall mean (i) if the Modified Schedule is terminated by the Company pursuant
to Section 5.A(a) above, the date specified in the Notice of Termination of
Modified Schedule; (ii) if the Modified Schedule is terminated by the Executive
pursuant to Section 5.A(b) above (subject to Section 4.A above ), the date
specified in the Notice of Executive Termination of Modified Schedule; or (iii)
June 30, 2004.

 

6.                                       Obligations
Upon Termination.

 

(a)                                  Return
of Property.  The Executive hereby
acknowledges and agrees that all personal property and equipment furnished to
or prepared by the Executive in the course of or incident to the Executive’s
employment  belongs to the Company and
shall be promptly returned to the Company upon termination of the Modified
Schedule (or if this Agreement is terminated prior to the commencement of the
Modified Schedule, on the Date of Initial Employment Termination).

 

8

 

(b)                                 Complete
Resignation.  Upon the termination
or expiration of the Modified Schedule (or if this Agreement is terminated
prior to the commencement of the Modified Schedule, on the Date of Initial
Employment Termination) and unless otherwise requested in writing by the Board,
the Executive shall be deemed to have resigned from all offices and
directorships then held with the Company or any of its subsidiaries.

 

(c)                                  Survival
of Representations, Warranties, Covenants and Other Provisions.  The representations and warranties contained
in this Agreement and the parties’ obligations under Section 4(d), Section 4.A,
this Section 6, Sections 7 through 9, and Sections 16 through 18, inclusively,
shall survive termination of the Initial Employment Period and the Modified
Schedule and the termination or expiration of this Agreement.

 

(d)                                 Release.  In exchange for the Company entering into
this Agreement and the terms and conditions of Section 4.A above, the Executive
agrees that, at the time of the termination of the Modified Schedule, the
Executive will execute a release acceptable to the Company of all liability of
the Company and its officers, stockholders, employees and directors to the
Executive in connection with or arising out of the Executive’s employment
relationship with the Company.

 

7.                                       Compensation
Upon Termination.

 

(a)                                  Termination
Under Sections 5(a) or 5(b).  Except
for the provisions of Section 4.A above, the Executive shall not be entitled to
any payments following the Initial Employment Period in the event the Initial
Employment Period terminates due to death or disability pursuant to Sections
5(a) or 5(b) above.

 

(b)                                 Termination
Under Section 5.  In the event of
any termination of the Initial Employment Period pursuant to Section 5 above,
the Executive shall be entitled to retain any and all options to purchase
securities of the Company granted to the Executive pursuant to the terms and
conditions of any of the Company’s stock incentive plans or otherwise that have
vested as of the date of such termination.

 

(c)                                  Benefits
Under Section 4 (c) (iii).  If, in
spite of the provisions of Section 4(c)(iii) of this Agreement entitling the
Executive to benefits under the Company’s Health and Dental Plans for a limited
period of time following the termination of the Initial Employment Period, such
benefits are not payable or provideable under any such plan to the Executive,
or to the Executive’s dependents, beneficiaries or estate, because the
Executive is no longer deemed to be an employee of the Company, then the
Company shall independently pay or provide for payment of such benefits for so
long as the Executive is entitled to such benefits under Section 4(c)(iii) of
this Agreement.

 

(d)                                 Excess
Parachute Payment.  In the event
that any payment by or on behalf of the Company or Golf Trust of America, L.P.
(or any affiliate of or successor to either of them) to Executive (whether or
not such payment is required under this Agreement) qualifies, or on the advice
of the Executive’s counsel or the Company’s auditors could reasonably be
expected to qualify, as an “excess parachute payment” under Section 280G or
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax Code”),
the Company shall immediately make

 

9

 

additional payments in cash to Executive (so called “gross-up
payments”) so that the Executive will be put in the same after-tax position as
the Executive would have been in had no excise tax been imposed by Section 4999
of the Tax Code (or any successor or similar provision).  In the event that the Company makes a
payment under this Section 7(d) in the expectation that such excise tax may be
imposed, but such tax is not ultimately imposed, the Executive shall refund the
payment to the Company upon its written request, plus any interest actually
earned on such funds while in the Executive’s possession (net of the
Executive’s tax liability on such interest).

 

8.                                       Covenant
of Confidentiality.  In addition
to the agreements set forth in Section 6 above, the Executive hereby agrees
that the Executive will not, during the Term and one (1) year thereafter,
directly or indirectly disclose or make available to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever,
any Confidential Information.  As used
in this Agreement, “Confidential Information” means:  non-public information disclosed to the
Executive or known by the Executive as a consequence of or through the
Executive’s relationship with the Company, about the Company’s subsidiaries,
affiliates and partners thereof, owners, customers, employees, business
methods, public relations methods, organization, procedures or finances,
including, without limitation, information of or relating to properties that
the Company or any of its affiliates, subsidiaries or partners thereof owns or
may be considering acquiring an interest in; provided, however, that the
Executive shall not be obligated to treat as confidential, or return to the
Company copies of, any Confidential Information that (i) was publicly known at the
time of disclosure to the Executive, (ii) becomes publicly known or available
thereafter other than by any means in violation of this Agreement or any other
duty owed to the Company by any person or entity, or (iii) the Executive is
required by law to disclose to a third party.

 

9.                                       Covenant
Not to Compete.

 

(a)                                  Limitations.  The Executive agrees that during the Initial
Employment Period the Executive will devote substantially the Executive’s full
working time to the business of the Company and, throughout the Term, will not
engage in any competitive business. 
Subject to such full-time requirement and the other restrictions set
forth in this Section 9 and Section 3(d) above, the Executive shall be
permitted to continue the Executive’s existing business investments and
activities and may pursue additional business investments.  Without limiting the foregoing, the
Executive specifically covenants that during the Term and one (1) year
thereafter the Executive shall not:

 

(i)                                     compete
directly with the Company in a business similar to that of the Company;

 

(ii)                                  compete
directly or indirectly with the Company, its subsidiaries and/or its partners,
potential golf course buyers, potential buyers of the Company (and/or its
affiliates), potential buyers of any preferred stock of the Company or
potential buyers of any debt of the Company (or any of its affiliates)
(collectively, the “Non-Compete Parties”) with respect to any
acquisition or development of any real estate project undertaken or being
considered by the Non-Compete Parties at any time during the Initial Employment
Period or the Modified Schedule;

 

10

 

(iii)                               lend
or allow the Executive’s name or reputation to be used by or in connection with
any business competitive with the Company, its subsidiaries and/or partners
thereof; excepting, however, the Executive shall have the right during the
period of the Modified Schedule to be employed by any business competitive with
the Company so long as the Executive does not have direct or indirect
responsibility for any interaction with the Company or analysis thereof, and is
wholly screened-off from such interaction and analysis by the business
competitive with the Company.

 

(iv)                              intentionally
interfere with, disrupt or attempt to disrupt the relationship, contractual or
otherwise, between the Company, its subsidiaries and/or partners thereof, and
any lessee, tenant, supplier, contractor, lender, employee or governmental
agency or authority.

 

(b)                                 The
provisions of this Section 9 shall survive for the Term and one (1) year
thereafter and no longer.

 

10.                                 Injunctive
Relief and Enforcement.  In the
event of breach by the Executive of the terms of Sections 6, 8 or 9 of this
Agreement, the Company shall be entitled to institute legal proceedings to
enforce the specific performance of this Agreement by the Executive and to
enjoin the Executive from any further violation of Sections 6, 8 or 9 and to
exercise such remedies cumulatively or in conjunction with all other rights and
remedies provided by law and not otherwise limited by this Agreement. The
Executive acknowledges, however, that the remedies at law for any breach by him
of the provisions of Sections 6, 8 or 9 may be inadequate. In addition, in the
event the agreements set forth in Sections 6, 8 or 9 shall be determined by any
court of competent jurisdiction to be unenforceable by reason of extending for
too great a period of time or over too great a geographical area or by reason
of being too extensive in any other respect, each such agreement shall be
interpreted to extend over the maximum period of time for which it may be
enforceable and to the maximum extent in all other respects as to which it may
be enforceable, and enforced as so interpreted, all as determined by such court
in such action.

 

11.                                 Notice.  For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered,
when transmitted by telecopy with receipt confirmed, or one day after delivery
to an overnight air courier guaranteeing next day delivery, addressed as
follows:

 

	
  If to the Executive:

  	
   

  	
  Scott D. Peters

  
	
   

  	
   

  	
  2758 Christ Church
  Court

  
	
   

  	
   

  	
  Mt. Pleasant, South
  Carolina 29464

  
	
   

  	
   

  	
  telecopy:  (843) 971-7487

  
	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  Golf Trust of America,
  Inc.

  
	
   

  	
   

  	
  14 North Adger’s Wharf

  
	
   

  	
   

  	
  Charleston, South
  Carolina  29401

  
	
   

  	
   

  	
  Attention:  Chief Executive Officer

  
	
   

  	
   

  	
  telecopy: (843)
  723-0479

  

 

11

 

	
  With a copy to:

  	
   

  	
  O’Melveny & Myers
  LLP

  
	
   

  	
   

  	
  Embarcadero Center West

  
	
   

  	
   

  	
  275 Battery Street,
  Suite 2600

  
	
   

  	
   

  	
  San Francisco,
  California 94111-3305

  
	
   

  	
   

  	
  Attention: Peter T.
  Healy, Esq.

  
	
   

  	
   

  	
  telecopy: (415)
  984-8701

  

 

or to such other address
as any such party may furnish to the others from time to time in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.

 

12.                                       Severability.  The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect; provided, however, that if any one or more
of the terms contained in Sections 6, 8 or 9 of this Agreement hereto shall for
any reason be held to be excessively broad with regard to time, duration,
geographic scope or activity, that term shall not be deleted but shall be
reformed and constructed in a manner to enable it to be enforced to the extent
compatible with applicable law.

 

13.                                       Assignment.  This Agreement may not be assigned by the
Executive, but may be assigned by the Company to any successor to its business
and will inure to the benefit and be binding upon any such successor.

 

14.                                       Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

15.                                       Headings.  The headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

 

16.                                       Choice of
Law; Consent to Jurisdiction. 
This Agreement shall be construed, interpreted and the rights of the
parties determined in accordance with the laws of the State of South Carolina
(without reference to the choice of law provisions of the State of South
Carolina), except with respect to matters of law concerning the internal
corporate affairs of any corporate entity which is a party to or the subject of
this Agreement, and as to those matters the law of the jurisdiction under which
the respective entity derives its powers shall govern.  Each of the parties agree to submit to the
exclusive jurisdiction of the federal and state courts of the State of South
Carolina with respect to the interpretation of this Agreement or for the
purposes of any action arising out of or relating to this Agreement.

 

17.                                       LIMITATION
ON LIABILITIES.  IF
EITHER THE EXECUTIVE OR THE COMPANY IS AWARDED ANY DAMAGES AS COMPENSATION FOR
ANY BREACH OR ACTION RELATED TO THIS AGREEMENT, A BREACH OF ANY COVENANT
CONTAINED IN THIS AGREEMENT (WHETHER EXPRESS OR IMPLIED BY EITHER LAW OR FACT),
OR ANY OTHER CAUSE OF ACTION BASED IN WHOLE OR IN PART ON ANY BREACH OF ANY
PROVISION OF THIS AGREEMENT, SUCH DAMAGES SHALL BE LIMITED TO CONTRACTUAL
DAMAGES AND SHALL EXCLUDE (I)

 

12

 

PUNITIVE DAMAGES, AND (II) CONSEQUENTIAL AND/OR INCIDENTAL DAMAGES
(E.G., LOST PROFITS AND OTHER INDIRECT OR SPECULATIVE DAMAGES). THE MAXIMUM
AMOUNT OF DAMAGES THAT THE EXECUTIVE MAY RECOVER FOR ANY REASON SHALL BE THE
AMOUNT EQUAL TO ALL AMOUNTS OWED (BUT NOT YET PAID) TO THE EXECUTIVE PURSUANT
TO THIS AGREEMENT THROUGH ITS NATURAL TERM, PLUS INTEREST ON ANY DELAYED
PAYMENT AT THE MAXIMUM RATE PER ANNUM ALLOWABLE BY APPLICABLE LAW FROM AND
AFTER THE DATE(S) THAT SUCH PAYMENTS WERE DUE.

 

18.                                       WAIVER
OF JURY TRIAL.  TO THE EXTENT
APPLICABLE, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT.

 

19.                                       Entire
Agreement.  This Agreement, and
the related agreements referred to herein, contain the entire agreement and
understanding between the Company and the Executive with respect to the
employment of the Executive by the Company as contemplated hereby and no
representations promises agreements or understandings written or oral, not
herein contained shall be of any force or effect.  This Agreement shall not be changed unless in writing and signed
by both the Executive and the Board of Directors of the Company.

 

20.                                       Executive’s
Acknowledgment.  The Executive
acknowledges (a) that the Executive has had the opportunity to consult with
independent counsel of the Executive’s own choice concerning this Agreement,
and (b) that the Executive has read and understands the Agreement, is
fully aware of its legal effect, and has entered into it freely based on the
Executive’s own judgment.

 

[Signature page follows.]

 

13

 

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

 

	
   

  	
  “COMPANY”

  
	
   

  	
   

  
	
   

  	
  GOLF TRUST OF AMERICA, INC., a Maryland

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Bradley Blair,
  II

  	
   

  
	
   

  	
  W.
  Bradley Blair, II

  
	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “EXECUTIVE”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Scott D. Peters

  	
   

  
	
   

  	
  SCOTT D. PETERS

  

 

S-1

 

EXHIBIT A

 

Board Minutes of April 25, 1997

 

14.                                 Compensation
Committee Matters

 

Mr. Chapman, Chairman of
the Compensation Committee, led a discussion of compensation matters.

 

a.                                       Approval
of Benefit Plans

 

After discussion, upon motion duly made, seconded and
unanimously carried, the following recitals and resolutions were adopted by the
Board:

 

WHEREAS, the
employment agreements between the Company and W. Bradley Blair, II, David J.
Dick and Scott D. Peters (collectively the “Executives”) contemplate but do not
require that the Company will establish certain benefit plans for its
Executives;

 

WHEREAS, this Board
of Directors deems it advisable and in the best interest of the Company and its
stockholders to make certain benefit plans available to the Executives; and

 

WHEREAS, this Board
of Directors deems it appropriate to direct the provision of certain employee
benefits and the adoption of certain benefit plans;

 

NOW, THEREFORE, BE IT RESOLVED,
that the Company shall offer the following benefits to each of the Executives:

 

1.                                       Financial
planning, tax compliance assistance and related services (to be provided
initially by the Company’s accountant, and thereafter by such provider as the
President shall select);

 

2.                                       Accidental
death and dismemberment insurance plan;

 

3.                                       Long-term
disability insurance (at 50% of employee’s salary);

 

4.                                       Payment
of, or reimbursement for, professional association dues, professional licensing
fees, continuing education tuition and associated expenses.

 

RESOLVED FURTHER,
that the Company shall provide the following benefits to each of the Executives
with the frequency or in the amounts indicated:

 

1.                                       Full
health exam and medical testing available on the following basis:

 

	
  Blair:

  	
   

  	
  Annually

  
	
  Dick:

  	
   

  	
  Bi-Annually

  
	
  Peters:

  	
   

  	
  Bi-Annually

  

 

 

A-1

 

2.                                       Automobile
allowances in the following amounts or, at the Compensation Committee’s option
and on such terms and conditions as the Compensation Committee shall specify,
use of Company automobiles:

 

	
  Blair:

  	
   

  	
  $1000/month

  
	
  Dick:

  	
   

  	
  $800/month

  
	
  Peters:

  	
   

  	
  $600/month

  

 

RESOLVED FURTHER,
that the enumeration of benefits in these resolutions is non-exclusive and
shall not be construed to limit the availability of other benefits for which
the Executives or any of them are otherwise eligible.

 

RESOLVED FURTHER,
that W. Bradley Blair, II and such other officers as he may from time to time
designate be, and hereby are, authorized and empowered on behalf of and by the
Company and in its name to enter into contracts with providers of the above
benefit packages as each shall deem advisable to accomplish the purposes of
these resolutions.

 

RESOLVED FURTHER,
that each of the officers of this Company be, and hereby is, authorized and
empowered on behalf of this Company and in its name to execute any applications,
certificates, agreements, or any other instruments or documents or amendments
or supplements thereto, or to do and to cause to be done any and all other acts
and things as such officers may in their discretion deem necessary or
appropriate to carry out the purposes of each of the foregoing resolutions, the
execution and delivery of such documents and the taking of such actions to be
conclusive evidence of the necessity or appropriateness thereof.

 

RESOLVED FURTHER,
that any and all actions heretofore or hereafter taken by any appropriate
officer or authorized representative of this Company within the terms or intent
of any of the foregoing resolutions be, and hereby are, ratified and confirmed
as the act and deed of this Company.

 

A-2

 

EXHIBIT B

 

FORM OF RELEASE

 

A-3

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