Document:

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                                                                    EXHIBIT 10.4

                SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                             (W. Bradley Blair, II)

                                February 25, 2001

                  THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
"AGREEMENT") is dated as of February 25, 2001 (the "EFFECTIVE DATE"), between
Golf Trust of America, Inc., a Maryland corporation, having its principal place
of business at 14 North Adger's Wharf, Charleston, South Carolina 29401 (the
"COMPANY"), and W. Bradley Blair, II, 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 (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 November 7, 1999 (the "Existing
Agreement");

                  C. the Executive desires to remain in the employ of the
Company;

                  D. the Company values the Executive's knowledge and
familiarity with the business of the Company and desires to assure itself of the
continued services of the Executive; and

                  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 employ the
Executive, and the Executive hereby agrees 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 four (4) years after the Company delivers
a written notice to the Executive that the Company elects to allow the
employment term to expire in accordance with this Agreement (a "Notice of
Non-Renewal"). (The notice of non-renewal delivered under the Existing Agreement
on February 6, 2001 is hereby deemed to be withdrawn and shall not affect this
Agreement.) Such term in its full duration is herein referred to as the
"EMPLOYMENT TERM,"

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and the period of the Executive's actual employment under this Agreement
consisting of the Employment Term as may be terminated early pursuant to
Section 5, is herein referred to as the "EMPLOYMENT PERIOD."

                  3. POSITION.

                     (a) TITLE AND POSITION. During the Employment Period, the
Executive shall be employed as an executive officer of the Company with the
title of President and Chief Executive Officer or in such other executive
position as 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) may from time to time determine with the consent of the
Executive. In addition, for so long as the Executive is an employee of the
Company and is elected by the Company's stockholders, the Executive hereby
agrees to serve as a member of the Board. The Executive understands that his
position as a member of the Board is subject to nomination by the Board. In the
performance of his duties as an officer, the Executive shall be subject to the
direction of the Board, and shall not be required to take direction from or
report to any other person. The Executive's duties and authority shall be
commensurate with his title and position with the Company.

                     (b) PLACE OF EMPLOYMENT. During the Employment Period, the
Executive shall perform the services required by this Agreement at the Company's
place of business in Charleston, South Carolina; PROVIDED, HOWEVER, that the
Company may require the Executive to travel to other locations on the Company's
business.

                     (c) DUTIES. 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. The Executive shall
serve the Company faithfully and to the best of his 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. The
Company shall retain the right to direct and control the means and methods by
which the Executive performs the above services.

                     (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 set forth in Section 9 of this
Agreement, the Executive, during the Employment Period, will not (i) accept any
other employment, or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that is or may be
competitive with, or that might place him 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) BASE SALARY. The Company shall pay the Executive a base
salary at a rate

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of Three Hundred Sixty Thousand Dollars ($360,000) per year ("Base Salary")
through the end of 2001. The Executive's base salary for each succeeding
calendar year shall, at a minimum, be increased over the salary in effect at
the end of the immediately preceding year by a factor measured by the
increase, if any, during such preceding year in the Consumer Price Index for
Wage Earners and Clerical Workers (as published by the Bureau of Labor
Statistics). The Base Salary may further be increased, but not decreased, in
succeeding years by an amount determined by the Compensation Committee of the
Board in its sole discretion. All salary shall be paid according to the
standard payroll practices of the Company (regarding, E.G., timing of
payments, standard employee deductions, income tax withholdings, social
security deductions, and etc.) as in place from time to time.

                     (b) BUSINESS AND PROFESSIONAL EXPENSES. The Company shall
reimburse the Executive for (i) personal expenditures incurred by the Executive
in connection with the conduct of the Company's business including, without
limitation, a prospectively paid automobile allowance, and (ii) reasonable
expenditures incurred by the Executive in connection with maintaining his
professional standing including, without limitation, bar association dues and
fees and continuing legal education expenses, in every case 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) BENEFIT PLAN ELIGIBILITY. During the 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, longterm 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.

                     (d) PERFORMANCE BONUS. Unless and until the stockholders of
the Company approve a plan for the liquidation and dissolution of the Company (a
"PLAN OF LIQUIDATION"), the Compensation Committee of the Board may establish
and administer a performance bonus program for the Executive to provide for
payment of a (cash and/or non-cash consideration) bonus to the Executive upon
the achievement of certain performance objectives to be established by the
Compensation Committee for the Executive. If such a program is established, the
Compensation Committee of the Board shall monitor, review and modify the program
from time to time as necessary to reflect the Executive's contributions to the
Company. Following stockholder approval of a Plan of Liquidation, no bonus
program (or additional bonus program, as the case may be) will be established
(except in the event that the Plan of Liquidation is withdrawn by a stockholder
vote or is otherwise cancelled or terminated); PROVIDED that stockholder
approval of a Plan of Liquidation shall not (except as otherwise expressly
provided herein or with respect to an award) affect any of the Executive's
rights under a bonus program that accrued prior to such stockholder approval
event.

                     (e) STOCK INCENTIVE PLAN. Unless and until the stockholders
of the Company approve a Plan of Liquidation, the Compensation Committee of the
Board shall establish and administer one or more stock-based incentive plans in
which the Executive shall be eligible to participate according to their terms.
Following stockholder approval of a Plan of Liquidation, no additional
stock-based incentive awards will be granted (except in the event that the Plan
of

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Liquidation is withdrawn by a stockholder vote or is otherwise cancelled or
terminated); PROVIDED that stockholder approval of a Plan of Liquidation shall
not (except as otherwise expressly provided herein or with respect to an award)
affect any of the Executive's rights under an incentive award that was granted
prior to such stockholder approval event.

                  (f) FRINGE BENEFITS. The Executive will be entitled to fringe
benefits as may be determined or granted from timetotime 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.

                  (g) VACATION AND HOLIDAYS. The Executive shall be entitled to
four (4) weeks (twenty (20) business days) of paid vacation time in each
calendar year on a prorated basis. The Executive shall be entitled to all paid
Company holidays.

                  (h) DIRECTORS AND OFFICERS INSURANCE AND INDEMNIFICATION. The
Company shall maintain insurance to insure the Executive against any claim
arising out of an alleged wrongful act by the Executive while acting as a
director or officer of the Company in an amount deemed reasonable by the
Company, PROVIDED that the amount of such occurrence-based policy of insurance
shall at no time be lower than that in effect on the date of this Agreement. The
Company shall further indemnify and exculpate from money damages the Executive
to the fullest extent permitted under applicable law.

                  (i) PERFORMANCE REVIEWS. At the end of each fiscal year, the
Board or the Compensation Committee thereof will review the Executive's job
performance and will provide the Executive a written review of the Executive's
job performance during the prior year and implement any Board authorized
revisions to the Executive's position, compensation and duties at the Company;
PROVIDED, HOWEVER, that the provisions set forth in this Agreement with respect
to the Executive's compensation, and other terms and conditions of the
Executive's employment at the Company shall not be modified by the Compensation
Committee or the Board in a manner which would result in less favorable or less
beneficial terms or conditions thereof being imposed on the Executive without
the Executive's full concurrence and consent. The Executive shall have no right
to a performance review-related bonus following stockholder approval of a Plan
of Liquidation (except in the event that the Plan of Liquidation is withdrawn by
a stockholder vote or is otherwise cancelled or terminated).

                  4.A ADDITIONAL BONUS PAYMENTS AND BONUS OPPORTUNITIES.

                     (a) STAY BONUS/ACCELERATED VESTING. In recognition of
services previously rendered by the Executive, (i) the Company shall pay to the
Executive a one-time bonus of $1,233,907 in cash (the "STAY BONUS") as soon as
administratively practicable after the execution of this Agreement, (ii) the
vesting of all stock-related compensation previously granted to the Executive
and currently outstanding shall automatically accelerate upon the execution of
this Agreement and thereupon become fully vested; PROVIDED, HOWEVER, that all
future stock-related compensation shall continue to be subject to the other
terms and conditions of the plan under which it was granted, if any, as such
plan may be amended from time to time in accordance with its terms, and subject
to the other terms and conditions of any applicable award agreement. As provided
by the existing promissory notes from Executive to the Company, as

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amended, all indebtedness of Executive to either Golf Trust of America, Inc. or
Golf Trust of America, L.P., shall be forgiven upon the Board of Directors'
approval of the Plan of Liquidation.

                     (b) MILESTONE PAYMENTS.

                         (i) In the event the Board approves the Plan of
Liquidation, the Company shall make the cash payments specified below (each a
"MILESTONE PAYMENT") to the Executive upon the occurrence of the events
specified below, which payments are in recognition of Executive's services from
the date of such Board approval through the date of such payment, and which
payments are intended to replace the normal performance bonus and stock awards
that Executive will no longer be eligible for upon stockholder approval of the
Plan of Liquidation.

<TABLE>
<CAPTION>

         PERFORMANCE MILESTONE                                                                     PAYMENT
         ---------------------                                                                     -------

      <S>                                                                                   <C>

         (A)      Later of (1) stockholder approval of a Plan of Liquidation or
                  (2) repayment of all unsecured debt* of the Company
                  and the Operating Partnership..............................................$1,645,210.00

         (B)      Later of (1) repayment of all unsecured debt* of the Company
                  and the Operating Partnership or (2) twelve months following
                  Board approval of a Plan of Liquidation....................................$1,233,907.00

</TABLE>

         *    Excluding routine trade creditor debt not yet due and excluding
              debt that the Company and/or the Operating Partnership have agreed
              to keep outstanding for the benefit of limited partners.

                         (ii) The Milestone Payments shall be paid upon the
occurrence of the events specified above, regardless of whether any other
element of the Plan of Liquidation has been, or is possible of being, achieved.

                         (iii) The Milestone Payments shall accrue interest at
the Bank of America Prime Rate from the date of stockholder approval of the Plan
of Liquidation. Interest shall accrue separately on each Milestone Payment and
shall be payable, if at all, together with the applicable Milestone Payment.

                         (iv) Notwithstanding anything herein to the contrary,
if the Executive becomes entitled to Severance Payments under any other
provision of this Agreement, the amount of such Severance Payments otherwise
payable shall be reduced by the amount of the Stay Bonus and the amount of each
Milestone Payment previously paid or then payable (including those that become
payable under Section 4.A(b)(v)(B), below) and ultimately paid.

                         (v) (A) Each Milestone Payment shall not be payable if
the Executive is not employed by the Company on the date on which the milestone
event occurs, as a consequence of the Executive's employment being terminated
pursuant to Section 5(a), 5(b), termination by the Company with Good Reason
pursuant to Section 7(c)(i) or resignation by the Executive without Good Cause
pursuant to Section 7(d)(ii). (B) Each Milestone Payment theretofore unpaid
shall be payable, regardless of whether the milestone event has occurred, upon
Voluntary Resignation for Good Cause pursuant to Section 7(d)(i) or upon a
termination without Good Reason pursuant to Section 7(c)(ii).

                     (c) REDUCTION IN EMPLOYMENT TERM. Following stockholder
approval of a Plan of Liquidation, notwithstanding Section 7(c)(ii), the Board
shall have the right, upon forty-five (45) days

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written notice, to terminate the Executive's employment without cause and
without the obligation to make any payments to the Executive pursuant to Section
7(c)(ii); provided, however, that such right may not be exercised until the
later of (1) the date on which the final Milestone Payment is paid or (2) the
date that is the eighteen (18) month anniversary of the Board's approval of the
Plan of Liquidation.

                     (d) NON-RECOURSE TAX LOANS SECURED BY STOCK. Upon each
non-cash benefit in accordance with this Section 4.A (e.g., stock award
acceleration provided above) and the debt forgiveness provided under the terms
of the Executive's existing promissory notes in connection with the Board's
adoption of a Plan of Liquidation, the Company shall offer to make a
non-recourse loan to Executive to fund the personal income tax liability and
employment tax withholding obligations resulting from such benefit (other than
any liability payable by the Company pursuant to Section 7(i) of this Agreement)
which loan (i) shall be evidenced by a promissory note substantially in the form
of EXHIBIT B attached hereto and (ii) shall be non-recourse to the Executive but
shall be secured, pursuant to a pledge agreement substantially in the form of
EXHIBIT C attached hereto, by a number of shares of Company common stock having
a then-current market value (based on the most recent closing price of the
Common Stock prior to the Effective Date) approximately equal to (but not less
than) the principal amount of the loan (the "Pledged Shares").

                   5. TERMINATION. The Executive's employment hereunder shall
be, or may be, as the case may be, terminated under the following circumstances:

                     (a) DEATH. The Executive's employment under this Agreement
shall terminate upon his 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 his 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 (as defined in Section
7(c) below), by a majority vote of all of the members of the Board of Directors
upon written Notice of Termination (as defined below) to Executive, subject only
to the provisions specifically set forth in Section 4.A, above, or
Section 7, below.

                     (d) VOLUNTARY RESIGNATION. The Executive may voluntarily
resign his position and terminate his 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 the date such
resignation shall become effective (the "DATE OF RESIGNATION"), which date shall
in any event, be at least ten (10) days and no more than thirty (30) days from
the date the Notice of Resignation is delivered to the Company. The Notice of
Resignation shall be sufficient notice under Section 2 above to prevent the
automatic extension of this Agreement, if timely given according to the terms of
Section 2.

                     (e) NOTICE. Any termination of the Executive's employment
by the Company

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shall be communicated by written Notice of Termination to the Executive. For
purposes of this Agreement, a "NOTICE OF TERMINATION" shall mean a notice that
indicates the specific termination provision in this Agreement relied upon and
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated. The Notice of Termination shall be sufficient notice under Section 2
above to prevent the automatic extension of this Agreement, if timely given
according to the terms of Section 2.

                     (f) DATE OF TERMINATION. "DATE OF TERMINATION" shall mean
(i) if the Executive's employment is terminated by his death, the date of his
death; (ii) if the Executive's employment is terminated by reason of his
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
for Good Reason or without Good Reason by the Company pursuant to Section 5(c)
above, the date specified in the Notice of Termination; and (iv) if the
Executive voluntarily resigns pursuant to Section 5(d) above, the Date of
Resignation set forth in the Notice of Resignation.

         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 his employment belongs to the Company
and shall be promptly returned to the Company upon termination of the Employment
Period.

                  (b) COMPLETE RESIGNATION. Upon the expiration of the
Employment Period or any termination of employment under Section 5 above, 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(h), Section 4.A, this Section 6,
Sections 7 through 9, and Sections 16 through 18, inclusively, shall survive
termination of the Employment Period and the expiration of this Agreement.

                  (d) RELEASE. In exchange for the Company entering into this
Agreement, the Executive agrees that, at the time of his resignation or
termination from the Company, he will resign from the Board and 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 his employment with the Company, except with respect to
(i) any thenvested rights under any of the Company's stock incentive plans or in
connection with other stock-based compensation; (ii) any deferred compensation
held in trust under the Company's Deferred Compensation Plan; (iii) any Stay
Bonus, Milestone Payments, Severance Payments or benefits which may be, or may
become, payable to him under Section 4(h), Section 4.A or Section 7 or other
provisions of this Agreement; and (iv) any continuation of health or other
benefit plans in accordance with this Agreement or as may be required by law.

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                  7. COMPENSATION UPON TERMINATION. The Executive shall be
entitled to the following post-termination payments:

                     (a) DEATH. If the Executive's employment is terminated by
reason of death pursuant to Section 5(a), the Company shall pay the Executive
his base salary payable under Section 4(a) as in effect on the Date of
Termination PLUS the greater of (1) the average value of the cash and non-cash
consideration received by Executive as a performance bonus in years 1997, 1998
and 1999 (which average is equal to $982,194) or (2) the value of the
then-most-recent calendar year's annual cash and non-cash consideration received
by Executive as a performance bonus (the "SEVERANCE PAYMENTS"), paid in
semi-monthly installments for the greater of (i) three (3) years following the
Date of Termination, or (ii) the time period beginning on the Date of
Termination and ending on the final day of the final Employment Term determined
according to Section 2, above. In addition, immediately prior to the Date of
Termination the vesting of all stock-related compensation previously granted to
the Executive shall be accelerated such that none of such compensation is
subject to forfeiture and such that any stock options or similar rights
previously granted to the Executive shall become immediately vested and
exercisable; PROVIDED, HOWEVER, that all stock-related compensation shall be
subject to the plan under which it was granted, if any, as such plan may be
amended from time to time in accordance with its terms. In addition, during the
greater of the time periods in the preceding clauses (i) and (ii), the
Executive, his estate and dependents shall continue to participate, at their
option, in all benefit plans described in Section 4(c) and shall continue to
receive all fringe benefits described in Section 4(f) in each case substantially
comparable to those in effect on the day before the Date of Termination.
Thereafter, at their own expense, the Executive's dependents shall be entitled
to any continuation of health insurance coverage rights required by any
applicable law.

                     (b) DISABILITY. If the Executive's employment is terminated
by reason of disability pursuant to Section 5(b), the Executive shall receive
Severance Payments for the greater of (i) three (3) years following the Date of
Termination, or (ii) the time period beginning on the Date of Termination and
ending on the final day of the final Employment Term determined according to
Section 2, above; PROVIDED, HOWEVER, that Severance Payments otherwise payable
to the Executive under this Section 7(b) shall be reduced by the sum of the
amounts, if any, payable to the Executive at or prior to the time of any such
Severance Payment under any disability benefit plan of the Company. In addition,
immediately prior to the Date of Termination the vesting of all stock-related
compensation previously granted to the Executive shall be accelerated such that
none of such compensation is subject to forfeiture and such that any stock
options or similar rights previously granted to the Executive shall become
immediately vested and exercisable; PROVIDED, HOWEVER, that all stock-related
compensation shall be subject to the plan under which it was granted, if any, as
such plan may be amended from time to time in accordance with its terms. In
addition, during the greater of the time periods in the preceding clauses (i)
and (ii), the Executive shall continue to participate, at his option, in all
benefit plans described in Section 4(c) and shall continue to receive all fringe
benefits described in Section 4(f) in each case substantially comparable to
those in effect on the day before the Date of Termination. Thereafter, at the
Executive's own expense, the Executive and his dependents shall be entitled to
any continuation of health insurance coverage rights required by any applicable
law.

<PAGE>

                     (c) TERMINATION BY COMPANY.

                         (i) FOR GOOD REASON. If the Executive's employment is
terminated by the Company pursuant to Section 5(c) for Good Reason (as defined
below), the Company shall pay the Executive his base salary and any bonus due
and payable pursuant to Section 4(d) through the Date of Termination. In
addition, the Executive shall be entitled to retain such stock-based
compensation (including, without limitation, shares of restricted stock and/or
options to purchase securities of the Company granted or sold to the Executive
pursuant to the terms and conditions of any of the Company's stock incentive
plans or otherwise) as has vested as of the Date of Termination. At the
Executive's own expense, the Executive and his dependents shall also be entitled
to any continuation of health insurance coverage rights required by any
applicable law.

                         (ii) WITHOUT GOOD REASON. Except as otherwise
provided in Section 4.A, if the Executive's employment is terminated by the
Company pursuant to Section 5(c) without any Good Reason, the Company shall
pay the Executive the Severance Payment for the greater of (A) three (3)
years following the Date of Termination, or (B) the time period beginning on
the Date of Termination and ending on the final day of the final Employment
Term determined according to Section 2, above. In addition, immediately prior
to the Date of Termination the vesting of all stock-related compensation
previously granted to the Executive shall be accelerated such that none of
such compensation is subject to forfeiture and such that any stock options or
similar rights previously granted to the Executive shall become immediately
vested and exercisable; PROVIDED, HOWEVER, that all stock-related
compensation shall be subject to the plan under which it was granted, if any,
as such plan may be amended from time to time in accordance with its terms.
In addition, during the greater of the time periods in the preceding clauses
(A) and (B), the Executive shall continue to participate, at his option, in
all benefit plans described in Section 4(c) and shall continue to receive all
fringe benefits described in Section 4(f) in each case substantially
comparable to those in effect on the day before the Date of Termination.
Thereafter, at the Executive's own expense, the Executive and his dependents
shall be entitled to any continuation of health insurance coverage rights
required by any applicable law.

                         (iii) "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 his 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. As of the Effective Date (and as of the date
of any Milestone Payment under Section 4.A unless the Company informed the
Executive otherwise), the Company represents (or will represent with respect to
Milestone Payments as aforesaid to the extent of the then applicable known
facts) to the Executive that the Board has no actual knowledge that the
Executive has materially breached any of the material terms of this Agreement or
that the Executive has acted with gross negligence, willful misconduct or
fraudulently in the performance of his duties hereunder.

                     (d) VOLUNTARY RESIGNATION.

<PAGE>

                         (i) FOR GOOD CAUSE. Except as otherwise provided in
Section 4.A, if the Executive terminates his employment with the Company
pursuant to Section 5(d) for Good Cause (as defined below), the Company shall
pay the Executive the Severance Payment for the greater of (A) three (3)
years following the Date of Termination, or (B) the time period beginning on
the Date of Termination and ending on the final day of the final Employment
Term determined according to Section 2, above. In addition, immediately prior
to the Date of Termination the vesting of all stock-related compensation
previously granted to the Executive shall be accelerated such that none of
such compensation is subject to forfeiture and such that any stock options or
similar rights previously granted to the Executive shall become immediately
vested and exercisable; PROVIDED, HOWEVER, that all stock-related
compensation shall be subject to the plan under which it was granted, if any,
as such plan may be amended from time to time in accordance with its terms.
In addition, during the greater of the time periods in the preceding clauses
(A) and (B), the Executive shall continue to participate, at his option, in
all benefit plans described in Section 4(c) and shall continue to receive all
fringe benefits described in Section 4(f) in each case substantially
comparable to those in effect on the day before the Date of Termination.
Thereafter, at the Executive's own expense, the Executive and his dependents
shall be entitled to any continuation of health insurance coverage rights
required by any applicable law.

                         (ii) WITHOUT GOOD CAUSE. If the Executive terminates
his employment with the Company pursuant to Section 5(g) without Good Cause, the
Company shall have no obligation to compensate the Executive following the Date
of Resignation. However, the Executive shall be entitled to retain such
stock-based compensation (including, without limitation, shares of restricted
stock and/or options to purchase securities of the Company granted or sold to
the Executive pursuant to the terms and conditions of any of the Company's stock
incentive plans or otherwise) as has vested as of the Date of Termination. In
any event, at the Executive's own expense, the Executive and his dependents
shall be entitled to any continuation of health insurance coverage rights
required by any applicable law.

                         (iii) "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) below, such event is substantially corrected by the
Company within forty-five (45) days following written notification by the
Executive to the Company that he intends to terminate his employment under this
Agreement because of such event:

         (A)      any reduction or diminution in the compensation, benefits or
                  responsibilities of the Executive without his written consent;

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

         (C)      any relocation of the Company's principal place of business
                  from Charleston County, South Carolina; or

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

                         (iv) "CHANGE IN CONTROL" means the occurrence of any of
the following

<PAGE>

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.

                         (v) For purposes of this Section 7(d), "PERSON" means
any natural person, corporation, or any other entity; PROVIDED, HOWEVER, that
the term "Person" shall not include any stockholder or employee of the Company
on the date immediately prior to the initial public offering of the Company's
common stock or any estate or member of the immediate family of such a
stockholder or employee.

                     (e) In the event of any termination pursuant to Section 5,
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.

                     (f) Any Severance Payments made pursuant to this Section 7
shall be payable in equal semi-monthly installments over the required duration
set forth herein; provided, however, that the Executive may elect, in lieu of
receiving the required Severance Payments and continued benefits and fringe
benefits over time to receive a single lump-sum payment equal to the net present
value of the stream of Severance Payments and the estimated cost of continued
benefit and fringe benefits computed using a discount rate to present value
equal to the then-

<PAGE>

current Bank of America Prime Rate.

                     (g) If, in spite of the provisions above entitling the
Executive to benefits under any benefit plan, 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 the remainder of the Employment Term,
unless the Executive has elected to receive the cost of such benefits pursuant
to subsection (f) above.

                     (h) The continuing obligation of the Company to make any
Severance Payment to the Executive is expressly conditioned upon the Executive
complying and continuing to comply with his obligations and covenants under
Sections 6, 8 and 9 of this Agreement following termination of his employment
with the Company.

                     (i) 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
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 he 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(i) 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, the Executive hereby agrees that the Executive will not,
during the Employment Period or for 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 his 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.

<PAGE>

                     (a) The Executive agrees that during the Employment Period
he will devote substantially his full working time to the business of the
Company and will not engage in any competitive business. Subject to such
fulltime requirement and the other restrictions set forth in this Section 9 and
Section 3(d) above, the Executive shall be permitted to continue his existing
business investments and activities and may pursue additional business
investments. Without limiting the foregoing, the Executive specifically
covenants that during and after his employment with the company he 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 partners thereof with respect to any acquisition or
development of any real estate project undertaken or being considered by the
Company, its subsidiaries and/or partners thereof at the end of Executive's
Employment Period;

                         (iii) lend or allow his name or reputation to be used
by or in connection with any business competitive with the Company, its
subsidiaries and/or partners thereof; or

                         (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) Notwithstanding anything to the contrary in this
Section 9 or elsewhere in this Agreement, the Executive shall be permitted, at
his option, to invest in residential real estate developments and resort
operations in which Larry D. Young or his affiliates now or hereafter
participate.

                     (c) The provisions of this Section 9 shall survive for one
(1) year and no longer following the termination of the Employment Period
regardless of whether such termination is for Good Cause or without Good Reason
or otherwise; PROVIDED, HOWEVER, that if the Executive resigns or is terminated
during the twelve months following a Change in Control (as defined in Section
7(d)) or following stockholder approval of the Plan of Liquidation approved by
the Board on February 25, 2001, then the provisions of this Section 9 shall not
survive the Executive's resignation or termination.

                  10. INJUNCTIVE RELIEF AND ENFORCEMENT. In the event of breach
by the Executive of the terms of Sections 6, 8 or 9, 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.

<PAGE>

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:

<TABLE>

<S>                            <C>

If to the Executive:                W. Bradley Blair, II
                                    3554 Bohicket Road
                                    Johns Island, South Carolina 29455

If to the Company:                  Golf Trust of America, Inc.
                                    14 North Adger's Wharf
                                    Charleston, South Carolina  29401
                                    Attention:  Chairman, Compensation Committee
                                    telecopy:  (843) 723-0479

With a copy to:                     Peter T. Healy, Esq.
                                    O'Melveny & Myers LLP
                                    Embarcadero Center West
                                    275 Battery Street, Suite 2600
                                    San Francisco, California 94111-3305
                                    telecopy:  (415) 984-8701

</TABLE>

or to such other address as either party may furnish to the other 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 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.

<PAGE>

                  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 AND 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. All judicial proceedings in connection with
this Agreement may be brought in any state or federal court of competent
jurisdiction in Charlotte City, South Carolina, and each party hereby accepts
the non-exclusive jurisdiction and venue of such courts.

                  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) 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 OR THROUGH ANY SEVERANCE PERIOD, 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 or referenced
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.

<PAGE>

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

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the Effective Date.

                              "COMPANY"

                              GOLF TRUST OF AMERICA, INC.,
                              a Maryland corporation

                             By:  /s/ SCOTT D. PETERS
                                 --------------------------
                                 Scott D. Peters
                                 Senior Vice President

                            "EXECUTIVE"

                             /s/ W. BRADLEY BLAIR, II
                             ------------------------------
                             W. BRADLEY BLAIR, II

<PAGE>

                                    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

<PAGE>

                                    Peters:          Bi-Annually

                  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.

<PAGE>

                                   EXHIBIT B

                         FORM OF MASTER PROMISSORY NOTE

<PAGE>

                                    EXHIBIT C

                         FORM OF MASTER PLEDGE AGREEMENT<PAGE>

                                                                    Exhibit 10.5

                 THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                                (Scott D. Peters)

                                February 25, 2001

                  THIS THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
"AGREEMENT") is dated as of February 25, 2001 (the "EFFECTIVE DATE"), between
Golf Trust of America, Inc., a Maryland corporation, having its principal place
of business at 14 North Adger's Wharf, Charleston, South Carolina 29401 (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 and amended and
restated as of July 25, 1997 (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 November 7, 1999 (the "EXISTING AGREEMENT");

         C. the Executive desires to remain in the employ of the Company;

         D. the Company values the Executive's knowledge and familiarity with
the business of the Company and desires to assure itself of the continued
services of the Executive; and

         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 employ the Executive, and
the Executive hereby agrees 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 three (3) years after the Company delivers a written notice
to the Executive that the Company elects to allow the employment term to expire
in accordance with this Agreement (a "Notice of Non-Renewal"). (The notice of
non-renewal delivered under the Existing Agreement on February 6, 2001 is hereby
deemed to be withdrawn and shall not affect this Agreement.) Such term in its
full duration is herein referred to as the "EMPLOYMENT TERM," and the period of
the Executive's actual employment under this Agreement consisting of the
Employment Term as may be terminated early pursuant to Section 5, is herein
referred to as the "EMPLOYMENT PERIOD."

         3. POSITION.

            (a) TITLE AND POSITION. During the Employment Period, the Executive
shall be

<PAGE>

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 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) may from time to time determine with the consent of the Executive. In
addition, for so long as the Executive is an employee of the Company and is
elected by the Company's stockholders, the Executive hereby agrees to serve as a
member of the Board. The Executive understands that his position as a member of
the Board is subject to nomination by the Board. In the performance of his
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 his
title and position with the Company.

            (b) PLACE OF EMPLOYMENT. During the Employment Period, the Executive
shall perform the services required by this Agreement at the Company's place of
business in Charleston, South Carolina; PROVIDED, HOWEVER, that the Company may
require the Executive to travel to other locations on the Company's business.

            (c) DUTIES. 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. The Executive shall serve the
Company faithfully and to the best of his 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. The
Company shall retain the right to direct and control the means and methods by
which the Executive performs the above services.

            (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 set forth in Section 9 of this Agreement, the
Executive, during the Employment Period, will not (i) accept any other
employment, or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that is or may be
competitive with, or that might place him 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) BASE SALARY. The Company shall pay the Executive a base salary
at a rate of Two Hundred Thousand Dollars ($200,000) per year ("Base Salary")
through the end of 2001. The Executive's base salary for each succeeding
calendar year shall, at a minimum, be increased over the salary in effect at the
end of the immediately preceding year by a factor measured by the increase, if
any, during such preceding year in the Consumer Price Index for Wage Earners and
Clerical Workers (as published by the Bureau of Labor Statistics). The Base
Salary may further be increased, but not decreased, in succeeding years by an
amount determined by the Compensation Committee of the Board in its sole
discretion. All salary shall be paid according to the standard payroll practices
of the Company (regarding, E.G., timing of payments, standard employee
deductions, income tax withholdings, social security deductions, and etc.) as in
place from time to time.

            (b) BUSINESS EXPENSES. The Company shall reimburse the Executive for
personal expenditures incurred in connection with the conduct of the Company's
business upon presentation of

<PAGE>

sufficient evidence of such expenditures as may be required by the Company's
policies as in place from time to time.

            (c) BENEFIT PLAN ELIGIBILITY. During the 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, longterm 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.

            (d) PERFORMANCE BONUS. Unless and until the stockholders of the
Company approve a plan for the liquidation and dissolution of the Company (a
"PLAN OF LIQUIDATION"), the Compensation Committee of the Board may establish
and administer a performance bonus program for the Executive to provide for
payment of a (cash and/or non-cash consideration) bonus to the Executive upon
the achievement of certain performance objectives to be established by the
Compensation Committee for the Executive. If such a program is established, the
Compensation Committee of the Board shall monitor, review and modify the program
from time to time as necessary to reflect the Executive's contributions to the
Company. Following stockholder approval of a Plan of Liquidation, no bonus
program (or additional bonus program, as the case may be) will be established
(except in the event that the Plan of Liquidation is withdrawn by a stockholder
vote or is otherwise cancelled or terminated); PROVIDED that stockholder
approval of a Plan of Liquidation shall not (except as otherwise expressly
provided herein or with respect to an award) affect any of the Executive's
rights under a bonus program that accrued prior to such stockholder approval
event.

            (e) STOCK INCENTIVE PLAN. Unless and until the stockholders of the
Company approve a Plan of Liquidation, the Compensation Committee of the Board
shall establish and administer one or more stock-based incentive plans in which
the Executive shall be eligible to participate according to their terms.
Following stockholder approval of a Plan of Liquidation, no additional
stock-based incentive awards will be granted (except in the event that the Plan
of Liquidation is withdrawn by a stockholder vote or is otherwise cancelled or
terminated); PROVIDED that stockholder approval of a Plan of Liquidation shall
not (except as otherwise expressly provided herein or with respect to an award)
affect any of the Executive's rights under an incentive award that was granted
prior to such stockholder approval event.

            (f) FRINGE BENEFITS. The Executive will be entitled to fringe
benefits as may be determined or granted from timetotime 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.

            (g) VACATION AND HOLIDAYS. The Executive shall be entitled to four
(4) weeks (twenty (20) business days) of paid vacation time in each calendar
year on a prorated basis. The Executive shall be entitled to all paid Company
holidays.

            (h) DIRECTORS AND OFFICERS INSURANCE AND INDEMNIFICATION. The
Company shall maintain insurance to insure the Executive against any claim
arising out of an alleged wrongful act by the Executive while acting as a
director or officer of the Company in an amount deemed reasonable by the
Company, PROVIDED that the amount of such occurrence-based policy of insurance
shall at no time be lower than that in effect on the date of this Agreement. The
Company shall further indemnify and exculpate from money damages the Executive
to the fullest extent permitted under applicable law.

<PAGE>

            (i) PERFORMANCE REVIEWS. At the end of each fiscal year, the Board
or the Compensation Committee thereof will review the Executive's job
performance and will provide the Executive a written review of the Executive's
job performance during the prior year and implement any Board authorized
revisions to the Executive's position, compensation and duties at the Company;
PROVIDED, HOWEVER, that the provisions set forth in this Agreement with respect
to the Executive's compensation, and other terms and conditions of the
Executive's employment at the Company shall not be modified by the Compensation
Committee or the Board in a manner which would result in less favorable or less
beneficial terms or conditions thereof being imposed on the Executive without
the Executive's full concurrence and consent. Executive shall have no right to a
performance review-related bonus following stockholder approval of a Plan of
Liquidation (except in the event that the Plan of Liquidation is withdrawn by a
stockholder vote or is otherwise cancelled or terminated).

         4.A ADDITIONAL BONUS PAYMENTS AND BONUS OPPORTUNITIES.

            (a) STAY BONUS/ACCELERATED VESTING. In recognition of services
previously rendered by the Executive, (i) the Company shall pay to the Executive
a one-time bonus of $660,921.00 in cash (the "STAY BONUS") as soon as
administratively practicable after the execution of this Agreement, (ii) the
vesting of all stock-related compensation previously granted to the Executive
and currently outstanding shall automatically accelerate upon the execution of
this Agreement and thereupon become fully vested; PROVIDED, HOWEVER, that all
future stock-related compensation shall continue to be subject to the other
terms and conditions of the plan under which it was granted, if any, as such
plan may be amended from time to time in accordance with its terms, and subject
to the other terms and conditions of any applicable award agreement. As provided
by the existing promissory notes from Executive to the Company, as amended, all
indebtedness of Executive to either Golf Trust of America, Inc. or Golf Trust of
America, L.P., shall be forgiven upon the Board of Directors' approval of the
Plan of Liquidation.

            (b) MILESTONE PAYMENTS.

                (i) In the event the Board approves the Plan of Liquidation, the
Company shall make the cash payments specified below (each a "MILESTONE
PAYMENT") to the Executive upon the occurrence of the events specified below,
which payments are in recognition of Executive's services from the date of such
Board approval through the date of such payment, and which payments are intended
to replace the normal performance bonus and stock awards that Executive will no
longer be eligible for upon stockholder approval of the Plan of Liquidation.

<TABLE>
<CAPTION>

         PERFORMANCE MILESTONE                                                                 PAYMENT
         ---------------------                                                                 -------

     <S>         <C>                                                                     <C>

         (A)      Later of (1) stockholder approval of a Plan of Liquidation or
                  (2) repayment of all unsecured debt* of the Company
                  and the Operating Partnership................................................$881,228.00

         (B)      Later of (1) repayment of all unsecured debt* of the Company
                  and the Operating Partnership or (2) twelve months following
                  Board approval of a Plan of Liquidation......................................$660,921.00

</TABLE>

         *    Excluding routine trade creditor debt not yet due and excluding
              debt that the Company and/or the Operating Partnership have agreed
              to keep outstanding for the benefit of limited partners.

                (ii) The Milestone Payments shall be paid upon the occurrence of
the events

<PAGE>

specified above, regardless of whether any other element of the Plan
of Liquidation has been, or is possible of being, achieved.

                (iii) The Milestone Payments shall accrue interest at the Bank
of America Prime Rate from the date of stockholder approval of the Plan of
Liquidation. Interest shall accrue separately on each Milestone Payment and
shall be payable, if at all, together with the applicable Milestone Payment.

                (iv) Notwithstanding anything herein to the contrary, if the
Executive becomes entitled to Severance Payments under any other provision of
this Agreement, the amount of such Severance Payments otherwise payable shall be
reduced by the amount of the Stay Bonus and the amount of each Milestone Payment
previously paid or then payable (including those that become payable under
Section 4.A(b)(v)(B), below) and ultimately paid.

                (v) (A) Each Milestone Payment shall not be payable if the
Executive is not employed by the Company on the date on which the milestone
event occurs, as a consequence of the Executive's employment being terminated
pursuant to Section 5(a), 5(b), termination by the Company with Good Reason
pursuant to Section 7(c)(i) or resignation by the Executive without Good Cause
pursuant to Section 7(d)(ii). (B) Each Milestone Payment theretofore unpaid
shall be payable, regardless of whether the milestone event has occurred, upon
Voluntary Resignation for Good Cause pursuant to Section 7(d)(i) or upon a
termination without Good Reason pursuant to Section 7(c)(ii).

            (c) REDUCTION IN EMPLOYMENT TERM. Following stockholder approval of
a Plan of Liquidation, notwithstanding Section 7(c)(ii), the Board shall have
the right, upon forty-five (45) days written notice, to terminate the
Executive's employment without cause and without the obligation to make any
payments to the Executive pursuant to Section 7(c)(ii); provided, however, that
such right may not be exercised until the later of (1) the date on which the
final Milestone Payment is paid or (2) the date that is the eighteen (18) month
anniversary of the Board's approval of the Plan of Liquidation.

            (d) NON-RECOURSE TAX LOANS SECURED BY STOCK. Upon each non-cash
benefit in accordance with this Section 4.A (e.g., stock award acceleration
provided above) and the debt forgiveness provided under the terms of the
Executive's existing promissory notes in connection with the Board's adoption of
a Plan of Liquidation, the Company shall offer to make a non-recourse loan to
Executive to fund the personal income tax liability and employment tax
withholding obligations resulting from such benefit (other than any liability
payable by the Company pursuant to Section 7(i) of this Agreement) which loan
(i) shall be evidenced by a promissory note substantially in the form of EXHIBIT
B attached hereto and (ii) shall be non-recourse to the Executive but shall be
secured, pursuant to a pledge agreement substantially in the form of EXHIBIT C
attached hereto, by a number of shares of Company common stock having a
then-current market value (based on the most recent closing price of the Common
Stock prior to the Effective Date) approximately equal to (but not less than)
the principal amount of the loan (the "Pledged Shares").

         5. TERMINATION. The Executive's employment hereunder shall be, or may
be, as the case may be, terminated under the following circumstances:

            (a) DEATH. The Executive's employment under this Agreement shall
terminate upon his 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

<PAGE>

physician selected by the Board, renders the Executive unable to perform his
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 (as defined in Section 7(c)
below), by the President or a majority vote of all of the members of the Board
of Directors upon written Notice of Termination (as defined below) to Executive,
subject only to the provisions specifically set forth in Section 4.A, above,
or Section 7, below.

            (d) VOLUNTARY RESIGNATION. The Executive may voluntarily resign his
position and terminate his 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 the date such resignation shall become
effective (the "DATE OF RESIGNATION"), which date shall in any event, be at
least ten (10) days and no more than thirty (30) days from the date the Notice
of Resignation is delivered to the Company. The Notice of Resignation shall be
sufficient notice under Section 2 above to prevent the automatic extension of
this Agreement, if timely given according to the terms of Section 2.

            (e) NOTICE. Any termination of the Executive's employment by the
Company shall be communicated by written Notice of Termination to the Executive.
For purposes of this Agreement, a "NOTICE OF TERMINATION" shall mean a notice
that indicates the specific termination provision in this Agreement relied upon
and sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated. The Notice of Termination shall be sufficient notice
under Section 2 above to prevent the automatic extension of this Agreement, if
timely given according to the terms of Section 2.

            (f) DATE OF TERMINATION. "DATE OF TERMINATION" shall mean (i) if the
Executive's employment is terminated by his death, the date of his death; (ii)
if the Executive's employment is terminated by reason of his 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 for Good Reason or
without Good Reason by the Company pursuant to Section 5(c) above, the date
specified in the Notice of Termination; and (iv) if the Executive voluntarily
resigns pursuant to Section 5(d) above, the Date of Resignation set forth in the
Notice of Resignation.

         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 his employment belongs to the Company
and shall be promptly returned to the Company upon termination of the Employment
Period.

            (b) COMPLETE RESIGNATION. Upon the expiration of the Employment
Period or any termination of employment under Section 5 above, 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(h), Section 4.A, this Section 6,
Sections 7 through 9, and Sections 16 through 18, inclusively, shall survive
termination of the Employment Period and the expiration of this Agreement.

<PAGE>

            (d) RELEASE. In exchange for the Company entering into this
Agreement, the Executive agrees that, at the time of his resignation or
termination from the Company, he will resign from the Board and 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 his employment with the Company, except with respect to
(i) any thenvested rights under any of the Company's stock incentive plans or in
connection with other stock-based compensation; (ii) any deferred compensation
held in trust under the Company's Deferred Compensation Plan; (iii) any Stay
Bonus, Milestone Payments, Severance Payments or benefits which may be, or may
become, payable to him under Section 4(h), Section 4.A or Section 7 or other
provisions of this Agreement; and (iv) any continuation of health or other
benefit plans in accordance with this Agreement or as may be required by law.

         7. COMPENSATION UPON TERMINATION. The Executive shall be entitled to
the following post-termination payments and no others:

            (a) DEATH. If the Executive's employment is terminated by reason of
death pursuant to Section 5(a), the Company shall pay the Executive his base
salary payable under Section 4(a) as in effect on the Date of Termination PLUS
the greater of (1) the average value of the cash and non-cash consideration
received by Executive as a performance bonus in years 1997, 1998 and 1999 (which
average is equal to $523,810), or (2) the value of the most recent year's annual
cash and non-cash consideration received by Executive as a performance bonus
(the "SEVERANCE PAYMENTS"), paid in semi-monthly installments for the greater of
(i) three (3) years following the Date of Termination, or (ii) the time period
beginning on the Date of Termination and ending on the final day of the final
Employment Term determined according to Section 2, above. In addition,
immediately prior to the Date of Termination the vesting of all stock-related
compensation previously granted to the Executive shall be accelerated such that
none of such compensation is subject to forfeiture and such that any stock
options or similar rights previously granted to the Executive shall become
immediately vested and exercisable; PROVIDED, HOWEVER, that all stock-related
compensation shall be subject to the plan under which it was granted, if any, as
such plan may be amended from time to time in accordance with its terms. In
addition, during the greater of the time periods in the preceding clauses (i)
and (ii), the Executive, his estate and dependents shall continue to
participate, at their option, in all benefit plans described in Section 4(c) and
shall continue to receive all fringe benefits described in Section 4(f) in each
case substantially comparable to those in effect on the day before the Date of
Termination. Thereafter, at their own expense, the Executive's dependents shall
be entitled to any continuation of health insurance coverage rights required by
any applicable law.

            (b) DISABILITY. If the Executive's employment is terminated by
reason of disability pursuant to Section 5(b), the Executive shall receive
Severance Payments paid in semi-monthly installments for the greater of (i)
three (3) years following the Date of Termination, or (ii) the time period
beginning on the Date of Termination and ending on the final day of the final
Employment Term determined according to Section 2, above; PROVIDED, HOWEVER,
that Severance Payments otherwise payable to the Executive under this Section
7(b) shall be reduced by the sum of the amounts, if any, payable to the
Executive at or prior to the time of any such Severance Payment under any
disability benefit plan of the Company. In addition, immediately prior to the
Date of Termination the vesting of all stock-related compensation previously
granted to the Executive shall be accelerated such that none of such
compensation is subject to forfeiture and such that any stock options or similar
rights previously granted to the Executive shall become immediately vested and
exercisable; PROVIDED, HOWEVER, that all stock-related compensation shall be
subject to the plan under which it was granted, if any, as such plan may be
amended from time to time in accordance with its terms. In addition, during the
greater of the time periods in the preceding clauses (i) and (ii), the Executive
shall continue to participate, at his option,

<PAGE>

in all benefit plans described in Section 4(c) and shall continue to receive all
fringe benefits described in Section 4(f) in each case substantially comparable
to those in effect on the day before the Date of Termination. Thereafter, at the
Executive's own expense, the Executive and his dependents shall be entitled to
any continuation of health insurance coverage rights required by any applicable
law.

            (c) TERMINATION BY COMPANY.

                (i) FOR GOOD REASON. If the Executive's employment is terminated
by the Company pursuant to Section 5(c) for Good Reason (as defined below), the
Company shall pay the Executive his base salary and any bonus due and payable
pursuant to Section 4(d) through the Date of Termination. In addition, the
Executive shall be entitled to retain such stock-based compensation (including,
without limitation, shares of restricted stock and/or options to purchase
securities of the Company granted or sold to the Executive pursuant to the terms
and conditions of any of the Company's stock incentive plans or otherwise) as
has vested as of the Date of Termination. At the Executive's own expense, the
Executive and his dependents shall also be entitled to any continuation of
health insurance coverage rights required by any applicable law.

                (ii) WITHOUT GOOD REASON. Except as otherwise provided in
Section 4.A, if the Executive's employment is terminated by the Company
pursuant to Section 5(c) without any Good Reason, the Company shall pay to
the Executive the Severance Payments in semi-monthly installments for the
greater of (A) three (3) years following the Date of Termination, or (B) the
time period beginning on the Date of Termination and ending on the final day
of the final Employment Term determined according to Section 2, above. In
addition, immediately prior to the Date of Termination the vesting of all
stock-related compensation previously granted to the Executive shall be
accelerated such that none of such compensation is subject to forfeiture and
such that any stock options or similar rights previously granted to the
Executive shall become immediately vested and exercisable; PROVIDED, HOWEVER,
that all stock-related compensation shall be subject to the plan under which
it was granted, if any, as such plan may be amended from time to time in
accordance with its terms. In addition, during the greater of the time
periods in the preceding clauses (A) and (B), the Executive shall continue to
participate, at his option, in all benefit plans described in Section 4(c)
and shall continue to receive all fringe benefits described in Section 4(f)
in each case substantially comparable to those in effect on the day before
the Date of Termination. Thereafter, at the Executive's own expense, the
Executive and his dependents shall be entitled to any continuation of health
insurance coverage rights required by any applicable law.

                (iii) "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 his 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. As of the Effective Date (and as of the date
of any Milestone Payment under Section 4.A unless the Company informed the
Executive otherwise), the Company represents (or will represent with respect to
Milestone Payments as aforesaid to the extent of the then applicable known
facts) to the Executive that the Board has no actual knowledge that the
Executive has materially breached any of the material terms of this Agreement or
that the Executive has acted with gross negligence, willful misconduct or
fraudulently in the performance of his duties hereunder.

            (d) VOLUNTARY RESIGNATION.

<PAGE>

                (i) FOR GOOD CAUSE. Except as otherwise provided in Section
4.A, if the Executive terminates his employment with the Company pursuant to
Section 5(d) for Good Cause (as defined below), the Company shall pay the
Executive the Severance Payments in semi-monthly installments for the greater
of (A) three (3) years following the Date of Termination, or (B) the time
period beginning on the Date of Termination and ending on the final day of
the final Employment Term determined according to Section 2, above.. In
addition, immediately prior to the Date of Termination the vesting of all
stock-related compensation previously granted to the Executive shall be
accelerated such that none of such compensation is subject to forfeiture and
such that any stock options or similar rights previously granted to the
Executive shall become immediately vested and exercisable; PROVIDED, HOWEVER,
that all stock-related compensation shall be subject to the plan under which
it was granted, if any, as such plan may be amended from time to time in
accordance with its terms. In addition, during the greater of the time
periods in the preceding clauses (A) and (B), the Executive shall continue to
participate, at his option, in all benefit plans described in Section 4(c)
and shall continue to receive all fringe benefits described in Section 4(f)
in each case substantially comparable to those in effect on the day before
the Date of Resignation. Thereafter, at the Executive's own expense, the
Executive and his dependents shall be entitled to any continuation of health
insurance coverage rights required by any applicable law.

                (ii) WITHOUT GOOD CAUSE. If the Executive terminates his
employment with the Company pursuant to Section 5(g) without Good Cause, the
Company shall have no obligation to compensate the Executive following the Date
of Resignation. However, the Executive shall be entitled to retain such
stock-based compensation (including, without limitation, shares of restricted
stock and/or options to purchase securities of the Company granted or sold to
the Executive pursuant to the terms and conditions of any of the Company's stock
incentive plans or otherwise) as has vested as of the Date of Termination. In
any event, at the Executive's own expense, the Executive and his dependents
shall be entitled to any continuation of health insurance coverage rights
required by any applicable law.

                (iii) "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) below, such event is substantially corrected by the Company
within forty-five (45) days following written notification by the Executive to
the Company that he intends to terminate his employment under this Agreement
because of such event:

         (A)      any reduction or diminution in the compensation, benefits or
                  responsibilities of the Executive;

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

         (C)      any relocation of the Company's principal place of business
                  from Charleston County, South Carolina; or

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

                (iv) "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.

<PAGE>

         (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.

                (v) For purposes of this Section 7(d), "PERSON" means any
natural person, corporation, or any other entity; PROVIDED, HOWEVER, that the
term "Person" shall not include any stockholder or employee of the Company on
the date immediately prior to the initial public offering of the Company's
common stock or any estate or member of the immediate family of such a
stockholder or employee.

            (e) In the event of any termination pursuant to Section 5, 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.

            (f) Any Severance Payments made pursuant to this Section 7 shall be
payable in equal semi-monthly installments over the required duration set forth
herein; provided, however, that the Executive may elect, in lieu of receiving
the required Severance Payments and continued benefits and fringe benefits over
time to receive a single lump-sum payment equal to the net present value of the
stream of Severance Payments and the estimated cost of continued benefit and
fringe benefits computed using a discount rate to present value equal to the
then-current Bank of America Prime Rate.

            (g) If, in spite of the provisions above entitling the Executive to
benefits under any benefit plan, 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 the remainder of the Employment Term, unless the
Executive has elected to receive the cost of such benefits pursuant to
subsection (f) above.

            (h) The continuing obligation of the Company to make any Severance
Payment to the Executive is expressly conditioned upon the Executive complying
and continuing to comply with his obligations and covenants under Sections 6, 8
and 9 of this Agreement following termination of his employment with the
Company.

            (i) 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

<PAGE>

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 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 he 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(i) 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, the Executive hereby agrees that the Executive will not, during
the Employment Period or for 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 his 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) The Executive agrees that during the Employment Period he will
devote substantially his full working time to the business of the Company and
will not engage in any competitive business. Subject to such fulltime
requirement and the other restrictions set forth in this Section 9 and Section
3(d) above, the Executive shall be permitted to continue his existing business
investments and activities and may pursue additional business investments.
Without limiting the foregoing, the Executive specifically covenants that during
and after his employment with the company he 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 partners thereof with respect to any acquisition or
development of any real estate project undertaken or being considered by the
Company, its subsidiaries and/or partners thereof at the end of Executive's
Employment Period;

                (iii) lend or allow his name or reputation to be used by or in
connection with any business competitive with the Company, its subsidiaries
and/or partners thereof; or

                (iv) intentionally interfere with, disrupt or attempt to disrupt
the relationship,

<PAGE>

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 one year and
no longer following the termination of the Employment Period regardless of
whether such termination is for Good Cause or without Good Reason or otherwise;
PROVIDED, HOWEVER, that if the Executive resigns or is terminated during the
twelve months following a Change in Control (as defined in Section 7(d)) or
following stockholder approval of the Plan of Liquidation approved by the Board
on February 25, 2001, then the provisions of this Section 9 shall not survive
the Executive's resignation or termination.

         10. INJUNCTIVE RELIEF AND ENFORCEMENT. In the event of breach by the
Executive of the terms of Sections 6, 8 or 9, 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:

<TABLE>

<S>                             <C>

If to the Executive:                Scott D. Peters
                                    2758 Christ Church Court
                                    Mt. Pleasant, South Carolina 29464

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

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

</TABLE>

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

<PAGE>

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
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. 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.

         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) 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 OR THROUGH ANY SEVERANCE PERIOD, 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

<PAGE>

Board of Directors of the Company.

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

             IN WITNESS WHEREOF, the parties have executed this Employment
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

<PAGE>

                                   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

                  2.       Automobile allowances in the following amounts or, at
                           the Compensation

<PAGE>

                           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-
<PAGE>

EXHIBIT B

                         FORM OF MASTER PROMISSORY NOTE

                                       B-
<PAGE>

EXHIBIT C

                         FORM OF MASTER PLEDGE AGREEMENT

                                       C-

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