Document:

ASSET PURCHASE AND SALE AGREEMENT

ASSET PURCHASE AND placeCitySALE AGREEMENT

BETWEEN

GLOBAL SAFETY HOLDINGS, CORP. 

And

 HOMELAND  SECURITY NETWORK,  INC. 

                                

THIS ASSET PURCHASE AND SALE AGREEMENT ("Agreement") made this 24th day of September, 2008  by and  amongst Global Safety Holdings, Corp.,  a corporation organized and existing under the laws of the State of Florida with offices at 2649 NE 186th Terrace, Aventura, Florida 33180  (the "Purchaser"), and Homeland Security Network,  Inc.  a corporation organized and existing under the laws of placeStateNevada with offices at addressStreet7920 Beltline Road, Suite 770 CityDallas, StateTexas PostalCode75254  (the “Seller”).

W I T N E S S E T H:

WHEREAS, Seller is willing to sell to Purchaser, but only as specifically provided herein,  and Purchaser is willing to buy from Seller upon the terms and conditions hereinafter set forth, all right, title and interest of the Seller in and to the assets  (as hereinafter defined) as more fully set forth in their Agreement; and

WHEREAS, Purchaser is desirous of purchasing the assets all subject to the terms and conditions set forth herein; 

WHEREAS, the Seller, its Board of Directors and its shareholders have consented to the sale of the assets and no other consents are required.   

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.

DEFINED TERMS Where used herein or in any amendments hereto, the following terms shall have the following meanings except as defined otherwise in their Agreement.

1.1

"ASSETS" means those assets to be conveyed hereunder as more fully set forth in the attached Schedule A constituting any aspect of the Seller’s business with respect to global positioning systems and global monitoring services, whether or not in control or possession of the Seller, including all intellectual property rights and goodwill related to the business attributable to the Assets.  

1.2

"BUSINESS"  those business operations of any kind or nature carried on by the Seller at any location throughout the world  related to the use of the Assets or any other assets associated with providing global positioning systems (“GPS”) and its GPS monitoring services  whether constituting  personal, tangible or intangible personal property, and whether or not in the possession or control of Seller.

1.3

"BUSINESS DAY" means any day except Saturday, Sunday, or any statutory holiday in the State of StateFlorida, placecountry-regionU.S.A.

1.4

“COMMON STOCK” means the $.001 common stock of Purchaser.

1.5

“CLOSING DATE" means within ten (10) days of Purchaser completing its due diligence investigation but in no event later than September 30, 2008 unless extended by the mutual consent of the parties. Notwithstanding the foregoing,  Closing may be extended until  October 15, 2008 in the sole and absolute discretion of the Purchaser if Purchaser has not completed its due diligence investigation.  

1.6

“COMMON STOCK”  means the $.001 par value  common stock of the Purchaser. 

       

1.7

"PURCHASE DOCUMENTS" means this Agreement and all other  agreements, documents or instruments to be executed in connection with  this Agreement.

1.8    “INTELLECTUAL PROPERTY” refers to trademarks, trade secrets, patents and patent rights, copyrights and applications for the foregoing, if any, for the Assets being purchased hereunder. 

1.9    “SATISFACTION AMOUNT” refers to the agreed value of the Assets to be transferred which for purposes of this Agreement shall be $4 million.

1.10    “SOFTWARE” shall mean all programming code source and object code relating to the ownership or use of the Assets. 

2.0

PURCHASE OF ASSETS AND PURCHASE PRICE

2.1        Assets.  Upon the terms and subject to the conditions provided in this Agreement, Seller shall, on the date of Closing convey, sell, transfer, assign and deliver to Purchaser, and Purchaser shall purchase from Seller, all of Sellers' right, title and interest in and to the Assets including, but without limitation, all of the Assets shown on the Schedule A hereto attached marked Schedule A as may be amended prior to Closing.  All Assets are to be in good working condition at Closing.   

Purchaser shall be entitled to use and market the Assets in its sole and absolute discretion, except that immediately following the Closing, Purchaser shall execute a licensing agreement with the Seller permitting the Seller to market global positioning services in the country-regionUnited States and placecountry-regionMexico. The terms and conditions of the licensing agreement to be more fully set forth in the License Agreement to be executed at the time of Closing.

The Licensing Agreement will terminate upon payment of the Satisfaction Amount.   

In consideration for the license being terminated, for as long as Seller conducts the Business in the United States or Mexico, Purchaser shall pay Seller two (2%) percent of the gross revenue collected from the United States and Mexico related to the business.

            

2.2 

Liabilities.  Except for the liabilities and obligations listed on Schedule B (hereinafter hereto attached marked Schedule B and collectively referred to as the ("Assumed Liabilities"), the Purchaser shall assume no liabilities or other obligations, commercial or otherwise, of Seller, known or unknown, fixed or contingent, choate or inchoate, liquidated or unliquidated, secured or unsecured or otherwise.   

A. 

Without in any way limiting the generality of the foregoing, Purchaser shall not assume any obligation or liability of Seller with respect to the following (i) any transaction involving Seller occurring after the Closing Date; (ii) any liability of Seller for federal, state or local taxes, fees, assessments or other similar charges (including without limitation income taxes, real estate taxes, payroll taxes and sales taxes); (iii) any liability for services performed by Seller on or prior to the Closing Date; (iv) except as expressly provided in their Agreement, any responsibility of Seller with respect to salary, wages, vacation pay, savings plans, severance pay, deferred compensation, or other obligations for the benefit of any employee of Seller, including pension benefits accrued (vested or unvested), or arising out of their employment through the Closing Date for which Seller shall be liable; (v) any liability or obligation incurred in connection with or related to the transfer of the Assets pursuant hereto including, but not limited to sales taxes, transfer taxes or stamp taxes; (vi) any liability of any kind whatsoever resulting from the failure of Seller to comply with the requirements of all applicable building, fire, zoning and environmental laws, laws relating to occupational health and safety and other laws applicable to Seller or the conduct of its business; (vii) any liability under any Assumed Contract to the extent such liability arises out of Sellers' failure to perform its obligations there under to the extent performance is due on or prior to the Closing Date; (viii) any liability of Seller to Sellers' stockholders or their relatives or friends; (ix) any indebtedness of Seller to any banks or other lending institutions; (x) liabilities in respect of any pension, profit sharing or other employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") of Seller; and (xi) any liability, obligation or account payable of Seller not listed on Schedule B.  

2.3      Purchase Price.   

Stock Consideration:

At the Closing,  Purchaser shall deliver to Seller a total of 3,111,111 million shares of the Purchaser’s  Common Stock.  Said shares of Common Stock have not been registered with the Securities and Exchange Commission and will be stamped with an appropriate restrictive legend indicating that the Common Stock has not been registered and that there are restrictions from further transfer of the Common Stock. 

         Following the Purchaser’s receipt of outside Investor funding of no less than $15 million in funding, (the “Financing”),    Seller shall be granted a non-dilutive equity stake in the Company based upon the Seller’s pro rata equity interest in the Purchaser’s common stock calculated on a fully diluted basis at the time of the completion of the Financing.  Any non-dilutive rights granted to the Seller in conjunction with the execution of this Agreement shall immediately terminate on the filing of any registration statement with the Securities and Exchange Commission.   

For purposes of example only,  if the Purchaser secured financing of $15 million in one or multiple tranches and issued an additional 15 million shares of common stock the equity ownership would be as follows:  

Purchaser:

28,000,000

Seller:

  3,111,111

Investor:

15,000,000

Total issued and outstanding:  46,111,111

Percentage of issued and outstanding owned by Seller:   6.75%

Until such time as the Purchaser shall file a registration statement with the Securities and Exchange Commission,  Seller shall be entitled to retain a non-dilutive equity ownership in the company of 6.75%, 

Cash Consideration:

           In addition to the 3,111,111 million shares of Common Stock, Seller shall receive the following cash consideration following execution of this Agreement

1.

 

1.

Beginning on the Closing date and continuing until September 30, 2009, Seller shall receive 10% of the Company’s  “EBITDA” as calculated pursuant to generally accepted accounting principles (“GAAP”).

b.

 

Beginning October 1, 2009 and continuing until September 30, 2010, Seller shall receive 5% of the Company’s EBITDA.

c.

 

Beginning October 1, 2010 and continuing until September 30, 2011 Seller shall receive 3% of the Company’s EBITDA.  

For purposes of this Agreement  EBITDA  shall be calculated only from revenues generated from the use of the Assets or operation of the  Business.   If the Company should engage in any other business activity or generate revenue or incur expenses from any other source not previously identified or defined in this Agreement, Seller shall not be entitled to any percentage of the revenues or EBITDA generated from these activities and any expenses attributable to these business activities shall not be deducted in calculating the EBITDA.   

All payments due and owing  pursuant to Section 2.3 shall be made no later than thirty days following the date in which the time period for the calculation of EBITDA  has been computed.

Purchaser shall deliver to Seller a statement showing the basis for the payment.  If the Seller disputes the calculation of the EBITDA,  Seller may,  at its sole cost and expense retain the services of an independent accounting firm to calculate EBITDA.  If Seller disputes the calculation of EBITDA as determined by the Seller’s chosen accounting firm, each party will agree on the appointment of a new accountant to calculate EBITDA.  The cost of this accounting will be borne equally by the parties.  It is further agreed that the calculation of EBITDA as determined by the  accounting firm nominated by both parties shall be binding upon the parties.  

In the event that the Satisfaction Amount is not paid to the Seller by October 31, 2011, then in that event, Purchaser shall pay to Seller 3% of the EBITDA until the 4 million dollars are paid to Seller.

2.4

Right to Offset.  In the event that Purchaser receives any demand for payment in connection with the transfer, use or operation of the Assets, unless those liabilities are set forth on Schedule B,  then in that event Purchaser shall notify Seller of the claim.

Until Seller has provided proof satisfactory to the Purchaser that the liability has been satisfied,  Purchaser shall have the right to offset any payments otherwise due the Seller pursuant to paragraph 2.3.   Alternatively, Purchaser shall have the right to demand indemnification from the Seller and its shareholders as more fully set forth in the agreement.  

If Purchaser shall pay any amounts for which any right of offset or  indemnification is otherwise due and payable, said amount shall be deducted from any annual EBITDA  payment due Seller and shall be credited against the Satisfaction Amount.  

2.5

Allocation of the Purchase Price.  The Purchase Price shall be allocated amongst the Assets as provided in Schedule A attached hereto, and each party shall file in a manner consistent therewith (i) the reports required under Section 1060 of the Internal Revenue Code of 1986, as amended, and (ii) their respective Federal, state and local tax returns.

2.6

Bankruptcy or Insolvency of the Seller.   THIS SECTION INTENTIONALLY LEFT BLANK.

2.7

Conditions to Closing.  A. Seller shall permit Purchaser, or its duly authorized representative to examine and test the software and hardware and its functionality.  Purchaser will be able to inspect all source codes and program codes necessary for the operation of the software. There shall be an open exchange of questions and answers. Seller shall  produce and demonstrate functionality of each and every software program and code for work in progress, if any, or any other work in progress.  Seller shall permit Purchaser to inspect any and all other Assets being transferred.   At Closing, the source code shall then be provided to Purchaser and Seller shall not be permitted to retain copies of in any format whatsoever.     

Seller shall provide computer generated schedules and descriptions of completed GPS and GPS Monitoring Station work product and work in progress product completed or in progress to be completed work. 

The code inspection by Purchaser as described above does not constitute a waiver by Purchaser of Sellers' definitive obligation to deliver at Closing the fully functioning software, all  source code components, web browser, all databases, a dated copy of each version or versions of the software.  

Seller shall also provide requisite signed documents transferring to Purchaser any and all

monitoring  accounts including hosting account(s) except for those in the country-regionUnited States and placecountry-regionMexico.

It is understood by the parties that Seller hereby warrant that Seller shall provide Purchaser  at Closing copies on separately labeled computer discs clean copies of the complete and latest version of all software and code including all upgrades separately identified on individual computer discs.  At Closing Seller shall provide complete copies of all software code which is included in this purchase and listed as an Asset on Schedule A to this Agreement. Software code shall be provided on separately labeled computer discs. Seller warrant that all software licenses, if any, are current and up to date and Seller shall provide a listing of same with appropriate start and end dates.

If for any reason Purchaser is not satisfied with the results of its due diligence investigation,  Purchaser may terminate this Agreement without further liability.

B.  Seller or its duly authorized representative shall be entitled to review the books and records of the Purchaser.  If the books and records are not acceptable to the Seller,   this Agreement may be cancelled by the Seller without further liability.

3.0

DOCUMENTS TO BE DELIVERED AT CLOSING

3.1. 

At the Closing:

A.

Seller shall execute and deliver to Purchaser a Bill of Sale fully executed and in the form of Schedule C  attached hereto, conveying, selling, transferring and assigning to Purchaser all of the Assets free and clear of any and all defects, liens, encumbrances, charges and equities whatsoever.

Seller shall execute or endorse and deliver to Purchaser other duly executed separate instruments of sale, assignment or transfer, including, but not limited to assignments of contract rights or leases, intangibles, in form suitable, where appropriate, for filing or recording with the appropriate office or agency for various items of the Assets or other rights of Seller to be conveyed hereunder, where, in Purchaser's reasonable judgment, the same are necessary or desirable in order to vest or evidence title hereto in Purchaser.

B.

Seller shall deliver to Purchaser copies, certified by the Secretary of Seller, of (i) certificates of good standing in the jurisdiction of the Sellers' incorporation and in each other jurisdiction in which the Seller is doing or transacting business,  (ii) the unanimous written consent of the Seller’s Board of Directors and (iii) the consent of the Company’s stockholders authorizing the Agreement and the other agreements and instruments to be delivered pursuant thereto and the transactions contemplated hereby and thereby.

C.

Purchaser shall deliver to Seller copies, certified by the Secretary of Purchaser, of (i) certificates of good standing in the jurisdiction of the Purchaser's incorporation and in each other jurisdiction in which the Purchaser is doing or transacting business, and (ii) the unanimous written consent of the Board of Directors and stockholders of Purchaser authorizing their Agreement and the other agreements and instruments to be delivered pursuant thereto and the transactions contemplated hereby and thereby.

D.

Seller shall deliver to the Purchaser at Closing all original books and records of 

the Seller relating to the Sellers' Business, including Customers and Sellers' assets, accompanied by a detailed listing fully identifying the Sellers' customers, and a detailed list of Assets as described on Schedule A. 

E.

Seller shall deliver to the Purchaser all necessary consents of third parties to the execution and delivery of their Agreement and the consummation of the transactions contemplated. The Seller shall specifically provide the requisite domain name transfers to Purchaser.

G.

Seller, its officers and directors  shall execute at Closing Non-Compete and Non-solicitation  agreements.   The agreements will prohibit Seller or any of its officers or directors from engaging in a competing business for a period of four  years except in the country-regionUnited States and placecountry-regionMexico.  Seller, its officers and directors shall be prohibiting from soliciting existing or prospective clients in any jurisdiction except for the country-regionUnited States and placecountry-regionMexico.   

Any breach of this provision will cause irreparable harm to the Purchaser,  the extent of which will be difficult to calculate with any degree of certainty.  Therefore,  the parties agree that the liquidated damage for any breach shall be the cessation and full release of Purchaser from any further payments of EBITDA as set forth in paragraph 2.3 of this Agreement.  In addition,  Purchaser shall not be required to pay to Seller the Satisfaction Amount.

3.2

 Purchaser  shall deliver to the Seller at Closing  copies of its  books and records. 

4.

CLOSING.  The Closing of the transactions contemplated by their Agreement, and all deliveries to be made at such time in connection therewith, shall take place at the law firm of Jeffrey G. Klein PA, Suite 270, 2600 North Military Trail, Boca Raton, Florida, 33431 upon the satisfaction of all of the conditions set forth in this Agreement on or before  September 30,  2008   subject to extension as more fully set forth in this Agreement. Such Closing to take place by delivery to such counsel of executed counterparts of their Agreement and all other documents, instruments and certificates required to be delivered by Seller or Purchaser at the Closing (Said Closing and said date thereof, herein referred to as the "Closing" and the "Closing Date", respectively).  

5.     REPRESENTATIONS AND WARRANTIES BY SELLER

5.1.

Seller warrants and represent to Purchaser as follows:

A.

Seller is a corporation duly organized and validly existing under the laws of the placeStateNevada.  Seller has full power and authority to own the Assets and conduct its business and that Assets are owned free and clear of all liabilities of any kind or nature without any liens or encumbrances.

B. 

The execution, delivery and performance of the Purchase Documents by Seller, and the consummation of the transactions contemplated hereby, will not with or without the giving of notice or the lapse of time or both:

(i) 

violate any provision of law, statute, rule or regulation to which Seller is subject, 

(ii)

violate any judgment, order, writ or decree to which Seller is a party or by which it is or may be bound; or

(iii) 

to the knowledge of Seller, result in the breach of or conflict with any term, covenant, condition or provision of, or result in the modification or termination of, or constitute a default under or result in the creation or imposition of any lien, security interest, charge or encumbrance upon any of the Assets being purchased hereunder, under the corporate charter or by-laws or any other agreement, understanding or instrument to which Seller is a  party or by which it is or may be bound or affected.

C. 

All necessary corporate action has been taken by Seller to authorize the execution, delivery and performance of the Purchase Documents.  Seller will provide Purchaser prior to closing copies of director and shareholder consents to enter into this Agreement.  The Purchase Documents have been duly and validly authorized, executed and delivered by Seller and constitute the valid and binding obligation of Seller enforceable against it in accordance with their respective terms.  

1.

All consents and approval required for transferring the Assets to Purchaser hereunder and for assigning the agreements, including without limitation all amendments, modifications, and supplements, whether written or oral and for performing Sellers' obligations under the Purchase Documents have been obtained.  No consent of any court, governmental agency or other public authority is required as a condition to the enforceability of the Purchase Documents.  

D.

The Assets being transferred per Schedule A are owned free and clear of all liens and encumbrances, are not encumbered by any lien or the subject matter of any known or anticipated litigation.   Seller has satisfied all conditions required of Seller in connection with the acquisition of the assets from the original owner and Seller has recorded title to the assets with the United State Patent and Trademark Office.   Copies of all registrations, whether in the placecountry-regionUnited States or with any foreign jurisdiction are attached hereto.  Seller further acknowledges and agrees that the Purchase Price paid by Purchaser for Seller’s Assets is fair and adequate consideration.

E.

Seller has conducted its business in compliance with all applicable placecountry-regionU.S. federal, state, and local laws, regulations and ordinances and any laws or regulations of any foreign jurisdiction. 

F.

Seller has  not received any notice that it is infringing upon the research, development, processes, methods, techniques, inventions, know how patents, patent rights, trade name, trademarks and service marks of any other party.

G.    Seller is not a party to any written or oral employment, agency or commission agreement with any of its employees that cannot be terminated upon the closing date of their transaction without penalty.  No employee, director, officer or stockholder (or any current or former family member thereof) of Seller, either individually or in any other capacity, has a claim of any kind against the Seller, the Business or the Assets and Seller has no obligation with respect to such person or entity.  Seller does not contribute to or sponsor any employee welfare or benefit plans, and is not subject to any collective bargaining agreement, for employees.

2.

The Seller has completed its due diligence on the Purchaser and understands the risks and uncertainties involved with the receipt of the Purchaser’s Common Stock.  Seller has had an opportunity to discuss the operations of Purchaser’s s business, financial condition and affairs with management and has been provided with any requested information.  The Seller understands that there is a substantial risk of loss with respect to their investment in the Common Stock of the Purchaser.  

3.

Restricted Securities.  The Seller understands  that the Common Stock has not been, and will not be, registered under the Securities Act.  The Seller  acknowledges that the Purchaser has no obligation to register or the Common Stock and that there is no public market for the Common Stock.    Seller further acknowledges that the Purchaser may place a restrictive legend on the certificate restricting the further transfer of the Common Stock.

H.

Seller has paid all personal and intangible property taxes due as a result of  the ownership of the assets and there are no amounts due and owing for personal or corporate property or intangible property taxes.

I. 

There is (and has not been since its inception) no claim, litigation, action, suit or proceeding, administrative or judicial, pending or threatened against or affecting Seller, or involving any of the Assets, at law or in equity or before any domestic or foreign federal, state, local or other governmental authority, including, without limitation, any claim, proceeding, or litigation for the purpose of enjoining or preventing the consummation of this  Agreement, or the transactions contemplated hereby, or otherwise claiming their Agreement, or any of the transactions contemplated hereby or the consummation thereof, is illegal or otherwise improper, nor to Sellers' knowledge is there any basis upon which any such claim, litigation, action, suit or proceeding could be brought or initiated.  Seller is not (and has not been within the past five years) subject to or in default under any judgment, order, writ, injunction or decree of any court or any governmental authority, and no replevins attachments, or executions have been issued or are now in force against Seller.  No petition in bankruptcy or receivership has ever been filed by or against Seller. 

J.    In the event that Purchaser discovers any asset(s) missing from those identified on Schedule A regardless if missing by omission, inadvertent or not, including any property identified that should have been identified as an asset and identified on Schedule A, including software code documents that represent or identify software ownership, software licensing agreements, contracts for any use or purpose, all other pertinent documents generated or obtained in the normal course of business, the transfer of critical knowledge considered representative and utilized in the business and operations of its GPS tracking devices or GPS monitoring services,   Purchaser shall notify Seller of said discovery.

  

K.   The Seller owns all Intellectual Property and proprietary rights to the Assets and for the operation of the Business as presently conducted and as presently proposed to be conducted. Each Item of Intellectual Property owned by the Seller with respect to the purchased Assets immediately prior to the Closing hereunder will be owned by the Purchaser immediately subsequent to the Closing hereunder. The Seller has taken all reasonable, necessary and prudent  action to maintain and protect each item of Intellectual Property that it owns.  

L.     The Seller warrants that no source codes, software, browser code, ancillary programming product, or any software versions thereof owned by the Seller or any predecessor entities, have been licensed, sold, rented, leased, loaned, hypothecated, or transferred to any individual or entity at any time or at any occasion for any reason.

6.

REPRESENTATIONS AND WARRANTIES OF PURCHASER

6.1 

Purchaser hereby represents and warrants to Seller as follows:

A.

Purchaser is a corporation duly organized and validly existing under the laws of the State of placeStateFlorida and has full power and authority to own its property and conduct its business.

B.

The execution, delivery and performance of their Agreement, and the consummation of the transactions contemplated hereby, will not with or without the giving of notice or the lapse of time or both:

(i)

violate any provision of law, statute, rule or regulation to which Purchaser is subject;

(ii)

violate any judgment, order, writ or decree to which Purchaser is a party or by which Purchaser is bound; or result in the modification or termination of, or constitute a default under the corporate charter or by-laws or any other agreement, understanding or instrument to which Purchaser is a party or by which Purchaser is or may be bound or affected.

C.     All necessary corporate action has been taken by Purchaser to authorize the execution, delivery and performance of their Agreement, and the consummation of the transaction contemplated hereby.  Their Agreement has been duly and validly authorized and is a binding obligation of Purchaser enforceable against it in accordance with its terms.

D.

Purchaser is not subject to any current or threatened litigation.

E.

There are currently 28 million shares of Common Stock issued and outstanding and there will be an equivalent number of shares of Common Stock issued and outstanding as of the date of Closing.  There are not currently, nor will there be as of the date of Closing,  any options, warrants or other rights which will upon exercise result in the issuance of additional shares of common stock of the Purchaser.  Attached hereto is a schedule indicating the current shareholders of the Purchaser.

7. 

CONDITIONS TO THE OBLIGATIONS OF SELLER TO CLOSE

7.1 

All obligations of Seller hereunder are, at the option of Seller, subject to the conditions that, at the Closing Date:

A.

All representations and warranties made in their Agreement by Purchaser shall be true and correct as of the Closing Date in all material respects.

B.

Purchaser shall have tendered the required documents and certificates at the Closing as set forth in Section 2.3 hereof.

C.     All corporate action necessary to authorize (A) the execution, delivery and performance by Purchaser of their Agreement and any other agreements or instruments contemplated hereby to which Purchaser is a party and (B) the consummation of the transactions and performance of its other obligations contemplated hereby and thereby shall have been duly and validly taken by Purchaser, and the Seller shall have been furnished with copies of all applicable resolutions adopted by the board of directors of Purchaser, certified by the Secretary or Assistant Secretary of Purchaser.

8.  CONDITIONS TO THE OBLIGATIONS OF PURCHASER TO CLOSE

8.01 

All obligations of Purchaser hereunder are, at the option of Purchaser, subject to the conditions that, at the Closing Date:

A.

All representations and warranties of Seller contained in their Agreement shall be true and correct as of the Closing Date in all material respects.

B.

Seller shall have performed all commitments hereunder up to the Closing Date and shall have tendered the required documents, instruments and certificates as set forth in Section 3 hereof.

C.   

No action suit, proceeding or investigation by or before any court,  administrative agency or other governmental authority shall have been instituted or threatened to restrain, prohibit or invalidate the transactions contemplated by their Agreement or which may affect the right of Purchaser to own, operate or control after the Closing Date the Assets and the Seller's Business.

D.     All corporate action, necessary to authorize (A) the execution, delivery and performance by the Seller of their Agreement and any other agreements or instruments contemplated hereby or thereby to which Seller is a party and (B) the consummation of the transactions contemplated hereby and thereby shall have been duly and validly taken by Seller, and Purchaser shall have been furnished with copies of all applicable resolutions of Seller certified by the Secretary or Assistant Secretary of the Seller.

E.

The Seller shall have obtained the approvals, consents and authorizations of all third parties and/or governmental agencies necessary for the communication of the transactions contemplated hereby in accordance with the requirements of applicable laws and agreements

F.        Non-Compete/Non-Disclosure Agreements:  All officers and directors  of Seller will execute Non-Compete and Non-Disclosure agreements at Closing. 

9.

INDEMNIFICATIONS

9.01

Seller agrees to indemnify and hold harmless Purchaser, its officers and directors  from:

A. 

Any and all damages or deficiencies resulting from any misrepresentation, breach of warranty or non-fulfillment of any covenants on the part of Seller under their Agreement.

B.  

Any and all actions, suits, proceedings, demands, assessments, judgments, costs, reasonable attorneys fees, expenses incident to any of the foregoing.

C.         Any and all liabilities as they relate to the personal property being transferred under their Purchase and Sale Agreement which are not specifically set forth.

9.02 

Purchaser agrees to indemnify and hold Seller harmless from:

A.

Any and all damages or deficiencies resulting from any misrepresentation, breach of warranty or non- fulfillment of any covenant on the part of Purchaser under their Agreement

B.  Any and all actions, suits, proceeding, demands, assessments, judgments, costs, reasonable attorney's fees and expenses incident to any of the foregoing.

9.03   

Any party having an indemnification claim hereunder (An Indemnitee") shall give the other party ("Indemnitor") prompt notice in writing of any claim by any third party which gives rise to a claim for indemnification hereunder, and of any alleged breach of any of the representations and warranties contained in their Agreement.  As to any alleged breach of the representations or warranties, written notice shall contain a statement setting forth the nature of the alleged breach or breaches.  The Indemnitor shall have thirty (30) days after the delivery of such notice to cure or contest any such claim by a third party or any such alleged breach or breaches.  At its option, to be exercised within thirty (30) days of such notice, the Indemnitor may defend against any such action or proceeding with counsel of its choice, at the Indemnitor's expense, it being understood, however, that the Indemnitor's designation of counsel shall be subject to the approval of the Indemnitee, which approval shall not be unreasonably withheld.  Additionally, at its own expense the Indemnitee may participate in any such defense with counsel of its choice.  As long as the defense is being handled by the Indemnitor, the Indemnitee shall not settle any such claim, action or proceeding without prior written consent of the Indemnitor, except that if the Indemnitee does elect to settle the matter without such consent, the Indemnitor shall be released from the terms of their indemnification.  Notwithstanding the foregoing, in the event the Indemnitor elects not to defend any such claim, action, or proceeding, the Indemnitee may do so, in which event the Indemnitor shall continue to indemnify the Indemnitee for any liabilities, losses and damages incurred by the Indemnitee, including any settlement payments and for the reasonable costs and expenses of their counsel.

9.04

All indemnifications made herein by Purchaser,  Seller and the Shareholders shall survive the closing of their transaction and shall inure to the benefit of the Purchaser’s and Seller’s heirs, assigns, agents, principals, members and/or shareholders.

10.   MISCELLANEOUS.

10.01

This Agreement may not be assigned by Seller  without the prior written consent of Purchaser whose consent may be withheld in the sole and absolute discretion of the Purchaser. 

10.02

Survival or Representations. The representations and warranties set forth herein shall survive the execution of their Agreement.

10.03   Entire Agreement.   This  Agreement constitutes the entire agreement between the parties with respect to the subject matter and shall not be change or amended without the prior written consent of all the parties hereto.

10.04

Governing Law and Disputes. This agreement shall be governed by and construed in accordance with the laws of the State of placeStateFlorida. 

10.05

By entering into their Agreement, the parties agree to the venue jurisdiction in the addressStreetState of Florida Court system  in  placeCityMiami-Dade County, StateFlorida.   

10.06

Captions.  The captions herein are for the convenience of the parties and are not to be constructed as part of the terms of their Agreement.

10.07

Waiver.  Any waiver by either party of any breach of their Agreement shall not be considered a waiver of any subsequent breach.  

10.08

Notices.  Any notice or other communication required or permitted to be given hereunder shall be in writing and mailed by registered or certified mail, postage prepaid return receipt requested, to the party to whom it is to be given.

10.09

Severability.  In the event that any part of their Agreement is held to be unenforceable, then such provision shall in no way affect the other terms and provisions of their Agreement which shall remain in full force and effect.

10.10

Expenses.  Each of the parties hereto shall bear its own expenses in connection  with the transactions contemplated.  However,  in the event of any litigation, the prevailing party shall be entitled to recover all costs including attorneys fees.

10.11

Finders Fees. The Seller or Seller's shareholders have not engaged a Finder nor have Seller or Seller's shareholders incurred any liabilities for Finder’s fees or commission of any nature whatsoever in connection with the transactions contemplated hereunder. The Seller and selling shareholders each warrant that they shall not incur any liabilities attributable to Purchaser for finder’s fees or commission of any nature.

10.12 Additional Documentation: The parties agree that without the payment of additional consideration, each party will provide the other with such information as may be necessary to carry out the terms and conditions of their Agreement.

IN WITNESS WHEREOF, the parties hereto have signed their Agreement under seal on the day and year first above written.

SELLER:

Global Safety Holdings, Corp. 

ATTEST:

________________________        

BY:

________________________________

ITS': 

PURCHASER:

ATTEST:

Global Safety Holdings, Corp. .         

________________________        

BY:

________________________________

ITS': 

SCHEDULE A

LIST OF ASSET

Software

Firmware

Hardware

Servers

Accounts Receivable

Service Contracts

Source codes

Inventory

Accounts receivable

Contracts with Manufacturers

All Intellectual Property associated with the Assets

All monitoring service contracts covering clients located outside  of either  country-regionMexico and the placecountry-regionUnited States.

 

Company’s  website.

All intellectual property rights of any kind or nature associated with the Assets or the Business of the Seller

All global patents.

.

SCHEDULE   B

LIST OF LIABILITIES

None.

SCHEDULE C

BILL OF SALEExhibit 10.1

 

THIS AGREEMENT CONTAINS AN ARBITRATION PROVISION
PURSUANT TO 

THE SOUTH CAROLINA UNIFORM ARBITRATION ACT

 

PURCHASE
AND SALE AGREEMENT

(Wildewood
Country Club and The Country Club at Woodcreek Farms)

 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”)
is made to be effective as of the 26th day of September, 2008 (the “Effective
Date”) by and among WCWW COMMITTEE, LLC,
a South Carolina limited liability company, (the “Purchaser”), the
address of which is c/o William A. McDougall, 100 Cricket Hill Road, Columbia,
South Carolina 29223; and GOLF TRUST OF AMERICA,
L.P., a Delaware limited partnership (“GTA”) on behalf of
itself and its wholly owned subsidiary GTA STONEHENGE, LLC,
a South Carolina limited liability company (“Stonehenge”), the address
of which is 10 North Adger’s Wharf, Charleston, South Carolina, 29401-2519
(collectively, the “Seller”).

 

RECITALS

 

A.                                   Seller
is the fee simple owner of certain real property on which are located golf
courses, related improvements and amenities, and personal property in Richland
County, South Carolina, commonly known as “Wildewood Country Club” and “The
Country Club at Woodcreek Farms” (collectively, the “Club Facilities”),
the legal descriptions of which are attached hereto as Exhibit A.

 

B.                                     GTA Stonehenge, LLC, a wholly owned subsidiary
of Golf Trust of America, L.P., is currently managing the operations at the
Club Facilities.

 

C.                                     Purchaser desires to purchase from Seller, and
Seller desires to sell to Purchaser the Conveyed Property (as defined below) upon
the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the purchase price,
and the mutual covenants and undertakings herein contained, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

DEFINITIONS

 

1.1                                 [reserved]

 

1.2                                 [reserved]

 

1.3                                 “Agreement”
shall mean this Purchase and Sale Agreement.

 

1.4                                 “Applicable
Law” means any federal, state, or local statute, resolution, ordinance or
other law in the jurisdiction where the Land is located without regard to
conflict-of-law principles.

 

 

1.5                                 “Assignment
of Club Documents” shall have the meaning set forth in Section 6.7(a)(ix) below.

 

1.6                                 “Assignment
of Intangible Property” shall have the meaning set forth in Section 6.7(a)(iv) below.

 

1.7                                 “Board
Approval Date” shall have the meaning set forth in Section 5.6(a) below.

 

1.8                                 “Bill
of Sale” shall have the meaning set forth in Section 6.7(a)(iii) below.

 

1.9                                 “Closing”
shall have the meaning set forth in Section 6.1(a) below.

 

1.10                           “Closing
Date” shall mean the date the Closing takes place, which shall be on or
before December 8, 2008, or one hundred twenty (120) days after the
Effective Date, whichever is later, unless otherwise mutually agreed upon in
writing by Seller and Purchaser.

 

1.11                           “Closing
Documents” shall have the meaning set forth in Section 6.7
below.

 

1.12                           “Club
Facilities” shall have the meaning set forth in Recital A above.

 

1.13                           “Confidentiality
Agreement” shall have the meaning set forth in Section 9.5
below.

 

1.14                           “Conveyed
Property” shall have the meaning set forth in Section 2.1
below.

 

1.15                           “Deed”
shall have the meaning set forth in Section 6.7(a)(i) below.

 

1.16                           “Due
Diligence Period” shall have the meaning set forth in Section 4.1
below.

 

1.17                           “Earnest
Money” shall have the meaning set forth in Section 2.4(a) below.

 

1.18                           “Earnest
Money Deposit” shall have the meaning set forth in Section 2.4(a) below.

 

1.19                           “Effective
Date” shall have the meaning set forth in the introductory paragraph to
this Agreement.

 

1.20                           “Escrow
Agent” shall mean Chicago Title Insurance Company.

 

1.21                           “Escrow
Agreement” shall mean that certain Escrow Agreement by and among Seller,
Purchaser, and Escrow Agent.

 

1.22                           “Excluded
Assets” shall mean those assets listed on Exhibit H attached
hereto.

 

1.23                           “Excluded
Obligations” shall have the meaning set forth in Section 2.2
below.

 

1.24                           “Existing
Phase I” shall have the meaning set forth in Section 4.1(a)(ii) below.

 

1.25                           “Existing
Survey” shall have the meaning set forth in Section 4.1(a)(i) below.

 

 

1.26                           “Existing
Title Commitment” shall have the meaning set forth in Section 4.1(a)(iv) below.

 

1.27                           “FF&E”
shall mean all articles of tangible personal property, whether in use or held
in reserve storage for future use in connection with the operation of the Club
Facilities located at the Club Facilities, including but not necessarily
limited to all golf carts and other vehicles, lawn mowers, ball machines and
other driving-range equipment, computers, cash registers and other similar
equipment, inventory-control systems, and other fixtures, furniture,
furnishings, fittings, equipment, machinery, apparatus, appliances, as well as
all golf clubs, bags, shoes and other golf equipment for rent, driving range
balls, china, glassware, linens, silverware, kitchen and bar small goods, paper
goods, guest supplies, cleaning supplies, operating supplies, printing,
stationery and uniforms.  A list of
FF&E forms part of Exhibit B attached hereto.

 

1.28                           “Final
Statement” shall have the meaning set forth in Section 6.2
below.

 

1.29                           “Food
and Beverages” shall mean all food and beverages (alcoholic and
non-alcoholic) whether in use or held in reserve storage for future use in
connection with the operation of the Club Facilities in the ordinary course of
the business of operating the Club Facilities.

 

1.30                           “Food
and Beverages Cost” shall mean the actual cost of all fresh first quality
Food and Beverages which are unopened or otherwise in the condition as
delivered and ready for use, excluding the cost of all items which are opened.

 

1.31                           “Club
Contracts” shall mean all golf pro, tennis pro, and other employment
contracts, management agreements, membership agreements, priority tee time
agreements and other similar agreements affecting the use and operation of the
Club Facilities, group, frequent player or other similar discount arrangements
or commitments, group, tournament and other facilities and clubhouse bookings
and reservation agreements, water, sewer or other utility agreements, landscaping,
maintenance and other service contracts, union contracts, collective bargaining
agreements, employee benefit plans, golf cart, maintenance equipment, telephone
and other equipment leases, and other contracts or agreements relating to the
maintenance, operation, provisioning or equipping of the Club Facilities,
together with all related written warranties and guaranties.  A list of all Club Contracts is attached
hereto as Exhibit K.

 

1.32                           “Club
Employees” shall mean all golf pros, instructors, staff and other persons
employed by Seller to operate the Club Facilities.  A list of all Club Employees as of the
Effective Date, their current annual compensation, accrued vacation and sick
leave, together with a list of all employment contracts and all pension, bonus,
profit-sharing, stock option, or other agreements or arrangements providing for
employee remuneration or benefits to which Seller is a party or by which Seller
is bound is attached hereto as Exhibit 6.3.

 

1.33                           “GTA”
shall mean Golf Trust of America, L.P., a Delaware limited partnership on
behalf of itself and its wholly owned subsidiary GTA Stonehenge, LLC, a South
Carolina limited liability company.

 

1.34                           [reserved]

 

 

1.35                           “Gross
Revenue” shall have the meaning set forth in Section 2.4(d) below.

 

1.36                           “Improvements”
shall have the meaning set forth in Section 2.1(a) below.

 

1.37                           “Indemnification
Claim” shall have the meaning set forth in Section 8.4(a) below.

 

1.38                           “Indemnitee”
shall have the meaning set forth in Section 8.4(a) below.

 

1.39                           “Indemnitor”
shall have the meaning set forth in Section 8.4(a) below.

 

1.40                           “Intangible
Property” shall mean Club Contracts, Permits, and Space Leases as well as
all group history, group contracts, tee times history, list of future bookings,
an annual member list, all proprietary rights Seller may have with respect to
the use of the Property, all trade names, trade marks, service marks, and
logos, all product and service warranties and guaranties, and the goodwill of
the business and other assets, books, records, and telephone numbers,
transferable licenses for computer programs, software, websites, domain names,
other intellectual property, and all other contract, property and other
intangible rights belonging to or otherwise used in the use, ownership and
operation of the Club Facilities (including but not limited to the use of the
name “Wildewood Country Club”, “The Country Club at Woodcreek Farms” and all
derivatives thereof).  A list of
Intangible Property not otherwise listed on Exhibits I, J, K and L, is
attached hereto as Exhibit C.

 

1.41                           [reserved]

 

1.42                           “Knowledge”
or “knowledge” shall have the meaning set forth in Section 5.3
below.

 

1.43                           “Land”
shall have the meaning set forth in Recital A above and more
particularly described in Exhibit A attached hereto and made a part
hereof.

 

1.44                           “Liquor
Licenses” shall have the meaning set forth in Section 9.1
below.

 

1.45                           “Liquor
Applications” shall have the meaning set forth in Section 9.1
below.

 

1.46                           “Losses”
shall have the meaning set forth in Section 8.1 below.

 

1.47                           “Members”
shall mean any persons or entities who have been granted special playing or
other use privileges at the Club Facilities. 
Lists of all Members of each Golf Course with their particular use
rights are attached hereto as Exhibit L.

 

1.48                           “Mineral
Rights” shall have the meaning set forth in Section 2.1(f).

 

1.49                           “Mutual
Closing Condition” shall have the meaning set forth in Section 5.8
below.

 

1.50                           “Patron
Property Inventory” shall have the meaning set forth in Section 5.4(c) below.

 

1.51                           “Payables”
shall have the meaning set forth in Section 6.2(e) below.

 

 

1.52                           “Permitted
Exceptions” shall have the meaning set forth in Section 4.3
below.

 

1.53                           “Permits
and Licenses” shall have the meaning set forth in Section 2.1(d) below.

 

1.54                           “Permits”
shall mean all licenses, permits, certificates of occupancy, authorizations and
approvals used in or relating to the ownership, occupancy or operation of any
part of the Club Facilities, including, without limitation, those necessary for
the sale and on-premises consumption of liquor and other alcoholic beverages,
if any.  A list of all Permits is
attached hereto as Exhibit I.

 

1.55                           “Personal
Property” shall mean all Tangible Personal Property and Intangible Property
related to the Club Facilities, other than the Excluded Assets.

 

1.56                           [reserved]

 

1.57                           “Preliminary
Statement” shall have the meaning set forth in Section 6.2
below.

 

1.58                           “Post-Closing
Expenses” shall have the meaning set forth in Section 6.2(e) below.

 

1.59                           “Prepaid
Membership Deposits” shall have the meaning set forth in Section 6.2(h) below.

 

1.60                           “Pro
Shops” shall mean all the golf and tennis pro shops located at the Club
Facilities.

 

1.61                           “Pro
Shop Inventory” shall mean the merchandise located in any Pro Shops or
similar facility and held for sale in the ordinary course of business,
including, without limitation, all golf clubs, bags and balls and other golf
equipment, all golf shirts, hats and shoes, tennis racquets, tennis shoes,
tennis apparel, and other items of clothing held for sale in and from the Pro
Shops in the ordinary course of operating the Pro Shops.

 

1.62                           “Pro
Shop Inventory Cost”  shall mean the
actual cost of all brand new unused first quality golf and tennis equipment and
apparel and other inventory stocked in the Pro Shops constituting Pro Shops
Inventory, excluding the cost of all items not in a condition to be sold at
full retail prices.

 

1.63                           “Property”
shall have the meaning set forth in Section 2.1(a) below.

 

1.64                           [reserved]

 

1.65                           “Purchase
Price” shall have the meaning set forth in Section 2.4 below.

 

1.66                           [reserved]

 

1.67                           “Purchaser”
shall mean WCWW Committee, LLC, its successors and assigns, including any
affiliated non-profit entity organized by WCWW Committee, LLC and designated as
the entity that shall acquire title to the Property and honor the obligations
of Purchaser hereunder.

 

 

1.68                           “Purchaser
Closing Conditions” shall have the meaning set forth in Section 5.7
below.

 

1.69                           “Purchaser
Due Diligence Materials” shall mean all reports, tests, documents, materials
or other material or information, however obtained, related in any way to or
about the Conveyed Property possessed by Purchaser prior to the Closing Date
including those referenced in Section 4.1(c) but excluding the
Seller Due Diligence Materials.

 

1.70                           “Purchaser
Indemnitees” shall have the meaning set forth at Section 8.1
below.

 

1.71                           “Receivables”
shall have the meaning set forth in Section 6.2(k) below.

 

1.72                           “Revenues”
shall mean all revenues of any kind or nature derived by the Seller from the
ownership, rental, use and/or operation of the Club Facilities, which revenues
include, but are not limited to, (i) membership dues and initiation fees, (ii) periodic
membership dues, (iii) green fees, (iv) fees to reserve a tee time, (v) guest
fees, (vi) golf cart rentals and trail fees, (vii) parking lot fees, (viii) locker
rentals, (ix) fees for golf club storage, (x) fees for the use of
swim, tennis or other facilities, (xi) charges for range balls, range fees, or
other fees for golf practice facilities, (xii) revenue derived from the
operation of snack bars, restaurants, bars, catering functions, and banquet
operations, or photography or other services (whether or not such revenue is
directly derived by Seller or from amounts paid to Seller by any lessee,
subtenant, concessionaire, or licensee), (xiii) fees or other charges paid for
golf or tennis lessons, (xiv) fees or other charges for fitness centers, (xv)
forfeited deposits with respect to any membership application, (xvi) transfer
fees imposed on any member in connection with the transfer of any membership
interest, (xvii) fees or other charges paid to Seller by sponsors of
tournaments at the Club Facilities, (xviii) advertisements or placement fees
paid by vendors in exchange for exclusive use or name rights at the Club
Facilities, (xix) fees received in connection with any golf package sponsored
by any hotel group, condominium group, golf association, travel agency, tourist
or travel association or similar payments, (xx) reimbursed expenses received
from homeowner’s associations, and (xxi) usage, food and beverage, merchandise
and other income.

 

1.73                           “Security
Deposits” shall have the meaning set forth in Section 6.2(h).

 

1.74                           “Seller”
shall mean collectively Golf Trust of
America, L.P. and its wholly owned subsidiary GTA Stonehenge, LLC.

 

1.75                           “Seller
Closing Conditions” shall have the meaning set forth in Section 5.6
below.

 

1.76                           “Seller
Due Diligence Materials” shall have the meaning set forth in Section 4.1(a) below.

 

1.77                           [reserved]

 

1.78                           “Seller
Indemnitees” shall have the meaning set forth in Section 8.2
below.

 

1.79                           “Space
Leases” shall mean all pro shop, restaurant and other leases, licenses,
concessions and other agreements (written or oral) for the occupancy of space
at the Club Facilities.  A list of all
Space Leases, and a summary of their terms and status, is attached hereto as Exhibit J.

 

 

1.80                           “Survival
Period” shall have the meaning set forth in Section 8.3(a) below.

 

1.81                           “Tangible
Personal Property” shall mean all FF&E, Food and Beverages, and Pro
Shop Inventory.  A list of Tangible
Personal Property is attached hereto as Exhibit B.

 

1.82                           “Title
Commitment” shall have the meaning set forth in Section 4.2(a) below.

 

1.83                           “Title
Company” shall have the meaning set forth in Section 4.2(a) below.

 

1.84                           “Trade-Outs”
shall have the meaning set forth in Section 6.2(h) below.

 

ARTICLE II

Purchase and Sale;
Consideration

 

2.1                                 Agreement For Purchase and Sale.  Seller agrees to sell, grant, convey and
deliver to Purchaser, and Purchaser agrees to purchase and accept the Conveyed
Property for the Purchase Price (as defined in Section 2.4 below)
and on the terms and conditions set forth herein, together with the legal
and/or beneficial rights to the following pertaining to the Conveyed Property:

 

a.                                       The
Land and all buildings and other improvements situated thereon, including, but
not limited to the clubhouses, maintenance buildings, golf practice facilities,
tennis facilities, and swimming facilities (collectively, the “Improvements”)
(hereinafter the Land and Improvements thereon shall collectively be referred
to as the “Property”);

 

b.                                      All
and singular the rights and appurtenances pertaining thereto, including, but
not limited to, any right, title and interest of Seller in and to adjacent
streets, roads, alleys, easements and rights-of-way;

 

c.                                       All
Tangible Personal Property and other personal property located on the Property,
including, but not limited to, the tangible personal property more particularly
described on Exhibit “B” attached hereto and made a part hereof,
excluding the Pro Shop Inventory;

 

d.                                      All
of Seller’s other permits, rights, licenses, interests and properties
pertaining thereto, to the extent the same are assignable, including, without
limitation, all of Seller’s right, title and interest in and to all water and
sewer connections, development rights, including any vested rights, concurrency
rights, zoning rights and site plan rights relating thereto, including without
limitation the permits and licenses more particularly described in Exhibit “I”
attached hereto and made a part hereof (the “Permits and Licenses”);

 

e.                                       All
water rights, riparian rights, appropriative rights, water allocations and
water stock, or equivalent (collectively, the “Water Rights”);

 

 

f.                                         All
of Seller’s right, title and interest (if any) in and to all minerals, oil, gas
and other hydrocarbons located in or beneath the Land, along with all rights to
surface and subsurface entry (collectively, the “Mineral Rights”);

 

g.                                      All
rights in and to any Intangible Property at or related to the Property
(including the Liquor Licenses);

 

h.                                      All
rights in and to the Property; and

 

i.                                          All
product and service warranties and guaranties.

 

The
above-described Land, Improvements, Tangible Personal Property, Permits and
Licenses, Water Rights, Mineral Rights, Intangible Property, appurtenances,
personalty, property, rights, interests and properties and property referenced
in Subsections a through i of this Section 2.1 are hereinafter
collectively sometimes referred to as the “Conveyed Property” (which is
synonymous with the “Club Facilities”). 
The Conveyed Property shall exclude the Excluded Assets.

 

2.2                                 Assumption of Obligations.  Seller acknowledges that it will continue to
be responsible for any of Seller’s liabilities or obligations related to the
Conveyed Property arising and accruing prior to the Closing Date, unless
otherwise expressly agreed to herein. 
The Purchaser agrees to assume all of Seller’s rights, duties, and
obligations under the Space Leases, the Club Contracts, and the Permits,
accruing from and after the Closing Date, except for those obligations
expressly excluded in Exhibit 2.2 attached hereto (the “Excluded
Obligations”), which shall remain the obligations of the Seller from and
after the Closing Date.  The assignment
and assumption of such rights and obligations shall be evidenced in the
Assignment of Intangible Property.

 

2.3                                 [Reserved].

 

2.4                                 Purchase Price.  The total purchase price (the “Purchase
Price”) to be paid to Seller by Purchaser for the Conveyed Property is Four
Million One Hundred Thousand ($4,100,000) Dollars, subject to all credits,
adjustments and prorations called for herein. 
The Purchase Price shall be paid by Purchaser as follows:

 

a.                                       Delivery
of Earnest Money Deposit.  On or
before three (3) business days following the Effective Date, Purchaser
shall deliver or has delivered to Escrow Agent by wire transfer of immediately
available good funds the amount of $41,000, and such amount (together with any
interest earned thereon) shall be considered earnest money (the “Earnest
Money Deposit”) under this Agreement and shall be fully refundable to
Purchaser during the Due Diligence Period in the event Purchaser chooses not to
proceed with the purchase hereunder.  The
Earnest Money Deposit, as applicable, shall be referred to herein as the “Earnest
Money”.  Subject to the provisions of
Article 5 below and Purchaser’s right to terminate this Agreement
in its sole and exclusive discretion under Section 4.1(d), the
Earnest Money shall be non-refundable to Purchaser in the event that Purchaser
does not close under this Agreement in accordance with the terms of this
Agreement.  In the event that one of the
Purchaser Closing Conditions or Mutual Closing Condition is not satisfied prior
to Closing, or termination of this Agreement for any other reason except
default by Purchaser, the Earnest Money shall be refundable to Purchaser.

 

 

ANY EARNEST MONEY PAID TO
OR RETAINED BY SELLER AS LIQUIDATED DAMAGES UNDER THIS AGREEMENT SHALL BE
SELLER’S SOLE MONETARY REMEDY IF PURCHASER FAILS TO CLOSE THE PURCHASE OF THIS
PROPERTY.  THE PARTIES HERETO EXPRESSLY
AGREE AND ACKNOWLEDGE THAT SELLER’S ACTUAL MONETARY DAMAGES IN SUCH EVENT WOULD
BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN AND THAT THE LIQUIDATED DAMAGES
(I.E., THE VALUE OF THE EARNEST MONEY) STATED ABOVE REPRESENTS THE PARTIES’
REASONABLE ESTIMATE OF SUCH DAMAGES.  THE
PAYMENT OF ANY SUCH DEPOSIT BY PURCHASER TO SELLER AS LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE LIQUIDATED
DAMAGES TO SELLER.

 

b.                                      Payment
of Purchase Price.  At Closing,
Purchaser shall pay to Seller the Purchase Price, in cash (i) less
the Earnest Money, which shall be remitted by the Escrow Agent to Seller at
Closing and credited against the Purchase Price, (ii) plus or minus
adjustments and prorations as provided in Section 6.2.

 

c.                                       Food
and Beverages and Pro Shop Inventory. 
In addition to the foregoing, at Closing, Purchaser shall pay cash for
Food and Beverages Cost and Pro Shop Inventory Costs as described in Section 6.2(b).

 

d.                                      Contingent
Value Rights. In addition to the foregoing, Seller and Purchaser agree to
the following three contingent incentive payments (“Contingent Value Rights”),
each of which is independent of the others:

 

(i)                                     If
Purchaser’s Gross Revenue in the year ending 12/31/2009 equals or exceeds $6.2
million, then Purchaser shall pay to Seller the sum of $200,000.

(ii)                                  If
Purchaser’s Gross Revenue in the year ending 12/31/2010 equals or exceeds $7.2
million, then Purchaser shall pay to Seller the sum of $200,000.

(iii)                               If
Purchaser’s Gross Revenue in the year ending 12/31/2011 equals or exceeds $8.2
million, then Purchaser shall pay to Seller the sum of $200,000.

 

Any payment earned
hereunder shall be due and payable on or before February 1 of the year
following (e.g., on or before 2/01/2010 for calendar year 2009, etc.).  As utilized herein, “Gross Revenue” is
defined as revenue from club dues, merchandise sales, green fees, private
functions, food sales and any and all club operating revenue, but excluding
equity membership receipts, initiation fees, and proceeds from loans.  During the period from Closing through
12/31/2011, Seller upon request from Purchaser would provide consulting
services pertaining to Seller’s historical lines of business, vendor
relationships, property-specific issues, and industry-wide opportunities, as
well as input on general financial and operational matters.  In the event that Michael Pearce no longer
serves as Seller’s CEO or is otherwise unavailable and is not replaced by an
alternative executive reasonably acceptable to Purchaser, then Purchaser shall
have the option of terminating any remaining unearned Contingent Value Rights.

 

 

2.5                                 Allocation of Purchase Price.  Seller and Purchaser agree to cooperate in
allocating the Purchase Price between land and improvements, the buildings, and
equipment and other personal property prior to the Closing Date.

 

ARTICLE III

[Reserved]

 

ARTICLE IV

Due Diligence Period;
Contingencies; Critical Dates

 

4.1                                 Due Diligence Period.  During the period of time beginning on the
Effective Date and ending ninety (90) days after the Effective Date (“Due
Diligence Period”), Purchaser shall have the following due diligence rights
concerning the Property:

 

	
   

  	
  a.

  	
  Seller shall provide Purchaser the following items
  within five (5) business days after the Effective 

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  i.

  	
   

  	
  Surveys related to the Property dated March 16,
  2004 for The Country Club at Woodcreek Farms and March 17, 2004 for
  Wildewood Country Club, and prepared by United Design Services, Inc.
  (the “Existing Survey”);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ii.

  	
   

  	
  Phase I environmental report related to the
  Property, dated February 28, 2004, and prepared by Arm Environmental Services
  (the “Existing Phase I”);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  iii.

  	
   

  	
  Seller’s operating reports for three (3) fiscal
  years prior to the Effective Date;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  iv.

  	
   

  	
  Commitment for ALTA Loan Policy and for ALTA Owner’s
  Policy, issued by Chicago Title Insurance Company with an effective date of
  October 1, 2005 (the “Existing Title Commitment”);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  v.

  	
   

  	
  a list of FF&E attached or to be attached hereto
  as Exhibit B;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  vi.

  	
   

  	
  a list of Excluded Assets attached or to be attached
  hereto as Exhibit H;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  vii.

  	
   

  	
  a list of Excluded Obligations attached or to be
  attached hereto as Exhibit 2.2;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  viii.

  	
   

  	
  a list of all Members of the Club with their
  particular use rights attached or to be attached hereto as Exhibit L;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ix.

  	
   

  	
  a list of all Club Contracts attached or to be
  attached hereto as Exhibit K and copies of the Club Contracts;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  x.

  	
   

  	
  a list of all Space Leases attached or to be
  attached hereto as Exhibit J, and copies of the Space Leases;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  xi.

  	
   

  	
  a list of the Patron Property Inventory attached or
  to be attached hereto as Exhibit 5.4(c);

  
	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
  xii.

  	
   

  	
  a list of Club Employees attached or to be attached
  hereto as Exhibit 6.3;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  xiii.

  	
   

  	
  a list of claims or litigation against Seller by
  Club Employees or any other parties attached or to be attached hereto as Exhibit 5.1(b) or
  Exhibit 5.1(i), respectively;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  xiv.

  	
   

  	
  a list of any work that may give rise to a
  mechanic’s lien attached or to be attached as Exhibit 5.1(k); and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  xv.

  	
   

  	
  the most recent title policy(ies) covering the
  Property.

  

 

The materials described
in this Section 4.1, collectively, shall be referred to herein as
the “Seller Due Diligence Materials”.

 

b.                                      Purchaser
shall be entitled to review and either accept or reject anything contained in
the Seller Due Diligence Materials.  Any
objection to any portion of the Seller Due Diligence materials shall be
presented to Seller in writing detailing the bases for the objection.  Subject to the provisions of Section 4.2,
any objection to any portion of the Seller Due Diligence Materials not
presented to Seller on or before thirty (30) days after the Effective Date
shall be deemed waived.

 

c.                                       Purchaser
is entitled to inspect all pertinent books, records, proformas, plans, and cost
estimates, as well as any other documents, surveys, building plans, leases, contracts,
environmental permits, title policies, and other materials relevant to the
Conveyed Property, and may undertake or cause to have undertaken, at Purchaser’s
sole cost and expense, whatever tests, studies and due diligence investigations
related to the Club Facilities as Purchaser may determine in Purchaser’s sole
discretion and obtain written reports thereon, including without limitation
structural investigation of all buildings located on the Conveyed Property,
soil testing, update of the Existing Survey or Existing Phase I Report (the “Purchaser
Due Diligence Materials”).  On or
before thirty (30) days after the Effective Date, Purchaser shall furnish
Seller a copy of an updated Existing Phase I and notify Seller of its
objections to any matters contained in the updated Existing Phase I.  In the event Purchaser determines that a
Phase II environmental report is necessary, Purchaser, at its expense, must
order the Phase II environmental report within three (3) business days of
its receipt of the updated Existing Phase I.

 

d.                                      If,
Purchaser, in its sole and absolute discretion, timely rejects any item
contained in either the Seller Due Diligence Materials or the Purchaser Due
Diligence Materials or otherwise chooses not to proceed with the purchase hereunder
in its sole and absolute discretion, Purchaser’s sole remedy and right shall be
to terminate this Agreement by delivering written notice of termination to
Seller before the end of the Due Diligence Period, in which case this Agreement
shall be of no further force and effect and the Earnest Money shall be promptly
returned to Purchaser.

 

4.2                               Title  Insurance
and  Survey.

 

a.                                       On
or before ten (10) days after the Effective Date, Seller shall obtain, at
its sole cost and expense, a commitment, for Purchaser for the issuance of a
policy of title insurance (the “Title Commitment”) applicable to the
Club Facilities dated no earlier than the date hereof, from Chicago Title
Insurance Company or an alternate title insurance company 

 

 

approved by Purchaser
(the “Title Company”).  The Title
Commitment shall contain no exceptions relating to mechanic’s liens,
possession, judgments, filled lands, gap or other exceptions not reasonably
acceptable to Purchaser, and Seller shall execute such standard documents as
may be required by the Title Company to remove all such exceptions.  General exceptions one through four shall be
deleted from the Title Commitment.  In
the event Purchaser within said ten-day period fails to acquire an updated
survey or a waiver of the requirement of an updated survey as set forth in Section 4.2(c),
the Title Commitment shall include a full survey exception.

 

b.                                      Purchaser
shall review the Title Commitment within ten (10) days of receipt thereof
and notify Seller within such ten (10) day period of its objections, if
any, to any matters affecting title to the Club Facilities, reasonably objected
to by Purchaser (the “Unpermitted Title Matters”); provided,
however, that any item appearing in the Existing Title Commitment or
Existing Survey must be objected to as provided in the above Section 4.1.  Seller shall have until the Closing Date to
remedy or remove objection(s) timely made by Purchaser to Purchaser’s
reasonable satisfaction.  Seller agrees
that it will use its good faith diligent efforts to remove or make acceptable
to Purchaser any Unpermitted Title Matter to Seller’s title to the Club
Facilities.  If Seller shall fail despite
such good faith diligent efforts to remove or make acceptable any Unpermitted
Title Matter then, at Purchaser’s option, this Agreement shall be null and void
and all further obligations of the parties hereunder shall cease.  In such event, the Earnest Money shall be
promptly returned to Purchaser.

 

c.                                       Purchaser
shall, at its own expense, contract to have an updated survey of the Club
Facilities, which shall be certified to Purchaser, Title Company and any
designee of Purchaser; provided, however,
that in the event Purchaser within five business days of the Effective Date
provides Seller (i) a commitment from a title insurance company to insure
title based on the Existing Surveys without a full update as long as an
inspection letter is available and (ii) Purchaser’s proposed lender
confirms in writing that an updated Existing Survey will not be required by
Purchaser’s proposed lender based on the title insurance being available
without a standard survey exception, no updated Existing Surveys need be
obtained as long as the required inspection letter is provided to Seller within
the time period otherwise set forth to provide the updated Existing
Surveys.  If an updated survey is
determined to be necessary, Purchaser shall provide Seller with the updated
Existing Surveys on or before forty-five (45) days after the Effective Date.  Within said forty-five (45) day period, Purchaser
shall notify Seller of any survey matters to which Purchaser objects; provided, however, that any item
must be objected to as provided in the above Section 4.1.  Seller shall have until the Closing Date to
remedy or remove objection(s) timely made by Purchaser to Purchaser’s
reasonable satisfaction.  If Seller shall
fail despite such good faith diligent efforts to remove or make acceptable any
such objections to the survey then, at Purchaser’s option, this Agreement shall
be null and void and all further obligations of the parties hereunder shall
cease.  In such event, the Earnest Money
shall be promptly returned to Purchaser.

 

4.3                                 The
Title Commitment shall be supplemented and updated through the Closing and the
recording of the Deed, and the Title Company shall deliver a marked and
initialed commitment to Purchaser, concurrently with the Closing, indicating
that upon recording of the Deed, the Title Company will issue the title policy
to Purchaser insuring that fee simple title to the Club Facilities shall be
vested in Purchaser, subject only to those matters set forth in the Title
Commitment and not objected to by Purchaser in writing during the Due Diligence
Period (the “Permitted Exceptions”).

 

 

4.4                                 Critical Dates.  Concurrent with the Due Diligence Period, the
parties have agreed on certain other benchmark dates (“Critical Dates”):

 

a.                                       Environmental.  On or before the 30th day
following the Effective Date, the Purchaser shall furnish Seller a copy of an
updated Existing Phase I and notify Seller of its objections to any matters
contained in the updated Existing Phase I as set forth in Section 4.1.c.

 

b.                                      Survey.  If an updated Existing Survey is required, on
or before the 45th day following the Effective Date, the Purchaser
shall provide Seller with an updated Existing Survey and in any event notify
Seller of any matters reflected in the survey and objected to by Purchaser as
set forth in Section 4.2.c

 

c.                                       Equity.  On or before the 70th day
following the Effective Date, the Purchaser shall provide to Seller
satisfactory evidence that a minimum of $500,000 of participating member equity
funds have been delivered in trust to the escrow account established by
Purchaser for application to the purchase price at Closing.

 

d.                                      Commitment Letter from Lender.  On or before the 90th day
following the Effective Date, the Purchaser shall provide to Seller a copy of a
commitment letter from a banking institution for the portion of the purchase
price that Purchaser proposes to finance (the “Borrowed Funds”).  The commitment letter shall be accompanied by
(i) an updated statement of participating member equity funds being held
by the Escrow Agent, and (ii) a statement by Purchaser that the commitment
letter has been accepted by Purchaser and that the participating member equity
funds and the Borrowed Funds available through the loan commitment are
sufficient to satisfy the Purchaser’s obligation at Closing.

 

e.                                       Closing.  On or before the 120th day
following the Effective Date, the Purchaser shall close the transaction.

 

ARTICLE V

Representations,
Warranties, Covenants and Conditions Precedent

 

5.1                               Seller’s Representations and Warranties.  Each matter set forth in this Section 5.1
is warranted to be true and correct as of the date hereof and as of the Closing
Date.  The representations, warranties
and covenants shall survive Closing and the delivery of the Deed as limited by
the terms of Section 8.3(a). 
Prior to Closing, Seller shall notify Purchaser if Seller learns of any
fact or circumstance that causes, or has a reasonable likelihood of causing, a
representation or warranty of Seller’s hereunder to be materially untrue or
misleading.  Seller acknowledges and
agrees that the following representations, warranties and covenants in this Section 5.1
are a material inducement to Purchaser executing this Agreement and without the
representations, warranties and covenants, Purchaser would not have entered
into this Agreement:

 

a.                                       Seller’s
execution of and performance under this Agreement is made pursuant to authority
validly and duly conferred upon Seller. 
This Agreement constitutes a legal, valid and binding obligation of
Seller enforceable in accordance with its terms.  This Agreement and the transaction herein
contemplated will not conflict with or result in a breach under any agreement
or instrument by which Seller or the Conveyed Property is presently bound, and
will 

 

 

not constitute a
violation of any applicable law, rule, regulation, judgment, order or decree of
any governmental entity or court to which Seller or the Property is
subject.  Golf Trust of America, L.P. is
a limited partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware and is authorized to do business in the
State of South Carolina.  GTA Stonehenge,
LLC is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of South Carolina and is authorized to do
business in the State of South Carolina.

 

b.                                      There
are no pending or threatened matters of litigation, administrative actions or
arbitration pending against the Seller in respect to the Conveyed Property, or
any pending or threatened eminent domain, condemnation proceeding or
governmental taking of the Conveyed Property or any part thereof and no general
assignment or insolvency proceedings are pending or threatened against Seller
other than as set forth on Exhibit 5.1(b).  As of the Effective Date, Seller has no
knowledge to believe that the information being submitted to Purchaser in the
Seller Due Diligence Materials is materially inaccurate.  As of the Effective Date and the Closing
Date, to the best of Seller’s knowledge, other than as may be indicated in the
attached Exhibits, the Club Contracts or other contracts affecting the Property
are in good standing.  As of the
Effective Date, to the best of Seller’s knowledge there are no pending or
threatened matters of litigation, demands, administrative actions or
arbitration pending by or against Seller in respect to any of the Club
Contracts or other contracts affecting the Property.  Seller shall immediately notify Purchaser of
a change in the factual status of its representations in the event any of its
representations are no longer true.

 

c.                                       Seller
has good and marketable title to the Land and Improvements, free and clear from
any liens and encumbrances except as disclosed in this Agreement, the Exhibits,
the Seller Due Diligence Materials, or the Purchaser Due Diligence
Materials.  Unless expressly indicated,
Seller has not transferred or leased any of the Land, Improvements, Tangible
Personal Property or Intangible Personal Property that it owns, and the sale,
transfer or lease of personal property is in the ordinary course of business.

 

d.                                      Seller
has not entered into any agreements with any third parties relating to the
right to use the Conveyed Property except for matters set forth in the Club
Contracts.

 

e.                                       Seller
has no knowledge of nor has received any actual notice that it is or may be
liable for the release or threatened release of any hazardous materials or
violations of environmental laws in connection with the Conveyed Property.

 

f.                                         Seller
shall execute and deliver a quit-claim Bill of Sale to Purchaser for all
Tangible Personal Property and a quit-claim Assignment of Intangible Property
for all Intangible Property, but makes no representations or warranties
regarding the ownership in such property, but has no notice of any encumbrances
or liens or claims of title which have not been otherwise disclosed to
Purchaser by Seller in this Agreement, the Exhibits, and/or the Seller Due
Diligence Materials.

 

 

g.                                      Seller
has duly filed in proper form all federal, state, and local income, franchise,
sales, and other tax returns and all other reports required to be filed by law
or any applicable rule, regulation, order, writ or decree or any court or
governmental department, commission, board, bureau, agency or
instrumentality.  All taxes, fees,
charges, premiums and assessments of whatsoever nature, upon or related to any
of the Conveyed Property or the operation thereof (including all employment
related obligations), which are due or payable, have been paid, other than
those payable without penalty or interest and for the payment of which, in
respect of all periods prior to Closing hereunder, adequate provision has been
made.  All returns and reports required
to be filed, and all taxes, fees, and assessments required to be paid prior to
the Closing will have been filed or paid, prior to the Closing.  There are no tax audits pending nor any
outstanding agreements or waivers extending the statutory period of limitations
applicable to any federal, state or local income tax return for any
period.  To Seller’s best knowledge, no
tax deficiencies have been determined nor proposed tax assessments charged
against Seller (nor is there any basis therefor).

 

h.                                      There
are no claims against Seller and no litigation to which Seller is a party
existing as of or arising after the Effective Date involving past or present
Club Employees and/or union or labor disputes, except as set forth in the “Employee
Claims Schedule” attached hereto as Exhibit 5.1(i).

 

i.                                          There
are no contracts with labor unions applicable to the Club Facilities.

 

j.                                          There
are currently no pending, and Seller has no knowledge of any threatened,
lawsuits or administrative proceedings against Seller or to which any of the
Conveyed Property is subject except as may be disclosed to Purchaser by Seller
in Exhibit 5.1(b) and Exhibit 5.1(i).

 

k.                                       To
the best of Seller’s knowledge, no work has been performed or is in progress by
Seller at and no material has been furnished to the Land or Improvements, which
might give rise to mechanic’s, materialman’s, or other liens against such real
estate, improvements or personalty or any portion of the Conveyed Property
except as may be disclosed to Purchaser by Seller in Exhibit 5.1(k).

 

5.2                                 Representations and Warranties of Purchaser.  Each matter set forth herein is warranted to
be true and correct as of the date hereof and as of the Closing Date.  The representations, warranties and covenants
shall survive Closing and the delivery of the Deed as limited by the terms of Section 7.3(a).  Prior to Closing, Purchaser shall notify
Seller if Purchaser learns of any fact or circumstance that causes, or has a
reasonable likelihood of causing, a representation or warranty of Purchaser’s
hereunder to be materially untrue or misleading.  Purchaser acknowledges and agrees that the
following representations, warranties and covenants are a material inducement
to Seller executing this Agreement and without the representations, warranties
and covenants, Seller would not have entered into this Agreement:

 

a.                                       Purchaser’s
execution of and performance under this Agreement is made pursuant to authority
validly and duly conferred upon Purchaser. 
This Agreement constitutes a legal, valid and binding obligation of
Purchaser enforceable in accordance with its terms.  This Agreement and the transaction herein
contemplated will not conflict with or result in a breach under any agreement
or instrument by which Purchaser is presently bound, and will not constitute a
violation of any applicable law, rule, regulation, judgment, order or decree of
any governmental entity or court to which Purchaser is subject.

 

 

b.                                      WCWW
Committee, LLC is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of South Carolina and is
authorized to do business in the State of South Carolina.

 

c.                                       If
Seller has knowledge prior to Closing of a breach of any representation or
warranty made by Purchaser in this Agreement and Seller nevertheless elects to
close this transaction, such representation or warranty by Purchaser with
respect to such matter shall be deemed to be modified to reflect such Seller’s
knowledge.

 

5.3                                 Knowledge. “Knowledge” or “knowledge”
as used herein means (i) the actual knowledge of the Seller, and expressly
excluding (A) any matter disclosed in any exhibits or schedules to this
Agreement; (B) any matter related to the Conveyed Property for which
Purchaser has actual knowledge; (C) any matter disclosed in any Seller Due
Diligence Materials or any other documents or materials provided by Seller to
Purchaser prior to Closing, and (D) any matter disclosed in the Purchaser
Due Diligence Materials; and (ii) with respect to Purchaser, the actual
knowledge of the Purchaser.

 

5.4                               Additional Covenants.  In addition to other covenants contained in
this Agreement, Seller and Purchaser, as applicable, covenant and agree as
follows:

 

a.                                       No
Leases.  Prior to Closing, Seller shall
enter into no material leases or agreements affecting the Club Facilities or
rent any portion of the Club Facilities, unless it has the consent of
Purchaser, which shall not be unreasonably withheld.

 

b.                                      Members.  With respect to the Members who hold memberships
as described on Exhibit L, Purchaser, on behalf of itself and its
successors and assigns, agrees to honor such memberships (including the
refundability obligations of any related membership initiation fees) as they
are described and defined on Exhibit L.

 

c.                                       Guest
Property in Seller’s Possession on Closing Date.  Property of guests and members of the Club
Facilities in Seller’s care, possession or control (e.g., golf clubs) on the
Closing Date shall be handled in the following manner:  all guest and member baggage and other
property checked and left in the possession, care and control of Seller shall
be listed in an inventory to be prepared in duplicate and signed by Seller’s
and Purchaser’s representatives on the Closing Date (such property, “Patron
Property Inventory”).  A list of the
Patron Property Inventory is or will be attached hereto as Exhibit 5.4(c).  Purchaser shall be responsible from and after
the Closing Date for all Patron Property Inventory, and Purchaser agrees to
indemnify, defend, and hold Seller harmless from and against any claim arising
out of or with respect to the Patron Property Inventory.  Seller shall be responsible for all matters
accruing prior to the Closing Date for all Patron Property Inventory, and
Seller agrees to indemnify, defend, and hold Purchaser harmless from and
against any claim arising out of or with respect to the Patron Property
Inventory accruing or arising prior to closing.

 

5.5                                 Seller’s Covenants.  In addition to other covenants of Seller
contained in this Agreement, Seller covenants and agrees as follows:

 

a.                                       After
the Effective Date, Seller shall enter into no leases or agreements affecting
the Property or rent any portion of the Property, unless approved by Purchaser.

 

 

b.                                      Prior
to the Closing Date, Seller agrees to give Purchaser reasonable access to the
Club Facilities, Club Employees, and the records of the Club Facilities.

 

c.                                       From
the Effective Date hereof until the Closing Date, the Seller shall operate the
Club Facilities in a commercially reasonable manner at least consistent with
existing operational practices.

 

5.6                                 Conditions to Seller’s Obligations.  Seller’s obligations to close the
transactions contemplated under this Agreement are subject to the satisfaction
at or prior to Closing of the following conditions precedent (the “Seller
Closing Conditions”):

 

a.                                       Seller
Board Approval.  Seller shall have
obtained approval from the relevant board of directors for the transaction
contemplated in this Agreement, although if Seller does not provide notice to
Purchaser that such approval has not been obtained on or before the third (3rd) business day after the Effective Date (the “Board
Approval Date”), this condition will no longer be deemed a Seller Closing
Condition; provided, however, if the terms of this Agreement are amended after
the end of the Board Approval Date, Seller reserves the right to obtain
approval from its board of directors with respect to the amendment within five (5) business
days after the amendment is agreed upon by Seller and Purchaser.  Prior to the Closing Seller shall deliver to
Purchaser documents reasonably requested by Purchaser that evidence the Seller
Board Approval.

 

b.                                      Receipt
of the Purchase Price.  Purchaser
shall have paid the Purchase Price to Seller pursuant to Section 2.

 

c.                                       Purchaser’s
Deliveries. Purchaser shall have delivered to Seller all of the Closing
Documents, settlement statement, and other items required by the terms of this
Agreement.

 

d.                                      Representations
and Warranties. The representations and warranties made by Purchaser in
this Agreement shall be true and correct in all material respects as of the
Closing (unless such representation or warranty is made expressly as of another
date).

 

e.                                       Covenants
and Obligations. Purchaser shall have performed its covenants and
obligations under this Agreement in all material respects.

 

The
Seller Closing Conditions are for the benefit of Seller, and Seller shall have
the right to waive any of the Seller Closing Conditions at or prior to Closing.

 

5.7                                 Conditions to Purchaser’s Obligations.  Purchaser’s obligations to close the
transactions contemplated under this Agreement also are subject to the
satisfaction at or prior to Closing of the following conditions precedent (the “Purchaser
Closing Conditions”):

 

a.                                       Seller’s
Deliveries. Seller shall have delivered to the Title Company all of the
closing documents and other items set forth in Section 6.7.

 

 

b.                                      Representations
and Warranties. The representations and warranties made by Seller in this
Agreement (as the same may be updated pursuant to the terms hereof) shall be
true and correct in all material respects as of the Closing (unless such
representation or warranty is made expressly as of another date).

 

c.                                       Covenants
and Obligations. Seller shall have performed its covenants and obligations
under this Agreement in all material respects.

 

d.                                      Title
Policy. The Title Company shall have committed to issue an owner’s title
insurance policy to Purchaser and mortgagee title insurance policy to Purchaser’s
lender together with requested endorsements in accordance with the Title
Commitment, insuring Purchaser’s fee simple interest in the Property as of the
Closing Date, with gap coverage from the last title update prior to Closing
through the date of recording, and as otherwise set forth in Section 4.2.

 

The
Purchaser Closing Conditions are for the benefit of Purchaser, and Purchaser
shall have the right to waive any of the Purchaser Closing Conditions at or
prior to Closing.

 

5.8                                 Condition Precedent to the Obligations of Both
Seller and Purchaser. The respective obligations of Seller to
close the transaction contemplated under this Agreement are subject to the
satisfaction at or prior to the Closing of the following condition precedent
(the “Mutual Closing Condition”):

 

a.                                       Adverse
Proceedings. No preliminary or permanent injunction or other order, decree
or ruling shall have been issued by a court of competent jurisdiction or by any
governmental authority, and no applicable law shall have been enacted (or
passed which upon enactment) which would make illegal or invalid or otherwise
prevent the consummation of the transaction contemplated under this Agreement.

 

5.9                                 Frustration of Closing Conditions.
Seller and Purchaser may not rely on the failure of the Seller Closing
Conditions or Purchaser Closing Conditions, respectively, if such failure was
caused by such Party’s failure to act in good faith or to use its commercially
reasonable efforts to cause the Closing to occur.

 

5.10                           “AS IS” Nature of Sale.  Except as otherwise set forth in this
Agreement, Purchaser acknowledges and agrees that Seller has not made, does not
make and specifically negates and disclaims any representations, warranties,
promises, covenants, agreements or guaranties of any kind or character
whatsoever, whether express or implied, oral or written, past, present or
future of, as to, concerning or with respect to: (a) the value, nature,
quality or condition of the Conveyed Property, including, without limitations,
the water, soil and geology; (b) the income to be derived from the
Conveyed Property; (c) the suitability of the Conveyed Property for any
and all activities and uses which Purchaser may conduct thereon; (d) the
compliance of or by the Conveyed Property or its operation with any laws,
rules, ordinances or regulations of any applicable governmental authority or
body; (e) the habitability, merchantability, marketability, profitability
or fitness for a particular purpose of the Conveyed Property; (f) the
manner or quality of the construction of materials, if any, incorporated into
the Conveyed Property, and specifically, that except as otherwise set forth in
this Agreement, Seller has not made, does not make, and specifically disclaims
any representations regarding compliance with any environmental protection, pollution
or land use laws, rules, regulations, 

 

 

order or requirements,
including, without limitation, the presence of any asbestos, petroleum and
petroleum by-products, UREA formaldehyde foam insulation, polychlorinated
biphenyls, lead paint, radon, any and all substances now or hereafter
designated as “hazardous waste”, “toxic substances”, “solid waste”, “toxic
pollutant”, “pollutant” as defined by any Environmental Laws (as hereinafter
defined), and any substance now or hereafter regulated by any Environmental
Laws (said substances are collectively herein defined as “Environmental
Contaminants”).  “Environmental Laws”
shall mean the Comprehensive Environmental Response Compensation and Liability
Act of 1980, 42 U.S.C. § 9601 et seq., and
any regulations promulgated thereunder; the Resource Conservation and Recovery
Act, 42 U.S.C. § 6901 et seq., and
any regulations promulgated thereunder; the Toxic Substances Control Act, 15
U.S.C. § 2601 et seq., and any regulations
promulgated thereunder; the Hazardous Materials Transportation Act, 49 U.S.C. §
1801 et seq., and any regulations promulgated
thereunder; the Clean Air Act, 42 U.S.C. § 7401 et seq.,
and any regulations promulgated thereunder; the Clean Water Act, 33 U.S.C. §
1251 et seq., and any regulations promulgated
thereunder; any amendments to the foregoing statutes and regulations; and any
other similar statute, regulations or ordinance now or hereafter enacted.  Purchaser further acknowledges and agrees
that having been given the opportunity to inspect the Conveyed Property,
Purchaser is relying solely on its own investigation of the Conveyed Property
and not on any information provided or to be provided by Seller.  Purchaser further acknowledges and agrees
that any information prepared by persons other than Seller which is provided or
to be provided by or on behalf of Seller with respect to the Property
including, without limitation, any reports (including without limitation any
environmental assessments reports), maps, or documents provided to Purchaser,
were obtained from a variety of sources and that Seller has not made any
independent investigation or verification of such information and makes no
representations as to the accuracy or completeness of such information.  Seller is not liable or bound in any manner
by any oral or written statements, representations or information pertaining to
the Conveyed Property, or the operation thereof, furnished by any real estate
broker, agent, employee, servant or other person.  Purchaser further acknowledges and agrees
that to the maximum extent permitted by law, that except as otherwise set forth
in this Agreement, the sale of the Conveyed Property as provided for herein is
made on an “AS IS” and “WHERE IS” condition and basis and “WITH ALL FAULTS”.  Purchaser and anyone claiming by, through or
under Purchaser hereby fully and irrevocably releases Seller, its employees,
officers, directors, representatives and agents from any and all claims that it
may now have or hereafter acquire against Seller, its employees, officers,
directors, representatives and agents for any cost, loss liability, damage,
expense, demand, action or cause of action arising from or related to any
construction defects, errors, omissions or other conditions, Environmental
Contaminants, Environmental Laws or other environmental matters.  Unless Seller and Purchaser specifically
agree otherwise in writing, it is understood and agreed that the Purchase Price
has been adjusted by Seller to take into account the “AS IS” and “WHERE IS”
nature of the Conveyed Property and the Conveyed Property is being purchased by
Purchaser subject to the foregoing and any specific disclosures made pursuant
to any other paragraph of this Agreement.  
The provisions of this Section 5.10 shall survive the
Closing.

 

Purchaser’s
Initials: WM

 

 

5.11                           Amendment of Seller Due Diligence Materials;
Knowledge. 
Notwithstanding anything to the contrary in this Agreement, Seller shall
have the right to amend and supplement the Seller Due Diligence Materials
provided pursuant to this Agreement from time to time prior to the Closing, and
shall so amend and supplement the Seller Due Diligence Materials at the Closing
before delivery of the Closing Documents to the extent that (i) such
information changes after the date of delivery of the Seller Due Diligence
Materials as a result of operation of the Property in accordance with the terms
of this Agreement, or (ii) Seller as of the date the Seller Due Diligence
Materials were delivered did not have knowledge of the matter being disclosed in
such amendment or supplement, in each case by providing a written copy of such
amendment or supplement to Purchaser. 
Upon the notice and delivery to Purchaser of any amended or supplemented
Seller Due Diligence Materials pursuant to clause (i) above, all
obligations of the parties shall remain unchanged.  Upon notice and delivery to Purchaser of any
amended or supplemented Seller Due Diligence Materials pursuant to clause (ii) above,
Purchaser shall have ten (10) business days to review such Seller Due Diligence
Materials and to provide written notice to Seller that it elects to terminate
this Agreement, although Purchaser shall only have the right to terminate this
Agreement if the information contained in the Seller Due Diligence Materials
creates a previously undisclosed material obligation for Purchaser or adversely
impacts the Property in a previously undisclosed material manner.

 

If Purchaser has knowledge prior to Closing
of a breach of any representation or warranty made by Seller in this Agreement
and Purchaser nevertheless elects to close this transaction, such
representation or warranty by Seller with respect to such matter shall be
deemed to be modified to reflect such Purchaser’s knowledge.  Purchaser acknowledges that any information
and documents regarding the Property that are provided to Purchaser are subject
to the terms of Section 5.10 herein, including without limitation
the express disclaimers and releases provided in Section 5.10.  Purchaser agrees that any disclosure by
Seller does not imply that Seller has disclosed all information concerning the
Conveyed Property nor does Purchaser have the right to infer such.  Purchaser acknowledges that it has had the
time and opportunity to conduct the due diligence review and investigation that
it deems necessary or appropriate with regard to the purchase of the Conveyed
Property.  Purchaser shall be deemed to
have accepted the Property in its “AS IS” and “WHERE IS” condition and “WITH
ALL FAULTS” without any obligation upon Seller to cure any circumstances or
conditions concerning the Property, unless specifically agreed otherwise in
writing.  The provisions of this Section 5.11
shall survive the Closing.

 

ARTICLE VI

Closing Matters

 

6.1                                 Closing, Default, Prorations and Expenses.

 

a.                                       Closing.  Subject to the conditions set forth
heretofore and hereinafter, the closing of this transaction (the “Closing”)
shall take place on the Closing Date. 
The Closing shall be conducted in a manner so that all documents and
closing statements are executed in counterpart by each of the parties, and
delivered to the Title Company prior to or on the Closing Date.  The obligation of Purchaser to close the
transaction contemplated herein is contingent upon title to the Property being
shown to be good and marketable, subject only to the Permitted Exceptions, and
the Title Company committing to issue a title policy in the form required
hereunder and all other conditions precedent to Closing having been satisfied.

 

 

b.                                      Termination
of Agreement; Default.  If this
Agreement is terminated solely due to Purchaser’s failure to perform or close
the transaction hereunder, except as permitted pursuant to the terms and
conditions hereof, then as Seller’s sole remedy and upon notice to Purchaser,
Seller may declare this Agreement terminated, and Escrow Agent shall pay over
to Seller the Earnest Money as liquidated damages, and thereupon the parties
hereto shall be relieved of all obligations hereunder.  If this Agreement is terminated due to Seller’s
failure to perform or close the transaction hereunder, then Purchaser may sue
for specific performance only, but not for damages.  The remedies set forth in this Section shall
be the sole and exclusive remedies of the parties.

 

c.                                       Closing
Costs.  Seller shall pay for (i) the
cost of recording the deed (including deed recording fees and/or any other
transfer taxes), (ii) one-half (1/2) of any escrow fees and costs, (iii) the
cost of obtaining the Title Commitment and the Owner’s Policy of title
insurance, and (iv) Seller’s attorneys’ fees.  Purchaser shall pay for all other costs of
Closing, including, without limitation, (i) one-half (1/2) of any escrow
fees, (ii) those costs, if any, related to financing (including any
mortgage intangibles tax or fee), (iii) environmental updates and surveys,
(iv) the costs of any endorsements to the Title Commitment and the Owner’s
Policy, (v) any costs of hydrology, water, and well reports, and (vi) and
Purchaser’s attorneys’ fees.

 

6.2                                 Adjustments and Prorations.  The matters, revenues and expenses of the
Conveyed Property shall be apportioned between Seller and Purchaser or, where
applicable, credited in total to a particular party as of the Closing
Date.  In connection therewith, Seller
and Purchaser shall jointly prepare a preliminary closing statement (“Preliminary
Statement”), which shall show the net amount due to Seller or Purchaser, as
the case may be, as a result of the adjustments and prorations set forth
herein.  Escrow Agent, for purposes of
Closing, shall be entitled to rely upon the information set forth in the
Preliminary Statement.  As soon as
practicable after the Closing Date, but in no event later than the date which
is sixty (60) days after the Closing Date, Seller and Purchaser shall jointly
prepare a final closing statement (“Final Statement”) and reconcile any
differences between the Preliminary Statement and the Final Statement.

 

a.                                       Taxes.  All real and personal property taxes and
special assessment district fees shall be prorated as of the Closing Date. If
such taxes or special assessments for the tax year in which the Closing occurs
have not been finally determined on the Closing Date, then such taxes shall be
prorated on an estimated basis using the most current information
available.  When such taxes or special
assessments have been finally determined, the parties shall recalculate such
prorations and any amount payable by Seller or Purchaser shall be paid to the
other party in accordance with the terms of Section 6.5 below.  Certified, confirmed and ratified special
assessment liens imposed by public bodies prior to the Effective Date shall be
the obligation of the Purchaser. Additionally, Seller agrees to be responsible
for all sales taxes, withholding taxes, South Carolina lease taxes, intangible
taxes, and other taxes and assessments related to the Club Facilities arising
prior to the Closing Date.  Prior to
Closing, Seller shall provide Purchaser with copies of all South Carolina Gross
Receipts Tax Returns (Form CRS-1) for each of the twelve months preceding
the Closing, together with evidence of payment of the gross receipts tax due
under those returns (the “Gross Receipts Tax Information”.  A list of all outstanding taxes or special
assessments related to the Club Facilities is more particularly described in Exhibit 6.2(a).

 

 

b.                                      Food
and Beverages/Pro Shop Inventory.                  All
Food and Beverages and Pro Shop Inventory shall be conveyed to Purchaser on the
Closing Date at the Food and Beverages Cost and Pro Shop Inventory Cost,
respectively, which shall be in addition to the Purchase Price.  A list of Food and Beverages and Pro Shop
Inventory, along with a list of Purchase Orders or other evidence of cost
related to applicable Food and Beverages items and Pro Shop Inventory items is
attached hereto as Exhibit 6.2(b).

 

c.                                       Telephone
Numbers and Fax Numbers.  Purchaser
agrees to assume title to, payment for, and responsibility of the telephone
numbers and fax numbers related to the Club Facilities as of the Closing Date
and a list of all such items is more particularly described in Exhibit 6.2(c) attached
hereto.

 

d.                                      Utility
Charges.  Utility charges for
telephone, gas, electricity, sewer, water, and other services shall not be
prorated to the extent that Seller can make arrangements for the rendering of
final bills based on meter readings as of the Closing Date.  Seller shall be responsible for the payment
as of the Closing Date of all bills for utility charges up to and including the
Closing Date.  To the extent that utility
bills cannot be rendered as of the Closing Date, such charges for the period
through the Closing Date shall be prorated as of the Closing Date based upon
the most recent available bills and readjusted on the basis of the actual bills
as and when received.  Upon such
readjustment, the utility charges payable by Seller and not paid by the Closing
Date shall be promptly paid by Seller. 
Any utility deposits shall be transferred to Purchaser and credited to
Seller as of the Closing Date.

 

e.                                       Operating
Expenses and Trade Accounts.  Seller
shall be responsible for all liabilities, obligations, operating expenses and
trade accounts related to the Club Facilities incurred by Seller (including all
charges and fees payable, if any, under the Club Contracts and all amounts, if
any, payable to third-party contractors and other parties for any additions,
alterations or improvements to the Club Facilities whether completed before or
to be completed after the Closing Date) up to the Closing Date (the “Payables”)
and a list of such Payables is attached hereto as Exhibit 6.2(e).  To the extent the amounts of such items for
which Seller is responsible are then known, Seller shall pay such Payables as
of the Closing Date for all Taxes, and any other Payables, which if the same
were not paid, would create a lien on the Club Facilities or would materially
adversely affect Purchaser’s ability to operate the Club Facilities as they are
currently being operated.  Seller shall
pay all other Payables in due course. 
All liabilities, obligations, operating expenses and trade accounts
accruing after the Closing Date (“Post-Closing Expenses”) which are not
the responsibility of Seller as otherwise provided under this Agreement shall
be the responsibility of Purchaser.

 

f.                                         Rents.  All rentals under the Space Leases (including
fixed and percentage rents and charges in respect of electricity, operating
expenses and taxes) shall be prorated as of the Closing Date if, as and when
collected.  If there are any arrearages
under the Space Leases as of the Closing Date, any rents collected by Seller or
Purchaser after the Closing Date with respect to such Space Leases shall be
applied first to current rent due, second to any arrearages for the months
after the calendar month in which the Closing occurs, third to any arrearages
for the calendar month immediately preceding the calendar month in which the
Closing occurs, and fourth to any other arrearages.  Payments from Sellers for electricity,
operating expenses and taxes which are billed to Sellers in arrears or on an
estimated basis shall be prorated on such basis and readjusted if, as and when
such amounts are finally determined and collected.  Seller shall not receive a credit at closing
for any rents not actually received.

 

 

g.                                      Employees.  Wages and fringe benefits of Club Employees
shall be prorated as provided in Section 6.3.

 

h.                                      Security
Deposits; Banquets, Outings, and League Play; Gift Certificates; Handicap Fees;
Prepaid Membership Deposits; Trade Outs. 
Any sums held by Seller as a security deposit, if any, due to the
depositor, together with interest thereon, for the rental, use of or any
services relating to the Club Facilities (or any portion thereof), including,
without limitation, prepaid and unearned tee time, banquet, outing, league
play, locker or storage fees, and other deposits for periods after the Closing
Date (the “Security Deposits”), shall be paid over and assigned to
Purchaser on the Closing Date.  As
between Purchaser and Seller, Purchaser shall assume all obligations of Seller
with respect to such Security Deposits actually assigned over to and paid to
Purchaser on the Closing Date. 
Additionally, Purchaser agrees to assume the Seller’s obligations under
any (i) prepaid annual membership deposits or dues (the “Prepaid
Membership Deposits”) provided Purchaser is given credit for such an amount
on the Closing Date, (ii) handicap fees paid in advance or gift
certificates for future play on the Club Facilities or food and beverage
service at the Club Facilities provided Purchaser is given credit for such an
amount as of the Closing Date, and (iii) any trade outs or other
agreements whereby the Seller has agreed to provide certain services in lieu of
payment made by members, trade vendors, or other third-party payors (“Trade-Outs”)
provided such handicap fees, gift certificates, and Trade Outs are disclosed in
Exhibit 6.2(h).  A list of
all Security Deposits and Prepaid Membership Deposits along with a list of any
related scheduled tee times, banquets, outings, or league play and any gift
certificates and Trade Outs is attached hereto as Exhibit 6.2(h).

 

i.                                          Prepaid
Expenses and Utilities Security Deposits. 
All expenses (including permit and inspection fees, license fees, and
regulatory fees) prepaid for periods after the Closing Date, and all utilities
security and other deposits paid by Seller to third parties for which the right
to the return of any such sums is transferred to Seller as of the Closing Date
(without any offsetting claim or liability) shall be credited to Seller as of
the Closing Date.  A list of such prepaid
expenses is attached as Exhibit 6.2(i).

 

j.                                          Cash.  All cash on hand in house banks (including
the general manager’s petty cash fund) on the morning of the Closing Date shall
not constitute Conveyed Property and, if Seller and Purchaser so elect in
writing, it shall become the property of Purchaser and the amount thereof shall
be credited to Seller at the Closing.

 

k.                                       Accounts
Receivable.  All those accounts
receivable which were accrued and earned in connection with the operation of
the Club Facilities prior to the Closing Date (hereinafter “Receivables”)
shall be deemed the property of Seller and the right to collect the Receivables
retained by Seller. As of the Closing Date, the Seller shall deliver to
Purchaser a detailed list of all of said Receivables, and the list of
Receivables is more particularly described in Exhibit 6.2(k).  If the actual amount of Receivables is not
known on the Closing Date, the list shall be based on the Receivables in
existence on the most recent date prior to the Closing Date that the
Receivables may be practicably determined, and the list updated after the
Closing.  Irrespective of Seller’s
ownership of the Receivables, for ninety (90) days after the Closing, Purchaser
shall provide appropriate notices as to the Receivables to the parties who are
obligated therefore and seek to collect the same as part of normal billing and
collection practices.  As funds are
received by Purchaser from each such party, Purchaser shall credit the received
funds first to 

 

 

the portion which
constitutes a Receivable due Seller from such party by remitting the same to
Seller within ten (10) days of the end of each calendar month.  At the end of the third full calendar month
after the Closing (the “Collection Period”), unless otherwise agreed by
Purchaser and Seller, Purchaser shall have no further obligation with respect
to the Receivables and Seller shall be solely responsible for all further
collection activities related thereto; provided, however,
that should any payments expressly designated as a payment related to a
Receivable be received by Purchaser after the Collection Period, 100% of such
amounts shall be promptly remitted to Seller, and, provided
further, upon notice from Seller, Purchaser shall suspend the
membership privileges of any member whose Receivables account remains unpaid at
the end of the Collection Period until such time as that member’s Receivables
account has been satisfied.

 

l.                                          Member
Deposits.  All deposits and fees paid
in advance in connection with the annual memberships shall be prorated based on
a calendar year ending December 31 (or such other applicable time period
if the calendar year is not the applicable period).  In addition, anything to the contrary contained
herein notwithstanding, Seller shall remit to Purchaser at Closing the
initiation fees and/or membership deposits received by Seller from all persons
who became members of the Club after June 30, 2008 and prior to the
Closing (the “New Members”) so long as the New Members are entitled to receive
from Purchaser a 100% credit for all sums paid as initiation fees or membership
deposits against amounts due for equity memberships in Purchaser should the New
Members elect to acquire equity memberships in Purchaser.  Purchaser is not entitled to any credit for
initiation fees paid on or before June 30, 2008.

 

m.                                    Revenues.  All Revenues (excluding amounts that are
treated as Receivables in accordance with Section 6.2(k) above)
from the use and operation of the Club Facilities shall be prorated as of the
Closing Date.  Seller shall have the
right to and shall receive an amount equal to any Revenues accrued as of the
Closing Date and not previously received by Seller, and Purchaser shall have
the right to and shall receive an amount equal to any revenues relating to the
Club Facilities for periods accruing from and after the Closing Date and
actually collected by the Seller prior to the Closing Date.

 

6.3                               Staff.

 

a.                                       Seller
shall be responsible for paying all wages and fringe benefits (including, but
not limited to, accrued vacation pay, sick pay and payroll taxes, and any
employee incentive bonus programs) through the Closing Date, and to the extent
that any such Club Employees’ wages and/or fringe benefits are not so paid by
Seller prior to the Closing Date, then such wages and/or fringe benefits for
Club Employees who are rehired by Purchaser on or after the Closing Date, upon
such notice as is required below, shall be apportioned as provided in this
Agreement below.  Specifically, (i) wages
accrued as of the Closing Date shall be paid by Seller on or before the Closing
Date as if the Club Employees to which such wages relate were terminated as of
the Closing Date and not rehired by Purchaser (i.e.,
whether or not the Club Employee is hired by Purchaser at or after the Closing
Date), (ii) fringe benefits (including, but not limited to, accrued
vacation pay, sick pay and payroll taxes) for any Club Employees who are
rehired by Purchaser shall be calculated and prorated for the benefit of
Purchaser as of the Closing Date and Purchaser shall assume the obligation to
pay such fringe benefits thereafter (e.g., if a Club
Employee who is rehired by Purchaser were to receive 7 days of vacation pay per
year and Purchaser agrees to honor the accrued vacation schedule for such
employee as 

 

 

hereinafter set forth but
the right to receive such 7 days of vacation pay did not vest until after 1
year of service and such Club Employee had only been employed for 6 months, an
amount shall be prorated and credited to Purchaser equal to one-half of such 7
days of vacation pay), although Seller agrees to remain responsible for any
payments which may have accrued prior to the Closing Date for any employee
incentive program, and (iii) fringe benefits (including, but not limited
to, accrued vacation pay, sick pay and payroll taxes) for any Club Employees
who are not rehired by Purchaser and that are vested as of the Closing Date
shall remain the responsibility of Seller, and Purchaser shall have no
obligation or liability of any nature whatsoever with respect thereto.  For purposes of determining the proration
credit to be given to Purchaser hereunder, Purchaser shall provide Seller with
a written list of all Club Employees that Purchaser will rehire on or after the
Closing Date no later than three (3) business days prior to the Closing
Date.  A list of all Club Employees is
attached hereto as Exhibit 6.3 and Purchaser agrees that it shall
honor the accrued vacation schedule for all Club Employees as more particularly
described in Exhibit 6.3.

 

b.                                      Seller
shall terminate all Club Employees as of the Closing Date.  Purchaser shall, before the Closing Date,
consider in good faith hiring each Club Employee desiring to be hired as of the
Closing Date and shall provide Seller with the list of Club Employees it
intends to rehire as provided in the last sentence of subsection (a) above.  Seller agrees to cooperate with Purchaser so
that Purchaser may distribute a letter or other appropriate forms to Club
Employees to determine if each such employee wishes to apply to work for
Purchaser at the Club Facility which employs such Club  Employee after the Closing Date.  Such letter or other forms may request that
any Club  Employee wishing to be
considered for employment agree to allow Purchaser to review the Club Employee’s
personnel file.  If Purchaser requests
access to the personnel files of the Club Employees, Seller agrees to allow
Purchaser to review such personnel files, subject to each Club Employee’s
written consent with Seller’s approval of the form thereof, and to permit the
transfer to Purchaser of the personnel files and medical files of any Club  Employee offered employment by Purchaser,
again subject to the written consent of each affected Club  Employee. 
Seller shall use its best efforts to have dismissed with prejudice,
prior to the Closing Date, any and all litigation existing as of or arising
after the Effective Date involving past or present Club Employees and/or union
or labor disputes.  In the event that
Seller is not successful in causing the dismissal of such litigation prior to
the Closing Date, then Seller shall indemnify and hold Purchaser harmless in
accordance with the applicable terms of this Agreement from and against any
Loss that may be incurred by, or asserted against, Purchaser after the Closing
Date which involves any matter relating to a past or present Club  Employee and/or union or labor disputes
concerning acts or omissions occurring prior to the Closing Date; provided,
however, Purchaser shall have the sole right, at Purchaser’s election,
after the Closing Date, to supervise and direct any such litigation and to use
counsel of Purchaser’s choosing (whether or not counsel for such litigation had
been retained by Seller prior to the Closing Date).  Nothing in this Agreement shall require (a) Purchaser
to assume any obligations under any employee benefit plans currently maintained
for Club Employees unless otherwise required by law or (b) Purchaser or
its management company to continue to employ any Club  Employee hired by either of them for any
specified period of time after the Closing Date.

 

 

6.4                                 General Proration Provisions.  All prorations shall be made on the basis of
the actual number of days of the month which shall have elapsed as of the
Closing Date and based upon the actual number of days in the month and a three
hundred sixty five (365) day year. 
Purchaser and Seller shall cause their respective representatives to
make such inventories, examinations and audits of the Club Facilities, Conveyed
Property, and of the books and records of the Club Facilities, as the parties
may deem necessary to make the adjustments and prorations required under this
Article. Based upon such audits and inventories, the Seller will prepare (with
the assistance and cooperation of Purchaser) and deliver on or before the
Closing Date, the closing statements setting forth the foregoing prorations and
adjustments.  The closing statements
shall contain Purchaser’s and Seller’s best good faith estimates of the amounts
of the items requiring prorations and adjustments pursuant to this Section.  Purchaser and Seller shall have the right to
approve the closing statements, which approval shall not be unreasonably
withheld or delayed.  The amount set
forth on the closing statement shall be the basis upon which the prorations and
adjustments provided for herein shall be made on the Closing Date.  The net proration amount shown on the closing
statement shall be paid, in cash, by Seller or Purchaser, as the case may be,
to the other on the Closing Date.

 

6.5                                 Post-Closing Date Adjustments.  Within sixty (60) days following the Closing
Date, Purchaser and Seller will cooperate in preparing the Final Statement
setting forth the final determination of all the items including the closing
statements.  In the event that, at any
time, within the said sixty (60) day period, either party discovers any items
that should have been included on the closing statements but were omitted
therefrom, such items shall be adjusted in the same manner as if their
existence had been known at the time of the preparation of the closing
statement.  The foregoing limitation
shall not apply to any item which, by its nature, cannot be finally determined
within the time period specified (such as real property taxes); provided, that,
no further adjustments shall be made in any event beyond twelve (12) months
after the Closing Date.  The terms and
provisions of this Section 6.5 shall survive the Closing Date for a
period of six (6) months after the Closing Date.

 

6.6                                 Limitation on Assumption of Liabilities.  The Seller shall transfer the Conveyed
Property to the Purchaser free and clear of all liens and encumbrances except
the Permitted Exceptions and without any assumption of liabilities and
obligations by Purchaser except as specifically set forth herein.  Purchaser shall not, by virtue of its
purchase of the Property, assume or become responsible for any liabilities or
obligations of the Seller, unless it expressly agrees to do so in writing.

 

6.7                                 Closing Documents.

 

a.                                       Seller
and Purchaser agree to execute and deliver to each other such documents at
Closing as are reasonably required by Seller and Purchaser to close this
transaction, including the following enumerated documents, all of which
documents shall be subject to the reasonable approval of counsel for Seller and
Purchaser and shall be executed by Seller and Purchaser and affiliated parties,
as applicable (the “Closing Documents”):

 

i.                                          Special
Warranty Deed(s) for the Conveyed Property (the “Deed”), by each of
GTA and Stonehenge, in the form more particularly described in Exhibit D
attached hereto and made a part hereof;

 

 

ii.                                       To
the extent that a new survey shows any variance from the surveys referenced in Exhibit A,
Quit Claim Deed(s) with description conforming to any new survey,

 

iii.                                    A
Bill of Sale and Assignment (the “Bill of Sale”), by Seller, in the form
more particularly described in Exhibit F attached hereto and made a
part hereof, transferring all of Seller’s Tangible Personal Property located on
the Property;

 

iv.                                   An
Assignment of Intangible Property (the “Assignment of Intangible Property”),
by Seller, in the form more particularly described in Exhibit G
attached hereto and made a part hereof, transferring all of Seller’s Intangible
Property related to the Property;

 

v.                                      If
necessary, the Right of Occupancy and Management Agreement executed by the
holder of the Liquor Licenses at the Club Facilities and Purchaser (or its
permitted assigns);

 

vi.                                   A
Certificate of Exemption (FIRPTA Affidavit);

 

vii.                                Execute
and deliver to Purchaser and the Title Company an Owner’s Affidavit in
sufficient form and substance so as to allow the Title Company to remove the “gap”
exception, the mechanic’s lien exception and parties-in-possession exception
from the Title Policy and a Warranty, Indemnification and Hold Harmless
Agreement against any and all claims, liens or encumbrances on account of any
of the same;

 

viii.                             Execute
and deliver instruments reasonably satisfactory to Purchaser and the Title
Company reflecting the proper power, good standing and authorization for the
sale of the Property from Seller to Purchaser and the execution and delivery of
all documents hereunder;

 

ix.                                     An
Assignment of Club Documents (the “Assignment of Club Documents”), by
each of GTA and Stonehenge, in the form more particularly described in Exhibit N
attached hereto and made a part hereof;

 

x.                                        A
South Carolina Department of Revenue tax compliance certificate as to Seller’s
payment of all taxes then due and payable, dated within thirty (30) days prior
to Closing, and

 

xi.                                     Such
other documents as may be reasonably necessary to effectuate the provisions of
this Agreement.

 

ARTICLE VII

Risk of
Loss/Casualty/Condemnation

 

7.1                                 Condemnation and Casualty.  Seller shall promptly notify Purchaser of any
condemnation proceeding filed or any casualty to the Conveyed Property
occurring prior to Closing.

 

 

a.                                       Condemnation.  If any condemnation proceeding filed prior to
the Closing may result in the loss of all or any portion of the Club
Facilities, then this Agreement shall, at Purchaser’s sole election, either (i) continue
in effect without modification of the terms thereof, in which event, upon the
Closing, Purchaser shall be entitled to any compensation, awards, or other payments
or relief resulting from such condemnation proceeding, or (ii) terminate
by Purchaser’s written notice to Seller delivered within five (5) days
after receipt by Purchaser of notice of such condemnation and all obligations,
duties, rights and entitlements of Seller and Purchaser shall terminate.

 

b.                                      Casualty.  In the event of fire, casualty or any other
damage of any kind whatsoever (insured or uninsured) to the Conveyed Property
which (i) would cost $100,000 or more to repair, replace or remediate, or (ii) would
require either or both of the golf courses to be closed for three (3) or
more days to repair such damage, Purchaser may upon written notice to Seller
terminate this Agreement, and all obligations, duties, rights and entitlements
of Seller and Purchaser shall terminate. 
If Purchaser proceeds to purchase the Conveyed Property after the
occurrence of any such casualty (either because Purchaser had no right to
terminate hereunder or because Purchaser does not elect to terminate this
Agreement), then Seller shall assign all available insurance proceeds to
Purchaser and Seller shall pay all applicable insurance deductibles and the
parties shall proceed to the Closing pursuant to the terms and conditions
hereof, without modification of the terms of this Agreement or the Purchase
Price.

 

ARTICLE VIII

Indemnification

 

8.1                                 Indemnification by Seller. Seller
shall indemnify and hold harmless the Purchaser and its affiliates, and each of
their respective shareholders, members, partners, trustees, directors, officers,
employees, attorneys, accountants, consultants, and agents, and the successors,
assigns, legal representatives, heirs, devisees and donees of each of the
foregoing (collectively, the “Purchaser Indemnitees”) from and against
any actual (and not contingent) liability, damage (but expressly excluding any
consequential and punitive damages), loss, cost or expense, including, without
limitation, reasonable attorneys fees and expenses and court costs
(collectively, “Losses”)  incurred (i) after
the Closing to the extent resulting from (a) any inaccuracy or untruth of
any representations or warranties made by Seller in this Agreement, and (b) the
breach by Seller of any of its covenants or obligations under this Agreement
which expressly survive the Closing, or (ii) after the termination of this
Agreement to the extent resulting from the breach by Seller of any of its
covenants or obligations under this Agreement which expressly survive such
termination.

 

8.2                                 Indemnification by Purchaser.  Purchaser shall indemnify and hold harmless
the Seller and its affiliates, and each of their respective shareholders,
members, partners, trustees, directors, officers, employees, attorneys,
accountants, consultants, and agents, and the successors, assigns, legal
representatives, heirs, devisees and donees of each of the foregoing
(collectively, the “Seller Indemnitees”) from and against any Losses as
defined above  incurred (i) after the
Closing to the extent resulting from (a) any inaccuracy or untruth of any
representations or warranties made by Purchaser in this Agreement, or (b) the
breach by Purchaser of any of its covenants or obligations under this Agreement
which expressly survive the Closing, or (ii) after the termination of this
Agreement to the extent resulting from the breach by Purchaser of any of its
covenants or obligations under this Agreement which expressly survive such
termination.

 

 

8.3                                 Limitations and Other Provisions Related to
Indemnification Obligations

 

a.                                       Survival
of Representations and Warranties. The representations, warranties and
covenants of Seller and the representations and warranties of Purchaser under
this Agreement shall survive the Closing and the delivery of the Deed until the
date that is six (6) months from the date of Closing (the “Survival
Period”).

 

8.4                                 Indemnification Procedure.

 

a.                                       Notice
of Indemnification Claim.  If any of
the Seller Indemnitees or Purchaser Indemnitees (as the case may be) (each, an “Indemnitee”)
is entitled to indemnification under Section 8.1 or 8.2 (each, an “Indemnification
Claim”), the Party required to provide indemnification to such Indemnitee
(the “Indemnitor”) shall not be obligated to indemnify and hold harmless
Indemnitee unless and until such Indemnitee provides written notice to such
Indemnitor after such Indemnitee has actual knowledge of any facts or
circumstances on which such Indemnification Claim is based or a third-party
claim is made on which such Indemnification Claim is based, describing such
facts and circumstances or third-party claim with respect to such
Indemnification Claim. Notwithstanding the foregoing or anything else to the
contrary in this Agreement, (i) to the extent any Indemnitee is seeking
indemnification for a breach of any representations or warranties, the
Indemnitee shall be entitled to indemnification only for those matters as to
which the Indemnitee has given written notice to the Indemnitor prior to the
expiration of the applicable Survival Period, and (ii) an Indemnitee shall
not be entitled to indemnification to the extent such Indemnitee’s failure to
reasonably notify the Indemnitor within a reasonable period in accordance with
this Section increases the amount of the indemnification obligation of the
Indemnitor or prejudices the Indemnitor’s ability to defend against any third-party
Claim on which such Indemnification Claim is based.

 

b.                                      Resolution
of Indemnification Claim Not Involving Third-Party Claim. If the
Indemnification Claim does not involve a third-party claim and is disputed by
the Indemnitor, the dispute shall be resolved by litigation or other means as
the Parties otherwise may agree in writing.

 

c.                                       Resolution
of Indemnification Claim Involving Third-Party Claim.  If
the Indemnification Claim involves a third-party Claim, the Indemnitor shall
have the right (but not the obligation) to assume the defense of such
third-party claim, at its cost and expense, and shall use good faith efforts
consistent with prudent business judgment to defend such third-party claim,
provided that (i) the counsel for the Indemnitor who shall conduct the
defense of the Third-Party Claim shall be reasonably satisfactory to the
Indemnitee (unless selected by Indemnitor’s insurance company), (ii) the
Indemnitee, at its cost and expense, may participate in, but shall not control,
the defense of such third-party claim, and (iii) the Indemnitor shall not
enter into any settlement or other agreement which requires any performance by
the Indemnitee, other than the payment of money which shall be paid by the
Indemnitor. The Indemnitee shall not enter into any settlement agreement with
respect to the Indemnification Claim, without the Indemnitor’s prior written
consent, which consent may be withheld in Indemnitor’s sole 

 

 

discretion. If the
Indemnitor elects not to assume the defense of such third-party claim, the
Indemnitee shall have the right to retain the defense of such Third-Party Claim
and shall use good faith efforts consistent with prudent business judgment to
defend such Third-Party Claim in an effective and cost-efficient manner.

 

d.                                      Accrual
of Indemnification Obligation. Notwithstanding anything to the contrary in
this Agreement, the Indemnitee shall have no right to indemnification against
the Indemnitor for any Indemnification Claim which (i) does not involve a
third-party claim but is disputed by Indemnitor until such time as such dispute
is resolved by court order, written agreement or other means as the parties
otherwise may agree in writing, or (ii) which involves a third-party claim
until such time as such third-party claim is concluded, including any appeals
with respect thereto.

 

e.                                       Exclusive
Remedy. Except for claims based on fraud, the indemnification provisions in
this Agreement shall be the sole and exclusive remedy of any Indemnitee with
respect to any claim for Losses arising from or in connection with this
Agreement.

 

f.                                         Liability
under Deed.  Purchaser agrees that if
Purchaser has any right or claim against Seller pursuant to the warranties in
the Deed delivered by Seller to Purchaser, Purchaser shall first assert its
claim against the Title Company pursuant to the Title Policy prior to bringing
any claim or action against Seller in respect of such warranties.

 

ARTICLE IX

Miscellaneous

 

9.1                                 Liquor Licenses.  Seller will cooperate in all reasonable
respects (which shall include, without limitation, supplying information known
to Seller and execution of such reasonable documents as may be legally
required) with Purchaser in connection with Purchaser’s application (the “Liquor
Applications”) for alcoholic beverage licenses (the “Liquor Licenses”).  Purchaser shall diligently and in good faith
proceed with the Liquor Applications to secure Liquor Licenses to be effective
from and after the Closing Date. On or before the Closing Date, Seller shall
execute such written agreements, statements and/or forms as may be reasonably
required to terminate Seller’s Liquor Licenses. 
The terms of this Section 9.1 shall survive the Closing
Date.

 

9.2                                 Notice.  Notices hereunder shall be deemed properly
delivered when and if personally delivered, sent by (a) facsimile, (b) a
nationally recognized overnight delivery service (e.g. FedEx, UPS Overnight
Delivery, or Airborne), or (c) registered or certified mail, return
receipt requested, postage prepaid, to the parties as set forth below (notices
being deemed given when so deposited in the U.S. Mail).  If Notice is sent to Seller at the address
stated above, a copy of the notice must also be sent to Seller’s attorney:
Charles Dibble, Esquire, Dibble Law Offices, 1331 Park Street, Suite 200,
Columbia, South Carolina 29201-3111 (Mail: P.O. Drawer 1240, Columbia, SC
29202-1240), Telephone: 803-254-0307, Fax: 866-253-0458, email .  If Notice is sent to Purchaser at the address
stated above, a copy of the notice must also be sent to Purchaser’s
attorney:  Edward G. Menzie, Esquire,
Nexsen Pruet, LLC, 1230 Main Street, Suite 700, Columbia, South Carolina,
29201-6220 (Mail: P.O. Drawer 2426, Columbia, SC 29202-2426), Telephone
803-771-8900, Fax 803-727-1479, email .

 

 

9.3                                 Broker’s Commission.  Seller represents that it has not engaged or
utilized any real estate broker, salesman, agent, or finder in connection with
this transaction, and that there is no broker’s commission or any other fee due
and owing with respect to the transaction contemplated hereby.  Purchaser represents that it has not engaged
or utilized a real estate broker, salesman, agent, or finder in connection with
this transaction, and Purchaser represents that there is no broker’s commission
or any other fee due and owing with respect to the transaction contemplated
hereby.  Each party hereby agrees to
indemnify and hold the other harmless from any other claim for a commission or
fee by any party arising out of or resulting from an agreement with the indemnifying
party.

 

9.4                                 [Reserved]

 

9.5                                 Confidentiality
Agreement.  Seller and Purchaser are
parties to that certain Confidentiality Letter Agreement, dated August 1,
2008 (the “Confidentiality Agreement”). 
Upon full execution of this Agreement, the parties shall continue to be
bound by the Confidentiality Agreement except as follows:

 

(a)                                  Purchaser
may disclose the terms of this Agreement as deemed necessary or appropriate to
make a full disclosure to the Members of the Club and prospective Members,
their advisors and representatives (collectively, the “Offerees”) in connection
with the offering of membership interests in Purchaser or an affiliated entity
that is anticipated to take title to the Club Facilities.

 

                                                (b)                                 Purchaser
may provide to Offerees information of a general nature regarding the Club
Facilities deemed material to Offerees in order for Offerees to make an
informed decision to participate in the offering, including Purchaser’s
business plan for acquisition and operation of the Club Facilities; provided,
however, Seller shall be provided with the proposed disclosure information in
advance and approves the use thereof, with such approval not to unreasonably be
withheld.

 

(c)                                  A
clear disclaimer shall be contained in any written materials provided to
Offerees that:

 

(i)                                     Seller
is not in any way responsible for the accuracy of any information provided by
Purchaser to Offerees; and

 

(ii)                                  Seller
is not directly or indirectly involved in any offering of any nature conducted
by Purchaser.

 

(d)                                 In
addition to the disclaimer referenced above, all subscriptions for interests
executed by Offerees shall expressly state that the subscriber acknowledges and
agrees that Seller has no involvement or participation whatsoever in any
activities of Purchaser and Seller has no responsibility for the accuracy of
any information provided to Offerees.

 

(e)                                  All
information disclosed to Offerees shall be as generic as possible so as to
minimize divulging information protected by the Confidentiality Agreement yet
still make a full disclosure of all material facts related to acquisition and
operation of the Club Facilities.

 

 

(f)                                    If
any detailed disclosure of information protected by the Confidentiality
Agreement is requested by Purchaser to permit Purchaser to satisfy its
disclosure obligations to Offerees generally, Seller shall not unreasonably
withhold consent to Purchaser’s requests so long as the language of the
proposed disclosure minimizes any adverse consequences to Seller should
Purchaser not acquire the Club Facilities.

 

(g)                                 Nothing
herein is intended to prevent Purchaser from providing pertinent but otherwise
confidential information to prospective investors provided each Offeree first
signs a confidentiality agreement embracing the terms and conditions of this Section 9.5.

 

9.6                                 [Reserved].

 

9.7                                 Backup Offers.  Subject to the rights of the Purchaser as
described in this Agreement, Seller shall have the right to discuss, negotiate
and accept backup offers for the purchase of the Conveyed Property with
third-parties in the event Purchaser and Seller do not proceed to Closing
hereunder.

 

9.8                                 Miscellaneous.

 

a.                                       Applicable
Law.  This Agreement and all
questions of interpretation, construction and enforcement hereof, and all
controversies hereunder, shall be governed by the applicable statutory and
common law of the State of South Carolina.

 

b.                                      Partial
Invalidity.  In the event any term or
provision of this Agreement shall be held illegal, unenforceable or inoperative
as a matter of law, the remaining terms and provisions of this Agreement shall
not be affected thereby, but each such term and provision shall be valid and
shall remain in full force and effect.

 

c.                                       Assignment.  Purchaser may assign this Agreement to any
entity in which Purchaser or an affiliate of Purchaser is a partner,
shareholder, officer, director, trustee or beneficiary (including a nonprofit
corporation in which the existing members of the Club may become members), but
in the event of such an assignment, Purchaser shall not be released from any
liability hereunder for any misrepresentation made or breach of any covenant
contained in this Agreement occurring prior to the Closing.

 

d.                                      Entire
Agreement.  This Agreement embodies
the entire agreement between the parties hereto and supersedes any and all
prior agreements and understandings, written or oral, formal or informal.  No modifications or amendments to this
Agreement, of any kind whatsoever, shall be a made or claimed by Seller or
Purchaser, and no notices of any extension, change, modification or amendment
made or claimed by Seller or Purchaser (except with respect to permitted waives
of conditions by Purchaser) shall have any force or effect whatsoever unless
the same shall be endorsed in writing and fully signed by Seller and
Purchaser.  This Agreement shall not be
construed more strictly against one party than against the other merely by
virtue of the fact that it may have been prepared by counsel for one of the
parties, it being recognized that both Seller and Purchaser have contributed
substantially and materially to the preparation of this Agreement.

 

 

e.                                       Incorporation
of Recitals; Counterparts; Captions. 
This Agreement may be executed in counterparts, each of which shall be
deemed an original.  The captions are for
convenience of reference only and shall not affect the construction to be given
any of the provisions hereof.  The
Recitals set forth at the beginning of this Agreement are incorporated herein
and made a part hereof.

 

f.                                         Waivers;
Extensions.  No waiver or any breach
of any agreement or provisions herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof or of any other agreement or provisions
herein contained.  No extension of time
for performance of any obligations or acts shall be deemed an extension of the
time for performance of any other obligations or acts.

 

g.                                      Time.  Time is of the essence of this Agreement.

 

h.                                      Attorneys’
Fees.  In the event of any litigation
arising out of this Agreement or the transaction contemplated hereunder, the
prevailing party shall be entitled to recover from the other party reasonable
attorneys’ fees and costs, both at the trial and appellate levels.

 

i.                                          Exhibits.  All Exhibits attached hereto are incorporated
herein by reference as if fully set forth herein; provided, however, in the
event that at the time of the execution of this Agreement any of the Exhibits
to be attached are incomplete, the parties shall use their best efforts to
complete such Exhibits at the earliest possible date, but in any event such
Exhibits shall be completed and attached to this Agreement prior to ten (10) business
days after the Effective Date.  If any
Exhibits are subsequently changed by the mutual written agreement of the
parties, the Exhibits shall be modified to reflect such change or changes and
initialed by the parties.

 

j.                                          Indemnification
Limitation. 
To the extent, if at all, Article 8 
is applicable to any agreement to indemnify, defend and hold harmless
set forth in this Agreement, such agreement and obligation shall not extend to
liability, claims, damages, losses or expenses, including attorneys fees,
arising out of (a) the preparation or approval of maps, drawings,
opinions, reports, surveys, change orders, designs or specifications by the
indemnitee, or the indemnitee’s agents or employees; or (b) the giving or
the failure to give directions or instructions by the indemnitee, or the
indemnitee’s agents or employees, where such 
giving or failure to give 
directions or instructions is the primary cause of bodily injury or
death to persons or damage to or loss of property.

 

k.                                       Alternate
Dispute Resolution.  If a dispute, controversy or claim (whether
based upon contract, tort, statute, common law, or otherwise) (collectively a “Dispute”)
arises from or relates directly or indirectly to the subject matter of this
Agreement, and if the Dispute cannot be settled within ten(10) days
through direct discussions between the parties, the parties shall first
endeavor to resolve the Dispute by immediately participating in a mediation
administered by a mediator selected by mutual agreement of the parties who
shall be guided by the Commercial Dispute Resolution Procedures, including
Mediation and Arbitration Rules, as amended, of the American Arbitration
Association (the “Commercial Arbitration Rules”), before resorting to
arbitration.  Thereafter, if any Disputes
remain after the mediation, such Disputes 

 

 

shall
be promptly resolved by binding arbitration administered by arbitrators with
the qualifications set forth below selected by mutual agreement of the
parties.  The selected arbitrators shall
be guided by applicable provisions of the Commercial Arbitration Rules, and
judgment on the award rendered by the arbitrator(s), after the review rights
set forth below have been exhausted, may be entered in any court having
jurisdiction.  The arbitration
proceedings shall be conducted in Columbia, South Carolina on an expedited
basis before a neutral arbitrator (or multiple arbitrators if called for by the
Commercial Arbitration Rules).  Each
arbitrator shall be an attorney with excellent academic and professional
credentials, who (i) is an active member of the Bar of the State of South
Carolina, (ii) has been actively engaged in the practice of corporate and
commercial law for at least fifteen (15) years, and (iii) has substantial
experience in legal matters which are the subject of this Agreement.  Any attorney who serves as an arbitrator
shall be compensated at a rate equal to his or her current regular hourly
billing rate if he or she is currently practicing.  Upon the request of either party, the arbitrator’s(s’)
award shall include findings of fact and conclusions of law provided that such
findings may be in summary form.  Either
party may seek review of the arbitrator’s(s’) award before an arbitration
review panel comprised of three arbitrators qualified in the same manner as the
initial arbitrator(s) (as set forth above) selected by mutual
agreement.  The right of review shall be
deemed waived unless requested in writing within ten (10) days of the
receipt by the party seeking review of the initial arbitrator’s(s’) award.  The arbitration review panel shall be
entitled to review all findings of fact and conclusions of law in whatever
manner it deems appropriate and may modify the award of the initial arbitrator(s) in
its discretion. The prevailing party in any arbitration proceeding shall be
entitled to an award of all reasonable out-of-pocket costs and expenses
(including attorneys’ and arbitrators’ fees) related to the entire arbitration
proceeding (including review if applicable). 
Upon request of either party, the arbitrator(s) may require that
the subject arbitration proceedings be kept confidential and no party shall
disclose or permit the disclosure of any information produced or disclosed in
the arbitration proceedings until the award is final.  A party shall not be prevented from seeking
temporary injunctive relief before a court of competent jurisdiction in an
emergency or other exigent situation, but responsibility for resolution of the
Dispute shall be appropriately transferred to the arbitrator(s) upon
appointment in accordance with the provisions hereof.  If the parties fail to select any required
mediator or arbitrator by mutual agreement within five (5) days after a
written request for final selection is made by either party to the other,
either party may promptly request such appointment by the Chief Administrative
Judge for the Fifth Judicial Circuit of the South Carolina Circuit Court, which
appointment shall be binding on all parties.

 

[SIGNATURES APPEAR ON THE
FOLLOWING PAGE]

 

 

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

 

	
  WITNESSED:

  	
   

  	
  “SELLER”

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GOLF TRUST OF AMERICA, L.P. a
  Delaware

  
	
   

  	
   

  	
  limited partnership

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: GTA GP, Inc., a Maryland corporation,

  	
   

  
	
   

  	
   

  	
  its general partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Michael
  C. Pearce

  
	
   

  	
   

  	
  Name:  Michael
  C. Pearce

  	
   

  
	
   

  	
   

  	
  Title: President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dated: 

  	
  September 26, 2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GTA STONEHENGE, LLC,

  	
   

  
	
   

  	
   

  	
  a South Carolina limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Michael C. Pearce

  
	
   

  	
   

  	
  Name:  Michael
  C. Pearce

  	
   

  
	
   

  	
   

  	
  Title: Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dated: 

  	
  September 26, 2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “PURCHASER”

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WCWW COMMITTEE, LLC,

  	
   

  
	
   

  	
   

  	
  a South Carolina limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/William A. McDougall

  
	
   

  	
   

  	
  Name:  William
  A. McDougall

  	
   

  
	
   

  	
   

  	
  Title: President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dated:

  	
  September 26, 2008

  
						

 

 

SCHEDULE OF EXHIBITS

 

	
  Exhibit A

  	
   

  	
  –

  	
   

  	
  Legal Description

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  –

  	
   

  	
  List of Tangible Personal Property

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  –

  	
   

  	
  List of Intangible Personal Property

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  –

  	
   

  	
  Form of Deed

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  –

  	
   

  	
  [reserved]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit F

  	
   

  	
  –

  	
   

  	
  Form of Bill of Sale and Assignment

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
  –

  	
   

  	
  Form of Assignment of Intangible Property

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit H

  	
   

  	
  –

  	
   

  	
  List of Excluded Assets

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit I

  	
   

  	
  –

  	
   

  	
  List of Permits

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit J

  	
   

  	
  –

  	
   

  	
  List of Space Leases

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit K

  	
   

  	
  –

  	
   

  	
  List of Club Contracts

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit L

  	
   

  	
  –

  	
   

  	
  List of Members and Their Use Rights

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit M

  	
   

  	
  –

  	
   

  	
  [reserved]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit N

  	
   

  	
  –

  	
   

  	
  Assignment of Club Documents

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 2.2

  	
   

  	
  –

  	
   

  	
  List of Excluded Obligations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 5.1(b)

  	
   

  	
  –

  	
   

  	
  List of Pending or Threatened Litigation or Condemnation
  Matters

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 5.1(i)

  	
   

  	
  –

  	
   

  	
  Employee Claim Schedule

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 5.1(k)

  	
   

  	
   

  	
   

  	
  Work which may give rise to Mechanic’s,
  Materialman’s or Other Liens.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 5.4(c)

  	
   

  	
  –

  	
   

  	
  Patron Property Inventory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 6.2(a)

  	
   

  	
  –

  	
   

  	
  List of Outstanding Taxes Related to the Club
  Facilities

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 6.2(b)

  	
   

  	
  –

  	
   

  	
  List of Food and Beverages and Purchase Orders
  Related to Food and Beverages; Pro Shop Inventory and Pro Shop Inventory Cost

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 6.2(c)

  	
   

  	
  –

  	
   

  	
  List of Telephone Numbers

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 6.2(e)

  	
   

  	
  –

  	
   

  	
  List of Club Payables

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 6.2(h)

  	
   

  	
  –

  	
   

  	
  List of Security Deposits, Banquets, Outings, and
  League Play; Handicap Fees; Gift Certificates; and Trade-Outs

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 6.2(i)

  	
   

  	
  –

  	
   

  	
  List of Prepaid Expenses and Utility Deposits

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 6.2(k)

  	
   

  	
  –

  	
   

  	
  List of Club Receivables

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 6.3

  	
   

  	
  –

  	
   

  	
  List of Club Employees; Accrued Vacation for Club
  Employees

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]