Document:

FIRST AMENDMENT TO

Exhibit 10.46

THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT

THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (the “Amendment”), dated as of May 11, 2009, among Kowabunga! Inc. (formerly known as Think Partnership Inc.), a Nevada corporation (“Borrower”), each of the Guarantors signatory hereto (the “Guarantors”) and Wachovia Bank, National Association (“Bank”).

W I T N E S S E T H:

WHEREAS, Bank has made available to Borrower a secured credit facility pursuant to the terms and conditions of the following:  (i) that certain Amended and Restated Loan Agreement, dated as of February 27, 2008, between Borrower and Bank, as amended by that certain Master Consent to Loan Documents and First Amendment to Loan Agreement and Amended and Restated Revolving Credit Promissory Note dated as of June 25, 2008, that certain Master Consent, Second Amendment to Amended and Restated Loan Agreement, Second Amendment to Amended and Restated Revolving Credit Promissory Note and First Amendment to Amended and Restated Term Promissory Note, dated as of March 18, 2009, and as amended, restated, supplemented or modified from time to time (the “Loan Agreement”); (ii) that certain Amended and Restated Guaranty Agreement, dated as of February 27, 2008, between Borrower, the Guarantors and Bank, as amended, restated, supplemented or modified from time to time (the “Guaranty Agreement”); (iii) that certain Amended and Restated Security Agreement, dated as of February 27, 2008, between Borrower, the Guarantors and Bank, as amended, restated, supplemented or modified from time to time (the “Security Agreement”); (iv) that certain Amended and Restated Revolving Credit Promissory Note in the original principal amount of $15,000,000 dated as of February 27, 2008, executed by Borrower payable to the order of Bank, as amended by that certain Master Consent to Loan Documents and First Amendment to Loan Agreement and Amended and Restated Revolving Credit Promissory Note dated as of June 25, 2008, that certain Master Consent, Second Amendment to Amended and Restated Loan Agreement, Second Amendment to Amended and Restated Revolving Credit Promissory Note and First Amendment to Amended and Restated Term Promissory Note, dated as of March 18, 2009, and as amended, restated, supplemented or modified from time to time (the “Revolving Credit Note”); (v) that certain Amended and Restated Term Promissory Note in the original principal amount of $5,000,000 dated as of February 27, 2008, executed by Borrower payable to the order of Bank, as amended by that certain Master Consent, Second Amendment to Amended and Restated Loan Agreement, Second Amendment to Amended and Restated Revolving Credit Promissory Note and First Amendment to Amended and Restated Term Promissory Note, dated as of March 18, 2009, and as amended, restated, supplemented or modified from time to time (the “Term Note”); (vi) that certain Letter of Credit dated September 26, 2007 in the amount of $725,000 (reference number SM227727) (“Letter of Credit #SM227727”); and (vii) all other documents executed in connection therewith, as amended, restated, supplemented or modified from time to time (collectively with the Loan Agreement, the Guaranty Agreement, the Security Agreement, the Revolving Credit Note, the Term Note and Letter of Credit #SM227727, the “Loan Documents”); and

WHEREAS, Borrower and Guarantors have requested that the Bank agree to amend the Loan Agreement as further set forth below.

NOW, THEREFORE, in consideration of the premises and agreements contained herein, the parties hereto hereby agree as follows:

1.

Definitions.  All capitalized terms used herein and not otherwise defined shall have the respective meanings provided to such terms in the Loan Documents, as amended hereby.

2.

Amendments to the Loan Agreement.

(a)

The “Other Financial Information” section in the Affirmative Covenants paragraph of the Loan Agreement is hereby amended by adding the following new subsection (ii) at the end of subsection (i) and renumbering the prior subsection (ii) to (iii):

commencing with the month ending January 31, 2009, a monthly calculation of Borrower’s Fixed 

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Charge Coverage Ratio (as defined below) in form and substance satisfactory to Bank, 

(b)

 The “Fixed Charge Coverage Ratio” section in the Financial Covenants paragraph of the Loan Agreement is hereby amended by inserting the following at the end of such section:

Notwithstanding the foregoing, from and after January 1, 2009, Borrower shall not be required to comply with the foregoing Fixed Charge Coverage Ratio covenant.  

3.

Amendment Fee.  In consideration of the agreements set forth herein, Borrower shall pay to Bank an amendment fee in the amount of $15,000 which amendment fee shall be fully earned on the date hereof (the “Amendment Fee”) and shall be payable on the date hereof. The Amendment Fee is in addition to all other fees, interest, costs and expenses payable in connection with the Loan Documents and may be charged by Bank to any account of Borrower maintained by Bank.  The Amendment Fee shall be fully earned by Bank notwithstanding any failure by Borrower to comply with any other term of this Amendment.  

4.

Reaffirmations by Borrower and the Guarantors.

(a)

Acknowledgment of Obligations.  Borrower and Guarantors hereby acknowledge, confirm and agree that, as of May 7, 2009, (a) Borrower is indebted to Bank in respect of the Revolving Credit Note in the principal amount of $5,605,283.38, (b) Borrower is indebted to Bank in respect of the Term Note in the aggregate principal amount of $2,410,812.37 and (c) under Letter of Credit #SM227727 remains outstanding and undrawn in the amount of $725,000.  All such Loans, together with interest accrued and accruing thereon, and all other Obligations, fees, costs, expenses and other charges now or hereafter payable by Borrower to Bank, in accordance with the Loan Documents and the Swap Agreements (including this Agreement), are unconditionally owing by Borrower and Guarantors to Bank without offset, defense or counterclaim of any kind, nature or description whatsoever.  

(b)

Acknowledgment of Security Interests.  Borrower and Guarantors hereby acknowledge, confirm and agree that Bank has and shall continue to have valid, enforceable and perfected first-priority liens upon and security interests in the Collateral heretofore granted to Bank pursuant to the Loan Documents or otherwise granted to or held by Bank.

5.

Conditions to Effectiveness.  This Amendment shall become effective as of the date when the following conditions have been met (the “Effective Date”):

(a)

Bank shall have received a copy of this Amendment executed by Borrower, the Guarantors and by Bank (whether such parties shall have signed the same or different copies);

(b)

payment of the Amendment Fee in accordance with Section 3;

(c)

Bank shall have been reimbursed by Borrower for all reasonable fees and third-party out-of-pocket charges and other expenses incurred in connection with this Amendment, including, without limitation, the reasonable attorneys’ fees and expenses of K&L Gates LLP;

(d)

Bank shall have received any other documents or instruments reasonably requested by Bank in connection with the execution of this Amendment; and

(e)

an officers’ certificate from a duly authorized officer of Borrower certifying, among other things, that attached are true and correct copies of: (i) certificate of the existence of Borrower, issued by the Secretary of State of the jurisdiction of organization, and each other jurisdiction where such Borrower is required to qualify to transact business, (ii) the Bylaws of Borrower, (iii) resolutions adopted by the Board of Directors of Borrower authorizing the execution, delivery and performance of this Agreement, and the other documents and certificates to be delivered in connection herewith; and (iv) the names, incumbency and certified signatures of those persons authorized on behalf of Borrower to sign this Amendment and the other documents and certificates to be delivered in connection herewith.

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6.

Representations and Warranties.  After giving effect to the amendments set forth herein, Borrower and each Guarantor hereby certifies that (a) each of the representations and warranties set forth in the Loan Agreement, the Revolving Credit Note, the Term Note, the Guaranty Agreement, the Security Agreement and the other Loan Documents is true and correct in all material respects as of the date hereof as if fully set forth herein (except for any representation and warranty made as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date), (b) no Default has occurred and is continuing as of the date hereof and (c) the execution, delivery, and performance of this Amendment have been authorized by all requisite corporate action.

7.

Confirmation of all Loan Documents.  By their execution hereof, Borrower and each Guarantor hereby expressly (a) consents to the modifications and amendments set forth in this Amendment, (b) reaffirms all of its respective covenants, representations, warranties and other obligations set forth in the Loan Agreement, the Revolving Credit Note, the Term Note, the Guaranty Agreement, the Security Agreement and each of the Loan Documents to which it is a party and (c) acknowledges, represents and agrees that its respective covenants, representations, warranties and other obligations set forth in the Loan Agreement, the Revolving Credit Note, the Term Note, the Guaranty Agreement, the Security Agreement and each of the Loan Documents to which it is a party remain in full force and effect.

8.

Release.  

(a)

In consideration of the agreements of Bank contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower and Guarantors, each on behalf of itself and its successors, assigns, and other legal representatives hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Bank, and its successors and assigns, and its present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Bank and all such other Persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, controversies, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”) of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which Borrower, Guarantor or any of their respective successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever that arose or has arisen at any time on or prior to the day and date of this Amendment, for or on account of, or in relation to, or in any way in connection with any of the Loan Agreement, the Swap Agreements, the other Loan Documents or this Amendment or transactions thereunder or related thereto.

(b)

Borrower and Guarantors each understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding that may be instituted, prosecuted or attempted in breach of the provisions of such release.

(c) 

Borrower Guarantors each agrees that no fact, event, circumstance, evidence or transaction that could now be asserted or that may hereafter be discovered that relate to conduct prior to the date of this Amendment shall affect in any manner the final, absolute and unconditional nature of the release set forth above.

9.

Covenant Not to Sue.  Borrower and Guarantors, each on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by Borrower pursuant to Section 8 above.  If Borrower or any Guarantor, or any of their respective successors, assigns or other legal representatives, violates the foregoing covenant, Borrower and Guarantors, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys' fees and costs incurred by any Releasee as a result of such violation.

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10.

Miscellaneous.  

(a)

This Amendment is limited and, except as set forth herein, shall not constitute a modification, acceptance or waiver of any provision of the Loan Agreement, the Revolving Credit Note, the Term Note, any Loan Document or any other document or instrument entered into in connection therewith.

(b)

This Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement, and the signature pages from any counterpart may be appended to any other counterpart to assemble fully-executed counterparts.  Counterparts of this Amendment may be exchanged via electronic means, and a facsimile of any party's signature shall be deemed to be an original signature for all purposes.

(c)

This Amendment and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the laws of the State of North Carolina without giving effect to the conflicts of law provision thereof.

(d)

On and after the effectiveness of this Amendment, each reference in the Loan Agreement, the Revolving Credit Note, the Term Note or any other Loan Document shall mean and be a reference to the Loan Agreement, the Revolving Credit Note, the Term Note and any other Loan Document as amended by this Amendment.  This Amendment constitutes a “Loan Document”. 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first above written.

				
	[CORPORATE SEAL]

	KOWABUNGA! INC. (formerly known as THINK PARTNERSHIP INC.), a Nevada corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	CHERISH, INC., a Florida corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	CHECKUP MARKETING, INC., a North Carolina corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	RIGHTSTUFF INC., a North Carolina corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	MARKETSMART ADVERTISING, INC., a North Carolina corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	OZONA ONLINE NETWORK, INC., a Florida corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	KOWABUNGA MARKETING, INC., a Michigan

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

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	[CORPORATE SEAL]

	PRIMARYADS, INC., a New Jersey corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	REAL ESTATE SCHOOL ONLINE INC., a Florida

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	VINTACOM FLORIDA, INC., a Florida corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	MOREX MARKETING GROUP, LLC, a New York limited liability company

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	LITMUS MEDIA, INC., a Missouri corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	ILEAD MEDIA LLC, a Delaware limited liability company

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	[CORPORATE SEAL]

	VALIDCLICK, INC., a Missouri corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

6

				
	[CORPORATE SEAL]

	SECOND BITE, LLC., a Kansas limited liability company

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ GAIL BABITT

	 
	 
	Name:

	Gail Babitt

	 
	 
	Title:

	CFO

	 
	 
	 

	 
	WACHOVIA BANK, NATIONAL ASSOCIATION

	 
	 
	  

	 
	 
	 

	 
	By:  

	/s/ C. DOUGLASS RIDDLE

	 
	 
	Name:

	C. Douglass Riddle

	 
	 
	Title:

	Senior Vice President

	 
	 
	 

7United States Securities and Exchange Commission Edgar Filing

Exhibit 10.1.2

FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This First Amended and Restated Employment Agreement (this “Agreement”) is made and entered into as of April 26, 2009 by and between Golf Trust of America, Inc., a Maryland corporation (the “Company”), and Michael C. Pearce (the “Employee”).

WHEREAS, the Employee has been employed as the Company’s Chief Executive Officer and President pursuant to the terms of an Employment Agreement dated November 8, 2007, by and between the Company and the Employee (the “Original Employment Agreement”);

WHEREAS, subsequent to the Original Employment Agreement, the Board of Directors of the Company (the “Board”) approved certain modifications to the Employee’s compensation package; and

WHEREAS, the Company and the Employee desire to modify the Original Employment Agreement by amending and restated the Original Employment Agreement in its entirety as set forth herein.

NOW, THEREFORE, the parties, intending to be legally bound and in consideration of the promises and mutual covenants and agreements contained herein, hereby stipulate and agree as follows:

1.

Term of Employment.  The Company hereby continues to employ the Employee as an employee of the Company and the Employee hereby accepts continued employment from the Company.

2.

Duties of Employee.  

(a)

The Employee shall be employed by the Company as its Chief Executive Officer and President.  The Employee’s duties shall include, but not be limited to, those duties and responsibilities set forth in the Company’s Second Amended and Restated Articles of Incorporation and the Company’s Bylaws, as either may be amended from time to time (the “Duties”).  In addition to these services, the Duties will include such other services and duties commensurate with the Employee’s position with the Company as the Board may, from time to time, assign to the Employee.

(b)

The Employee shall at all times discharge the Employee’s responsibilities and duties in compliance with the rules and regulations of the Company and in accordance with the policies and directives of the Company adopted from time to time.  

(c)

The Employee shall serve the Company faithfully in the performance of the Employee’s Duties and shall devote the Employee’s time and best efforts to the Employee’s employment, including the requirements of the Company and the performance of the Employee’s Duties.  The Employee shall not during the term of this Agreement be engaged in any other business activity which interferes with the Employee’s obligations under this Agreement, whether or not such business activity is pursued for gain, profit, or other pecuniary advantage, without the prior written approval of the Board. 

3.

Compensation.  For all services rendered by the Employee under this Agreement, the Employee shall be entitled to compensation in accordance with the following:

(a)

Base Salary.  On December 17, 2007, the Board increased the Employee’s annual salary (“Annual Base Salary”) to $180,000, and the Company shall continue to pay such Annual Base Salary until adjusted as provided for herein.  The Employee shall be paid according to the Company’s normal payroll practices, less normal and appropriate withholdings.  This Annual Base Salary shall be adjusted by the Company on an annual basis to account for cost of living changes (as determined by the Company in its reasonable discretion), and may also be increased based on merit at the Company’s discretion.

(b)

Stock Options.  The Golf Trust of America, Inc. 2007 Stock Option Plan (the “2007 Plan”) was approved by the Company’s stockholders at the 2007 Annual Meeting of Stockholders held on December 14, 2007 (the “2007 Annual Meeting”).  Upon approval of the 2007 Plan, the Employee’s stock appreciation rights granted under the Original Employment Agreement terminated and the Employee received in their place a grant of  275,000 options to purchase the Company’s common stock at an exercise price equal to $2.10 (the “2007 Stock Options”).  The 2007 Stock Options vest on each of the first three anniversaries of the grant date in the following amounts: 91,667 vested on December 14, 2008; 91,667 will vest on December 14, 2009; and 91,666 will vest on December 14, 2010.  On February 27, 2009, 85,000 options to purchase the Company’s common stock at an exercise price equal to $1.10 were issued  to the Employee pursuant to the 2007 Plan (the “2009 Stock Options;” and together with the 2007 Stock Options, collectively, the “Stock Options”).  The 2009 Stock Options vest on each of the first three anniversaries of the grant date in the following amounts:  28,334 will vest on February 27, 2010; 28,333 will vest on February 27, 2011; and 28,333 will vest on February 27, 2012.  Notwithstanding anything herein or in the 2007 Plan to the contrary, all unvested Stock Options will automatically vest upon a termination Without Cause (as defined below), the Employee’s death or Disability (as defined below) or a Change in Control (as defined below) of the Company or other similar fundamental corporate transaction.  The Stock Options were granted in accordance with the terms and conditions of the 2007 Plan and any grant agreement entered into by and between the Company and the Employee.  For purposes of this Agreement, the term “Change in Control” shall mean (i) any merger or consolidation of the Company with or into another entity; provided, however,  a merger or consolidation of the Company shall not constitute a “Change in Control” if the holders of the outstanding voting securities of the Company (determined immediately prior to such merger or consolidation) own a majority of the outstanding voting securities of the surviving corporation (determined immediately following such merger or consolidation), (ii) any sale or transfer by the Company of all or substantially all of its assets, or (iii) any tender offer or exchange offer for or the acquisition, directly or indirectly, by any person or group of all or a majority of the then-outstanding voting securities of the Company.

4.

Fringe Benefits.  The Employee shall receive with other similarly situated employees of the Company, all of the fringe benefits to be established by the Company, together 

2

with the following additional fringe benefits, provided that the Employee is otherwise eligible and desires to participate.

(a)

Reimbursement for all business expenses which are ordinary, necessary and reasonable, including, without limitation, travel expenses, incurred by the Employee in accordance with the policies, practices and procedures of the Company that may be in effect from time to time and in connection with the performance of the Employee’s Duties; provided that the Employee presents appropriate substantiation for such expenses in a form acceptable to the Internal Revenue Services and in compliance with the Company’s then applicable policy.  On December 17, 2007, the Board granted the Employee a monthly car allowance of $400, and the Company shall continue to pay such allowance in accordance with the terms of this Agreement.

(b)

The Employee shall be entitled to participate in all Company sponsored group insurance policies and programs or elect to have the Company remit premiums on his behalf for third-party health coverage if such coverage is less costly than the Company-provided programs.

(c)

During each full calendar year of employment, the Employee shall be entitled to four weeks of paid vacation time.  The Employee shall also be paid for observed Company holidays.

5.

Termination of Employment.  This Agreement shall terminate as follows:

(a)

Death or Disability.  The Employee’s employment shall terminate automatically upon the Employee’s death.  For purposes of this Agreement, the Employee shall be deemed to be “Disabled” (the defined term including “Disability”) if the Employee suffers an illness or disability resulting in the Employee’s inability to perform the essential functions of the Employee’s Duties hereunder, with or without reasonable accommodation, for a period of one-hundred eighty (180) consecutive days.  If the Employee is Disabled, then the Company shall give to the Employee written notice of its intention to terminate the Employee’s employment.  In such event, the Employee’s employment with the Company shall terminate effective on the thirtieth (30th) day after receipt of such notice by the Employee provided that, within the thirty (30) days after such receipt, the Employee shall not have returned to full time performance of the Employee’s Duties.

(b)

Cause.  The Company may terminate the Employee’s employment at any time, without notice and with immediate effect, for Cause.  For purposes of this Agreement, “Cause” shall mean: 

(i)

a material breach by the Employee of the Employee’s Duties and obligations as set forth in this Agreement (other than due to Disability), which material breach is not remedied within five (5) business days after receipt of written notice from the Company specifying such a breach; 

(ii)

the conviction of the Employee of a felony;

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(iii)

actions by the Employee involving moral turpitude;

(iv)

any willful or material misconduct of the Employee, including, without limitation, misconduct involving fraud or dishonesty in the performance of the Employee’s Duties or obligations under this Agreement or conduct which is deemed, in the sole judgment of the Company, to be injurious to the Company; or 

(v)

the Employee’s illegal use of controlled substances.

(c)

Without Cause.  Either the Employee or the Company may terminate this Agreement “Without Cause” upon thirty (30) days written notice.  

6.

Obligations of Employee and the Company Upon Termination.  The parties agree as follows:

(a)

Death or Disability.  If the Employee’s employment is terminated by reason of the Employee’s death or Disability, the Employee or the Employee’s estate shall be paid the Employee’s salary described in Paragraph 3 of this Agreement, together with those fringe benefits described in Paragraph 4 of this Agreement, through the end of the month during which the Employee’s death occurs or during which the Disability effective date falls.

(b)

Cause.  If the Employee’s employment is terminated for Cause, such termination for Cause shall constitute an immediate termination of the Company’s obligations pursuant to Paragraphs 3 and 4 of this Agreement.  The Employee shall not be entitled to any compensation or benefits beyond the effective date of such termination for Cause.  

(c)

Without Cause.  

(i)

By the Company.  If the Employee’s employment is terminated by the Company Without Cause, then the Company shall (a) pay to the Employee an amount equal to fifty percent (50%) of his Annual Base Salary described in Paragraph 3 of this Agreement and (b) provide the fringe benefits described in Paragraph 4 of this Agreement for six (6) months following such termination of employment. Any amounts payable to the Employee under this Paragraph 6(c)(i) will be payable, at the Employee’s election, (a) in a lump sum upon the date of termination or (b) ratably over six (6) months on regular Company paydays.

(ii)

By Employee.  If the Employee resigns from employment, such resignation shall constitute an immediate termination of the Company’s obligations pursuant to Paragraphs 3 and 4 of this Agreement and the Employee shall not be entitled to any compensation or benefits beyond the effective date of such resignation.  Notwithstanding the above, if the Employee’s resignation (a) is the result of a material breach by the Company of its obligations hereunder, (b) as a result of a material diminution in the Employee’s Duties, or (c) occurs in connection with a Change in Control, then the Company shall (a) pay to the Employee an amount equal to fifty percent (50%) of his Annual Base Salary 

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described in Paragraph 3 of this Agreement and (b) provide the fringe benefits described in Paragraph 4 of this Agreement for six (6) months following such termination of employment.  Any amounts payable to the Employee under this Paragraph 6(c)(ii) will be payable, at the Employee’s election, (a) in a lump sum upon the date of resignation or (b) ratably over six (6) months on regular Company paydays.

7.

Covenant Not to Disclose Confidential Information.

(a)

It is stipulated and agreed that as a result of the Employee’s employment by the Company, and as a result of the Employee’s continued employment hereunder, the Employee has and will have access to valuable, highly confidential, privileged and proprietary information not generally available in the public domain relating to the Company’s business (the “Confidential Information”).  For purposes of this Agreement, “Confidential Information” means customer lists, customer requirements and specifications, financial data, sales figures, costs and pricing figures, marketing and other business plans, product development information, product design information, computer programs and listings, marketing concepts, personnel matters, drawings, specifications, instructions, methods, processes, techniques, shop practices, formulae or any other information relating to the Company’s sales, technology, research data, and all other know-how, trade secrets or proprietary information, or any copies, elaborations, modifications and adaptations thereof, which are in the possession of the Company and which have not been published or disclosed to, and are not otherwise known to, the public.  It is further acknowledged that the unauthorized use or disclosure by the Employee of any of the Confidential Information would seriously damage the Company in its Business. 

(b)

As a consequence of the above, with respect to any Confidential Information which is obtained by the Employee during or as the result of the Employee’s performance of services for the Company and/or its customers, vendors, suppliers and distributors and which is not generally available to the public, whatever its nature and form and whether obtained orally, by observation, from written materials or otherwise, the Employee agrees as follows.  During the term of this Agreement and after its termination or expiration for any reason:

(i)

The Employee will hold all such Confidential Information in strict confidence and will not use, publish, divulge or otherwise reveal or allow to be revealed any portion thereof to any third person, company or other entity, except to or with the prior written consent of the President of the Company; 

(ii)

The Employee will use all reasonable precautions to assure that all such Confidential Information is properly protected and kept from unauthorized persons or entities, and will immediately report to the President of the Company any misuse of such Confidential Information that the Employee may encounter by another person or entity; 

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(iii)

The Employee will make no use of any such Confidential Information except such use as is required in the performance of the Employee’s services for the Company or its customers; and

(iv)

Upon termination of the Employee’s employment with the Company for any reason, or upon the Company’s request, the Employee will immediately deliver to the Company all documents, software, hardware, written materials and other items which contain such Confidential Information.  After the termination of the Employee’s employment with the Company for any reason, the Employee will not, without the President’s prior written consent, use, divulge, disclose, furnish or make accessible to any third person, company or other entity, any aspect of the Confidential Information.  

8.

Remedies.

It is stipulated that a breach by the Employee of the provisions of Paragraph 7 would cause irreparable damage to the Company.  The Company, in addition to any other rights or remedies which the Company may have, shall be entitled to an injunction restraining the Employee from violating or continuing any violation of the provisions of Paragraph 7.  Such right to obtain injunctive relief may be exercised at the option of the Company, concurrently with, prior to, after or in lieu of, the exercise of any other rights or remedies which the Company may have as a result of any such breach or threatened breach.

9.

Acknowledgment of Reasonableness.  The Employee has carefully read and considered the provisions of this Agreement, has had the opportunity for consultation with an attorney of the Employee’s choice and agrees that the restrictions set forth herein are fair and reasonably required for the protection of the Company.

10.

Other Agreements/Warranties.  The Employee warrants that the Employee is not bound by the terms of a confidentiality agreement or non-competition agreement or any other agreement with a former employer or other third party which would preclude the Employee from accepting employment with the Company or which would preclude the Employee from effectively performing the Employee’s Duties.

11.

Surrender of Books and Records.  The Employee acknowledges that all files, computer disks, records, lists, designs, specifications, books, products, plans and other materials or property owned or used by the Company in connection with the conduct of its business shall at all times remain the property of the Company, and that upon termination or expiration of this Agreement for any reason or upon the request of the Company, the Employee will immediately surrender to the Company all such materials.

12.

Entire Agreement.  This Agreement contains the entire agreement of the parties hereto and supersedes and replaces all prior agreements, arrangements and understandings, whether written or oral.  This Agreement replaces and supersedes the Original Employment Agreement.  Moreover, this Agreement shall not be modified or changed in any respect except by a writing executed by both parties hereto.

13.

Successors and Assigns.  The rights and obligations of the Employee under this Agreement, including but not limited to the provisions of Paragraph 7 herein, shall inure to the benefit of the Company, its successors and assigns, and shall be binding upon the Employee and 

6

the Employee’s respective successors, heirs and assigns.  The Company shall have the right to assign, transfer or convey this Agreement to its affiliated companies, successor entities, or assignees or transferees of substantially all of the Company’s business activities.  This Agreement, being personal in nature to the Employee, may not be assigned by the Employee without the Company’s prior written consent.

14.

Notice.  All notices required and permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when mailed by certified or registered mail, return receipt requested, addressed to the intended recipient as follows, or at such other address as is provided by either party to the other:

If to the Company:

Golf Trust of America, Inc.

10 North Adger’s Wharf 

Charleston, South Carolina 29401

Attn: Chairman of the Board

If to the Employee:

Michael C. Pearce

213 Rhododendron Drive

Chapel Hill, North Carolina 27517

15.

Governing Law.  This Agreement shall, in all respects, be governed by and construed according to the laws of the State of South Carolina, notwithstanding any South Carolina or other conflict-of-interest provisions to the contrary.  

16.

General Provisions.

(a)

This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

(b)

The parties may waive in writing any breach or non-fulfillment by the other party of any provision of this Agreement.  Any waiver of a breach of any provision of this Agreement shall not operate or be construed as a waiver of, or estoppel with respect to, any subsequent breach.

(c)

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

(d)

The provisions of Paragraph 7 of this Agreement shall survive the termination of the Employee’s employment with the Company for any reason.

[SIGNATURE PAGE FOLLOWS]

7

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the date first above written.

			
	 
	Employee:

	 
	 
	 

	 
	 
	 

	 
	/s/Michael C. Pearce

	 
	Michael C. Pearce 

	 
	 
	 

	 
	 
	 

	 
	Golf Trust of America, Inc.

	 
	 
	 

	 
	 
	 

	 
	By:

	/s/ Jay Gottlieb

	 
	 
	Name: Jay Gottlieb

	 
	 
	Title: Chairman of the Compensation Committee

8

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