ASSIGNMENT, ASSUMPTION AND MODIFICATION OF
PURCHASE AGREEMENT
(Silverthorn Country Club)
THIS ASSIGNMENT, ASSUMPTION AND MODIFICATION OF PURCHASE AGREEMENT (this
"Assignment Agreement") is made and entered into as of the 18th day of June 1998
(the "Effective Date"), by and between SCARBOROUGH SEMBLER JOINT VENTURE II, a
Florida general partnership, and SILVERTHORN COUNTRY CLUB, INC., a Florida
corporation (collectively, "Seller"); GRANITE GOLF GROUP, INC., a Nevada
corporation ("Assignor"); and GOLF TRUST OF AMERICA, L.P., a Delaware limited
partnership ("Assignee").
THE PARTIES ENTER THIS ASSIGNMENT AGREEMENT on the basis of the following
facts, understandings, and intentions:
A. Assignor and Seller have entered into that certain Purchase
Agreement dated as of May 13, 1998 (the "Purchase Agreement"), a copy of which
is attached hereto as EXHIBIT M, whereby Assignor agreed, subject to certain
terms and conditions set forth therein, to acquire from Seller that certain real
property, improvements and tangible and intangible personal property located
thereon at Silverthorn Country Club, located in Brooksville, Florida, as more
particularly described in the Purchase Agreement (the "Property"). Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Purchase Agreement.
B. Assignor desires to assign to Assignee, and Assignee desires to
assume from Assignor, Assignor's right and obligation to acquire the Property,
together with Assignor's right, title and interest in, to and under the Purchase
Agreement as modified and on the terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Seller, Assignor, and Assignee hereby agree as
follows:
1. MODIFICATION TO THE PURCHASE AGREEMENT. The Seller, Assignor, and
Assignee agree to the following modifications of the Purchase Agreement:
a. EXHIBITS A, B, C, D, E, F, G, H, I, J, K, AND L, attached to the
Purchase Agreement are hereby deleted in their entirety and replaced with the
amended and restated EXHIBITS A, B, C, D, E, F, G, H, I, J, K, AND L,
respectively, which have been attached hereto and made a part hereof.
b. Seller agrees to complete and pay for all costs associated with
the relocation of the cart path bordering hole 15 on the Property and such
relocation shall be completed within fifty (50) days of Closing.
c. Seller agrees to complete and pay for all costs associated with
the following repairs and improvements to the rest station facilities near hole
14 of the Property and such repairs shall be completed within fifty (50) days of
Closing :
i. permanent connection to the county potable water supply;
ii. permanent connection to the sanitary sewer system;
iii. replacement of the drinking fountain;
iv. repair the damage to fascia board and support timber.
d. The following is inserted in Section 1.1 after the definition of
"ESCROW AGENT":
"EARNEST MONEY DEPOSIT" means the $150,000 earnest money deposit
delivered by Assignee to Seller on June 5, 1998 as more
particularly set forth in that certain Amended and Restated
Escrow Agreement by and between Seller, Assignee, and Escrow
Agent dated June 5, 1998, a copy of which is attached hereto as
EXHIBIT O.
e. Section 4.7 is hereby deleted in its entirety and the following
is substituted in lieu thereof:
4.7 GOLF COURSE MAINTENANCE STANDARDS. Buyer agrees that, during
such time as Seller is actively selling property within
Silverthorn but no longer than for a period of five (5) years
from the date of Closing, Buyer shall not materially reduce or
eliminate the quality standards established and currently
employed by Seller in maintaining the Property and Improvements
thereon; provided, however, if at the end of five (5) years from
the date of Closing, twenty (20) or more lots remain to be sold
by Seller within Silverthorn, then this provision shall be
extended for one (1) additional year. A copy of the maintenance
standards is attached hereto and incorporated herein as EXHIBIT
J.
f. Section 5.1 "TITLE INSURANCE" is deleted in its entirety and the
following is substituted in lieu thereof:
TITLE INSURANCE. The Title Company shall have delivered or
unconditionally and irrevocably committed to deliver within
thirty (30) days after Closing, the Owner's Title Policy,
subject only to the Permitted Title Exceptions (which shall not
include a survey exception).
g. Section 5.1 LANDSCAPING" is deleted in its entirety and the
following is substituted in lieu thereof:
LANDSCAPING. From time to time Seller may desire to plant trees
and place landscaping on portions of the Property which are
adjacent to
2
the residential lots in order to enhance the aesthetic appeal of
the lots. Conversely, from time to time, Seller may desire to
remove trees and vegetation from the Property in order to enhance
the view of the golf course from one of the adjacent residential
lots. Prior to planting or removing trees, landscaping, or
vegetation, Seller shall request in writing Buyer's approval, and
Buyer shall respond to such a request within fifteen (15) days of
receipt thereof, such approval not being unreasonably withheld
provided that the request does not interfere with the use of the
Property as a golf course. Seller agrees that it will perform all
related activities at times and in the manner directed by Buyer
and at Seller's sole cost and expense. Seller further agrees
that the portion of the Property so affected shall not result in
any drainage, maintenance, or playability conditions harmful to
the intended use.
h. Section 5.1 "SILVERTHORN TRADENAME" is deleted in its entirety
and the following is substituted in lieu thereof:
"SILVERTHORN TRADENAME". Buyer agrees that Seller shall have the
right to use the "Silverthorn" tradename and trademark in
advertising and promotional materials that are currently being
used to promote the sale of homes and properties within the
Silverthorn community. Seller may assign this right to builders
that are operating within Silverthorn. Silverthorn/Hernando
Homeowner's Association, Inc. ("Homeowners") shall also have a
right to use the "Silverthorn" tradename and trademark in
pursuing those activities for which it is authorized under its
existing organizational documents; provided, however, that
Seller, its assigns, and Homeowners shall not make reference to
the Silverthorn Country Club without requesting Buyer's prior
written consent, and Buyer shall have fifteen (15) days to
respond to such a written request after receipt thereof, with
such approval not being unreasonably withheld. The use of
materials existing and being utilized as of the Effective Date
are conclusively deemed to be approved by Buyer. After current
materials are depleted, all new materials referencing the Golf
Club must be pre-approved in writing by Buyer.
i. The following portion of SECTION 5.1 of the Purchase Agreement is
deleted in its entirety and the following is substituted in lieu thereof:
SELLER'S RETAINED MEMBERSHIP. Provided that Seller is actively
selling property within Silverthorn, but no longer than for a
period of five (5) years from Closing, the Seller shall retain a
membership in the Golf Club that allows for a maximum number of
designees at any time of three (3). Said membership may be held
by any entity which is an affiliate or controlled by either
Seller. Seller shall provide a written
3
schedule of designees to Buyer from time to time as such
designees change. Seller and/or such designees shall not pay
dues or assessments, but will be subject to all other regular
charges or fees and all rules and regulations of the Golf Club.
j. Section 5.2 "BILLBOARDS"of the Purchase Agreement shall be
deleted in its entirety and the following is substituted in lieu thereof:
BILLBOARDS. Buyer agrees to pay twenty-five percent (25%) of the
rental cost of advertising billboards which jointly promote the
residential properties and the operation of the Golf Club. The
list of such billboards, including the lease term, is included in
EXHIBIT H. Upon termination of the lease for each billboard,
Buyer shall not be responsible for future rental costs unless it
so agrees in writing. Seller may retain the billboard locations
for future community advertising.
k. Section 6.1 is amended such that the first sentence is deleted in
its entirety and the following is substituted in lieu thereof:
Closing shall be held the second (2nd) business day after Buyer
receives an as-built survey of the Property in form and content
reasonably acceptable to Buyer pursuant to the terms of the
letter of May 27, 1998 from Buyer to Mr. Steve Richards and Gary
Strohauer, Esquire, attached hereto as EXHIBIT N and made a part
hereof provided that Seller is not in default under the terms of
the Purchase Agreement, as modified herein.
l. Section 6.2 is amended by inserting a new provision as follows:
TENANT AND VENDOR NOTICES. Tenant shall be responsible for
providing to all tenants and vendors related to the Property
notices of the conveyance of the Property from Seller to Buyer,
and such notices shall be in form and content acceptable to Buyer
and Seller.
m. Section 9.5 is amended such that the following is inserted at the
end of the first sentence: "and the Amended and Restated Escrow Agreement
entered into by and among Assignee, Seller and Escrow Agent as of June 5, 1998."
n. Except as otherwise described herein and modified herein, all
other terms and conditions of the Purchase Agreement shall remain the same and
in full force and effect.
2. OBLIGATIONS NOT ASSUMED BY ASSIGNEE. Notwithstanding anything to the
contrary contained in this Assignment Agreement, Assignee shall not assume the
following obligations of Assignor under the Purchase Agreement, which
obligations are specifically retained by Assignor:
4
a. The obligation to pay for the cost of studies and investigations
set forth in EXHIBIT I, as more particularly set forth in Section 2.2. "SITE
INSPECTION" of the Purchase Agreement.
b. The obligation to assume, at Closing, those Operating Agreements
described and identified on EXHIBIT H of the Purchase Agreement; provided,
however, that Tenant or Assignee, as Assignee shall determine, shall assume such
Operating Agreements at Closing.
c. The obligation for payment of any brokerage fees due Core Real
Estate and/or Mr. Michael Garsoni, as more particularly set forth in Section 7.3
of the Purchase Agreement; provided, however, that Assignor agrees to pay such
fees.
d. The obligation to purchase Seller's Inventory as defined in the
Purchase Agreement and attached as EXHIBIT C to the Purchase Agreement, all as
more particularly set forth in Section 6.3 of the Purchase Agreement; provided,
however, that Assignor agrees to comply with Buyer's obligations as described in
Section 6.3 of the Purchase Agreement.
e. The obligation to purchase any of Seller's Accounts Receivables
as defined in the Purchase Agreement, all as more particularly set forth in
Section 6.3 of the Purchase Agreement; provided, however, that Assignor agrees
to comply with Buyer's obligations described in Section 6.3 of the Purchase
Agreement.
f. The obligation to pay for any closing costs pursuant to Section
6.5 of the Purchase Agreement, except for the obligation to pay for up to
$23,500 of the closing costs as more particularly set forth in Assignee's Lease
(defined below) with an affiliate of Assignor, Granite Silverthorn, Inc., a
Florida corporation ("Tenant") prepared in connection with this transaction.
3. ASSIGNMENT AND ASSUMPTION. As of the Effective Date, Assignor hereby
assigns and transfers to Assignee, all of Assignor's right, title and interest
in, to and under the Purchase Agreement, and subject to the modifications
contained in Section 1 and subject to Section 2 of this Assignment Agreement,
Assignee hereby accepts Assignor's assignment and assumes all of Assignor's
duties and obligations and responsibilities arising under the Purchase Agreement
from and after the Effective Date. Nothing contained in this Assignment
Agreement shall release Assignor from any of its obligations under the Purchase
Agreement.
4. CLOSING. Closing shall be held at the offices of Baxter & Strohauer,
P.A. ("Escrow Agent") in Clearwater, Florida on the Closing Date. At Closing,
Buyer shall remit a portion of the Purchase Price equal to $4,700,000 LESS the
Earnest Money Deposit (which is $150,000) to Seller by federal funds wired to an
account designated by Seller. Additionally, the Escrow Agent shall remit the
Earnest Money Deposit to the Seller. The parties will then deliver to each
other, as applicable, all of the documents and instruments,
5
each of which have been duly executed and, where applicable, acknowledged and/or
sworn on behalf of the signing party as more particularly set forth in Sections
6.2, 6.3 and 6.4 in this Purchase Agreement, as modified herein.
5. REPRESENTATIONS AND WARRANTIES REGARDING THE PURCHASE AGREEMENT.
Assignor hereby represents and warrants to Assignee that: (i) there has been no
prior assignment of the Purchase Agreement; (ii) there has occurred no default
under the Purchase Agreement on the part of Assignor or, to Assignor's actual
knowledge, on the part of Seller; and (iii) Assignee may rely on all of the
representations and warranties made by Assignor to Seller pursuant to Article IV
of the Purchase Agreement.
6. LEASE AND PLEDGE AGREEMENT.
a. As a condition to Assignee's performance of its obligations under
the Assignment Agreement, at closing the Tenant shall deliver to Assignee
executed counterparts of a lease in the form attached hereto as EXHIBIT P (the
"Lease"), and a pledge agreement in the form attached to the Lease as Exhibit D
(the "Pledge Agreement").
b. As a condition to Assignor's performance of its obligations under
this Assignment Agreement, at Closing, Assignee shall deliver to Assignor
executed counterparts of the Lease and Pledge Agreement.
7. INDEMNITY. Assignor shall indemnify and hold Assignee harmless from
and against all claims, demands, losses, damages, expenses and costs including,
but not limited to, reasonable attorneys' fees and expenses actually incurred,
arising our of or in connection with Assignor's failure to observe, perform and
discharge each and every one of the covenants, obligations and liabilities of
"buyer" under the Purchase Agreement to be observed, performed or discharged on,
or relating to, accruing with respect to the period prior to the date of this
Assignment Agreement. Assignee shall indemnify and hold Assignor harmless from
and against all claims, demands, losses, damages, expenses and costs including,
but not limited to, reasonable attorneys' fees and expenses actually incurred,
arising our of or in connection with Assignee's failure, from and after the date
of this Assignment Agreement, to observe, perform and discharge each and every
one of the covenants, obligations and liabilities assumed by Assignee with
respect to the Purchase Agreement and relating to the period from and after the
date of this Agreement.
8. NOTICES. All notices, consents, approvals, waivers, and elections
which any party shall be required or shall desire to make or give under this
Assignment Agreement shall be in writing and shall be in writing and shall be
sufficiently made or given only when sent by (a) certified mail, return receipt
requested, (b) prepaid overnight delivery service with proof of delivery, or (c)
electronic transmission with hard copy to follow as confirmation of receipt,
addressed:
6
To Seller:
Mr. David Felice
Scarborough Sembler Joint Venture II and
Silverthorn Country Club, Inc.
P.O. Box 7078
Wesley Chapel, Florida 33543
Telephone: (813) 973-7553
Facsimile: (813) 973-7807
with a copy to:
Baxter & Strohauer, P. A.
1150 Cleveland Street, Suite 300
Clearwater, Florida 33755
Attn: Gary N. Strohauer, Esq.
Telephone: (813) 461-6100
Facsimile: (813) 447-6899
To Assignor:
Granite Golf Group, Inc.
15170 N. Hayden Road, Suite 106
Scottsdale, Arizona 85254
Attention: Steve Richards
Telephone: (602) 905-0978
Facsimile: (602) 905-0979
to Assignee:
Golf Trust of America, L.P.
14 North Adger's Wharf
Charleston, S.C. 29401
Attn: Scott D. Peters
Telephone: (843) 723-4653
Facsimile: (843) 723-0479
with a copy to:
Nexsen Pruet Jacobs Pollard & Robinson, LLP
200 Meeting Street, Suite 301
Charleston, S.C. 29401
Attn: Matthew J. Norton, Esq.
Telephone: (843) 720-1772
Facsimile: (843) 720-1777
7
9. GOVERNING LAW. This Assignment Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of Florida.
10. BINDING EFFECT. This Assignment Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, personal representatives, successors and assigns.
11. COUNTERPARTS. This Assignment Agreement may be executed in any number
of counterparts, which counterparts, when considered together, shall constitute
a single, binding, valid and enforceable agreement.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the day and year first above written:
[Signature Pages Attached]
8
SELLER:
SCARBOROUGH SEMBLER JOINT
VENTURE II, a Florida general
partnership (SEAL)
BY: SCARBOROUGH CONSTRUCTORS,
INC., its general partner
__________________________ By: __/S/______________________________
Name:__________________________________
__________________________ Title:_________________________________
SILVERTHORN COUNTRY CLUB, INC.,
a Florida corporation
__________________________ By:___/S/______________________________
Name:__________________________________
__________________________ Title:_________________________________
ASSIGNOR:
GRANITE GOLF GROUP, INC.,
a Nevada corporation
__________________________ By:___/S/______________________________
Name:__________________________________
__________________________ Title:_________________________________
ASSIGNEE:
GOLF TRUST OF AMERICA, L.P.,
a Delaware limited partnership
By: GTA GP, Inc., its general partner
_________________________ By:___/S/______________________________
Name: W. Bradley Blair, II
_________________________ Title: President and Chief Executive Officer
9
LIST OF EXHIBITS
SILVERTHORN COUNTRY CLUB
Exhibit A Legal Description
Exhibit B Improvements
Exhibit C Tangible Personal Property
Exhibit D Intangible Personal Property
Exhibit E Bill of Sale - Personal Property
Exhibit F Warranty Deed
Exhibit G FIRPTA Certificate
Exhibit H Operating Agreements
Exhibit I Due Diligence Request
Exhibit J Maintenance Standards
Exhibit K Comparable Facilities
Exhibit L Seller's Warranty Certificate
Exhibit M Purchase Agreement dated May 13, 1998
Exhibit N Letter Regarding Survey Standards
Exhibit O Amended and Restated Escrow Agreement
Exhibit P Lease
10
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT B
IMPROVEMENTS
EXHIBIT C
TANGIBLE PERSONAL PROPERTY
EXHIBIT D
INTANGIBLE PERSONAL PROPERTY
EXHIBIT E
BILL OF SALE - PERSONAL PROPERTY
EXHIBIT F
WARRANTY DEED
EXHIBIT G
FIRPTA CERTIFICATE
EXHIBIT H
OPERATING AGREEMENTS
EXHIBIT I
DUE DILIGENCE REQUEST
EXHIBIT J
MAINTENANCE STANDARDS
EXHIBIT K
COMPARABLE FACILITIES
EXHIBIT L
SELLER'S WARRANTY CERTIFICATE
EXHIBIT M
PURCHASE AGREEMENT DATED MAY 13, 1998
EXHIBIT N
LETTER REGARDING SURVEY STANDARDS
EXHIBIT O
AMENDED AND RESTATED ESCROW AGREEMENT
EXHIBIT P
LEASE