REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
March 14, 1997, by and between Grove Real Estate Asset Trust, a Maryland real
estate investment trust (the "Company"), and each of the parties listed on
Schedule 1 hereto (each, a "Purchaser" and collectively, the "Purchasers").
WHEREAS, the Company has entered into a Securities Purchase
Agreement (each, a "Securities Purchase Agreement") with each Purchaser
providing for the purchase by such Purchaser and sale by the Company of Common
Shares; and
WHEREAS, in order to induce each Purchaser to enter into the
Securities Purchase Agreement, the Company has agreed to provide the
registration rights set forth herein;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
0. Definitions. As used herein, the following terms shall have the meanings set
forth below:
( ) "Agreement" shall have the meaning set forth in the preamble to this
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Agreement.
(a)"Business Day" shall mean any day on which the American Stock Exchange,
Inc. is open for trading.
(b)"Commencement Date" shall mean the six (6) month anniversary of the date of
this Agreement.
(c)"Company" shall have the meaning set forth in the preamble to this
Agreement.
(d)"Commission" shall mean the Securities and Exchange Commission, and any
successor thereto.
(e) "Common Shares" shall mean the common shares of beneficial interest, $0.01
par value per share, of the Company.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and any successor thereto, and the rules and regulations thereunder.
(g) "Effectiveness Period" shall have the meaning set forth in Section 2(a).
(h) "Fair Market Value" shall mean, as of any date, (i) if the Common Shares are
listed or admitted for trading on any national securities exchange, the Fair
Market Value of each Common Share shall be the average closing price per share
on such exchange (or if so listed on more than one exchange, the principal
exchange) on the ten (10) Business Days preceding the relevant date; (ii) if the
Common Shares are not traded on any national securities exchange, but are quoted
on the NASD Automated Quotation System (NASDAQ System) or any similar system of
automated dissemination of quotations of prices in common use, the Fair Market
Value of each Common Share shall be the average price per share equal to the
mean between the closing high asked and the low bid on such system on the ten
(10) Business Days preceding the relevant date; or (iii) if neither clause (i)
nor clause (ii) is applicable, the Fair Market Value of each Common Share shall
be the fair market value as of the close of trading on the relevant date as
determined by the Board of Trust Managers of the Company, in good faith in
accordance with uniform principles consistently applied.
(i) "NASD" shall mean the National Association of Securities Dealers, Inc.
(j) "Permitted Transferee" of any Purchaser shall mean any Person to whom
Registrable Securities are permitted to be transferred pursuant to the
Securities Purchase Agreement.
(k) "Person" shall mean an individual, a partnership (general or limited),
corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
(l) "Purchaser" shall have the meaning set forth in the preamble to this
Agreement.
(m) "Registrable Securities" shall mean (i) the Common Shares acquired by a
Purchaser pursuant to the Securities Purchase Agreement and listed on Schedule 1
hereto, (ii) the Common Shares, if any, acquired by a Purchaser pursuant to any
preemptive rights granted in a Securities Purchase Agreement (subject to any
restrictions on transfer relating to compliance with securities laws specified
in the applicable securities purchase agreement), and (iii) any securities
issued or issuable with respect to any Common Shares or other securities
referred to in clause (i) or clause (ii) by way of conversion, exchange, stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise. As
to any particular Registrable Securities, once issued, such securities shall
cease to be Registrable Securities when (A) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (B) such securities are permitted to be
disposed of pursuant to Rule 144(k) (or any successor provision to such Rule)
under the Securities Act as confirmed in a written opinion of counsel to the
Company addressed to the Purchaser holding such securities or (C) such
securities shall have been otherwise transferred pursuant to an applicable
exemption under the Securities Act, new certificates for such securities not
bearing a legend restricting further transfer shall have been delivered by the
Company and such securities shall be freely transferable to the public without
registration under the Securities Act.
(n) "Registration Expenses" shall mean all expenses incident to the Company's
performance of or compliance with the registration requirements set forth in
this Agreement including, without limitation, the following: (a) the fees,
disbursements and expenses of the Company's counsel, accountants and experts in
connection with the registration of Registrable Securities to be disposed of
under the Securities Act; (b) all expenses in connection with the preparation,
printing and filing of any registration statement, preliminary prospectus or
final prospectus, any other offering document and amendments and supplements
thereto and the mailing and delivery of copies thereof to any underwriters and
dealers; (c) the cost of printing or producing any agreement(s) among
underwriters, underwriting agreement(s) and blue sky or legal investment
memoranda, any selling agreements and any other documents in connection with the
offering, sale or delivery of Registrable Securities to be disposed of; (d) all
expenses in connection with the qualification of Registrable Securities to be
disposed of for offering and sale under state securities laws, including the
fees and disbursements of counsel for any underwriters in connection with such
qualification and in connection with any blue sky and legal investment surveys;
(e) the Commission or blue sky registration fees and any filing fees incident to
securing any required review by the NASD of the terms of the sale of Registrable
Securities to be disposed of; and (f) fees and expenses incurred in connection
with the listing of Registrable Securities on each securities exchange or
quotation system on which the Common Shares are then listed; provided, that
Registration Expenses with respect to any registration pursuant to this
Agreement shall not include underwriting discounts or commissions attributable
to Registrable Securities, transfer taxes applicable to Registrable Securities
or fees of counsel, if any, or other expenses of any Purchaser.
(o) "Registration Suspension Period" shall have the meaning set forth in
Section 2(b).
(p) "Securities Act" shall mean the Securities Act of 1933, as amended, and any
successor thereto, and the rules and regulations thereunder.
(q) "Securities Purchase Agreement" shall have the meaning set forth in the
recitals to this Agreement.
(r) "Shelf Registration" shall have the meaning set forth in Section 2(a).
(s) "Suspension Notice" shall have the meaning set forth in Section 2(b).
1. Shelf Registration. Obligation to File and Maintain. Promptly following the
Commencement Date, the Company will use commercially reasonable efforts to file
with the Commission a registration statement under the Securities Act for the
offering on a continuous or delayed basis in the future of all of the
Registrable Securities and will use commercially reasonable efforts to have it
declared effective as promptly as practicable following the Commencement Date
(the "Shelf Registration"). The Shelf Registration shall be on an appropriate
form and the Shelf Registration and any form of prospectus included therein or
prospectus supplement relating thereto shall reflect such plan of distribution
or method of sale as a Purchaser may from time to time notify the Company,
including, without limitation, the sale of some or all of the Registrable
Securities in a public offering or, if requested by a Purchaser, subject to
receipt by the Company of such information (including information relating to
Purchasers) as the Company reasonably may require, (i) in a transaction
constituting an offering outside the United States which is exempt from
registration requirements of the Securities Act in which the seller undertakes
to effect registration after the completion of such offering in order to permit
such shares to be freely tradeable in the United States, (ii) in a transaction
constituting a private placement under Section 4(2) of the Securities Act in
connection with which the seller undertakes to effect a registration after the
conclusion of such placement to permit such shares to be freely tradeable by the
purchasers thereof or (iii) in a transaction under Rule 144A of the Securities
Act in connection with which the seller undertakes to effect a registration
after the conclusion of such transaction to permit such shares to be freely
tradeable by the purchasers thereof. The Company shall use commercially
reasonable efforts to keep the Shelf Registration continuously effective for the
period beginning on the date on which the Shelf Registration is declared
effective and ending three years thereafter, or, with respect to any Purchaser
entitled to preemptive rights under the Securities Purchase Agreement, if
longer, three years after the last acquisition by such Purchaser of securities
of the Company pursuant to such preemptive rights (not including periods during
such period of effectiveness which are Registration Suspension Periods and any
periods during which such registration cannot be used by Purchasers as a result
of any stop order, injunction or other order of the Commission or other
government authority for any reason other than an act or omission of a
Purchaser), or, if shorter, the holding period under Rule 144(k) promulgated
under the Securities Act for Persons who are not affiliates of the Company (the
"Effectiveness Period")). During the period during which the Shelf Registration
is effective, the Company shall supplement or make amendments to the Shelf
Registration, if required by the Securities Act or if reasonably requested by a
Purchaser or an underwriter of Registrable Securities, including to reflect any
specific plan of distribution or method of sale, and shall use commercially
reasonable efforts to have such supplements and amendments declared effective,
if required, as soon as practicable after filing.
( ) Black-Out Periods. Notwithstanding anything herein to the contrary, (i)
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the Company shall have the right from time to time to require Purchasers not to
sell under the Shelf Registration or to suspend the effectiveness thereof during
the period starting with the date 15 days prior to the Company's good faith
estimate of the proposed date of closing of an underwritten public offering of
equity securities of the Company for the account of the Company (or such longer
period, not to exceed 30 days, as the Company may be engaged in a "road show" in
connection with such offering), and ending on the date 90 days following such
closing, and (ii) the Company shall be entitled to require Purchasers not to
sell under the Shelf Registration or to suspend the effectiveness thereof (but
not for a period exceeding 60 days) if the Company determines, in its good faith
judgment, that (A) such offering or continued effectiveness would interfere with
any material financing, acquisition, disposition, corporate reorganization or
other material transaction involving the Company or any of its subsidiaries, (B)
public disclosure of any such transaction would be required prior to the time
such disclosure might otherwise be required, or (C) when the Company is in
possession of material information that it deems advisable not to disclose in a
registration statement. The Company may not exercise its rights under this
Section 2(b) more than two times during any 12-month period; provided, that the
period during which the Company requires Purchaser not to sell under the Shelf
Registration or suspends effectiveness thereof under this Section 2(b) shall not
exceed 150 days during such 12-month period.
Once any Shelf Registration has been declared effective, any period during which
the Company causes Purchaser to not sell under the Shelf Registration or fails
to keep such Shelf Registration effective and usable for resale of Registrable
Securities for the period required hereunder shall be referred to as a
"Registration Suspension Period". Following the date a Shelf Registration
becomes effective, a Purchaser shall be required to advise the Company in
writing of its intent to sell Registrable Securities under the Shelf
Registration two Business Days prior to the date of the intended sale, at which
time the Company shall advise such Purchaser whether a Registration Suspension
Period is then currently in effect by giving written notice pursuant to this
Section 2(b) to such Purchaser of its determination that such registration
statement is no longer in effect or usable for resale of Registrable Securities
(a "Suspension Notice"). If the Company does not respond to a Purchaser's notice
of its intent to sell Registrable Securities within two Business Days of the
Company's receipt of that notice, the Company will be deemed to have confirmed
that the Shelf Registration is currently in effect and no Registration
Suspension Period exists. Any Registration Suspension Period shall continue
until the date when the Company notifies Purchasers that the use of the
prospectus included in a registration statement filed pursuant to this Section 2
may be resumed for the disposition of Registrable Securities. Any Suspension
Notice is not required to state the reason therefor, but shall be sufficient if
it contains a certification by an executive officer of the Company that such
suspension is permitted by this Section 2(b). The Effectiveness Period will be
extended by the same number of days that comprise a Registration Suspension
Period.
(a) Number of Shelf Registrations. The Company shall be obligated to effect,
under this Section 2, only one Shelf Registration. A Shelf Registration shall
not be deemed to have been effected unless such registration becomes effective
pursuant to the Securities Act and is kept continuously in effect for the
Effectiveness Period.
(b) Expenses. All Registration Expenses incurred in connection with any Shelf
Registration shall be borne by the Company; provided, that the Company shall not
be required to bear the Registration Expenses of more than one underwritten
offering; provided, further, that the Company shall not be obligated to bear the
expenses for any underwritten offering, and such expenses shall be borne pro
rata by the Purchasers whose Registrable Securities are included in such
offering if the offering yields gross proceeds to the sellers of the Registrable
Securities thereunder of less than $10 million.
(c) Selection of Underwriters. Purchasers holding in the aggregate at least 50%
of the Registrable Securities shall be entitled to select the lead underwriter
for any underwritten sale of Registrable Securities pursuant to a registration
statement contemplated by this Section 2, subject to the approval of the
Company, which approval shall not be unreasonably withheld or delayed.
2. Incidental Registrations. Notification and Inclusion. If the Company proposes
to register for its own account any equity securities of the Company or any
securities convertible into equity securities of the Company under the
Securities Act on a form and in a manner that would permit registration of
Registrable Securities for sale to the public under the Securities Act (other
than a registration relating solely to the sale of securities to participants in
a dividend reinvestment plan, a registration on Form S-4 relating to a business
combination or similar transaction permitted to be registered on such Form S-4,
a registration on Form S-8 relating solely to the sale of securities to
participants in a stock or employee benefit plan, a registration permitted under
Rule 462 under the Securities Act registering additional securities of the same
class as were included in an earlier registration statement for the same
offering, and declared effective), the Company shall, at each such time after
the Commencement Date, promptly give written notice of such registration to the
Purchasers. Upon the written request of a Purchaser given within 10 Business
Days after the giving of such notice by the Company (which request shall specify
the number of Registrable Securities intended to be disposed of by such
Purchaser and the intended method of disposition thereof, but which shall not
include an underwritten offering unless the registration by the Company
contemplates an underwritten offering), the Company shall seek to include in
such proposed registration such Registrable Securities as a Purchaser shall
request to be so included and shall use commercially reasonable efforts to cause
a registration statement covering all of the Registrable Securities that such
Purchaser has requested to be registered to become effective under the
Securities Act. The Company shall be under no obligation to complete any
offering of securities it proposes to make under this Section 3 and shall incur
no liability to the Purchasers for its failure to do so. If, at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to the Purchasers and, thereupon, (i) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
incurred in connection therewith) and (ii) in the case of a determination to
delay registering, the Company shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities.
( ) Cut-back Provisions. The Company will not be required to effect any
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registration pursuant to this Section 3 if the Company shall have been advised
in writing (with a copy to the Purchasers) by a nationally recognized
independent investment banking firm selected by the Company to act as lead
underwriter in connection with the public offering of securities by the Company
that, in such firm's written opinion, a registration of Registrable Securities
requested to be registered at that time could adversely affect the Company's own
scheduled offering of securities; provided, that if an offering of some but not
all of the Registrable Securities requested to be registered by the Purchasers
would not adversely affect the Company's own offering of securities, the
aggregate number of Registrable Securities requested to be included in such
offering by the Purchasers shall be reduced pro rata according to the total
number of Registrable Securities requested to be registered by the Purchasers
(and any other holders of securities of the Company requesting registration)
until the aggregate number of Registrable Securities requested to be included in
the Company's own offering of securities (as such number is reduced in
accordance with the foregoing) would not adversely affect the Company's own
offering of securities. The number of Registrable Securities that each Purchaser
could then include in such registration would be reduced pro rata according to
the number of Registrable Securities requested to be included as compared to the
total number of Registrable Securities requested to be registered by all
Purchasers (and any other holders of securities of the Company requesting
registration). In no event shall the Company be required to reduce its own
offering of securities.
(a) Expenses. All Registration Expenses incurred in connection with any
registration of Registrable Securities pursuant to this Section 3 shall be borne
by the Company.
(b) Withdrawal by Purchaser. Notwithstanding any request under Section 3(a), a
Purchaser may elect in writing prior to the effective date of a registration
under this Section 3, not to register its Registrable Securities in connection
with such registration of securities by the Company.
(c) Obligations Unaffected. No registration of Registrable Securities effected
under this Section 3 shall relieve the Company of its obligation to effect
registrations of Registrable Securities pursuant to Section 2.
3. Registration Procedures. In connection with the filing of any registration
statement as provided in Section 2 or 3, the Company shall use commercially
reasonable efforts, as expeditiously as reasonably practicable, to:
() prepare and file with the Commission the requisite registration statement
(including a prospectus therein) to effect such registration and use
commercially reasonable efforts to cause such registration statement to become
effective;
(a) prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to maintain the continued effectiveness of such registration and to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement until, in the case of
Section 2, the termination of the period during which the Shelf Registration is
required to be kept effective, or, in the case of Section 3, the earlier of such
time as all of such securities have been disposed of and the date which is 90
days after the date of initial effectiveness of such registration statement;
(b) furnish to each Purchaser such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statements (including each complete prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, including documents incorporated by reference, as a
Purchaser may reasonable request;
(c) use commercially reasonable efforts to register or qualify all Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
a Purchaser shall reasonably request, keep such registration or qualification in
effect for so long as such registration statement remains in effect, and take
any other action which may be reasonably necessary or advisable to enable the
Purchasers to consummate the disposition in such jurisdictions of the securities
owned by the Purchasers, except that the Company shall not for any such purpose
be required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this paragraph be
obligated to be so qualified, or to consent to general service of process in any
such jurisdiction, or to subject the Company to any material tax in any such
jurisdiction where it is not then so subject;
(d) use commercially reasonable efforts in connection with an underwritten
offering of Registrable Securities to furnish to the Purchasers a signed
counterpart, addressed to each Purchaser (and the underwriters) of:
() an opinion of counsel for the Company, dated the effective date of such
registration statement (and dated the date of the closing under the underwriting
agreement), reasonably satisfactory in form and substance to the Purchasers, and
(i) to the extent permitted by then applicable rules of professional
conduct, a "comfort" letter, dated the effective date of such registration
statement (and dated the date of the closing under the underwriting agreement),
signed by the independent public accountants who have certified the Company's
financial statements included in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, all as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities;
(e) immediately notify the Purchasers at any time when the Company becomes aware
that a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect or any
document incorporated or deemed to be incorporated therein by reference,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made, and
at the request of a Purchaser promptly prepare and furnish to such Purchaser a
reasonable number of copies of a supplement to or an amendment of such
prospectus or registration statement as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
(f) use commercially reasonable efforts to provide a transfer agent and
registrar for all Registrable Securities covered by such registration statement
not later than the effective date of such registration statement; and
(g) use commercially reasonable efforts to list all Common Shares covered by
such registration statement on any securities exchange on which any of the
Common Shares are then listed.
(h) Notify each Purchaser and the managing underwriters, if any, promptly, and
(if requested by any of those Persons) confirm such notice in writing, (i) when
a prospectus or any prospectus supplement or post-effective amendment has been
filed, and, with respect to a registration statement or any post-effective
amendment, when the registration statement or amendment has become effective,
(ii) of any request by the Commission or any other federal or state governmental
authority for amendments or supplements to a registration statement or related
prospectus or for additional information, (iii) of the issuance by the
Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of a registration statement or the initiation
of any proceedings for that purpose, (iv) if at any time the representations and
warranties of the Company contained in any agreement contemplated by Section 5
(including any underwriting agreement) cease to be true and correct, (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, and (vi) of the Company's reasonable determination
that a post-effective amendment to a registration statement would be
appropriate.
(i) Use every reasonable effort to obtain the withdrawal of any order suspending
the effectiveness of a registration statement, or the lifting of any suspension
of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest possible moment.
(j) If requested by the managing underwriters, if any, or a Purchaser, (i)
promptly incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and the Purchaser agree should
be included therein as may be required by applicable law and (ii) make all
required filings of the prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in the prospectus supplement or post-effective
amendment; provided, however, that the Company will not be required to take any
actions under this Section 4(k) that are not, in the reasonable opinion of
counsel for the Company, in compliance with applicable law.
(k) Cooperate with each Purchaser and the managing underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates will not bear any
restrictive legends (other than any legends contemplated by the Company's
articles of incorporation); and enable the Registrable Securities to be in such
denominations and registered in such names as the managing underwriters, if any,
shall request at least two business days prior to any sale of Registrable
Securities to the underwriters.
(l) Make available for inspection by a representative of each Purchaser, any
underwriter participating in any disposition of Registrable Securities, and any
attorney or accountant retained by a Purchaser or underwriter, all financial and
other records, pertinent corporate documents and properties of the Company and
its subsidiaries, and cause the officers, directors and employees of the Company
and its subsidiaries to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with such
registration statement; provided, however, that any records, information or
documents that are designated by the Company in writing as confidential at the
time of delivery of such records, information or documents will be kept
confidential by those Persons unless (i) those records, information or documents
are in the public domain or otherwise publicly available, (ii) disclosure of
those records, information or documents is required by court or administrative
order or is necessary to respond to inquiries of regulatory authorities, or
(iii) disclosure of those records, information or documents, in the opinion of
counsel to such Person, is otherwise required by law (including, without
limitation, pursuant to the requirements of the Securities Act).
(m) Comply with all applicable rules and regulations of the Commission and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 calendar
days after the end of any 12-month period (or 90 calendar days after the end of
any 12-month period if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Registrable Securities are sold to underwriters
in a firm commitment or best efforts underwritten offering, and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company, after the effective date of a registration
statement, which statements shall cover that 12-month period.
(n) Cause its officers and other appropriate employees to participate in any
presentations regarding any underwritten offering reasonably requested by a
Purchaser or the managing underwriter or underwriters participating in the
disposition of the Registrable Securities.
Each Purchaser shall furnish in writing to the Company such information
regarding such Purchaser (and any of its affiliates), the Registrable Securities
to be sold, the intended method of distribution of such Registrable Securities,
and such other information requested by Company as is necessary for inclusion in
the registration statement relating to such offering pursuant to the Securities
Act and the rules of the Commission thereunder. The Company may also impose such
restrictions and limitations on the distribution of such Registrable Securities
as the Company reasonably believes are necessary or advisable to comply with
applicable law or to effect an orderly distribution, including those
restrictions set forth in Section 2(b).
Each Purchaser agrees by acquisition of the Registrable Securities that upon
receipt of any notice from the Company of the happening of any event of the kind
described in paragraph (f) of this Section 4, such Purchaser will forthwith
discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such
Purchaser's receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (f) of this Section 4.
4. Underwriting. If requested by the underwriters for any underwritten offering
of Registrable Securities pursuant to a registration described in this
Agreement, the Company will enter into and perform its obligations under an
underwriting agreement with such underwriters for such offering, such agreement
to contain such representations and warranties by the Company and such other
terms and provisions as are customarily contained in underwriting agreements
with respect to secondary distributions, including, without limitation,
indemnities and contribution to the effect and to the extent provided in Section
7. The holders of Registrable Securities on whose behalf Registrable Securities
are to be distributed by such underwriters shall be parties to any such
underwriting agreement, and the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities.
() In the event that any registration pursuant to Section 3 shall involve, in
whole or in part, an underwritten offering, the Company may require Registrable
Securities requested to be registered pursuant to Section 3 to be included in
such underwriting on the same terms and conditions as shall be applicable to the
Registrable Securities or other of the Company's securities being sold through
underwriters under such registration. In such case, the holders of Registrable
Securities on whose behalf Registrable Securities are to be distributed by such
underwriters shall be parties to any such underwriting agreement. Such agreement
shall contain such representations and warranties by the Company and the
Purchasers and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution to the effect and to the extent
provided in Section 7. The representations and warranties in such underwriting
agreement by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such holders of Registrable Securities.
5. Preparation; Reasonable Investigation. In connection with the preparation and
filing of the registration statement under the Securities Act, the Company will
give the Purchasers, their underwriters, if any, and their respective counsel,
the opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission, and
each amendment thereof or supplement thereto, and will give each of them such
access to its books and records and such opportunities to discuss the business
of the Company with its officers, its counsel and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of the Purchasers' and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
6. Indemnification. The Company will, and hereby does, indemnify and hold
harmless each Purchaser, its respective directors, officers, partners, agents,
employees and affiliates and each other person who participates as an
underwriter in the offering or sale of such securities and each other Person, if
any, who controls each such Purchaser or any such underwriter within the meaning
of the Securities Act, against any and all losses, claims, damages, expenses or
reasonable costs, or liabilities, joint or several, actions or proceedings
(whether commenced or threatened) in respect thereof, to which each such
indemnified party may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, expenses or reasonable costs, or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading, and the Company will reimburse each such
Purchaser and each such director, officer, partner, agent, employee or
affiliate, underwriter and controlling person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, expense or reasonable costs, liability,
action or proceeding; provided, that (i) the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, expense or liability
(or action or proceeding, whether commenced or threatened, in respect thereof)
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Purchaser or underwriter expressly for
use in the preparation thereof, (ii) the Company shall not be liable to any
Person who participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls or is controlled by such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, expense or reasonable costs, or
liability (or action or proceeding, whether commenced or threatened, in respect
thereof) arises out of such underwriter's failure to send or give a copy of the
final prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus and (iii) the Company shall only reimburse the Purchasers for
legal expenses incurred due to the representation of all Purchasers by not more
than one legal counsel. The Company shall not be liable under this Section 7(a)
for any settlement of any claim or action effected without its consent, which
consent will not be unreasonably withheld or delayed.
() Each Purchaser severally shall indemnify, and hereby does, indemnify and hold
harmless the Company, its directors, its officers who sign the registration
statement, each Person who participates as an underwriter in the offering or
sale of securities, and each Person, if any, who controls the Company or any
such underwriter within the meaning of the Securities Act against any and all
losses, claims, damages, expenses or reasonable costs, or liabilities, joint or
several, actions or proceedings (whether commenced or threatened) in respect
thereof, to which each such indemnified party may become subject under the
Securities Act or otherwise insofar as such losses, claims, damages, expenses or
reasonable costs, or liabilities (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon an untrue
statement of a material fact in or omission to state a material fact required to
be stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading in such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, but only to the
extent that such statement or omission was made in reliance upon and in
conformity with written information furnished by such Purchaser to the Company
by or on behalf of such Purchaser for use in preparation thereof.
(a) Promptly after receipt by any indemnified party hereunder of notice of the
commencement of any action or proceeding involving a claim referred to in
paragraphs (a) or (b) of this Section 7, the indemnified party will notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve the indemnifying party from
any liability which it may have to any indemnified party under paragraphs (a) or
(b) of this Section 7, except to the extent that the indemnifying party is
adversely affected by any delay caused thereby. In case any such action shall be
brought against any indemnified party, the indemnifying party shall be entitled
to participate therein and, to the extent that the indemnifying party shall
elect (jointly with any other indemnifying party similarly so electing) to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party (which approval shall not be unreasonably withheld or delayed)
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under paragraph
(a) or (b) of this Section 7 for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof. In addition, the indemnifying party shall
not be required to indemnify, reimburse or otherwise make any contribution to
the amount paid or payable by the indemnified party for any losses, claims,
damages, expenses or reasonable costs, or liabilities (or actions or
proceedings, actual or threatened, in respect thereof) incurred by the
indemnified party in settlement of any such losses, claims, damages, expenses or
reasonable costs, liabilities, actions or proceedings otherwise covered
hereunder unless such settlement has been previously approved by the
indemnifying party, which approval shall not be unreasonably withheld or
delayed.
(b) If for any reason the indemnity under this Section 7 is unavailable or is
insufficient to hold harmless any indemnified party under paragraph (a) or (b)
of this Section 7, then the indemnifying parties shall contribute to the amount
paid or payable to the indemnified party as a result of any loss, claim,
expense, damage or liability (or actions or proceedings, whether commenced or
threatened, in respect thereof), and legal or other expenses reasonably incurred
by the indemnified party in connection with investigating or defending any such
loss, claim, expense, damage, liability, action or proceeding, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or a
Purchaser and each party's relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. If,
however, the allocation provided in the second preceding sentence is not
permitted by applicable law, or if the allocation provided in the second
preceding sentence provides a lesser sum to the indemnified party than the
amount hereinafter calculated, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party in such proportion as is
appropriate to reflect not only such relative fault but also the relative
benefits of the indemnifying party and the indemnified party as well as any
other relevant equitable considerations. The parties hereto agree that it would
not be just and equitable if contributions pursuant to this paragraph (d) of
Section 7 were to be determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the preceding sentences of this paragraph (d) of Section 7.
Notwithstanding the provisions of this Section 7(d), an indemnifying party that
is a Purchaser will not be required to contribute any amount in excess of the
dollar amount of the gross proceeds received by that Purchaser upon the sale of
the Registrable Securities giving rise to the contribution obligation over the
amount of any damages which that Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(c) Indemnification and contribution similar to that specified in this Section 7
(with appropriate modifications) shall be given by the Company and the
Purchasers with respect to any required registration or other qualification of
securities under any federal, state or blue sky law or regulation of any
governmental authority other than the Securities Act.
(d) Notwithstanding any other provision of this Section 7, to the extent that
any director, officer, partner, agent, employee, affiliate or other
representative (current or former) of any indemnified party is a witness in any
action or proceeding, the indemnifying party agrees to pay to the indemnified
party all expenses reasonably incurred by, or on the behalf of, the indemnified
party and such witness in connection therewith.
(e) The termination of any proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, adversely affect the rights of any indemnified party to indemnification
hereunder or create a presumption that any indemnified party violated any
federal or state securities laws.
(f) In the event that advances are not made pursuant to this Section 7 or
payment has not otherwise been timely made, each indemnified party shall be
entitled to seek a final adjudication in an appropriate court of competent
jurisdiction of the entitlement of the indemnified party to indemnification or
advances hereunder.
( ) The Company and the Purchasers agree that they shall be precluded from
asserting that the procedures and presumptions of this Section 7 are not valid,
binding and enforceable. The Company and the Purchasers further agree to
stipulate in any such court that the Company and the Purchasers are bound by all
the provisions of this Section 7 and are precluded from making any assertion to
the contrary.
(i) To the extent deemed appropriate by the court, interest shall be paid by the
indemnifying party to the indemnified party at a reasonable interest rate for
amounts which the indemnifying party has not timely paid as the result of its
indemnification and contribution obligations hereunder.
(g) In the event that any indemnified party is a party to or intervenes in any
proceeding in which the validity or enforceability of this Section 7 is at issue
or seeks an adjudication to enforce the rights of any indemnified party under,
or to recover damages for breach of, this Section 7, the indemnified party, if
the indemnified party prevails in such action, shall be entitled to recover from
the indemnifying party and shall be indemnified by the indemnifying party
against, any expenses incurred by the indemnified party.
(h) The indemnity and contribution obligations of the Company contained in this
Section 7 shall be in addition to any other liability which it may have pursuant
to law or contract and shall remain operative and in full force and effect
regardless of any investigation made or omitted by or on behalf of any
indemnified party and shall survive the transfer of any Registrable Securities
by any Purchaser.
(k) In no event will the liability of any Purchaser under this Section 7 be
greater in amount than the dollar amount of the gross proceeds received by that
Purchaser upon the sale of the Registrable Securities giving rise to the
indemnification obligation.
7. Benefits of Registration Rights. Each Purchaser shall give notice to the
Company of any transfer by it of Registrable Securities to any Permitted
Transferee, identifying the name and address of the Permitted Transferee and the
Registerable Securities so transferred, and accompanied by a signature page to
this Agreement pursuant to which such Permitted Transferee agrees to be bound by
the terms and conditions of this Agreement. No consent of any Purchaser shall be
required for its Permitted Transferees to exercise registration rights under
this Agreement or otherwise to be entitled to the benefits of this Agreement
provided to all Purchasers.
8. Qualification for Rule 144 Sales. The Company will take all actions
reasonably necessary to comply with the filing requirements described in Rule
144(c)(1) of the Securities Act so as to enable the Purchasers to sell
Registrable Securities without registration under the Securities Act and, upon
the written request of any Purchaser, the Company will deliver to such Purchaser
a written statement as to whether it has complied with such filing requirements.
9. Miscellaneous. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party. Copies of executed counterparts
transmitted by telecopy, telefax or other electronic transmission service shall
be considered original executed counterparts for purposes of this Section 9,
provided receipt of copies of such counterparts is confirmed.
( ) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE
CHOICE OF LAW PRINCIPLES THEREOF.
(a) Entire Agreement. This Agreement and the Securities Purchase Agreement
together contain the entire agreement between the parties with respect to the
subject matter hereof and there are no agreements or understandings between
parties other than those set forth or referred to herein. This Agreement is not
intended to confer upon any Person not a party hereto (and their successors and
assigns) any rights or remedies hereunder.
(b) Notices. All notices and other communications hereunder shall be
sufficiently given for all purposes hereunder if in writing and delivered
personally, sent by documented overnight delivery service or, to the extent
receipt is confirmed, telecopy, telefax or other electronic transmission service
to the appropriate address or number as set forth below. Notices to the Company
shall be addressed to:
Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxx XxXxxxxx
Telecopy Number: (000) 000-0000
with a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Telecopy Number: (000) 000-0000
or at such other address and to the attention of such other person as
the Company may designate by written notice to the Purchasers. Notices to the
Purchasers shall be addressed to the address on the stock transfer records of
the Company.
(c) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
Permitted Transferees.
(d) Headings. The Section and other headings contained in this Agreement
are inserted for convenience of reference only and will not affect the meaning
or interpretation of this Agreement. All references to Sections or other
headings contained herein mean Sections or other headings of this Agreement
unless otherwise stated.
(e) Amendments and Waivers. This Agreement may not be modified or amended
except by an instrument or instruments in writing signed by the party against
whom enforcement of any such modification or amendment is sought. Either party
hereto may, only by an instrument in writing, waive compliance by the other
party hereto with any term or provision hereof on the part of such other party
hereto to be performed or complied with. The waiver by any party hereto of a
breach of any term or provision hereof shall not be construed as a waiver of any
subsequent breach.
(f) Interpretation; Absence of Presumption. For the purposes hereof, (i)
words in the singular shall be held to include the plural and vice versa and
words of one gender shall be held to include the other gender as the context
requires, (ii) the terms "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and Section,
paragraph or other references are to the Sections, paragraphs, or other
references to this Agreement unless otherwise specified, (iii) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless the context otherwise requires or unless
otherwise specified, (iv) the word "or" shall not be exclusive and (v)
provisions shall apply, when appropriate, to successive events and transactions.
This Agreement shall be construed without regard to any presumption or
rule requiringconstruction or interpretation against the party drafting or
causing any instrument to be drafted.
(g) Severability. Any provision hereof which is invalid or unenforceable
shall beineffective to the extent of such invalidity or unenforceability,
without affecting in any way the remaining provisions hereof.
(h)Jurisdiction; Venue. The parties to this Agreement hereby irrevocably
submit to the jurisdiction of any New York State or Federal court and any
appellate court from any district thereof over any action arising out of or
relating to this Agreement, and hereby irrevocably agree that all claims in
respect of such action or proceeding may be heard and determined in such New
York State court or in such Federal court. The parties to this Agreement hereby
irrevocably waive, to the fullest extent permitted under law, the defense of an
inconvenient forum or improper venue to the maintenance of such action or
proceeding.
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of
the parties hereto as of the day first above written.
GROVE REAL ESTATE ASSET TRUST
By: /s/ XXXXX XXXXXXX
Xxxxx Xxxxxxx
President
XXXXXX XXXXXXX GROUP INC.
By: /s/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Managing Director
OREGON INVESTMENT COUNCIL ACTING ON
BEHALF OF OREGON PUBLIC EMPLOYEES'
RETIREMENT FUND UNDER AUTHORITY OF
OREGON REVISED STATUTES SECTION 293.741
BY ITS AGENT ABKB/LASALLE SECURITIES
LIMITED
By: /s/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Managing Director of ABKB/LaSalle
Securities Limited
PURCHASERS
By: /s/ XXXXX XXXXXXX
Xxxxx Xxxxxxx
Attorney-In-Fact
Schedule 1
Purchasers Common Shares
1. Xx. X.X. Xxxxxxxxx, Xx. 60,732
2. Xxxxx and Xxxxxxx Xxxxxxx 3,813
3. Xx. Xxxxxx Xxxxxxxx 2,942
4. Xxxxxx X. Xxxx, III 20,809
5. Xxxx and Xxxxx Xxxxxxxx 37,475
6. Xx. Xxxxx Xxxx 7,626
7. Dr. Xxxxxx Xxxxx 16,288
8. Worsdale Trust FBO Xxxxx X. Xxxxxxx 11,242
9. Rossett Trust FBO Holiday Xxxxxxx 11,242
10. Xxxxxx X. Xxxxxx Revocable Trust 7,626
Xxxx Xxxx 3,813
The Xxxxxx Xxxxxx 1988 Family Trust 15,253
Xxxx Xxxxxxx 2,235
Xx. Xxxx X. Xxxxxxxx 7,626
Holiday Trust FBO Holiday Xxxxxxx, Xxxxx Xxxxxxx
Trustee 7,495
Xx. Xxxx X. Xxxxx 22,222
Xx. Xxxxx X. Xxxxxxxx 3,490
Lion Castle Trust FBO Xxxxxxxx Xxxxxxx, Xxxxx Xxxxxxx
Trustee 7,495
Xxxxxx X. Xxxxxxx 7,626
Xx. Xxxx X. Xxxx 3,468
Xxxxxx X. Xxxxxxxx 2,777
Xxxxx and Xxxxx Xxxx 7,626
Xxxxxx X. Xxxxxxx 10,404
Dr. Xxxx Xxxxxxx 3,468
Mr. Xxxxxxx Xxxxx 7,626
Xxxxxx and Xxxx Xxxxxx 3,813
Xx. Xxxxxxx X. Walkoff 15,253
Xxxxxx Xxxxxx 16,666
Xxxxx X. Xxxxxxxxxx 5,555
Xxxxxx X. Xxxxxxxxxx 13,900
Bendor Management LTD 8,335
Xxx X. Xxxxxxxxxx 5,000
Estate of Xxxxxxxx X. Xxxxxxxxxx - Trust "A", Xxxxxxx
X. Xxxxxxxxxx, Trustee 1,115
ANB Enterprises Corporation 2,800
Xxxxxx Xxxxxxxxx 20,000
Xxxx X. Xxxxx 188,888
Xxxxxxx X. Xxxxxxx 20,000
Dr. Xxxxx Xxxxxx 5,555
Xxxxxx X. XxXxxx Foundation 188,888
Millenco, LP 188,888
Englander Specialist Corp. 111,111
Xxxxx Xxxxxx 1,111
Xxxxxx X. Xxxxxxxx 22,222
X. Xxxxx and Xxxxx X. Fine JT/WROS 27,777
Xxxxxxx X. and Xxxxx Xxxxxxxx Xxxxx XX/WROS 27,777
Xxxxxxx X. Xxxxx 11,111
GT Special Situations, L.P. 166,666
Xxxxx Xxxxxxxxxx 22,222
Xxxxxxx X. Xxxxxxxx 22,222
LKCM Investment Partnership 111,111
Xxxxx X. Xxxxxx 11,111
Xxxxxx M. and Xxxxxxxx X. Xxxxxx Trust, Xxxxxxx X.
Xxxxxxx, Xx., Trustee 11,111
Xxxxx Xxxxxxx 11,111
Xxxxxx X. Xxxxxx 22,222
Xxxxx X. Xxxxxx 2,777
Xxxxx X. XxXxxxx 11,111
Xxxxxxxx X. and Xxxxx X. Xxxxxxx 35,555
Xxxxx X. Xxxxxxxxx 5,555
Xxxxxx X. Poster 15,698
Xxxx Poster 11,111
Xxxxxxxx Poster 5,555
Xxxxxxx Poster 5,555
The Trust U/W/O Xxxx Xxxxxxx FBO Xxxxxx Xxxxxxx,
Xxxxxx X. Poster Trustee 5,555
Xxxxxxx Family Trust 11,111
X.X. Xxxxxxxxx 5,555
Xxxxxxx X. Xxxxxxx 15,000
Xxxxxx X. Xxxxxxxx 11,111
Xxxxxxxxx Xxxxxxxxx Revocable Trust UA 3/20/90 5,600
Xxxxxxx X. Xxxxxxx 22,000
Xxxx Xxx XxXxxxxx 16,000
National Fire and Casualty 22,000
Ashmont Insurance Co., LTD 44,000
Xxxxx X. Xxxxxx, Xx. Equity 22,000
Xxxxxx Family Foundation, Inc. 11,000
Kylher Investments L.P. 1994 11,000
Kylher Investments 85-I 16,000
Cliffwood Equity Fund, L.P. 75,000
Cliffwood Real Estate Equity Fund LTD 91,800
Xxxxx Xxxxxxx 8,333
Xxxxxxx X. Xxxxxxx 11,111
Stuzin Family Partnership, Ltd. 50,000
Xxxxxxx X. Xxxxxx 33,335
Stuzin Associates, Ltd. 16,665
L.A. & C. Limited Partnership 11,110
Oregon Investment Council Acting On Behalf Of
Oregon Public Employees' Retirement Fund Under
Authority of Oregon Revised Statutes Section 293.741
By Its Agent ABKB/LaSalle Securities Limited 391,392
Xxxxxx Xxxxxxx Group, Inc. 777,778
