SECURITIES PURCHASE AGREEMENT
dated as of February 21, 1997
between
GROVE REAL ESTATE ASSET TRUST
and
OREGON INVESTMENT COUNCIL ACTING ON BEHALF OF OREGON PUBLIC
EMPLOYEES' RETIREMENT FUND UNDER AUTHORITY OF
OREGON REVISED STATUTES SECTION 293.741
BY ITS AGENTABKB/LASALLE SECURITIES
LIMITED
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement"), dated as of
February 21, 1997, between Grove Real Estate Asset Trust, a Maryland real estate
investment trust ("GREAT") and 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
("Purchaser").
WHEREAS, GREAT has distributed to certain prospective investors
(including Purchaser) who are Accredited Investors (as defined), a Private
Placement Memorandum, dated December 5, 1996 (together with all appendices
thereto, the "PPM"), in connection with the offering by GREAT to such investors
of up to 3,333,333 of GREAT's common shares of beneficial interest, par value
$0.01 per share (each a "Common Share"), at a price of $9.00 per Common Share
(the "Purchase Price Per Share");
WHEREAS, following a complete and thorough review of the PPM, Purchaser
desires to purchase from GREAT, and GREAT desires to sell to Purchaser, 391,392
Common Shares (as such number of Common Shares may be reduced from time to time
in accordance with Section 5.3(b), the "Purchased Common Shares"), upon the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
Article I
Definitions
1.1 Definitions. As used in this Agreement, the following terms have the
meaning set forth below:
"Accredited Investor" means, as defined under Regulation D promulgated
under the Act, any Person who (i) is able to bear the economic risk of the
acquisition of a security and can afford to sustain a total loss with respect to
such investment, and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment,
and therefore has the capacity to protect its own interest in connection with
the acquisition of a security and/or (ii) comes within any of the following
categories: (1) any bank as defined in Section 3(a)(2) of the Act, or any
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity;
any broker or dealer registered pursuant to Section 15 of the Exchange Act; any
insurance company as defined in Section 2(13) of the Act; any investment company
registered under the
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Investment Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that act; any Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; any plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or its
subdivisions for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; any employee benefit plan within the meaning of ERISA, if
the investment decision is made by a plan fiduciary, as defined in Section 3(21)
of ERISA, which is either a bank, savings and loan association, insurance
company, or registered investment advisor, or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are Accredited Investors; (2)
any private business development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940; (3) any organization described in Section
501(c)(3) of the Code, corporation, Massachusetts or similar business trust or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000; (4) any trust manager or
executive officer of GREAT; (5) any natural person whose individual net worth,
or joint net worth with that person's spouse, at the time of that person's
purchase exceeds $1,000,000; (6) any natural person who had an individual income
in excess of $200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years, and who has a
reasonable expectation of reaching the same income level in the current year;
(7) any trust with total assets in excess of $5,000,000 not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D;
and (8) any entity in which all of the equity owners are Accredited Investors.
As used in this definition, the term "net worth" means the excess of
the total assets over total liabilities. In calculating "net worth," the value
of a principal residence must be valued at cost or at a written appraised value
used by an institutional lender to make a loan secured by the property. In
determining income, an investor should add to such investor's adjusted gross
income any amounts attributable to tax exempt income received, losses claimed as
a limited partner in any limited partnership, deductions claimed for depletion
contributions to an "XXX" or "XXXXX" retirement plan, alimony payments and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
"Act" means the Securities Act of 1933, as amended, or any successor statute.
"Affiliate" of any Person means any Person which, directly or indirectly,
controls, is controlled by, or is under common control with, such Person. The
term "control" (including, with correlative meaning, the terms "controlled by"
and "under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management
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and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
"Agreement" has the meaning ascribed to such term in the introductory
paragraph of this Agreement.
"AMEX" means the American Stock Exchange, Inc. (Emerging Company
Marketplace).
"best efforts" , as used in this Agreement, shall mean commercially
reasonable efforts; provided, that in no event shall "best efforts" mean efforts
which require the performing party (i) to do any act that is unreasonable under
the circumstances, to make any capital contribution or to expend any funds other
than reasonable out-of-pocket expenses incurred in satisfying its obligations
under this Agreement, including, but not limited to, the fees, expenses and
disbursements of its accountants, counsel and other professionals, or (ii) in
the case of GREAT, to modify the terms of the Consolidation Transactions.
"Charter" means the Second Amended and Restated Declaration of Trust of
GREAT.
"Charter Amendments" means the amendments proposed to be effected to
the Charter, as set forth in the Proxy Statement.
"Charter Documents" means the Charter and the Bylaws of GREAT, as each
may be amended from time to time.
"Closing" has the meaning ascribed to such term in Section 2.2 of this
Agreement.
"Closing Date" has the meaning ascribed to such term in Section 2.2 of
this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, together
with the rules and regulations promulgated thereunder, or any successor statute.
"Common Shares" means the common shares of beneficial interest, $0.01
par value per share, of GREAT.
"Common Units" means common units representing ownership interests in
the Operating Partnership.
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"Consolidation Transactions" means the consolidation transactions,
including the Private Placement, proposed to be entered into by GREAT, as
described in the Proxy Statement.
"Current Proposals" has the meaning ascribed to such term in Section
5.1(b) of this Agreement.
"Damages" of any Person means any loss, liability (however defined or
characterized), diminution in value, damage or expense (including reasonable
costs of investigation and prosecution of litigation and attorneys' fees)
incurred by such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Certification" has the meaning ascribed to such term in Section
5.3(a) of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
"Exchange Offer" means the Offer to Exchange, dated December 2, 1996,
by the Operating Partnership to the limited partners of certain limited
partnerships, pursuant to which certain such limited partners can exchange the
interests held by them in such limited partnerships for Common Units or, under
certain circumstances, cash, as such Offer to Exchange may be supplemented,
amended or modified from time to time.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States.
"GREAT" has the meaning ascribed to such term in the introductory paragraph
of this Agreement.
"Knowledge" of GREAT means the actual knowledge of any of its officers
(other than assistant officers whose duties are principally ministerial) after
due inquiry to satisfy themselves that there is a reasonable basis for belief in
the accuracy of any of the representations and warranties made by GREAT, but
shall not be construed to require independent review or verification by them of
underlying facts.
"Material Adverse Effect" means any change in or effect on the business
of GREAT or its Subsidiaries that is materially adverse to the business, assets,
results of operations or financial condition of GREAT and its Subsidiaries taken
as a whole, or
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materially impairs the ability of GREAT to consummate the transactions
contemplated by this Agreement.
"Operating Partnership" means Grove Operating, L.P., a Delaware limited
partnership and the operating partnership of GREAT.
"Person" means any individual, a partnership, a joint venture, a
corporation, a trust, limited liability company, an unincorporated organization
or a government or any department or agency thereof.
"PPM" has the meaning ascribed to such term in the first Whereas clause
of this Agreement.
"Private Placement" means the private placement of up to 3,333,333
Common Shares by GREAT pursuant to and as more fully set forth in the PPM.
"Proxy Statement" has the meaning ascribed to such term in Section
5.1(b) of this Agreement.
"Purchase Price" means $3,522,528, which is equal to the product of
$9.00 (the Purchase Price Per Share) and 391,392 (the number of Common Shares
which constitutes the Purchased Common Shares), subject to adjustment in
accordance with Section 5.3(c).
"Purchase Price Per Share" has the meaning ascribed to such term in the
first Whereas clause of this Agreement.
"Purchased Common Shares" has the meaning ascribed to such term in the
second Whereas clause of this Agreement.
"Qualified Public Offering" means an underwritten public offering of
Common Shares yielding gross proceeds (including upon exercise of any
over-allotment option) of at least $40 million and the listing for trading of
such Common Shares on the AMEX or similar or successor national stock exchange.
"Receipt" means the receipt to be executed and delivered by each of
Purchaser and GREAT at Closing, in the form attached as Exhibit D hereto.
"Redemption Rights" means the right, beginning one year after the
issuance of Common Units to limited partners of the limited partnerships
participating in the Exchange Offer, of certain limited partners to require the
Operating Partnership to redeem their Common Units for cash equal to the fair
market value of an equivalent number of Common Shares at the time of redemption
or, at the Operating Partnership's
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option, it can exchange such Common Units for Common Shares on a one-for-one
basis (subject to adjustment).
"Registration Rights Agreement" means the Registration Rights
Agreement, to be entered into on or prior to the Closing, among GREAT,
Purchaser, certain other purchasers of the Common Shares offered in the Private
Placement and others, which will grant to Purchaser certain "piggyback"
registration rights (provided, that in any event, no registration statement in
connection with such registration rights shall be filed with the SEC or with any
state securities commission at any time prior to the six-month anniversary of
the Closing) and subject the sale by Purchaser of its Common Shares to certain
"black out" provisions.
"SEC" means the United States Securities and Exchange Commission.
"SEC Filings" has the meaning ascribed to such term in Section 3.4 of
this Agreement.
"Special Meeting" shall have the meaning ascribed to such term in
Section 5.1(b) of this Agreement.
"Subsidiaries" means, collectively, GREAT's direct or indirect
majority-owned subsidiaries, including, without limitation, the Operating
Partnership.
Article II.
Purchase of Common Shares
2.1 Purchase of Common Shares. At the Closing, GREAT shall issue and
sell to Purchaser, and Purchaser shall purchase from GREAT, the Purchased Common
Shares. At the Closing, Purchaser shall pay the Purchase Price for the Purchased
Common Shares by wire transfer of immediately available funds or by certified or
official bank check payable in same day funds to the order of GREAT. Upon
receipt of the Purchase Price, GREAT shall deliver to Purchaser a certificate
representing the number of Common Shares constituting the Purchased Common
Shares, registered in the name of Purchaser.
2.2 Closing. The closing of the issuance and sale of the Purchased
Common Shares hereunder (the "Closing") shall take place at the offices of Xxxx,
Scholer, Fierman, Xxxx & Handler, LLP located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, and will occur substantially simultaneously with the closing of the
other purchases and sales of Common Shares in the Private Placement. GREAT will
notify
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Purchaser of the date of the Closing (the "Closing Date") not less than three
business days prior to the Closing Date.
2.3 Deliveries.
(a) Purchaser's Deliveries. At the Closing, in consideration of
Purchaser's receipt from GREAT of the Purchased Common Shares, Purchaser shall
deliver to GREAT the following:
(i) the Purchase Price in accordance with Section 2.1 hereof;
(ii) the certificate referred to in Section 7.3 hereof duly executed on
behalf of Purchaser;
(iii) the Registration Rights Agreement, duly executed on behalf of
Purchaser; and
(iv) the Receipt, duly executed on behalf of Purchaser.
(b) GREAT's Deliveries. At the Closing, in consideration of GREAT's receipt of
the Purchase Price from Purchaser, GREAT shall deliver to Purchaser the
following:
(i) certificates representing the Purchased Shares, duly issued in the
name of Purchaser;
(ii) the certificate referred to in Section 6.3 hereof, duly executed by an
authorized officer on behalf of GREAT;
(iii) the Registration Rights Agreement, duly executed by an authorized
officer on behalf of GREAT; and
(iv) the Receipt, duly executed by an authorized officer on behalf of
GREAT.
2.4 Legends. In addition to the legend concerning inter alia, Excess
Shares, set forth in the Charter, the certificates evidencing the Purchased
Common Shares shall bear the following legends:
(a) "The transfer of the securities represented by this
certificate is subject to conditions specified in section 5.3(d) of a Securities
Purchase Agreement dated February 21, 1997, as such agreement may be amended
from time to time, and no transfer of such securities shall be valid or
effective until such conditions have been fulfilled with respect to such
transfer. A copy of such Securities Purchase Agreement
8
will be furnished by the company to the holder of this certificate upon written
request and without charge."
(b) "These securities have not been registered under the
Securities Act of 1933, as amended (the "Act") and may not be offered sold or
otherwise transferred except pursuant to an effective registration statement
under the Act or an exemption from the registration requirements thereof. These
securities have not been registered under the securities laws of any state."
Article III
Representations and Warranties of GREAT
GREAT hereby represents and warrants to Purchaser that, as of the date
of this Agreement and as of the Closing Date:
3.1 Organization, Good Standing and Qualification. GREAT has been duly
organized and is a validly existing trust in good standing under the laws of
Maryland with all requisite power and authority to carry on its business as
presently conducted. GREAT is duly qualified to transact business and is in good
standing in each jurisdiction in which it is required to be qualified except
where the failure to be so qualified or in good standing would not, in the
aggregate, have a Material Adverse Effect.
3.2 Capitalization. (a) As of the date hereof, the authorized capital
stock of GREAT consists of 10,000,000 Common Shares, 525,000 of which are issued
and outstanding as of the date hereof, and 4,000,000 preferred shares of
beneficial interest, $0.01 par value per share, none of which are issued and
outstanding as of the date hereof. No other shares of capital stock of GREAT are
outstanding or held as treasury shares. There are no outstanding options,
warrants, rights (including conversion or preemptive rights) or agreements for
the purchase or acquisition from GREAT of any shares of its capital stock or
securities or obligations of any kind convertible into any shares of its capital
stock except for (i) options to purchase an aggregate of 100,000 Common Shares
held by certain executive officers and trust managers of GREAT and issued under
GREAT's 1994 Share Option Plan, (ii) as contemplated by the Private Placement
(including pursuant to this Agreement and pursuant to other Securities Purchase
Agreements between GREAT on the one hand, and other purchasers of Common Shares
therein on the other hand), (iii) the Common Shares issuable to certain Persons
participating in the Exchange Offer at the option of the Operating Partnership
upon the exercise by such Persons of Redemption Rights and (iv) warrants to
purchase 40,000 Common Shares granted to Xxxxxxx Investments, Inc. in connection
with GREAT's initial public offering.
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(b) The Capitalization Table set forth in the section of
Appendix I to the PPM entitled "SUMMARY -- Capitalization" sets forth the
currently anticipated capitalization of GREAT at the Closing, giving effect to
the consummation of the Consolidation Transactions, including the Private
Placement. The capitalization set forth on such table has been calculated taking
into account various assumptions regarding the Consolidation Transactions, as
described in further detail in the above-referenced section of Appendix I to the
PPM, and accordingly, the actual capitalization of GREAT following the
consummation of the Consolidation Transactions may differ.
3.3 Authorization. GREAT has full power and corporate authority to
execute and deliver this Agreement and (subject to shareholder approval as
contemplated by the Proxy Statement) to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the other agreements
and instruments contemplated hereby, and the consummation of the transactions
contemplated by this Agreement, have been authorized by the Board of Trust
Managers of GREAT and no other proceedings (except for a meeting of the
shareholders of GREAT for the purpose of obtaining shareholder approval as
contemplated by the Proxy Statement) on the part of GREAT are necessary to
authorize this Agreement or to consummate the transactions so contemplated. This
Agreement has been duly and validly executed by GREAT and, subject as aforesaid,
constitutes a valid and binding agreement of GREAT enforceable in accordance
with its terms except as limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles relating to or
limiting creditors' rights generally.
3.4 SEC Filings. Purchaser has been provided (or will, upon Purchaser's
written request, be provided) true and correct copies of GREAT's annual reports
on Form 10-KSB for the fiscal years ended December 31, 1995 and 1994, and
GREAT's quarterly reports on Form 10-QSB for the fiscal quarters ended March 31,
1996, June 30, 1996 and September 30, 1996 (collectively, the "SEC Filings"). As
of their respective dates, the SEC Filings (including all exhibits and schedules
thereto and documents incorporated by reference therein) complied in all
material respects with the laws, regulations and forms governing the SEC
Filings; and none of the SEC Filings contained, as of the date it was filed with
the SEC, any untrue statement of any material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
3.5 Valid Issuance of Shares. The Purchased Common Shares, when issued,
sold and delivered to Purchaser in accordance with the terms hereof for the
consideration expressed herein, will be duly authorized and validly issued,
fully paid and nonassessable and, based in part on the representations of
Purchaser in this Agreement, will be issued in compliance with all applicable
federal and state securities laws.
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3.6 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by GREAT, its consummation of the transactions
contemplated hereby nor its compliance with any of the provisions hereof will
(a) conflict with or result in the breach of any provision of the Charter
Documents; (b) require any consent, approval, order or authorization of, or
registration, qualification, designation or filing with or notification to, any
governmental or regulatory authority, the failure of which to obtain would have
a Material Adverse Effect, except for (i) the filing with the SEC of a Form D
and such other documents as may be required in connection with this Agreement
and the other Common Shares being issued in the Private Placement and the
obtaining from the SEC of such orders as may be so required, (ii) the filing of
such documents with, and the obtaining of orders from, the various state
securities authorities that are required in connection with the transactions
contemplated by this agreement and (iii) the filing of an additional listing
application and the listing of the Purchased Common Shares to be issued pursuant
to this Agreement and the other Common Shares to be issued in the Private
Placement, as contemplated by Section 5.1(c); or (c) conflict with or result in
any breach or default (with or without notice or lapse of time or both) or
violate any loan agreement, note, mortgage, indenture, lease or other
obligation, instrument, order, injunction, decree, statute, rule or regulation
applicable to GREAT or its Subsidiaries or any of their respective properties or
assets where such conflicts, breaches, defaults or violations would, in the
aggregate, have a Material Adverse Effect.
3.7 REIT Status. (a) To GREAT's Knowledge, no person or entity which
would be treated as an "individual" for purposes of Section 542(a)(2) of the
Code (as modified by the by Section 856(h) of the Code) owns or would be
considered to own (taking into account the ownership attribution rules under
Section 544 of the Code, as modified by Section 856(h) of the Code) in excess of
5.0% of the value of the outstanding equity interest in GREAT. The Board of
Trust Managers of GREAT has not exempted any Person from the Ownership Limit (as
defined in the Charter) or the Grove Affiliate Investor Limit (as defined in the
Charter) or otherwise waived any of the provisions of Section 7 of the Charter.
The Ownership Limit and the Grove Affiliate Investor Limit (each as defined in
the Charter) have not been modified pursuant to Section 7.9 or 7.10 of the
Charter or otherwise; provided, that such limits are expected to be modified
pursuant to the Charter Amendments, and, if the Charter Amendments are effected,
GREAT's Board of Trust Managers will be permitted to exempt from such limits one
or more Persons in connection with a purchase of Common Shares by such Persons
in the Private Placement.
(b) GREAT (i) has been or intends in its federal income tax returns for
the tax years ended December 31, 1994, 1995 and 1996 to be taxed as a real
estate investment trust within the meaning of Section 856 of the Code (a "REIT")
and has complied (or will comply) with all applicable provisions of the Code
relating to a REIT for 1995 and 1996, (ii) has operated and currently intends to
continue to operate in such a manner so as to qualify as a REIT, (iii) has not
taken or omitted to take any action
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which would reasonably be expected to result in a challenge to its status as a
REIT, and (iv) to GREAT's Knowledge, and assuming the accuracy of Purchaser's
representations in Article IV hereof, will not be rendered unable to qualify as
a REIT for federal income tax purposes as a consequence of the transactions
contemplated hereby.
3.8 No Brokers' or Other Fees. No broker, finder or investment banker
is entitled to any brokerage, finder or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by GREAT for which Purchaser shall be liable or obligated.
ARTICLE
Representations and Warranties of Purchaser
Purchaser hereby represents and warrants to GREAT that, as of
the date of this Agreement and as of the Closing Date:
.0 Organization and Authorization. Purchaser is an entity of the
type identified in the introductory paragraph of this Agreement, duly organized,
validly existing and in good standing under the laws of its jurisdiction of
formation. The execution and delivery of this Agreement and the other agreements
and instruments contemplated hereby have been, and the consummation of the
transactions contemplated hereby and thereby have been, duly and validly
authorized by all necessary action of Purchaser, and no other proceedings on the
part of Purchaser are or will be necessary to consummate the transactions
contemplated hereby. Purchaser has the right, power, legal capacity and
authority to enter into, deliver and perform this Agreement and any other
agreements and instruments contemplated hereby and to own the Purchased Common
Shares, and this Agreement and all such other agreements are, or upon the
execution thereof will be, valid and legally binding upon Purchaser and
enforceable in accordance with their respective terms except as limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles relating to or limiting creditors' rights generally.
.1 Consents and Approvals; No Violation. None of the execution
and delivery of this Agreement by Purchaser, its consummation of the
transactions contemplated hereby or its compliance with any of the provisions
hereof will (i) conflict with or result in any breach of any provision of the
statutes governing the organization and operation of Purchaser or the
organizational documents of Purchaser, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, except for any filings referred to in Section 3.6,
filings by Purchaser under Section 13(d) or 16(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions contemplated
hereby, and except for such other consents as are obtained or waived prior to
the Closing Date,
or (iii) conflict with or result in any breach or default (with or without
notice or lapse of time or both) or violate any loan agreement, note, mortgage,
indenture, lease or other obligation, instrument, order, writ, injunction,
decree, statute, rule or regulation applicable to Purchaser or any of its
properties or assets.
.2 ERISA Certification. Purchaser has read and comprehends the ERISA
Certification referred to in Section 5.3(a) and attached hereto as Exhibit A
(the "ERISA Certification"), has completed and executed the ERISA Certification
and has delivered the same to GREAT simultaneously with the execution of this
Agreement.
.3 Information Supplied. None of the information to be supplied by
Purchaser in connection with the Proxy Statement will, at the date mailed to
shareholders and at the time of the Special Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
4. No Brokers' or Other Fees. No broker, finder or investment banker is
entitled to any brokerage, finder or other fee or commission in connection with
the transaction contemplated by this Agreement based upon arrangements made by
or on behalf of Purchaser or its Affiliates for which GREAT shall be liable or
obligated.
5. Investment Intent. Purchaser has read and comprehends the definition of
"Accredited Investor" set forth in Section 1.1 hereof, and is an "Accredited
Investor." Purchaser is acquiring the Purchased Common Shares for the purpose of
investment only and not with a view to or for sale in connection with any
distribution thereof (other than in a transaction which is either registered
under the Act or which is exempt from such registration). Purchaser hereby
acknowledges that (i) copies of the SEC Filings have been provided or made
available to Purchaser and (ii) Purchaser has been given an opportunity to ask
questions of, and receive written answers from, GREAT and its executive officers
concerning the terms and conditions of the Private Placement, and to obtain any
additional written information (to the extent GREAT possesses such information
or can acquire it without unreasonable expense or effort) necessary to verify
the accuracy of the information contained therein.
6. REIT Qualification Matters. To Purchaser's knowledge, no Person which
would be treated as an "individual" for purposes of Section 542(a)(2) of the
Code (as modified by Section 856(h) of the Code) owns or would be considered to
own (taking into account the ownership attribution rules under Section 544 of
the Code as modified by Section 856(h) of the Code) in excess of 5.0% of the
value of the outstanding equity interest in Purchaser.
7.Investment Company Matters. Purchaser is not, and after giving
effect to the purchase of the Purchased Common Shares hereunder, will not be, an
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"investment company" or an entity "controlled" by an "investment company", as
such terms are defined in the Investment Company Act of 1940, as amended.
ARTICLE
Covenants of Great and Purchaser
0. Covenants of GREAT. GREAT covenants and agrees with Purchaser
as follows:
( ) Access. Between the date of this Agreement and the Closing Date, and
subject to any limitations imposed by Section 5(c) of the Act, GREAT shall (and
shall cause its Subsidiaries to) give Purchaser and its counsel, accountants and
other representatives access to, and furnish Purchaser and its representatives
with, all documents, copies of documents, financial and operating data and other
information concerning the property and affairs of GREAT as Purchaser may from
time to time reasonably request.
(a) Shareholder Meeting. GREAT shall call a special meeting of its
shareholders (the "Special Meeting") to be held as promptly as practicable for
the purpose of voting upon the issuance and sale of Common Shares pursuant to
the Private Placement (including the Purchased Shares) and certain other
matters. GREAT filed on November 21, 1996 with the SEC under the Exchange Act,
and shall use its best efforts to clear with the SEC, a proxy statement with
respect to the Special Meeting (together with any amendments and supplements
thereto, the "Proxy Statement"). At the Special Meeting, GREAT will, through its
Board of Trust Managers, recommend to its shareholders approval of all proposals
(the "Current Proposals") included in the Proxy Statement as filed with the SEC
on November 21, 1996.
(b) Stock Exchange Listing. Prior to the Closing Date, the Purchased Common
Shares to be issued pursuant to this Agreement shall be approved for listing on
the AMEX, subject to official notice of issuance.
(c) Ancillary Agreements. GREAT shall cause the Registration Rights
Agreement to be executed by a duly authorized officer on behalf of GREAT at or
prior to the Closing and shall use all reasonable efforts to obtain the
execution of the Registration Rights Agreement by the other parties thereto
(other than Purchaser) effective on the Closing.
(d) Best Efforts. Subject to the terms and conditions of this Agreement,
GREAT shall use its best efforts to take, or cause to be taken, all reasonable
action, and to do, or cause to be done, all reasonable things necessary,
14
proper or advisable under the applicable laws and regulations to cause the
conditions specified in Article VI to be satisfied and otherwise to consummate
and make effective the transactions contemplated by this Agreement.
(e) Material Adverse Changes; SEC Filings; Financial
Statements.
( ) GREAT will promptly notify Purchaser of any event of which GREAT
obtains knowledge which has had or might reasonably be expected to have a
Material Adverse Effect or which might reasonably be expected to result in the
non-satisfaction of any condition set forth in Article VI.
(i) Prior to the Closing, GREAT will timely file with the SEC all
disclosure documents, including each Quarterly Report on Form 10-Q, Current
Report on Form 8-K and Annual Report on Form 10-K, required to be filed by GREAT
under the Exchange Act and the rules and regulations promulgated thereunder. As
of their respective dates, none of such reports shall contain any 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, in light of the
circumstances under which they were made, not misleading.
(ii) Each of the financial statements included in GREAT's Forms 10-Q and
Form 10-K referred to in clause (ii) shall be prepared in accordance with GAAP
consistently applied during the periods covered (except as disclosed therein),
except that the quarterly financial statements may omit (y) statements of
changes in financial position and footnote disclosures required by GAAP to the
extent the content thereof would not materially differ from those disclosures
reported in the most recent annual financial statement, and (z) year-end
adjustments to the extent not material.
(f) Preemptive Rights. GREAT shall provide Purchaser with written notice
(the "Issuance Notice") of any proposed issuance for cash of any Common Shares
or any securities convertible into or exchangeable for, or any rights or
warrants to acquire, any Common Shares no later than 30 days prior to the
proposed issuance thereof, including any Qualified Public Offering. The Issuance
Notice shall specify the securities to be issued, a purchase price range or
formula under which the purchase price is to be determined, the proposed
issuance date and all other material terms of such issuance (to the extent then
known by GREAT). Upon delivery to GREAT by Purchaser no later than 10 days after
the Issuance Notice of a notice (the "Purchase Notice") stating that Purchaser
intends to acquire a portion of the securities to be issued, Purchaser shall be
entitled, on the terms offered by GREAT to other prospective purchasers of the
securities to be issued, to purchase (A) in the case of a proposed issuance of
Common Shares, up to a number of Common Shares such that, giving effect to the
proposed issuance (and the exercise in full by Purchaser of its rights
15
under this Section 5.1(g) with respect to such proposed issuance), Purchaser
would hold 11.2% of the issued and outstanding Common Shares, and (B) in the
case of a proposed issuance of any securities convertible into or exchangeable
for, or any rights or warrants to acquire, any Common Shares, up to 11.2% of
such securities proposed for issuance. Any Purchase Notice shall state the
amount of securities Purchaser intends to purchase. Notwithstanding anything
herein to the contrary, GREAT shall be entitled not to proceed with the proposed
issuance or to alter the terms thereof; provided that, in the event that any
material terms of the proposed issuance are altered, (i) any Issuance Notice and
Purchase Notice shall be deemed to be revoked automatically and (ii) Purchaser
shall be entitled to participate in such proposed issuance on the terms set
forth in a revised Issuance Notice in accordance with this Section 5.1(g),
except that the revised Issuance Notice shall be given as soon as practicable
but in no event later than five business days prior to the proposed issuance and
the Purchase Notice with respect thereto shall be given no later than two
business days after the revised Issuance Notice. Notwithstanding the foregoing,
this Section 5.1(g) shall not apply to (i) the issuance of Common Shares at any
time pursuant to Redemption Rights, (ii) the issuance of any Common Shares
pursuant to warrants, options or other securities, convertible into,
exchangeable or exercisable for or otherwise carrying the right to receive
Common Shares, in each case outstanding as of Closing Date, (iii) the issuance
of Common Shares or options or other rights to acquire Common Shares (and the
issuance of Common Shares pursuant thereto) pursuant to GREAT's 1996 Share
Incentive Plan, and (iv) the issuance of Common Shares or options or other
rights to acquire Common Shares (and the issuance of Common Shares pursuant
thereto) pursuant to any stock incentive plan adopted after the date of this
Agreement.
(g) Expiration of Covenants. The covenants of GREAT contained in Section
5.1(g) shall expire upon the earlier to occur of (i) consummation of a Qualified
Public Offering, and (ii) such time as the Purchaser holds less than 5.6% of the
outstanding Common Shares (excluding from the number of outstanding Common
Shares for purposes of such calculation, Common Shares issued after the Closing
Date to which Purchaser's preemptive rights set forth in Section 5.1(g) did not
apply).
.1 Covenants of Purchaser. Purchaser covenants and agrees with GREAT as
follows:
( ) Confidentiality. Subject to the requirements of applicable law,
Purchaser shall, and shall use all reasonable efforts to cause its officers,
employees and agents who obtain such information to, hold in confidence all
non-public information obtained from GREAT until such time as such information
is otherwise available to Purchaser without breach of an agreement with
Purchaser or becomes publicly available.
16
(a) Proxy Statement. Purchaser shall cooperate with GREAT in the
preparation of the Proxy Statement and shall provide to GREAT any information
regarding Purchaser required or deemed advisable by GREAT or its advisors to be
included in the Proxy Statement. None of the information to be supplied by
Purchaser expressly for inclusion in the Proxy Statement, or in any amendments
or supplements thereto, will, at the time of (x) the first delivery or mailing
thereof or (y) the Special Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. At the Special Meeting called
pursuant to Section 5.1(b), Purchaser shall vote all Common Shares owned by it
(if any) in favor of approval and adoption of each of the Current Proposals.
(b) Ancillary Agreements. Purchaser shall cause the Registration Rights
Agreement to be executed on behalf of Purchaser and delivered to GREAT at or
prior to the Closing.
(c) Best Efforts. Subject to the terms and conditions of this Agreement,
Purchaser shall use its best efforts to take, or cause to be taken, all
reasonable actions, and to do, or cause to be done, all reasonable things
necessary, proper or advisable under the applicable laws and regulations to
cause the conditions specified in Article VII to be satisfied and otherwise to
consummate and make effective the transactions contemplated by this Agreement.
5.3 ERISA Covenants.
(a) ERISA Certification. Simultaneous with the execution of
this Agreement, Purchaser shall review, complete and deliver to GREAT an ERISA
Certification, substantially in the form of Exhibit A hereto (the "ERISA
Certification").
(b) Adjustment to Purchased Common Shares. The parties hereby
acknowledge and agree that, notwithstanding any prior agreement between the
parties or anything to the contrary contained herein, in the event that
Purchaser is a "benefit plan investor" (as defined in the ERISA Certification),
GREAT may, in its sole discretion, by delivery of a notice to Purchaser at any
time prior to the Closing, reduce the number of Common Shares that constitute
the Purchased Common Shares hereunder, and such reduction shall not affect
Purchaser's obligations hereunder except as specifically contemplated by Section
5.3(c). GREAT's notice shall set forth (i) the number of Common Shares which
shall thereafter constitute the Purchased Shares hereunder and (ii) the Purchase
Price for the Purchased Shares, as reduced in accordance with Section 5.3(c).
(c) Adjustment to Purchase Price. In the event that the number of
Common Shares which constitutes the Purchased Common Shares is reduced
17
pursuant to Section 5.3(b) hereof, the Purchase Price to be paid by Purchaser
hereunder shall be reduced accordingly, and shall thereafter be equal to the
product of (i) the Purchase Price Per Common Share and (ii) the number of Common
Shares constituting the Purchased Common Shares, after giving effect to the
reduction pursuant to Section 5.3(b).
(d) Restrictions on Transfer. In addition to any other restrictions on
the transfer of the Purchased Common Shares, whether contained in the Charter,
GREAT's Bylaws or elsewhere, in no event may a transfer of any interest in a
Purchased Common Share be made unless, prior to such transfer, (i) the proposed
transferee delivers to GREAT a completed and executed ERISA Certification, and
(ii) GREAT determines, in its sole discretion, that such transfer would not
cause any portion of its assets to be deemed to be "plan assets" for purposes of
the fiduciary requirements of ERISA and the prohibited transaction provisions of
ERISA and/or Internal Revenue Code Section 4975.
ARTICLE
Conditions of Purchaser's Obligations at Closing
The obligations of Purchaser set forth in Article II are
subject to the fulfillment or waiver by Purchaser on or before the Closing Date
of each of the following conditions:
.0 Representations and Warranties. The representations and warranties of
GREAT contained in Article III shall be true in all material respects on and as
of the Closing Date with the effect as though such representations and
warranties had been made on and as of the Closing Date.
.1 Performance. GREAT shall have performed and complied in all material
respects with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing Date.
.2 Compliance Certificate. GREAT shall deliver to Purchaser at the Closing
a certificate, in the form of Exhibit C hereto, duly executed by an authorized
officer on behalf of GREAT, certifying that the conditions specified in Sections
6.1 and 6.2 have been satisfied.
18
.3 No Litigation. There shall be no order, decree or injunction of a court
of competent jurisdiction which, as of the Closing Date, stays or prohibits the
transactions contemplated by this Agreement.
.4 Consents and Waivers. Any and all consents or waivers from other parties
to any agreements, or consents, waivers or permits from other Persons, that are
required in connection with the consummation by Purchaser or GREAT of the
transactions contemplated by this Agreement shall have been obtained, including,
without limitation, the approval of GREAT's shareholders of the Current
Proposals.
.5 Ancillary Agreements. The Registration Rights Agreement shall have been
duly and validly executed by the parties thereto (other than Purchaser) and
shall be in full force and effect.
.6 Minimum Private Placement. The aggregate gross proceeds received by
GREAT from the concurrent sale of Common Shares hereunder and to other
purchasers of Common Shares in the Private Placement shall be not less than
$15,000,000.
ARTICLE
Conditions of GREAT's Obligations at Closing
The obligations of GREAT set forth in Article II are subject
to the fulfillment or waiver by GREAT on or before the Closing of each of the
following conditions:
.0 Representations and Warranties. The representations and warranties of
Purchaser contained in Article IV shall be true on and as of the Closing Date
with the same effect as though such representations and warranties had been made
on and as of the Closing Date.
.1 Purchase Price. Purchaser shall have delivered the Purchase Price to
GREAT.
.2 Compliance Certificate. Purchaser shall deliver to GREAT at the Closing
a certificate, in the form of Exhibit B hereto, duly executed by or on behalf of
Purchaser, certifying that the conditions specified in Sections 7.1 and 7.4 have
been satisfied.
19
.3 Performance. Purchaser shall have performed and complied in all material
respects with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing Date.
.4 No Litigation. There shall not be any action, suit, proceeding, hearing
or investigation or order, decree or injunction of any nature or type
threatened, pending or made by or before any governmental body that questions or
challenges the lawfulness of the transactions contemplated by this Agreement or
in connection with any of the Consolidation Transactions under any law or
regulation or seeks to delay, restrain or prevent or obtain damages in respect
of such transactions.
.5 Consents and Waivers. Any and all consents or waivers from other parties
to any agreements or consents, waivers or permits from other Persons that are
required in connection with the consummation by Purchaser or GREAT of the
transactions contemplated in this Agreement shall have been obtained, including
without limitation approval of the Current Proposals by GREAT's shareholders.
.6 Ancillary Agreements. The Registration Rights Agreement shall have been
duly and validly executed by the parties thereto (other than GREAT) and shall be
in full force and effect.
.7 ERISA Certification. Purchaser shall have reviewed, completed and
delivered to GREAT the ERISA Certification.
7.9 Minimum Private Placement. The aggregate gross proceeds
received by GREAT from the concurrent sale of Common Shares hereunder and to
other purchasers of Common Shares in the Private Placement shall be not less
than $15,000,000.
7.10 "Consolidation Transactions". The closing under the
Contribution Agreement (as described in the Proxy Statement), the Exchange Offer
and the Refinancing (as described in the Proxy Statement) shall have occurred,
or all of the conditions thereto shall have been satisfied so that the closings
thereunder occur concurrently with the sale of the Purchased Shares.
ARTICLE VIII
MISCELLANEOUS
8.1 Successors and Assigns. Neither party may assign
any of its rights or delegate any of its duties under this Agreement with out
the prior written consent of the other party hereto. Except as otherwise
provided herein, the terms and
20
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
8.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York as applied to agreements among
New York residents entered into and to be performed entirely within New York,
except that the internal corporate affairs of GREAT shall be governed by the
laws of Maryland applicable thereto.
8.3 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.4 Captions. The captions used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
8.5 Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to another party hereto shall
be in writing, shall be deemed to have been duly given or delivered when
delivered personally or telecopied (receipt confirmed, with a copy sent by
certified or registered mail as set forth herein) or sent by certified or
registered mail, postage prepaid, return receipt requested, or by Federal
Express or other overnight delivery service, to the address of the party set
forth below or to such address as the party to whom notice is to be given may
provide in a written notice to GREAT, a copy of which written notice shall be on
file with the Secretary of GREAT:
To GREAT:
Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xx. Xxxxxx XxXxxxxx, Chief Financial Officer
and Secretary
21
With copies to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx Xxxx Xxxxxx, Esq.
To Purchaser:
ABKB/LaSalle Securities Limited
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx Xxxx
8.6 Expenses. Whether or not the Closing occurs, GREAT and
Purchaser shall each pay all costs and expenses that it incurs with respect to
the negotiation, execution, delivery and performance of this Agreement.
8.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only by a writing executed by each of GREAT and Purchaser.
8.8 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms to the fullest extent permitted by law.
8.9 Publicity. GREAT and Purchaser shall continue to consult
with each other before issuing any press releases or otherwise making any public
statement with respect to this Agreement and the transactions contemplated
hereby, and they shall not issue any such press release or make any such public
statement prior to such consultation, except as may, in the judgment of counsel,
be required by law or by obligations pursuant to any securities laws or listing
agreement with any national securities exchange.
8.10 Further Assurances. Each of the parties shall,
without furtherconsideration, use reasonable efforts to execute and deliver
to the other such additional
22
documents and take such other action as the other may reasonably request to
carry out the intent of this Agreement and the transactions contemplated hereby.
8.11 Entire Agreement. This Agreement, including the exhibits
hereto, the documents, schedules, certificates and referred to herein, together
with the Registration Rights Agreement, embodies the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by such agreements. There are no restrictions promises, inducements,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
written or oral agreements and understandings between the parties with respect
to such transactions.
8.12 Survival. All representations and warranties and
covenants of the parties contained in this Agreement shall survive the Closing.
ARTICLE IX
Termination
9.1 Termination Events. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned at any time before
the Closing Date:
(a) by mutual written agreement of Purchaser and GREAT;
(b) by either GREAT or Purchaser at any time after April 30,
1997 if, at the time notice of such termination is given, the Closing has not
occurred, unless the failure of such occurrence shall be due to the failure of
the party seeking to terminate this Agreement to perform or observe any material
covenant or agreement set forth herein required to be performed or observed by
such party on or before the Closing Date;
(c) by Purchaser (if it is not in breach of any of its
material obligations hereunder) in the event of a breach or failure by GREAT
that is material in the context of the transactions contemplated hereby of any
representation, warranty, covenant or agreement by GREAT contained herein which
has not been, or cannot be, cured within 30 days after written notice of such
breach is given to GREAT; or
(d) Purchaser (if it is not in breach of any of its material
obligations hereunder) in the event of a breach or failure by GREAT that is
material in the context of the transactions contemplated hereby of any
representation, warranty, covenant or agreement by GREAT contained herein which
has not been, or cannot be, cured within 30 days after written notice of such
breach is given to GREAT.
23
The power of termination provided for by this Section 9.1 shall be effective
only after notice thereof, duly executed on behalf of the party for which it is
given, shall have been given to the other.
9.2 Procedure Upon Termination; Liabilities. In the event of a
termination of this Agreement by either or both of GREAT and Purchaser pursuant
to Section 9.1, notice thereof shall forthwith be given by the terminating party
to the other party, and this Agreement shall thereupon terminate and become void
and have no further effect, and the transactions contemplated hereby shall be
abandoned without further action by the parties hereto, except that the
provisions of Section 5.2(a) (Confidentiality), 8.6 (Expenses), 8.2 (Governing
Law), and 8.5 (Notices), and any related definitional, interpretive or other
provisions necessary for the logical interpretation of such provisions, shall
survive the termination of this Agreement; provided, however, that such
termination shall not relieve any party hereto of any liability for any breach
of this Agreement.
IN WITNESS WHEREOF, Purchaser and GREAT have caused this
Agreement to be executed by their respective duly authorized officers as of the
date first above written.
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
Xxxxx X. Xxxxxx
Managing Director of ABKA/LaSalle
Securities Limited
GROVE REAL ESTATE ASSET TRUST
By: /s/ XXXXX XXXXXXX
Xxxxx Xxxxxxx
Chief Executive Officer
24
Exhibit A
ERISA CERTIFICATION
Reference is made to that certain Securities Purchase Agreement (the
"Agreement"), dated as of February 21, 1997, between Grove Real Estate Asset
Trust ("GREAT") and 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 ("Purchaser"). Capitalized
terms used but not defined herein shall have the meanings ascribed to such terms
in the Agreement.
This is the ERISA Certification referred to in, and contemplated by,
Section 5.3(a) of the Agreement.
The United States Department of Labor (the "DOL") has promulgated 29
CFR 2510.101 (the "DOL Regulation") defining the term "plan assets" for purposes
of the fiduciary requirements of Employee Retirement Income Security Act of
1974, as amended ("ERISA") and the prohibited transaction provisions of ERISA
and Internal Revenue Code Section 4975. Under the DOL Regulation, when an
employee benefit plan or an entity that holds the assets of an employee benefit
plan ("Benefit Plan Investors") makes an equity investment in another entity,
the underlying assets of that entity generally will be considered plan assets
unless one of the exceptions contained in the DOL Regulation is met. In order to
avoid having its assets deemed to be plan assets of any Benefit Plan Investor
that purchases Common Shares in the Private Placement, GREAT has determined to
restrict the number of Common Shares purchased by Benefit Plan Investors in the
Private Placement. In order to permit GREAT to comply with this restriction,
Purchaser hereby certifies the following under penalties of perjury [check one]:
[X| It is not a Benefit Plan Investor.
[_| It is a Benefit Plan Investor because it is [Check Applicable Category]:
|_| an employee welfare benefit plan or employee pension benefit
plan, as those terms are defined in ERISA Section 3, whether
or not such plan is subject to ERISA (including, without
limitation: (i) a pension, profit sharing, stock bonus or
employee stock ownership plan that is qualified under Internal
Revenue Code Section 401(a), and is established for the
benefit of the employees of any employer or is a "Xxxxx" plan
established for the benefit of a self-employed individual (or the
partners of a partnership), or (ii) a governmental plan (as
defined in ERISA);
25
|_| an individual retirement account or annuity described in
Internal Revenue Code Section 408; or
|_| any other entity or account the underlying assets of which are
deemed to be "plan assets," within the meaning of 29 CFR Section
2510.3-101 (including, without limitation, a bank collective
investment vehicle or group trust or an insurance company separate
account) as follows [describe]:
==========================================
==========================================
==========================================
Purchaser acknowledges that, notwithstanding anything set forth in the
Agreement to the contrary, in the event that Purchaser is a "Benefit Plan
Investor," as defined in the DOL Regulation, and GREAT determines, in its sole
discretion, that the ownership by Benefit Plan Investors of Common Shares issued
in the Private Placement should be restricted to avoid having the assets of the
Purchaser deemed to be "plan assets" for purpose of the fiduciary requirements
of ERISA and the prohibited transaction provisions of ERISA and/or Internal
Revenue Code Section 4975, (a) the number of Common Shares which constitute the
Purchased Common Shares to be purchased by Purchaser under the Agreement will be
reduced in accordance with Section 5.3(b) thereof to the extent that GREAT, in
its sole discretion, deems necessary or appropriate and (b) the Purchase Price
to be paid by Purchaser for the Purchased Common Shares thereunder will be
reduced accordingly in accordance with Section 5.3(c) thereof.
IN WITNESS WHEREOF, Purchaser has executed this ERISA Certification as
of this 21st day of February, 1997.
OREGON INVESTMENT COUNCIL ACTING ON
BEHALF OF OREGON PUBLIC EMPLOYES'
RETIREMENT FUND UNDER AUTHORITY OF
OREGON REVISED STATUTES SECTION 293.741
BY ITS AGENT ABKB/LASALLE SECURITIES
LIMITED
By: /s/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx
Managing Director of ABKB/LaSalle
Securities Limited
26
Exhibit B
PURCHASER'S COMPLIANCE CERTIFICATE
Pursuant to Section 7.3 of the Securities Purchase Agreement (the
"Agreement"), dated February 21, 1997, between 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,
("Purchaser") and Grove Real Estate Asset Trust ("GREAT"), the undersigned is
duly authorized to certify on behalf of Purchaser, and hereby certifies on
behalf of Purchaser that:
1. The representations and warranties of Purchaser contained
in the Agreement are true as of the date hereof, as though such
representations and warranties had been made on the date hereof.
2. Purchaser has performed and complied in all material respects
with all agreements, obligations and conditions contained in the
Agreement that were required to be performed or complied with by
Purchaser on or before the date hereof.
IN WITNESS WHEREOF, the undersigned has set his hand this __ day of
___________________, 199_.
OREGON INVESTMENT COUNCIL ACTING
ON BEHALF OF OREGON PUBLIC
EMPLOYES' RETIREMENT FUND UNDER
AUTHORITY OF OREGON REVISED
STATUTES SECTION 293.741 BY ITS AGENT
ABKB/LASALLE SECURITIES LIMITED
By:_____________________________
Name:
Title:
27
Exhibit C
GREAT's COMPLIANCE CERTIFICATE
(ABKB/LaSalle)
Pursuant to Section 6.3 of the Securities Purchase Agreement (the
"Agreement"), dated February 21, 1997, between 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
("Purchaser"), and Grove Real Estate Asset Trust ("GREAT"), the undersigned, the
Secretary of GREAT, hereby duly certifies on behalf of GREAT that:
1. The representations and warranties of GREAT contained in
the Agreement are true in all material respects as of the date hereof,
as though such representations and warranties had been made on the date
hereof.
2. GREAT has performed and complied in all material respects
with all agreements, obligations and conditions contained in the
Agreement that were required to be performed or complied with by GREAT
on or before the date hereof.
IN WITNESS WHEREOF, the undersigned has set his hand this __ day of
March, 1997.
GROVE REAL ESTATE ASSET TRUST
By:_____________________________
Xxxxxx X. XxXxxxxx
Secretary
28
Exhibit D
RECEIPT
Reference is made to the Securities Purchase Agreement (the
"Agreement"), dated February 21, 1997, between 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
("Purchaser") and Grove Real Estate Asset Trust ("GREAT"). Capitalized terms
used but not defined herein shall have the meanings ascribed to such terms in
the Agreement.
GREAT hereby acknowledges receipt, on the date hereof, of
$_____________ in respect of the Purchase Price, as such amount may have been
adjusted from time to time prior to the date hereof in accordance with Section
5.3(c) of the Agreement.
Purchaser hereby acknowledges receipt, on the date hereof, the
certificate(s) listed on Schedule A hereto representing an aggregate of ____
Common Shares, which Common Shares constitute the Purchased Common Shares, as
such number of Common Shares may have been adjusted from time to time prior to
the date hereof in accordance with Section 5.3(b) of the Agreement.
GROVE REAL ESTATE ASSET TRUST
By:_______________________________
Xxxxxx X. XxXxxxxx
Chief Financial Officer
OREGON INVESTMENT COUNCIL ACTING
ON BEHALF OF OREGON PUBLIC
EMPLOYES' RETIREMENT FUND UNDER
AUTHORITY OF OREGON REVISED
STATUTES SECTION 293.741 BY ITS AGENT
ABKB/LASALLE SECURITIES LIMITED
By:___________________________________
Name:
Title:
29
Schedule A
Certificate(s) Representing Purchased Shares
30
31
