SECURITIES PURCHASE AGREEMENT
dated as of February 20, 1997
between
GROVE REAL ESTATE ASSET TRUST
and
XXXXXX XXXXXXX GROUP INC.
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement"), dated as of
February 20, 1997, between Grove Real Estate Asset Trust, a Maryland real estate
investment trust ("GREAT") and Xxxxxx Xxxxxxx Group Inc., a corporation
organized and existing under the laws of the State of Delaware ("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, 777,778
Common Shares (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 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 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.
"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,
liabilities, results of operations, financial condition or prospects of GREAT
and its Subsidiaries taken as a whole, or 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.
"Permitted Transferee" means (i) any Affiliate of Purchaser and (ii)
any investor party to the Xxxxxx Xxxxxxx Real Estate Special Situations Fund
Separate Accounts Agreement that has granted Purchaser discretionary authority
(with respect to voting and investment) over the funds invested pursuant
thereto; provided that such transferee executes a counterpart of this Agreement
under which it agrees to be bound by all the terms and conditions hereof,
including, without limitation, making the representations and warranties set
forth in Article IV.
"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 $7,000,000, which is equal to the product of
$9.00 (the Purchase Price Per Share) and 777,778 (the number of Common Shares
which constitutes the Purchased Common Shares).
"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 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
and certain other purchasers of the Common Shares offered in the Private
Placement, substantially in the form attached hereto as Exhibit E.
"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 certificates
representing the number of Common Shares constituting the Purchased Common
Shares, registered in such name or names and such denominations and delivered at
such address or addresses as Purchaser shall request.
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 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
ofPurchaser;
(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 in accordance with
Section 2.1 hereof.
(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;
(iv) the Receipt, duly executed by an authorized officer on behalf of GREAT;
(v) A comfort letter of Ernst & Young, LLP in the form attached as Exhibit F
hereto;
(vi) a Secretary's certificate of GREAT certifying as to the Charter
Documents and the resolutions of the Board of Trust Managers approving the
transactions contemplated hereby and by the Proxy Statement; and
(vii) A Certificate of Good Standing of GREAT issued by the Maryland State
Department of Assessments and Taxation.
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 __, 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 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 in all material respects
on the terms described in the Proxy Statement and (iv) warrants to purchase
40,000 Common Shares granted to Xxxxxxx Investments, Inc. in connection with
GREAT's initial public offering.
(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 the Registration Rights Agreement
(subject to shareholder approval as contemplated by the Proxy Statement) and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Registration Rights Agreement and the other
agreements and instruments contemplated hereby and thereby, and the consummation
of the transactions contemplated by this Agreement and the Registration Rights
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 and
the Registration Rights Agreement or to consummate the transactions so
contemplated. This Agreement has been duly and validly executed by GREAT and,
subject as aforesaid, constitutes, and upon execution and delivery thereof the
Registration Rights Agreement will constitute 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, GREAT's
quarterly reports on Form 10-QSB for the fiscal quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996 and the Proxy Statement (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.
3.6 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement or the Registration Rights Agreement by GREAT, its
consummation of the transactions contemplated hereby or thereby nor its
compliance with any of the provisions hereof or thereof 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, (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 in its federal income tax returns for
the tax years ended December 31, 1994 and 1995 taxed as a real estate investment
trust within the meaning of Section 856 of the Code (a "REIT"), and intends in
its federal income tax returns for the tax year ended December 31, 1996 to be so
taxed and has complied with all applicable provisions of the Code relating to a
REIT for 1994, 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 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.
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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 written information
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 Investment Company Matters. Purchaser is not, and after giving effect to
the purchase of the Purchased Common Shares hereunder, will not be, an
"investment company" subject to registration under the Investment Company Act of
1940, as amended.
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 in
connection with the approval by shareholders of certain matters relating to the
Consolidation Transactions. GREAT filed on November 21, 1996 with the SEC under
the Exchange Act, a proxy statement with respect to the Special Meeting
(together with any amendments and supplements thereto, the "Proxy Statement"),
and the SEC took a "no review" position with respect to 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.
(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.
(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, 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) Director Liability Insurance. GREAT shall maintain directors', and
officers' liability insurance in an amount not less than $5 million for the
benefit of the Board of Trust Managers.
(g) Board of Trust Managers; Nominees; Observers.
( ) Purchaser shall be entitled to designate either Xxx Xxxxxx or Xxxxxxx
Xxxxx or such other individual acceptable to GREAT, in its reasonable
discretion, to be nominated as a member of the Board of Trust Managers and GREAT
shall recommend such nominee for election to the Board of Trust Managers. In
furtherance thereof, at or prior to the Closing, GREAT shall increase the size
of the Board of Trust Managers by at least one additional Trust Manager and
shall elect Purchaser's nominee to the class of Trust Managers whose term
expires at the 1997 annual meeting of GREAT shareholders. At such meeting, GREAT
shall nominate Purchaser's nominee for election to the Board of Trust Managers
for a three-year term. With respect to any annual meeting of GREAT shareholders
thereafter, at least 60 days prior to the date GREAT submits nominees for the
Board of Trust Managers to its shareholders, GREAT shall notify Purchaser and
thereafter Purchaser shall have 30 days from the date of such notice to submit
the name of Purchaser's nominee, together with such other information regarding
such nominee as reasonably requested by GREAT in order to prepare the related
proxy statement. In the event that at any time Purchaser is entitled to
designate a nominee to the Board of Trust Managers pursuant to this Section
5.1(h), such nominee resigns or is removed from the Board, Purchaser shall be
entitled to designate a replacement to fill the vacancy created thereby.
(i) If at any time Purchaser is entitled to designate a nominee to the
Board of Trust Managers pursuant to this Section 5.1(h) and Purchaser does not
have a representative on the Board of Trust Managers, GREAT shall permit one
representative of Purchaser (which representative shall be acceptable to GREAT,
in its reasonable discretion) to attend, but not vote, as an observer at each
meeting of the Board of Trust Managers or any committee of the Board of Trust
Managers empowered to act with the full authority of the Board of Trust
Managers, including telephonic meetings. GREAT shall cause notice of any meeting
of the Board of Trust Managers or any such committee of the Board of Trust
Managers to be delivered to any such representative at the same time and in the
same manner as notice is given to the members of the Board of Trust Managers.
Such representative will be entitled to receive all written materials given to
the members of the Board of Trust Managers in connection with such meetings at
the time such materials and information are given to the Board of Trust
Managers. GREAT shall reimburse such representative for his reasonable
out-of-pocket expenses incurred in connection with attending meetings of the
Board of Trust Managers.
(iii) In the event that the Board of Trust Managers forms a committee to
act in connection with a proposed Qualified Public Offering, GREAT shall name
Purchaser's nominee (if any) on the Board of Trust Managers to serve on such
committee.
(iv) Upon termination pursuant to Section 5.1(j) below of Purchaser's right
to designate a member of the Board of Trust Managers, Purchaser shall cause its
nominee to resign from the Board of Trust Managers, and the provisions of this
Section 5.1(h) shall have no further force or effect.
(h) 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 the 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 under
this Section 5.1(i) with respect to such proposed issuance), Purchaser would
hold the Percentage Amount of all issued and outstanding Common Shares and
then-exercisable "in-the-money" options, in the aggregate, 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 the Percentage
Amount 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(i),
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(i) 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. For purposes of this Section 5.1(i), the "Percentage Amount" shall
mean twenty percent (20%), except in the case of any proposed issuance of Common
Shares for less than $9.00 per share or any securities convertible into or
exchangeable for, or any rights or warrants to acquire, any Common Shares where
the initial conversion, exchange or exercise price, as the case may be, is less
than $9.00 per Common Share, in which case the "Percentage Amount" shall mean
twenty-five percent (25%).
(i) Expiration of Covenants. The covenants of GREAT contained in Sections
5.1(g) through (i) shall expire upon the earlier to occur of (i) consummation of
a Qualified Public Offering, and (ii) such time as the Purchaser and its
Permitted Transferees, in the aggregate, hold less than ten percent (10%) 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(i) did not
apply).
(k) Registration Statements. Before the filing thereof with the SEC, the
Company will use reasonable efforts to furnish to Purchaser and the managing
underwriters, if any, copies of any shelf registration statement or prospectus,
or any amendments or supplements thereto, to be filed pursuant to the
Registration Rights Agreement if Purchaser has elected to include any
Registrable Securities (as defined in the Registration Rights Agreement) in such
registration statement.
.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.
(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)Restrictions on Transfer. In addition to any other restrictions on the
transferof the Purchased Common Shares, whether contained in the Charter,
GREAT's Bylaws or elsewhere, until such time as the Purchased Common Shares are
registered under the Act, 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.
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 delivered to the Purchaser
the items set forth in Section 2.3(b) and 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 and that no condition exists or
event has occurred requiring GREAT to notify Purchaser under Section 5.1(f)(i).
.3 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.
.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 GREAT 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
$17,500,000 (such minimum condition to be reduced to as low as $15.0 million, if
and to the extent that limited partners entitled to receive Common Units in lieu
of cash in the Exchange Offer elect to do so).
.7 Consolidation Transactions. The Consolidated Transactions
(including, without limitation, the closing under the Contribution Agreement (as
defined in the Proxy Statement), the Exchange Offer and the Refinancing (as
defined in the Proxy Statement)) shall have been consummated in all material
respects upon the terms and conditions set forth in the Proxy Statement, or all
conditions thereto shall have been satisfied so that the same shall occur
concurrent with the Closing of the Purchased Shares.
.8 Director Nominee. The designee of Purchaser, if any, shall have been
elected to the Board of Trust Managers of GREAT in accordance with Section
5.1(h).
.9 Ownership Limitations. GREAT's Board of Trust Managers will have waived
the application of the ownership limitations as applied to Purchaser and its
Permitted Transferees with respect to the Purchased Common Shares and any
securities purchased under Section 5.1(i).
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.
.3 Performance. Purchaser shall have delivered to GREAT the items set forth
in Section 2.3(a) and 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 without the prior
written consent of the other; provided, that Purchaser shall be entitled to
assign its rights (and delegate its duties, provided that, notwithstanding such
delegation, Purchaser shall continue to remain obligated therefor) under this
Agreement to any Permitted Transferee who acquires Purchased Common Shares from
the Purchaser, provided, further that Purchaser's rights under Section 5.1(g)
and (h) shall only be assignable to a Permitted Transferee which is an Affiliate
of Purchaser. Except as otherwise provided herein, the terms and 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
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.
(a) To Purchaser:
Xxxxxx Xxxxxxx Asset Management Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: General Counsel
Any Notice given to Purchaser shall be deemed to have been given to
any Permitted Transferee.
8.6 Expenses. Whether or not the Closing occurs, GREAT shall
pay all costs and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of this Agreement and shall reimburse
Purchaser for all such costs incurred by it (including the reasonable fees and
expenses of counsel to Purchaser) provided such costs shall not exceed $50,000
without GREAT's written consent.
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 (i) GREAT and (ii)
Purchaser and/or Permitted Transferees holding a majority of the Purchased
Common Shares.
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, in which case GREAT shall use
reasonable efforts to provide a copy of any such press release or public
statement to Purchaser prior to the filing or release thereof.
8.10 Further Assurances. Each of the parties shall, without
further consideration, use reasonable efforts to execute and deliver to the
other such additional 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) by GREAT (if it is not in breach of any of its material obligations
hereunder) in the event of a breach or failure by Purchaser that is material in
the context of the transactions contemplated hereby of any representation,
warranty, covenant or agreement by Purchaser contained herein which has not
been, or cannot be, cured within 30 days after written notice of such breach is
given to Purchaser.
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.
XXXXXX XXXXXXX GROUP INC.
By: /s/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Managing Director
GROVE REAL ESTATE ASSET TRUST
By:
Xxxxx Xxxxxxx
Chief Executive Officer
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 Xxxxxx Xxxxxxx Group Inc. ("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]:
|_| 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, subject to ERISA (including, without
limitation: 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);
|_| a governmental plan (as defined in ERISA) which is not subject to
ERISA;
|_| 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]:
IN WITNESS WHEREOF, Purchaser has executed this ERISA
Certification as of this 20th day of February, 1997.
XXXXXX XXXXXXX GROUP INC.
By
Name:
Title:
Exhibit B
PURCHASER'S COMPLIANCE CERTIFICATE
Pursuant to Section 7.3 of the Securities Purchase Agreement
(the "Agreement"), dated February __, 1997, between ____________________,
("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 delivered to GREAT all items set forth in Section 2.3(a)
and 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_.
Insert Name of Purchaser
By Name: Title:
Exhibit C
GREAT's COMPLIANCE CERTIFICATE
Pursuant to Section 6.3 of the Securities Purchase Agreement
(the "Agreement"), dated February __, 1997, between ____________________,
("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 delivered to Purchaser all items set forth in Section 2.3(b)
and 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.
3. No condition exists or event has occurred requiring GREAT to notify
Purchaser under Section 5.1(f)(i) of the Agreement.
IN WITNESS WHEREOF, the undersigned has set his hand this __ day of
___________________, 199_.
GROVE REAL ESTATE ASSET TRUST
By:
Xxxxxx X. XxXxxxxx
Secretary
Exhibit D
RECEIPT
Reference is made to the Securities Purchase Agreement (the
"Agreement"), dated February __, 1997, between ____________________
("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.
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
XXXXXX XXXXXXX GROUP INC.
By: Xxxxxx Xxxxxxx Asset Management Inc.
By
Name:
Title:
Schedule A
Certificate(s) Representing Purchased Shares
Exhibit E
FORM OF REGISTRATION RIGHTS AGREEMENT
Exhibit F
FORM OF COMFORT LETTER
