DOC 1401554
1
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT is entered into as of March 14, 1997 by
and among GROVE REAL ESTATE ASSET TRUST, a real estate investment trust
organized under the laws of Maryland ("GREAT"), GROVE OPERATING, L.P., a
Delaware limited partnership (the "Operating Partnership"), and _____________
(the "Executive").
WHEREAS, on the date hereof, the GREAT, the Operating Partnership and
certain other persons are entering into a series of related transactions
pursuant to which it will acquire, among other things, substantially all of the
interests of Executive and certain other individuals and entities in a portfolio
of multi-family residential properties (and one retail mixed-use property)
located in the Northeastern United states; and
WHEREAS, as a condition to the consummation of the transactions
described above, the parties hereto desire to enter into certain agreements
restricting the activities of Executive in an effort to eliminate potential
conflicts of interest that may arise in the future to protect the Company's
legitimate business interests, i.e., the value of its business and its good
will, and for other business purposes;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Definitions. Capitalized terms used herein shall have the meanings set
forth below:
"Agreement" means this Noncompetition Agreement, including any
amendments hereto made in accordance with paragraph 7(d) hereof.
"Company" means, collectively, GREAT and its subsidiaries,
including without limitation the Operating Partnership.
"Employment Agreement" means that certain Employment Agreement
between GREAT and Executive, of even date herewith, as amended from time to
time.
"Excluded Properties" means those properties listed on
Schedule A hereto, each of which is owned by the limited partnership, and has
the corporate general partner, indicated on such Schedule A.
"Noncompetition Term" means the period beginning on the date
hereof through the date which is twenty-four (24) months after Executive is no
longer an executive officer, trust manager, Significant Shareholder, or employee
of or consultant to the Company; provided, that in the event that Executive's
employment with GREAT is terminated by GREAT without "Cause" or by the Executive
for "Good Reason" or in connection with a "Change of Control" (as such terms are
defined in the Employment Agreement), the Noncompetition Term shall terminate on
the effective date of such termination of employment.
"Significant Shareholder" means any individual or entity that
"beneficially owns" (as defined in Rule 13d-3 of the Securities Exchange Act of
1934, as amended) 5% of the then issued and outstanding common shares of
beneficial interest, par value $0.01 per share, of GREAT.
(a) Noncompetition. (a) During the Noncompetition Term, Executive shall be
prohibited from engaging in Competition (as defined below) with the Company.
(b) The term "Competition" for purposes of this Agreement shall mean
engaging directly or indirectly in developing, redeveloping, acquiring,
managing or operating multi-family or retail mixed-use properties in
the Northeastern United States or in any other market in which the
Company owns, develops or manages property, whether by the Executive
individually or as principal, partner, officer, director, consultant,
employee, stockholder or manager of any person, partnership,
corporation, limited liability company or any other entity; provided,
however, that the term "Competition" shall be deemed to exclude (i) the
Executive's ownership, management or leasing of the Executive's
interests in any of the Excluded Properties and any passive ownership
interest in real property received in exchange therefor, and (ii) the
provision of real estate brokerage services. The term "Northeastern
United States" for purposes of this Agreement shall mean the following
states: Maine, New Hampshire, Vermont, Massachusetts, Connecticut,
Rhode Island, New York, New Jersey and Pennsylvania.
2. Reasonable and Necessary Restrictions. Executive acknowledges that the
restrictions, prohibitions and other provisions hereof are reasonable, fair and
equitable in scope, terms and duration, are necessary to protect the legitimate
business interests of the Company, and are a material inducement to the Company
to enter into the transactions contemplated in the recitals hereto. Executive
covenants that he will not challenge the enforceability of this Agreement nor
will he raise any equitable defense to its enforcement.
3. Restrictions in Addition to Employment Agreement. Executive acknowledges
that the restrictions, prohibitions and other provisions hereof shall be in
addition to and not in substitution of the restrictions, prohibitions and other
provisions of the Employment Agreement.
4. Specific Performance. Executive acknowledges that the obligations
undertaken by him pursuant to this Agreement are unique and that the Company
likely will have no adequate remedy at law if Executive shall fail to perform
any of his obligations hereunder, and Executive therefore confirms that the
Company's right to specific performance of the terms of this Agreement is
essential to protect the rights and interests of the Company. Accordingly, in
addition to any other remedies that the Company may have at law or in equity,
the Company shall have the right to have all obligations, covenants, agreements
and other provisions of this Agreement specifically performed by Executive, and
the Company shall have the right to obtain preliminary and permanent injunctive
relief to secure specific performance and to prevent a breach or contemplated
breach of this Agreement by Executive, and Executive submits to the jurisdiction
of the courts of the State of New York for this purpose.
5. Termination of Existing Noncompetition Agreement. The existing
Noncompetition Agreement between Executive and GREAT is hereby terminated, and
shall be of no further legal effect.
6. Miscellaneous Provisions.
(a) Binding Effect. Subject to any provisions hereof restricting
assignment, all covenants and agreements in this Agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of the respective
successors, permitted assigns, heirs, and personal representatives. None of the
parties hereto may assign any of its rights under this Agreement or attempt to
have any other person or entity assume any of its obligations hereunder,
provided, that this Agreement may be assigned by GREAT and the Operating
Partnership to any successor to its business.
(b) Severability. If fulfillment of any provision of this Agreement, at the
time such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any clause or provision contained in this
Agreement operates or would operate to invalidate this Agreement, in whole or in
part, then such clause or provision only shall be held ineffective, as though
not herein contained, and the remainder of this Agreement shall remain operative
and in full force and effect.
(c) Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto shall be governed by
and construed in accordance with the laws of the State of New York, not
including the choice-of-law rules thereof.
(d) Amendment; Waiver. Except as otherwise expressly provided in this
Agreement, no amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by each of the
parties hereto. Any waiver by any party or consent by any party to any variation
from any provision of this Agreement shall be valid only if in writing and only
in the specific instance in which it is given, and such waiver or consent shall
not be construed as a waiver of any other provision or as a consent with respect
to any similar instance or circumstance.
(e) Headings. Paragraph and subparagraph headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
(f) Pronouns. All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity of
the person or entity may require.
(g) Notices. All notices and other communications to any party hereunder
shall be in writing and shall be personally delivered or sent by certified mail,
postage prepaid, return receipt requested, or by a reputable courier delivery
service or by prepaid telex or telecopy and shall be given to the address or
telex or telecopier number for such party set forth below such party's signature
to this Agreement, or to such other address or telex or telecopier number as
such party may hereafter specify by notice to the others. Each such notice or
other communication shall be effective (a) if given by telex or telecopier, when
such telex or telecopy is transmitted to the telex or telecopier number
specified by this Section and the appropriate answerback or confirmation is
received or (b) if given by any other means (including, without limitation, by
courier), when delivered at the address specified by this Section.
(h) Exclusive Agreement. This Agreement supersedes all prior agreements
(whether written or oral) among the parties with respect to the subject matter
(other than the Employment Agreement), including, without limitation, any
noncompetition agreement entered into by Executive in connection with the
initial public offering of GREAT, and is intended as a complete and exclusive
statement of the terms of the agreement among the parties with respect thereto.
(i) Execution in Counterparts. This Agreement may be executed in two or
more counterparts, none of which need contain the signatures of all parties
hereto and each of which shall be deemed an original.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement, or
caused this Agreement to be duly executed on its behalf, as of the date first
set forth above.
GROVE REAL ESTATE ASSET TRUST
_______________________________ By: ___________________________
[Executive] Name:
Title:
Address: Address:
Business
x/x Xxxxx Xxxx Xxxxxx Xxxxx Xxxxx Xxxxx Xxxx Xxxxxx Asset Trust
000 Xxxxxx Xxxxxx 000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Residence
SCHEDULE A
"Excluded Properties"
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Corporate General
Limited Partnership Owning Partner of
Excluded Property Excluded Property Excluded Property
----------------- ----------------- -------------------
Arbor on the Farmington Windsor Arbor LP Windsor Common Corp(a)
Birch Hill Apartments Farmington Summit Associates LP FSLP, Inc.(b)
Boulevard West Apartments Grove Boulevard Associates LP (1)
Capital View Apartments Grove Hartford Associates LP (1)
Coachlight Village
Apartments ANE Associates LP (2)
Farmington Forest Farmington Forest Associates LP Eastbrook Willow
Condominiums Corp.
Glastonbury Center
Apartments Heritage Court Associates LP Glastonbury Realty L.P.
Harbor View Apartments Grove Coastal Associates LP (3)
Bridge Building Grove Coastal Associates LP (3)
Xxxxxxxxx Building Grove Coastal Associates LP (3)
0 Xxxxx Xxxxxx Xxxxx Xxxxxxx Associates LP (3)
Xxxxxx Square Grove Coastal Associates LP (3)
Corner Block Building Grove Coastal Associates LP (3)
Wharf Building Grove Coastal Associates LP (3)
Park Place East Apartments Grove Coastal Associates LP (1)
Quequechan Apartments Northeast Apartment LP NEALP, Inc.
River Grove Apartments River Grove Associates LP (4)
Summit Apartments Farmington Summit Associates LP FSLP, Inc.
Brooksyde Apartments West Hartford Centre Associates LP WHCALP, Inc.
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Xxxxxxx Condominiums Grove Xxxxxxx Associates LP GTALP, Inc.
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Colonial Inn Edgartown Associates LP (4)
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(1) Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxx & Xxxxxx Xxxxx
(2) Xxxxxx Xxxxx, Xxxxxx Xxxxx, Grove ANE Corp.
(3) Grove Investment Group, Inc. and Springfield Development Corp.
(4) Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxxx XxXxxxxx
(a) Grove Investment Group, Inc. is owned 100% by Xxxxx Xxxxxxx, Xxxxx
Xxxxxxx and Xxxxxx Xxxxxxx (40%, 40% and 20% respectively). Springfield
Development Corp. is owned 100% by Xxxxxx Xxxxx and Xxxxxx Xxxxx (50% each)
(b) Grove ANE Corp is owned 100% by Xxxxx & Xxxxx Xxxxxxx (50% each)
(c) Glastonbury Realty is owned by Xxxxx Xxxxxxx (16.667%), Xxxxx Xxxxxxx
(16.667%), Xxxxxx Xxxxx (16.667%), Xxxxxx Xxxxx (16.667%), Xxxxxxx Xxxxx
(19.166%) and Xxxxxx Xxxxxxxxxxxx (14.166%)
