REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
March 14, 1997, by and between Grove Real Estate Asset Trust, a Maryland real
estate investment trust (the "Company"), Grove Operating, L.P., a Delaware
limited partnership (the "Operating Partnership") and each of the parties listed
on Schedule 1 hereto (each, a "Purchaser" and collectively, the "Purchasers").
WHEREAS, the Company has agreed to provide the Purchasers with
certain registration rights as set forth in this Agreement with respect to the
Common Shares (as defined below) issuable upon exchange by the Company of units
(the "Common Units") held by each Purchaser representing a limited partnership
interest in the Operating Partnership.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
0. Definitions. As used herein, the following terms shall have the meanings
set forth below:
() "Agreement" shall have the meaning set forth in the preamble to this
Agreement.
(a) "Business Day" shall mean any day on which the American Stock Exchange,
Inc. is open for trading.
(b) "Commencement Date" shall mean the one (1) year anniversary of the date
of this Agreement.
(c) "Company" shall have the meaning set forth in the preamble to this
Agreement.
(d) "Commission" shall mean the Securities and Exchange Commission, and any
successor thereto.
(e) "Common Shares" shall mean the common shares of beneficial interest,
$0.01 par value per share, of the Company.
(f) "Common Units" shall have the meaning set forth in the recitals to this
Agreement.
(g) "Contribution Agreement" shall mean the Contribution Agreement, dated
as of March __, 1997, among the Company, the Operating Partnership and the
Contributors identified therein.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any successor thereto, and the rules and regulations thereunder.
(i) "Effectiveness Pe
riod" shall have the meaning set forth in Section2(a).
(j) "Fair Market Value" shall mean, as of any date, (i) if the Common
Shares are listed or admitted for trading on any national securities exchange,
the Fair Market Value of each Common Share shall be the average closing price
per share on such exchange (or if so listed on more than one exchange, the
principal exchange) on the ten (10) Business Days preceding the relevant date;
(ii) if the Common Shares are not traded on any national securities exchange,
but are quoted on the NASD Automated Quotation System (NASDAQ System) or any
similar system of automated dissemination of quotations of prices in common use,
the Fair Market Value of each Common Share shall be the average price per share
equal to the mean between the closing high asked and the low bid on such system
on the ten (10) Business Days preceding the relevant date; or (iii) if neither
clause (i) nor clause (ii) is applicable, the Fair Market Value of each Common
Share shall be the fair market value as of the close of trading on the relevant
date as determined by the Board of Trust Managers of the Company, in good faith
in accordance with uniform principles consistently applied.
(k) "NASD" shall mean the National Association of Securities Dealers, Inc.
(l) "Operating Partnership" shall have the meaning set forth in the
preamble to this Agreement.
(m) "Permitted Transferee" of any Purchaser shall mean any Person to whom
Registrable Securities are permitted to be transferred pursuant to the Agreement
of Limited Partnership of the Operating Partnership, as in effect from time to
time.
(n) "Person" shall mean an individual, a partnership (general or limited),
corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
(o) "Purchaser" shall have the meaning set forth in the preamble to this
Agreement.
(p) "Registrable Securities" shall mean (i) all or any portion of the
Common Shares acquired by the Purchasers upon exchange of the Common Units
acquired on the date hereof and (ii) any securities issued or issuable with
respect to such Common Shares by way of conversion, exchange, stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued, such securities shall cease to be
Registrable Securities when (A) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (B) such securities are permitted to be disposed of pursuant to Rule
144(k) (or any successor provision to such Rule) under the Securities Act as
confirmed in a written opinion of counsel to the Company addressed to the
Purchaser holding such securities or (C) such securities shall have been
otherwise transferred pursuant to an applicable exemption under the Securities
Act, new certificates for such securities not bearing a legend restricting
further transfer shall have been delivered by the Company and such securities
shall be freely transferable to the public without registration under the
Securities Act.
(q) "Registration Expenses" shall mean all expenses incident to the
Company's performance of or compliance with the registration requirements set
forth in this Agreement including, without limitation, the following: (a) the
fees, disbursements and expenses of the Company's counsel, accountants and
experts in connection with the registration of Registrable Securities to be
disposed of under the Securities Act; (b) all expenses in connection with the
preparation, printing and filing of any registration statement, preliminary
prospectus or final prospectus, any other offering document and amendments and
supplements thereto and the mailing and delivery of copies thereof to any
underwriters and dealers; (c) the cost of printing or producing any agreement(s)
among underwriters, underwriting agreement(s) and blue sky or legal investment
memoranda, any selling agreements and any other documents in connection with the
offering, sale or delivery of Registrable Securities to be disposed of; (d) all
expenses in connection with the qualification of Registrable Securities to be
disposed of for offering and sale under state securities laws, including the
fees and disbursements of counsel for any underwriters in connection with such
qualification and in connection with any blue sky and legal investment surveys;
(e) the Commission or blue sky registration fees and any filing fees incident to
securing any required review by the NASD of the terms of the sale of Registrable
Securities to be disposed of; and (f) fees and expenses incurred in connection
with the listing of Registrable Securities on each securities exchange or
quotation system on which the Common Shares are then listed; provided, that
Registration Expenses with respect to any registration pursuant to this
Agreement shall not include underwriting discounts or commissions attributable
to Registrable Securities, transfer taxes applicable to Registrable Securities
or fees of counsel, if any, or other expenses of any Purchaser.
(r) "Registration Suspension Period" shall have the meaning set forth in
Section 2(b).
(s) "Securities Act" shall mean the Securities Act of 1933, as amended, and
any successor thereto, and the rules and regulations thereunder.
(t) "Shelf Registration" shall have the meaning set forth in Section 2(a).
(u) "Suspension Notice" shall have the meaning set forth in Section 2(b).
1. Shelf Registration. Obligation to File and Maintain. Promptly following the
Commencement Date, the Company will use commercially reasonable efforts to file
with the Commission a registration statement under the Securities Act for the
offering on a continuous or delayed basis in the future of all of the
Registrable Securities and will use commercially reasonable efforts to have it
declared effective as promptly as practicable following the Commencement Date
(the "Shelf Registration"). The Shelf Registration shall be on an appropriate
form and the Shelf Registration and any form of prospectus included therein or
prospectus supplement relating thereto shall reflect such plan of distribution
or method of sale as a Purchaser may from time to time notify the Company,
including, without limitation, the sale of some or all of the Registrable
Securities in a public offering or, if requested by a Purchaser, subject to
receipt by the Company of such information (including information relating to
Purchasers) as the Company reasonably may require, (i) in a transaction
constituting an offering outside the United States which is exempt from
registration requirements of the Securities Act in which the seller undertakes
to effect registration after the completion of such offering in order to permit
such shares to be freely tradeable in the United States, (ii) in a transaction
constituting a private placement under Section 4(2) of the Securities Act in
connection with which the seller undertakes to effect a registration after the
conclusion of such placement to permit such shares to be freely tradeable by the
purchasers thereof or (iii) in a transaction under Rule 144A of the Securities
Act in connection with which the seller undertakes to effect a registration
after the conclusion of such transaction to permit such shares to be freely
tradeable by the purchasers thereof. The Company shall use commercially
reasonable efforts to keep the Shelf Registration continuously effective for the
period beginning on the date on which the Shelf Registration is declared
effective and ending three years thereafter (not including periods during such
period of effectiveness which are Registration Suspension Periods and any
periods during which such registration cannot be used by Purchasers as a result
of any stop order, injunction or other order of the Commission or other
government authority for any reason other than an act or omission of a
Purchaser), or, if shorter, the holding period under Rule 144(k) promulgated
under the Securities Act for Persons who are not affiliates of the Company (the
"Effectiveness Period"). During the period during which the Shelf Registration
is effective, the Company shall supplement or make amendments to the Shelf
Registration, if required by the Securities Act or if reasonably requested by a
Purchaser or an underwriter of Registrable Securities, including to reflect any
specific plan of distribution or method of sale, and shall use commercially
reasonable efforts to have such supplements and amendments declared effective,
if required, as soon as practicable after filing.
() Black-Out Periods. Notwithstanding anything herein to the contrary, (i)
the Company shall have the right from time to time to require Purchasers not to
sell under the Shelf Registration or to suspend the effectiveness thereof during
the period starting with the date 15 days prior to the Company's good faith
estimate of the proposed date of closing of an underwritten public offering of
equity securities of the Company for the account of the Company (or such longer
period, not to exceed 30 days, as the Company may be engaged in a "road show" in
connection with such offering), and ending on the date 90 days following such
closing, and (ii) the Company shall be entitled to require Purchasers not to
sell under the Shelf Registration or to suspend the effectiveness thereof (but
not for a period exceeding 60 days) if the Company determines, in its good faith
judgment, that (A) such offering or continued effectiveness would interfere with
any material financing, acquisition, disposition, corporate reorganization or
other material transaction involving the Company or any of its subsidiaries, (B)
public disclosure of any such transaction would be required prior to the time
such disclosure might otherwise be required, or (C) when the Company is in
possession of material information that it deems advisable not to disclose in a
registration statement. The Company may not exercise its rights under this
Section 2(b) more than two times during any 12-month period; provided, that the
period during which the Company requires Purchaser not to sell under the Shelf
Registration or suspends effectiveness thereof under this Section 2(b) shall not
exceed 150 days during such 12-month period.
Once any Shelf Registration has been declared
effective, any period during which the Company causes Purchaser to not sell
under the Shelf Registration or fails to keep such Shelf Registration effective
and usable for resale of Registrable Securities for the period required
hereunder shall be referred to as a "Registration Suspension Period". Following
the date a Shelf Registration becomes effective, a Purchaser shall be required
to advise the Company in writing of its intent to sell Registrable Securities
under the Shelf Registration two Business Days prior to the date of the intended
sale, at which time the Company shall advise such Purchaser whether a
Registration Suspension Period is then currently in effect by giving written
notice pursuant to this Section 2(b) to such Purchaser of its determination that
such registration statement is no longer in effect or usable for resale of
Registrable Securities (a "Suspension Notice"). If the Company does not respond
to a Purchaser's notice of its intent to sell Registrable Securities within two
Business Days of the Company's receipt of that notice, the Company will be
deemed to have confirmed that the Shelf Registration is currently in effect and
no Registration Suspension Period exists. Any Registration Suspension Period
shall continue until the date when the Company notifies Purchasers that the use
of the prospectus included in a registration statement filed pursuant to this
Section 2 may be resumed for the disposition of Registrable Securities. Any
Suspension Notice is not required to state the reason therefor, but shall be
sufficient if it contains a certification by an executive officer of the Company
that such suspension is permitted by this Section 2(b). The Effectiveness Period
will be extended by the same number of days that comprise a Registration
Suspension Period.
(a) Number of Shelf Registrations. The Company shall be obligated to
effect, under this Section 2, only one Shelf Registration. A Shelf Registration
shall not be deemed to have been effected unless such registration becomes
effective pursuant to the Securities Act and is kept continuously in effect for
the Effectiveness Period.
(b) Expenses. All Registration Expenses incurred in connection with any
Shelf Registration shall be borne by the Company; provided, that the Company
shall not be required to bear the Registration Expenses of more than one
underwritten offering; provided, further, that the Company shall not be
obligated to bear the expenses for any underwritten offering, and such expenses
shall be borne pro rata by the Purchasers whose Registrable Securities are
included in such offering if the offering yields gross proceeds to the sellers
of the Registrable Securities thereunder of less than $10 million.
(c) Selection of Underwriters. Purchasers holding in the aggregate at least
50% of the Registrable Securities shall be entitled to select the lead
underwriter for any underwritten sale of Registrable Securities pursuant to a
registration statement contemplated by this Section 2, subject to the approval
of the Company, which approval shall not be unreasonably withheld or delayed.
2. Incidental Registrations. Notification and Inclusion. If the Company proposes
to register for its own account any equity securities of the Company or any
securities convertible into equity securities of the Company under the
Securities Act on a form and in a manner that would permit registration of
Registrable Securities for sale to the public under the Securities Act (other
than a registration relating solely to the sale of securities to participants in
a dividend reinvestment plan, a registration on Form S-4 relating to a business
combination or similar transaction permitted to be registered on such Form S-4,
a registration on Form S-8 relating solely to the sale of securities to
participants in a stock or employee benefit plan, a registration permitted under
Rule 462 under the Securities Act registering additional securities of the same
class as were included in an earlier registration statement for the same
offering, and declared effective), the Company shall, at each such time after
the Commencement Date, promptly give written notice of such registration to the
Purchasers. Upon the written request of a Purchaser given within 10 Business
Days after the giving of such notice by the Company (which request shall specify
the number of Registrable Securities intended to be disposed of by such
Purchaser and the intended method of disposition thereof, but which shall not
include an underwritten offering unless the registration by the Company
contemplates an underwritten offering), the Company shall seek to include in
such proposed registration such Registrable Securities as a Purchaser shall
request to be so included and shall use commercially reasonable efforts to cause
a registration statement covering all of the Registrable Securities that such
Purchaser has requested to be registered to become effective under the
Securities Act. The Company shall be under no obligation to complete any
offering of securities it proposes to make under this Section 3 and shall incur
no liability to the Purchasers for its failure to do so. If, at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to the Purchasers and, thereupon, (i) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
incurred in connection therewith) and (ii) in the case of a determination to
delay registering, the Company shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities.
() Cut-back Provisions. The Company will not be required to effect any
registration pursuant to this Section 3 if the Company shall have been advised
in writing (with a copy to the Purchasers) by a nationally recognized
independent investment banking firm selected by the Company to act as lead
underwriter in connection with the public offering of securities by the Company
that, in such firm's written opinion, a registration of Registrable Securities
requested to be registered at that time could adversely affect the Company's own
scheduled offering of securities; provided, that if an offering of some but not
all of the Registrable Securities requested to be registered by the Purchasers
would not adversely affect the Company's own offering of securities, the
aggregate number of Registrable Securities requested to be included in such
offering by the Purchasers shall be reduced pro rata according to the total
number of Registrable Securities requested to be registered by the Purchasers
(and any other holders of securities of the Company requesting registration)
until the aggregate number of Registrable Securities requested to be included in
the Company's own offering of securities (as such number is reduced in
accordance with the foregoing) would not adversely affect the Company's own
offering of securities. The number of Registrable Securities that each Purchaser
could then include in such registration would be reduced pro rata according to
the number of Registrable Securities requested to be included as compared to the
total number of Registrable Securities requested to be registered by all
Purchasers (and any other holders of securities of the Company requesting
registration). In no event shall the Company be required to reduce its own
offering of securities.
(a) Expenses. All Registration Expenses incurred in connection with any
registration of Registrable Securities pursuant to this Section 3 shall be borne
by the Company.
(b) Withdrawal by Purchaser. Notwithstanding any request under Section
3(a), a Purchaser may elect in writing prior to the effective date of a
registration under this Section 3, not to register its Registrable Securities in
connection with such registration of securities by the Company.
(c) Obligations Unaffected. No registration of Registrable Securities
effected under this Section 3 shall relieve the Company of its obligation to
effect registrations of Registrable Securities pursuant to Section 2.
3. Registration Procedures. In connection with the filing of any
registration statement as provided in Section 2 or 3, the Company shall use
commercially reasonable efforts, as expeditiously as reasonably practicable, to:
() prepare and file with the Commission the requisite registration
statement (including a prospectus therein) to effect such registration and use
commercially reasonable efforts to cause such registration statement to become
effective;
(a) prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to maintain the continued effectiveness of such registration
and to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until, in
the case of Section 2, the termination of the period during which the Shelf
Registration is required to be kept effective, or, in the case of Section 3, the
earlier of such time as all of such securities have been disposed of and the
date which is 90 days after the date of initial effectiveness of such
registration statement;
(b) furnish to each Purchaser such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statements (including each complete prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, including documents incorporated by reference, as a
Purchaser may reasonable request;
(c) use commercially reasonable efforts to register or qualify all
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as a Purchaser shall reasonably request, keep such registration or
qualification in effect for so long as such registration statement remains in
effect, and take any other action which may be reasonably necessary or advisable
to enable the Purchasers to consummate the disposition in such jurisdictions of
the securities owned by the Purchasers, except that the Company shall not for
any such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the requirements of
this paragraph be obligated to be so qualified, or to consent to general service
of process in any such jurisdiction, or to subject the Company to any material
tax in any such jurisdiction where it is not then so subject;
(d) use commercially reasonable efforts in connection with an underwritten
offering of Registrable Securities to furnish to the Purchasers a signed
counterpart, addressed to each Purchaser (and the underwriters) of:
( ) an opinion of counsel for the Company, dated the effective date of such
registration statement (and dated the date of the closing under the underwriting
agreement), reasonably satisfactory in form and substance to the Purchasers, and
(i) to the extent permitted by then applicable rules of professional
conduct, a "comfort" letter, dated the effective date of such registration
statement (and dated the date of the closing under the underwriting agreement),
signed by the independent public accountants who have certified the Company's
financial statements included in such registration statement, covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of the accountants' letter,
with respect to events subsequent to the date of such financial statements, all
as are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to the underwriters in underwritten public offerings of
securities;
(e) immediately notify the Purchasers at any time when the Company becomes
aware that a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect or any
document incorporated or deemed to be incorporated therein by reference,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made, and
at the request of a Purchaser promptly prepare and furnish to such Purchaser a
reasonable number of copies of a supplement to or an amendment of such
prospectus or registration statement as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
(f) use commercially reasonable efforts to provide a transfer agent and
registrar for all Registrable Securities covered by such registration statement
not later than the effective date of such registration statement;
(g) use commercially reasonable efforts to list all Common Shares covered
by such registration statement on any securities exchange on which any of the
Common Shares are then listed.
(h) Notify each Purchaser and the managing underwriters, if any, promptly,
and (if requested by any of those Persons) confirm such notice in writing, (i)
when a prospectus or any prospectus supplement or post-effective amendment has
been filed, and, with respect to a registration statement or any post-effective
amendment, when the registration statement or amendment has become effective,
(ii) of any request by the Commission or any other federal or state governmental
authority for amendments or supplements to a registration statement or related
prospectus or for additional information, (iii) of the issuance by the
Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of a registration statement or the initiation
of any proceedings for that purpose, (iv) if at any time the representations and
warranties of the Company contained in any agreement contemplated by Section 5
(including any underwriting agreement) cease to be true and correct, (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, and (vi) of the Company's reasonable determination
that a post-effective amendment to a registration statement would be
appropriate.
(i) Use every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment.
(j) If requested by the managing underwriters, if any, or a Purchaser, (i)
promptly incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and the Purchaser agree should
be included therein as may be required by applicable law and (ii) make all
required filings of the prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in the prospectus supplement or post-effective
amendment; provided, however, that the Company will not be required to take any
actions under this Section 4(k) that are not, in the reasonable opinion of
counsel for the Company, in compliance with applicable law.
(k) Cooperate with each Purchaser and the managing underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates will not bear any
restrictive legends (other than any legends contemplated by the Company's
declaration of trust); and enable the Registrable Securities to be in such
denominations and registered in such names as the managing underwriters, if any,
shall request at least two business days prior to any sale of Registrable
Securities to the underwriters.
(l) Make available for inspection by a representative of each Purchaser,
any underwriter participating in any disposition of Registrable Securities, and
any attorney or accountant retained by a Purchaser or underwriter, all financial
and other records, pertinent corporate documents and properties of the Company
and its subsidiaries, and cause the officers, directors and employees of the
Company and its subsidiaries to supply all information reasonably requested by
any such representative, underwriter, attorney or accountant in connection with
such registration statement; provided, however, that any records, information or
documents that are designated by the Company in writing as confidential at the
time of delivery of such records, information or documents will be kept
confidential by those Persons unless (i) those records, information or documents
are in the public domain or otherwise publicly available, (ii) disclosure of
those records, information or documents is required by court or administrative
order or is necessary to respond to inquiries of regulatory authorities, or
(iii) disclosure of those records, information or documents, in the opinion of
counsel to such Person, is otherwise required by law (including, without
limitation, pursuant to the requirements of the Securities Act).
(m) Comply with all applicable rules and regulations of the Commission and
make generally available to its security holders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45
calendar days after the end of any 12-month period (or 90 calendar days after
the end of any 12-month period if such period is a fiscal year) (i) commencing
at the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts underwritten offering, and
(ii) if not sold to underwriters in such an offering, commencing on the first
day of the first fiscal quarter of the Company, after the effective date of a
registration statement, which statements shall cover that 12-month period.
(n) Cause its officers and other appropriate employees to participate in
any presentations regarding any underwritten offering reasonably requested by a
Purchaser or the managing underwriter or underwriters participating in the
disposition of the Registrable Securities.
Each Purchaser shall furnish in writing to the Company such
information regarding such Purchaser (and any of its affiliates), the
Registrable Securities to be sold, the intended method of distribution of such
Registrable Securities, and such other information requested by Company as is
necessary for inclusion in the registration statement relating to such offering
pursuant to the Securities Act and the rules of the Commission thereunder. The
Company may also impose such restrictions and limitations on the distribution of
such Registrable Securities as the Company reasonably believes are necessary or
advisable to comply with applicable law or to effect an orderly distribution,
including those restrictions set forth in Section 2(b).
Each Purchaser agrees by acquisition of the Registrable Securities that
upon receipt of any notice from the Company of the happening of any event of the
kind described in paragraph (f) of this Section 4, such Purchaser will forthwith
discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such
Purchaser's receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (f) of this Section 4.
4. Underwriting. If requested by the underwriters for any underwritten offering
of Registrable Securities pursuant to a registration described in this
Agreement, the Company will enter into and perform its obligations under an
underwriting agreement with such underwriters for such offering, such agreement
to contain such representations and warranties by the Company and such other
terms and provisions as are customarily contained in underwriting agreements
with respect to secondary distributions, including, without limitation,
indemnities and contribution to the effect and to the extent provided in Section
7. The holders of Registrable Securities on whose behalf Registrable Securities
are to be distributed by such underwriters shall be parties to any such
underwriting agreement, and the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities.
( ) In the event that any registration pursuant to Section 3 shall involve,
in whole or in part, an underwritten offering, the Company may require
Registrable Securities requested to be registered pursuant to Section 3 to be
included in such underwriting on the same terms and conditions as shall be
applicable to the Registrable Securities or other of the Company's securities
being sold through underwriters under such registration. In such case, the
holders of Registrable Securities on whose behalf Registrable Securities are to
be distributed by such underwriters shall be parties to any such underwriting
agreement. Such agreement shall contain such representations and warranties by
the Company and the Purchasers and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution to
the effect and to the extent provided in Section 7. The representations and
warranties in such underwriting agreement by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of such holders of Registrable Securities.
5. Preparation; Reasonable Investigation. In connection with the preparation and
filing of the registration statement under the Securities Act, the Company will
give the Purchasers, their underwriters, if any, and their respective counsel,
the opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission, and
each amendment thereof or supplement thereto, and will give each of them such
access to its books and records and such opportunities to discuss the business
of the Company with its officers, its counsel and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of the Purchasers' and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
6. Indemnification. The Company and the Operating Partnership jointly and
severally will, and hereby do, indemnify and hold harmless each Purchaser, its
respective directors, officers, partners, agents, employees and affiliates and
each other person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls each such Purchaser
or any such underwriter within the meaning of the Securities Act, against any
and all losses, claims, damages, expenses or reasonable costs, or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof, to which each such indemnified party may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages,
expenses or reasonable costs, or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and the Company and the
Operating Partnership will, jointly and severally, reimburse each such Purchaser
and each such director, officer, partner, agent, employee or affiliate,
underwriter and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, expense or reasonable costs, liability, action or
proceeding; provided, that (i) the Company and the Operating Partnership shall
not be liable in any such case to the extent that any such loss, claim, damage,
expense or liability (or action or proceeding, whether commenced or threatened,
in respect thereof) arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company or the Operating Partnership
by or on behalf of such Purchaser or underwriter expressly for use in the
preparation thereof, (ii) the Company and the Operating Partnership shall not be
liable to any Person who participates as an underwriter in the offering or sale
of Registrable Securities or any other Person, if any, who controls or is
controlled by such underwriter within the meaning of the Securities Act, in any
such case to the extent that any such loss, claim, damage, expense or reasonable
costs, or liability (or action or proceeding, whether commenced or threatened,
in respect thereof) arises out of such underwriter's failure to send or give a
copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus and (iii) the Company and the Operating
Partnership shall only reimburse the Purchasers for legal expenses incurred due
to the representation of all Purchasers by not more than one legal counsel.
Neither the Company nor the Operating Partnership shall be liable under this
Section 7(a) for any settlement of any claim or action effected without its
consent, which consent will not be unreasonably withheld or delayed.
( ) Each Purchaser severally shall indemnify, and hereby does, indemnify
and hold harmless the Company, its directors, its officers who sign the
registration statement, the Operating Partnership, each Person who participates
as an underwriter in the offering or sale of securities, and each Person, if
any, who controls the Company or any such underwriter within the meaning of the
Securities Act against any and all losses, claims, damages, expenses or
reasonable costs, or liabilities, joint or several, actions or proceedings
(whether commenced or threatened) in respect thereof, to which each such
indemnified party may become subject under the Securities Act or otherwise
insofar as such losses, claims, damages, expenses or reasonable costs, or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon an untrue statement of a
material fact in or omission to state a material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading in such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, but only to the
extent that such statement or omission was made in reliance upon and in
conformity with written information furnished by such Purchaser to the Company
or the Operating Partnership by or on behalf of such Purchaser for use in
preparation thereof.
(a) Promptly after receipt by any indemnified party hereunder of notice of
the commencement of any action or proceeding involving a claim referred to in
paragraphs (a) or (b) of this Section 7, the indemnified party will notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve the indemnifying party from
any liability which it may have to any indemnified party under paragraphs (a) or
(b) of this Section 7, except to the extent that the indemnifying party is
adversely affected by any delay caused thereby. In case any such action shall be
brought against any indemnified party, the indemnifying party shall be entitled
to participate therein and, to the extent that the indemnifying party shall
elect (jointly with any other indemnifying party similarly so electing) to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party (which approval shall not be unreasonably withheld or delayed)
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under paragraph
(a) or (b) of this Section 7 for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof. In addition, the indemnifying party shall
not be required to indemnify, reimburse or otherwise make any contribution to
the amount paid or payable by the indemnified party for any losses, claims,
damages, expenses or reasonable costs, or liabilities (or actions or
proceedings, actual or threatened, in respect thereof) incurred by the
indemnified party in settlement of any such losses, claims, damages, expenses or
reasonable costs, liabilities, actions or proceedings otherwise covered
hereunder unless such settlement has been previously approved by the
indemnifying party, which approval shall not be unreasonably withheld or
delayed.
(b) If for any reason the indemnity under this Section 7 is unavailable or
is insufficient to hold harmless any indemnified party under paragraph (a) or
(b) of this Section 7, then the indemnifying parties shall contribute to the
amount paid or payable to the indemnified party as a result of any loss, claim,
expense, damage or liability (or actions or proceedings, whether commenced or
threatened, in respect thereof), and legal or other expenses reasonably incurred
by the indemnified party in connection with investigating or defending any such
loss, claim, expense, damage, liability, action or proceeding, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or a
Purchaser and each party's relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. If,
however, the allocation provided in the second preceding sentence is not
permitted by applicable law, or if the allocation provided in the second
preceding sentence provides a lesser sum to the indemnified party than the
amount hereinafter calculated, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party in such proportion as is
appropriate to reflect not only such relative fault but also the relative
benefits of the indemnifying party and the indemnified party as well as any
other relevant equitable considerations. The parties hereto agree that it would
not be just and equitable if contributions pursuant to this paragraph (d) of
Section 7 were to be determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the preceding sentences of this paragraph (d) of Section 7.
Notwithstanding the provisions of this Section 7(d), an indemnifying party that
is a Purchaser will not be required to contribute any amount in excess of the
dollar amount of the gross proceeds received by that Purchaser upon the sale of
the Registrable Securities giving rise to the contribution obligation over the
amount of any damages which that Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(c) Indemnification and contribution similar to that specified in this
Section 7 (with appropriate modifications) shall be given by the Company and the
Operating Partnership and the Purchasers with respect to any required
registration or other qualification of securities under any federal, state or
blue sky law or regulation of any governmental authority other than the
Securities Act.
(d) Notwithstanding any other provision of this Section 7, to the extent
that any director, officer, partner, agent, employee, affiliate or other
representative (current or former) of any indemnified party is a witness in any
action or proceeding, the indemnifying party agrees to pay to the indemnified
party all expenses reasonably incurred by, or on the behalf of, the indemnified
party and such witness in connection therewith.
(e) The termination of any proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, adversely affect the rights of any indemnified party to indemnification
hereunder or create a presumption that any indemnified party violated any
federal or state securities laws.
(f) In the event that advances are not made pursuant to this Section 7 or
payment has not otherwise been timely made, each indemnified party shall be
entitled to seek a final adjudication in an appropriate court of competent
jurisdiction of the entitlement of the indemnified party to indemnification or
advances hereunder.
( ) The Company, the Operating Partnership and the Purchasers agree that
they shall be precluded from asserting that the procedures and presumptions
of this Section 7 are not valid, binding and enforceable. The Company, the
Operating Partnership and the Purchasers further agree to stipulate in any
such court that the Company, the Operating Partnership and the Purchasers
are bound by all the provisions of this Section 7 and are precluded from
making any assertion to the contrary.
(i) To the extent deemed appropriate by the court, interest shall be
paid by the indemnifying party to the indemnified party at a
reasonable interest rate for amounts which the indemnifying party has
not timely paid as the result of its indemnification and contribution
obligations hereunder.
(g) In the event that any indemnified party is a party to or intervenes in
any proceeding in which the validity or enforceability of this Section 7 is at
issue or seeks an adjudication to enforce the rights of any indemnified party
under, or to recover damages for breach of, this Section 7, the indemnified
party, if the indemnified party prevails in such action, shall be entitled to
recover from the indemnifying party and shall be indemnified by the indemnifying
party against, any expenses incurred by the indemnified party.
(h) The indemnity and contribution obligations of the Company and the
Operating Partnership contained in this Section 7 shall be in addition to any
other liability which it may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party and shall survive the transfer
of any Registrable Securities by any Purchaser.
(k) In no event will the liability of any Purchaser under this Section 7 be
greater in amount than the dollar amount of the gross proceeds received by that
Purchaser upon the sale of the Registrable Securities giving rise to the
indemnification obligation.
7. Benefits of Registration Rights. Each Purchaser shall give notice to the
Company of any transfer by it of Registrable Securities to any Permitted
Transferee, identifying the name and address of the Permitted Transferee and the
Registerable Securities so transferred, and accompanied by a signature page to
this Agreement pursuant to which such Permitted Transferee agrees to be bound by
the terms and conditions of this Agreement. No consent of any Purchaser shall be
required for its Permitted Transferees to exercise registration rights under
this Agreement or otherwise to be entitled to the benefits of this Agreement
provided to all Purchasers.
8. Qualification for Rule 144 Sales. The Company will take all actions
reasonably necessary to comply with the filing requirements described in Rule
144(c)(1) of the Securities Act so as to enable the Purchasers to sell
Registrable Securities without registration under the Securities Act and, upon
the written request of any Purchaser, the Company will deliver to such Purchaser
a written statement as to whether it has complied with such filing requirements.
9. Miscellaneous. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party. Copies of executed counterparts
transmitted by telecopy, telefax or other electronic transmission service shall
be considered original executed counterparts for purposes of this Section 9,
provided receipt of copies of such counterparts is confirmed.
( ) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE
CHOICE OF LAW PRINCIPLES THEREOF.
(a) Entire Agreement. This Agreement and the Contribution Agreement
together contain the entire agreement between the parties with respect to the
subject matter hereof and there are no agreements or understandings between
parties other than those set forth or referred to herein. This Agreement is not
intended to confer upon any Person not a party hereto (and their successors and
assigns) any rights or remedies hereunder.
(b) Notices. All notices and other communications hereunder shall be
sufficiently given for all purposes hereunder if in writing and delivered
personally, sent by documented overnight delivery service or, to the extent
receipt is confirmed, telecopy, telefax or other electronic transmission service
to the appropriate address or number as set forth below. Notices to the Company
or the Operating Partnership shall be addressed to:
Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxx XxXxxxxx
Telecopy Number: (000) 000-0000
with a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Telecopy Number: (000) 000-0000
or at such other address and to the attention of such other person as
the Company may designate by written notice to the Purchasers. Notices to the
Purchasers shall be addressed to the address listed either on the records of the
Operating Partnership or on the stock transfer records of the Company.
(c) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
Permitted Transferees.
(d) Headings. The Section and other headings contained in this Agreement
are inserted for convenience of reference only and will not affect the meaning
or interpretation of this Agreement. All references to Sections or other
headings contained herein mean Sections or other headings of this Agreement
unless otherwise stated.
(e) Amendments and Waivers. This Agreement may not be modified or amended
except by an instrument or instruments in writing signed by the party against
whom enforcement of any such modification or amendment is sought. Either party
hereto may, only by an instrument in writing, waive compliance by the other
party hereto with any term or provision hereof on the part of such other party
hereto to be performed or complied with. The waiver by any party hereto of a
breach of any term or provision hereof shall not be construed as a waiver of any
subsequent breach.
(f) Interpretation; Absence of Presumption. For the purposes hereof, (i)
words in the singular shall be held to include the plural and vice versa and
words of one gender shall be held to include the other gender as the context
requires, (ii) the terms "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and Section,
paragraph or other references are to the Sections, paragraphs, or other
references to this Agreement unless otherwise specified, (iii) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless the context otherwise requires or unless
otherwise specified, (iv) the word "or" shall not be exclusive and (v)
provisions shall apply, when appropriate, to successive events and transactions.
This Agreement shall be construed without regard to any presumption or rule
requiring construction or interpretation against the party drafting or causing
any instrument to be drafted.
(g) Severability. Any provision hereof which is invalid or unenforceable
shall be ineffective to the extent of such invalidity or unenforceability,
without affecting in any way the remaining provisions hereof.
(h) Jurisdiction; Venue. The parties to this Agreement hereby irrevocably
submit to the jurisdiction of any New York State or Federal court and any
appellate court from any district thereof over any action arising out of or
relating to this Agreement, and hereby irrevocably agree that all claims in
respect of such action or proceeding may be heard and determined in such New
York State court or in such Federal court. The parties to this Agreement hereby
irrevocably waive, to the fullest extent permitted under law, the defense of an
inconvenient forum or improper venue to the maintenance of such action or
proceeding.
IN WITNESS WHEREOF, this Agreement has been signed by or on
behalf of each of the parties hereto as of the day first above written.
GROVE REAL ESTATE ASSET TRUST
By: /s/ XXXXXX XXXXXXXX
Name: Xxxxxx XxXxxxxx
Title: Chief Financial Officer
GROVE OPERATING, L.P.
BY: GROVE REAL ESTATE ASSET TRUST, its
general partner
By: /s/ XXXXXX XXXXXXXX
Name: Xxxxxx XxXxxxxx
Title: Chief Financial Officer
PURCHASERS
By: /s/ XXXXXX XXXXXXXX
Name: Xxxxxx XxXxxxxx
Title: Attorney-in-Fact for all of the
Purchasers set forth on Schedule 1
hereto pursuant to powers of
attorney on file at the offices of
the Operating Partnership
20
Schedule 1
Purchasers: Registrable Securities:
Xxxxx Xxxxxxx 2,898.00
Xxxxx Xxxxxxx 2,898.00
Xxxxxx Xxxxxxx 963.00
Grove Property Services Limited Partnership 695,928.00
Grove Equity Partnership 168,442.00
JRC Management, Inc. 339.00
GMG-Avon, Inc. 226.00
Pelham Associates Partnership 20,930.00
Xxxx Xxxxxxxx 4,345.00
Springfield Development Corporation 3,376.62
Xxxxxx Xxxxx 8,909.00
Xxxxxx Xxxxx 8,909.00
Springfield Retail Development, Inc. 3,376.00
Xxxxxx XxXxxxxx 3,979.00
