NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "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 each of the individuals and entities that execute a signature page to this
Agreement (each a "Grove Company" and, together, the "Grove Companies").
WHEREAS, on the date hereof, the Grove Companies, GREAT, the Operating
Partnership and certain other persons are entering into a series of related
transactions pursuant to which the Operating Partnership will acquire, among
other things, substantially all of the interests of the Grove Companies 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 each Grove Company, 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:
0. 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 6(d) hereof.
"Company" means, collectively, GREAT and its subsidiaries, including
without limitation the Operating Partnership.
"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.
"Executive Officers" means each of Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxxx
Xxxxxxx, Xxxxxx XxXxxxxx and Xxxxxx XxXxxxxx.
"Executive Officer Noncompetition Agreements" means each of the
Noncompetition Agreements, dated the date hereof, between GREAT and the
Operating Partnership, on the one hand, and an Executive Officer on the other
hand.
"Noncompetition Term" means the period during which any Executive Officer
remains bound by the terms of, and is prohibited from engaging in Competition
(as defined) pursuant to, the Executive Officer Noncompetition Agreement to
which such Executive Officer is a party.
1. Noncompetition. During the Noncompetition Term, each Grove Company shall
be prohibited from engaging in Competition (as defined below) with the Company.
( ) 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 a Grove Company 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) a
Grove Company's ownership, management or leasing of such Grove Company'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. Each Grove Company 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.
Each Grove Company covenants that it will not challenge the enforceability of
this Agreement nor will it raise any equitable defense to its enforcement.
3. Specific Performance. Each Grove Company acknowledges that the
obligations undertaken by it pursuant to this Agreement are unique and that the
Company likely will have no adequate remedy at law if such Grove Company shall
fail to perform any of its obligations hereunder, and each Grove Company
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 each Grove Company, 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 a Grove Company,
and each Grove Company submits to the jurisdiction of the courts of the State of
New York for this purpose.
4. Termination of Existing Noncompetition Agreement. The existing
Noncompetition Agreement between the Grove Companies, GREAT and certain other
individuals and entities is hereby terminated, and shall be of no further legal
effect.
5. Miscellaneous Provisions.
( ) Binding Effect. Subject to any provisions hereof restricting
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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.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
(g) Exclusive Agreement. This Agreement supersedes all prior agreements
(whether written or oral) among the parties with respect to the subject matter,
including, without limitation, any noncompetition agreement entered into by any
Grove Company 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.
(h) 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: /s/ Xxxxxx X.
XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Chief Financial Officer
Address:
Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
GROVE OPERATING, L.P., by its
General Partner
GROVE REAL ESTATE ASSET
TRUST
By: /s/ Xxxxxx X. XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Chief Financial Officer
Address:
Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE
TO
NONCOMPETITION AGREEMENT
NATIONAL REALTY SERVICES, L.P.
By: Grove Services, Inc.,
its General Partner
By: /s/ Xxxxxx X.XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Treasurer
Address:
c/o Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE
TO
NONCOMPETITION AGREEMENT
GROVE INVESTMENT GROUP, INC.
By: /s/ Xxxxxx X. XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Treasurer
Address:
c/o Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE
TO
NONCOMPETITION AGREEMENT
BURGUNDY ASSOCIATES LIMITED
PARTNERSHIP
By: BALP, Inc.,
its General Partner
By:/s/ Xxxxxx X.XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Treasurer
Address:
c/o Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE
TO
NONCOMPETITION AGREEMENT
GROVE HOLDING CO. INC.
By: /s/ Xxxxxx X. XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Treasurer
Address:
c/o Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE
TO
NONCOMPETITION AGREEMENT
GROVE EQUITY PARTNERSHIP
By: /s/ Xxxxxx X. XxXxxxxx
Xxxxxx X. XxXxxxxx
Partner
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Partner
By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Partner
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Partner
Address:
c/o Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE
TO
NONCOMPETITION AGREEMENT
GROVE PROPERTY SERVICES LIMITED
PARTNERSHIP
By: Grove Services, Inc., its
General Partner
By: /s/ Xxxxxx X. XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Treasurer
Address:
/o Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
SCHEDULE A
"Excluded Properties"
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Corporate General
Limited Partnership Owning Partner of
Excluded Excluded Property Excluded
Property 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 ANE Associates LP (2)
Apartments
Farmington Forest Farmington Forest Associates LP Eastbrook Willow Corp.
Condominiums
Glastonbury Center Heritage Court Associates LP Glastonbury Realty L.P.
Apartments
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%)
