EXHIBIT 10.1
 

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NO. 13-CI-00452
JEFFERSON CIRCUIT COURT
DIVISION FOUR (4)
HON. CHARLES L. CUNNINGHAM, JR.

STEPHEN J. DANNIS, et al.
PLAINTIFFS
   
STIPULATION AND AGREEMENT OF COMPROMISE,
SETTLEMENT AND RELEASE
v.
 
J. D. NICHOLS, et al.
DEFENDANTS

The parties, through their undersigned counsel, in the above-captioned action
(the “Action” or the “Kentucky Action”), have reached this Stipulation and
Agreement of Compromise, Settlement and Release (with the exhibits hereto, the
“Stipulation”), which provides for the full and complete settlement of the
Actions, as defined below, on the terms set forth herein (the “Settlement”),
subject to approval by this Court:
 
WHEREAS, on December 28, 2012, NTS Realty Holdings Limited Partnership (“NTS” or
the “Company”) announced that it and NTS Realty Capital, Inc. (“Realty
Capital”), the Company’s managing general partner, entered into an Agreement and
Plan of Merger (the “Original Merger Agreement”) with NTS Merger Parent, LLC
(“Parent”), an entity controlled by the Company’s founder and Realty Capital’s
Chairman, J.D. Nichols, and Realty Capital’s President and Chief Executive
Officer, Brian F. Lavin, and NTS Merger Sub, LLC (“Merger Sub”), a wholly-owned
subsidiary of Parent, and together with Mr. Nichols, Mr. Lavin, Parent and
certain of their respective affiliates, the “Purchasers”);
 
WHEREAS, the Original Merger Agreement was negotiated between the Purchasers, on
the one hand, and a special committee (the “Special Committee”)

 
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comprised of the outside directors of the Realty Capital board of directors,
Mark D. Anderson, John P. Daly, Sr. and John Lenihan, with the assistance of its
financial advisor, Centerboard Securities, LLC (“Centerboard”), on the other
hand;
 
WHEREAS, upon consummation of the transactions proposed in the Original Merger
Agreement, Merger Sub was to merge with and into NTS and NTS was to continue as
the surviving entity (the “Original Merger”).  Upon consummation of the Original
Merger, all of the NTS limited partnership units (“Units”), other than Units
owned by the Purchasers, were to have been canceled and converted automatically
into the right to receive a cash payment equal to $7.50 per Unit (the “Original
Merger Consideration”);
 
WHEREAS, on January 25, 2013, the Kentucky Action was filed in the Court by
plaintiffs Stephen and Sharon Dannis alleging, among other things, that Realty
Capital’s board of directors had breached their fiduciary duties in connection
with their consideration and approval of the Original Merger Agreement;
 
WHEREAS, on February 4, 2013, NTS filed a Preliminary Proxy Statement on
Schedule 14A with the Securities and Exchange Commission (“SEC”);
 
WHEREAS, between February 12, 2013 and February 15, 2013, two actions were filed
in the Delaware Court of Chancery (the “Delaware Court”) by NTS unitholders
alleging, among other things, that Realty Capital’s board of directors had
breached their fiduciary duties in connection with their consideration and
approval of the Original Merger Agreement.  These actions, and their filing
dates, are as follows:  R. Jay Tejera v. NTS Realty Holdings LP et al.,
C.A.  No. 8302-VCP, filed February 12, 2013 and Gerald A. Wells v. NTS Realty
Holdings LP et al., C.A. No. 8322-VCP, filed February 15, 2013.

 
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WHEREAS, on March 13, 2013, plaintiffs Stephen and Sharon Dannis filed an
amended complaint in the Kentucky Action;
 
WHEREAS, on March 19, 2013, the Delaware Court consolidated the Tejera and Wells
actions under the consolidated case caption of In re NTS Realty Holdings Limited
Partnership Unitholders Litigation, Consol. CA. No. 8302-VCP (the “Delaware
Action”) and appointed the law firms of Rigrodsky & Long, P.A. and Wohl &
Fruchter LLP as Co-Lead Counsel for plaintiffs in the Delaware Action;
 
WHEREAS, on April 12, 2013 Defendants filed their motions to dismiss the amended
complaint in the Kentucky Action;
 
WHEREAS, on April 24, 2013, counsel appeared in the Kentucky Action and the
Court set a briefing schedule for hearing on the motions to dismiss;
 
WHEREAS, after counsel for plaintiff Tejera advised of his intention to join in
prosecution of the Kentucky Action and plaintiffs Tejera and Stephen and Sharon
Dannis tendered a proposed Second Amended Complaint on May 24, 2013, the parties
submitted an agreed order on May 31, 2013, allowing plaintiffs to file a Second
Amended Complaint, which order was entered June 7, 2013;
 
WHEREAS, in contemplation of plaintiff Tejera joining in the prosecution of the
Kentucky Action, all parties stipulated to dismissal of his claims in the
Delaware Action, which stipulation was approved by the Delaware Court on June
12, 2013;
 
WHEREAS, plaintiffs Tejera and Stephen and Sharon Dannis thereupon served their
Second Amended Class Action Complaint (the “Complaint”) on June 13, 2013 and
Defendants thereafter filed their motions to dismiss the Complaint;

 
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WHEREAS, in early July 2013, Defendants proposed that the parties meet to
discuss a possible resolution of the Actions, and the plaintiffs in the Kentucky
and Delaware Actions (collectively, “Plaintiffs”) agreed to do so following
receipt of detailed financial information and other discovery and an opportunity
to fully review and analyze such discovery;
 
WHEREAS, the parties submitted a proposed Agreed Confidentiality Order, which
the Court approved and entered on July 15, 2013;
 
WHEREAS, on July 19, 2013, NTS filed an amended Preliminary Proxy Statement on
Schedule 14A with the SEC;
 
WHEREAS, between May and July, 2013, Defendants and Centerboard produced
approximately 51,000 pages of documents, and also provided spreadsheets
containing property-level financial data for the period January 1, 2006 to June
30, 2013;
 
WHEREAS, Plaintiffs engaged a national real estate advisory firm to obtain
comparable sales data for each property in the NTS portfolio and operating
expense data for each market;
 
WHEREAS, Plaintiffs retained a valuation expert who utilized the comparable
property and expense data in conjunction with financial data supplied by
Defendants to perform a detailed property-level valuation analysis;
 
WHEREAS, on August 15, 2013, at the parties’ request in contemplation of
settlement negotiations, the Court entered an Agreed Order suspending briefing
on Defendants’ motions to dismiss;
 
WHEREAS, on August 20-21, 2013, the parties conducted two days of in-person
negotiations, with Plaintiffs’ valuation expert and representatives of the
Special

 
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Committee’s financial advisor, Centerboard, and continued to discuss settlement
over the following weeks;
 
WHEREAS, the parties’ settlement negotiations were unsuccessful and certain
Defendants issued notice to resume briefing of motions to dismiss;
 
WHEREAS, counsel for the parties appeared at a status conference before the
Court on September 13, 2013, met in person after such conference to further
discuss settlement, and conducted additional settlement discussions by telephone
thereafter, which concluded unsuccessfully in late September 2013;
 
WHEREAS, Plaintiffs filed their opposition to Defendants’ motions to dismiss on
September 24, 2013 and Defendants filed their reply briefs on October 15, 2013;
 
WHEREAS, the Original Merger Agreement provided that either the Special
Committee or the Purchasers could terminate such agreement if the Original
Merger was not consummated by September 30, 2013, and on October 18, 2013, the
Special Committee delivered notice terminating the Original Merger Agreement;
 
WHEREAS, the parties resumed settlement discussions in early November 2013 and
after extensive discussions among counsel, ultimately reached agreement to
settle for total per-unit merger consideration of $9.25 in cash (less attorneys’
fees and expenses, if any, approved by the Court), and on the other terms set
forth in the form of merger agreement annexed hereto as Exhibit A (the “Amended
Merger Agreement”);
 
WHEREAS, the Realty Capital directors and officers, together with NTS and Realty
Capital, each have denied, and continue to deny, that they have committed or
aided and abetted the commission of any violation of law or duty or engaged in
any of the wrongful acts alleged in the Action, and expressly maintain that they
diligently and

 
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scrupulously complied with their fiduciary and other legal duties in connection
with the Original Merger, the Original Merger Agreement and the Amended Merger
Agreement and are entering into this Settlement solely to eliminate the burden
and expense of further litigation;
 
WHEREAS, Plaintiffs continue to maintain that their claims have merit and
believe that the settlement set forth in this Stipulation is, subject to
confirmatory discovery provided herein, fair, reasonable, adequate, and in the
best interests of Plaintiffs and the Class (as defined below);
 
WHEREAS, the parties wish to settle and resolve the claims asserted by
Plaintiffs and all claims relating to or arising out of the Original Merger
Agreement, the Original Merger, the Amended Merger Agreement as hereinafter
defined and related transactions (collectively, the “Proposed Transactions”);
 
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, in consideration of the
benefits afforded herein, that the Kentucky and Delaware Actions (together, the
“Actions”) shall be compromised, settled, released and dismissed with prejudice,
upon and subject to the following terms and conditions, and further subject to
the approval of the Court and pursuant to the Kentucky Rules of Civil Procedure:
 
SETTLEMENT CONSIDERATION
 
1.  In consideration for the full settlement and release of all Settled Claims
(as defined below), Wells Fargo Shareowner Services (“Paying Agent”), shall pay
to each member of the Class, as hereinafter defined, in connection with the
closing of the merger contemplated in the Amended Merger Agreement (“Merger”),
(i) $7.50 per Unit, plus (ii) a share of the Net Settlement Fund (as defined
below), divided pro rata among the

 
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Eligible Units (as defined below), at the time, subject to the conditions and
pursuant to the procedures set forth in Section 2.2(b) of the Amended Merger
Agreement.
 
2.  The total number of Units held by the members of the Class is 4,229,421 (the
“Eligible Units”), and the settlement consideration payable hereunder is $1.75
per Unit, resulting in a total settlement payment of Seven Million Four Hundred
and One Thousand, Four Hundred and Eighty-Seven Dollars ($7,401,487) (the
“Settlement Payment”).  The Settlement Payment, less fees, expenses and
Incentive Award to Plaintiffs, if any awarded by the Court, shall constitute the
Net Settlement Fund (“Net Settlement Fund.”)  All Defendants acknowledge that
the prosecution of the Actions and the efforts of counsel for Plaintiffs
(collectively, “Plaintiffs’ Counsel”) were the sole causal factors that led to
the agreement to make the Settlement Payment.
 
3.  Parent and Merger Sub, or their affiliates, shall pay the Original Merger
Consideration and the Settlement Payment to the Paying Agent at or before the
closing of the Merger.  The Paying Agent shall hold the Settlement Payment in
trust pending disbursement as provided in the Amended Merger Agreement.  The
Settlement Payment and the Original Merger Consideration shall not be due or
owing under this Stipulation or paid as provided herein until (i) the Court has
finally certified the Class; (ii) Final Approval of the Settlement has occurred;
(iii) the Court has approved a complete release of all Released Persons (defined
below), in the form customarily approved by the Court in connection with
settlements of this type; (iv) an Order dismissing the Kentucky Action with
prejudice has become final and no longer subject to appeal, whether by passage
of time or otherwise; (v) an Order dismissing the Delaware Action with prejudice
has become final and no longer subject to appeal, whether by passage of time or
otherwise;

 
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(vi) the Effective Time (as defined in the Amended Merger Agreement); and (vii)
with respect to any member of the Class, paid in compliance with the procedures
set forth in Section 2.2(b) of the Amended Merger Agreement by or on behalf of
such member.  The Parent Parties and the Surviving Entity (both as defined in
the Amended Merger Agreement) shall be responsible for the costs of making the
Settlement Payment.
 
4.  “Excluded Unitholders” shall include J.D. Nichols, Brian F. Lavin, NTS
Realty Capital, Inc., NTS Realty Partners, LLC, ORIG, LLC, Ocean Ridge
Investments, Ltd., BKK Financial, Inc., The J.D. Nicholas Irrevocable Trust for
My Daughters, The J.D. Nichols Irrevocable Trust for My Grandchildren, Kimberly
Ann Nichols, Zelma Nichols and Brickwood, LLC.  The Special Committee members
are not Excluded Unitholders.  Excluded Unitholders shall have no claim to and
shall not receive any of the Settlement Payment, in whole or in part.   The
Excluded Unitholders hereby relinquish any right of themselves or their
respective affiliates to receive any part of the Settlement Payment, or any
additional amount based on any claim relating to the fact that the Settlement
Payment is being received by any other unitholder, in each case under any
theory, including but not limited to contract, application of statutory or
judicial law, or equity.
 
CLASS CERTIFICATION
 
5.  For settlement purposes only, the parties agree that the Action shall be
conditionally certified as a non-opt out class (the “Class”) pursuant to
Kentucky Rules of Civil Procedure 23.01, 23.02 and 23.03, defined as:
 
Any and all record holders and beneficial owners of NTS Units, and any holder of
any current or former right, upon due surrender of any equity or interest in a
predecessor partnership that was merged with and into NTS and delivery of
related documentation in connection with such surrender, to exchange such equity
or

 
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interest for NTS Units, other than the Excluded Unitholders, their respective
successors in interest, successors, predecessors in interest, predecessors,
representatives, trustees, executors, administrators, heirs, assigns or
transferees, immediate and remote, and any person or entity acting for or on
behalf of, or claiming under, any of them, and each of them, together with their
predecessors and successors and assigns, who held Units of NTS and such rights
at any time between December 28, 2012 and the date of final approval.

6.  In the event the Settlement does not become final for any reason, Defendants
reserve the right to oppose certification of any Plaintiff class in future
proceedings.
 
SUBMISSION AND APPLICATION TO THE COURT
 
7.  As soon as practicable after this Stipulation has been executed the parties
shall apply jointly for an Order preliminarily approving the Settlement (the
“Preliminary Approval Order”) substantially in the form attached hereto as
Exhibit B establishing the procedure for:  (i) the approval of notice to the
Class substantially in the form attached hereto as Exhibit C (the “Notice”), and
(ii) the Court’s consideration of the proposed Settlement, Class certification,
and Plaintiffs’ application for attorneys’ fees and expenses and an incentive
award to Plaintiffs.
CONFIRMATORY DISCOVERY
 
8.  Defendants shall provide to Plaintiffs’ Counsel such additional discovery,
including depositions, as is reasonably necessary for Plaintiffs to confirm that
the Settlement is fair, reasonable and adequate.  Plaintiffs will complete such
discovery by January 30, 2014 and make a final determination with respect to the
fairness, reasonableness and adequacy of the Settlement and provide notice to
Defendants on or before February 10, 2014.

 
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NOTICE AND INFORMATION STATEMENT
 
9.  Notice of the proposed Settlement shall be provided by NTS, at its expense,
by mailing a Notice in substantially the form attached hereto as Exhibit C to
all unitholders of record of NTS, in accordance with the Preliminary Approval
Order, and shall publish the notice and this Stipulation on the “investor
relations” page of NTS’s website. Counsel for NTS shall, at least ten (10)
business days before the Settlement Hearing (as defined below), file with the
Court an appropriate affidavit with respect to the preparation and mailing of
the Notice.
 
10.  Defendants shall provide the Information Statement for the Merger to
Plaintiffs for review prior to submission thereof to the SEC.  Defendants shall
incorporate into such draft the additional disclosures set forth in Exhibit D
hereto.  The final Information Statement issued in connection with the Merger
shall be in a form reasonably acceptable to Plaintiffs.  Such final Information
Statement shall be approved or rejected by Plaintiffs within three (3) business
days of submission.
 
ORDER AND FINAL JUDGMENT
 
11.  If the Settlement (including any modification thereto made with the consent
of the parties hereto as provided for herein) shall be approved by the Court
following a hearing (the “Settlement Hearing”) as fair, reasonable, and adequate
and in the best interests of the Class, the parties shall jointly request that
the Court enter an Order and Final Judgment substantially in the form attached
hereto as Exhibit E.
 
12.  The Order and Final Judgment shall, among other things, provide for the
full and complete dismissal with prejudice of the Actions, and the settlement
and release of, and a permanent injunction barring, any claims, demands, rights,
actions, causes of action, liabilities, damages, losses, obligations, judgments,
duties, suits, costs, expenses,

 
10
 

matters and issues known or unknown, contingent or absolute, suspected or
unsuspected, disclosed or undisclosed, liquidated or unliquidated, matured or
unmatured, accrued or unaccrued, apparent or unapparent, that have been, could
have been, or in the future can or might be asserted in any court, tribunal or
proceeding, (including but not limited to any claims arising under federal,
state, foreign or common law, including the federal securities laws and any
state disclosure law), by or on behalf of Plaintiffs or any member of the Class,
whether individual, direct, class, derivative, representative, legal, equitable,
or any other type or in any other capacity (collectively, the “Releasing
Persons”) against NTS, Realty Capital, NTS Realty Partners, LLC, J.D. Nichols,
Brian F. Lavin, Parent, Merger Sub, NTS Development Company, NTS Management
Company, Mark D. Anderson, John P. Daly, Sr., and John Lenihan, or any of their
families, parent entities, controlling persons, associates, affiliates or
subsidiaries and each and all of their respective past or present officers,
directors, stockholders, principals, representatives, employees, attorneys,
financial or investment advisors, consultants, accountants, investment bankers,
commercial bankers, entities providing fairness opinions, underwriters, brokers,
dealers, advisors or agents, heirs, executors, trustees, general or limited
partners or partnerships, limited liability companies, members, managers, joint
ventures, personal or legal representatives, estates, administrators,
predecessors, successors and assigns (collectively, the “Released Persons”)
which have arisen, could have arisen, arise now or hereafter, out of or relating
in any manner to the acts, events, facts, matters, transactions, occurrences,
statements, representations, misrepresentations or omissions or any other matter
whatsoever set forth in or otherwise related, directly or indirectly, to the
allegations in the Actions, claims of mismanagement or self dealing

 
11
 

against the management of NTS, the Original Merger Agreement, the Amended Merger
Agreement, the Proposed Transactions, or disclosures made in connection
therewith (including the adequacy and completeness of such disclosures)
(collectively, the “Settled Claims”), however, the Settled Claims shall not
include any claims to enforce the Settlement.
 
13.  The Order and Final Judgment shall also provide that the Released Persons
shall be deemed to have, and by operation of the judgment shall have, fully,
finally, and forever released, relinquished, and discharged Plaintiffs, each and
all members of the Class, and Plaintiffs’ Counsel from all claims (including
unknown claims) arising out of, relating to, or in connection with, the
institution, prosecution, assertion, settlement or resolution of the Actions or
the Settled Claims.
 
CONDITIONS OF SETTLEMENT
 
14.  Defendants deny and continue to deny that they have committed or aided and
abetted the commission of any unlawful or wrongful acts alleged in the Actions,
and expressly maintain that they diligently and scrupulously complied with their
fiduciary duties and other legal duties in connection with the Proposed
Transactions.  All Defendants are entering into the Stipulation solely because
the proposed Settlement will eliminate the burden and expense of further
litigation.  Plaintiffs continue to maintain that their claims have merit as set
forth in the Complaint.
 
15.  Plaintiffs and Plaintiffs’ Counsel represent that none of Plaintiffs’
claims or causes of action referred to in the Stipulation have been assigned,
encumbered or otherwise transferred.
 
16.  The Settlement is conditioned upon the fulfillment of each of the
following:

 
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          (i) Plaintiffs’ determination, following completion of the
confirmatory discovery provided in paragraph 8 above, that the Settlement is
fair, reasonable and adequate to them and the Class;
 
          (ii) Plaintiffs’ approval of the form of the final Information
Statement issued in connection with the Merger, as provided in paragraph 10
above;
 
          (iii) the approval of the Merger, on substantially the terms set forth
in the Amended Merger Agreement, by the holders of a majority of the Units of
the Company;
         
          (iv) The Purchasers agree and commit to vote in favor of approval of
the Merger;
 
          (v) the dismissal with prejudice of the Kentucky Action without the
award of any damages, costs, fees or the grant of any further relief beyond that
provided by this Stipulation;
 
          (vi) the entry of an Order dismissing the Delaware Action with
prejudice;
 
          (vii) the entry of a final judgment in the Kentucky Action approving
the proposed Settlement and providing for the dismissal with prejudice of the
Action and approving the grant of a release by the Class to the Released Persons
of the Settled Claims;
   
          (viii) the inclusion in the final judgment of a provision enjoining
all members of the Class from asserting any of the Settled Claims; and
 
 
 
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          (ix) such final judgment and dismissal of the Actions being finally
affirmed on appeal or such final judgment and dismissal not being subject to
appeal (or further appeal) by lapse of time or otherwise.
 
17.  Each of the Defendants shall have the right to withdraw from the Settlement
in the event that any claims related to the subject matter of the Actions are
commenced or prosecuted against any of the Released Persons (as defined in
paragraph 12 above) in any court prior to final approval of the Settlement and
(following a motion by the Defendants) such claims are not dismissed with
prejudice or stayed in contemplation of dismissal. In the event such claims are
commenced, all Plaintiffs and all Defendants agree to cooperate and use their
reasonable best efforts to secure the dismissal (or a stay in contemplation of
dismissal following final approval of the Settlement) thereof.
 
18.  This Stipulation shall be null and void and of no force and effect if the
Settlement does not obtain Final Approval for any reason.  In any such event,
this Stipulation shall not be deemed to prejudice in any way the respective
positions of the parties with respect to the Actions or to entitle any party to
the recovery of agreed costs and expenses incurred in connection with the
intended implementation of the Settlement; provided, however, that NTS or its
successor shall be responsible for paying the costs of providing the Notice to
the Class regardless of whether the Settlement is approved.
 
19.  In the event that the proposed Settlement is rendered null and void for any
reason, the existence of or the provisions contained in this Stipulation shall
not be deemed to prejudice in any way the respective positions of any party with
respect to the Actions, including the right of any Defendant to oppose the
certification of the Class in

 
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any future proceedings; nor shall they be deemed a presumption, a concession, or
an admission by Plaintiffs or any of Defendants of any fault, liability, or
wrongdoing as to any facts, claims, or defenses that have been or might have
been alleged or asserted in the Actions, or any other action or proceeding or
each thereof; nor shall they be interpreted, construed, deemed, invoked,
offered, or received in evidence or otherwise used by any person in the Actions,
or in any other action or proceeding.
 
FINAL COURT APPROVAL
 
20.  The approval of the Settlement by the Court shall be considered final
(“Final Approval”) for purposes of this Stipulation upon the later of (i) unless
waived by agreement of the parties, the expiration of the time for the filing or
notice of an appeal or motion for re-argument or rehearing from the Court’s
Order and Final Judgment approving the material terms of the Settlement without
such appeal or motion having been made; (ii) the date of final affirmance of the
Court’s Order and Final Judgment on any appeal or re-argument or rehearing; or
(iii) the final dismissal of any appeal.  Notwithstanding the foregoing, Final
Approval shall not be conditioned upon the approval of any award of attorneys’
fees and expenses to Plaintiffs’ counsel and shall not be delayed based on any
proceedings solely relating to any award of attorneys’ fees and expenses to
Plaintiffs’ counsel.
 
ATTORNEYS’ FEES, REIMBURSEMENT OF EXPENSES AND INCENTIVE AWARD
 
21.  Plaintiffs’ counsel intend to petition the Court for an award of attorneys’
fees and reimbursement of expenses incurred in connection with the Actions,
together with an incentive award for Plaintiffs (the “Fee and Expense
Application”).  Any and all amounts payable in respect of attorneys’ fees and
reimbursement of expenses to

 
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Plaintiffs’ counsel or an incentive award for Plaintiffs will be paid out of the
Settlement Payment.  Defendants shall take no position as to the Fee and Expense
Application so long as the attorneys fees requested do not exceed thirty (30%)
percent of the Settlement Payment.  The amount awarded by the Court, if any,
pursuant to the Fee and Expense Application shall be paid by the Paying Agent to
Plaintiffs’ Counsel within five (5) business days after the closing of the
Merger, into an account mutually designated by Plaintiffs’ Counsel and shall be
held in trust and disbursed to all parties entitled to payment thereof. No other
application for attorneys’ fees and expenses shall be filed by counsel for
Plaintiffs in the Actions, and counsel for Plaintiffs expressly waive any right
to seek any award of such fees and expenses in connection with the Settlement of
the Actions except as provided in this paragraph.
 
22.  Any failure or refusal of the Court to approve a request for attorneys’
fees and expenses or incentive award to Plaintiffs in whole or in part shall not
affect the remainder of the Settlement.
 
23.  No fees or expenses shall be paid to Plaintiffs’ Counsel pursuant to the
Settlement in the absence of approval by the Court of a complete release of all
Released Persons, in the form customarily approved by the Court in connection
with settlements of this type.
 
24.  Except as provided above, no Defendant shall have the obligation to pay or
reimburse any fees, expenses, costs or damages alleged or incurred by
Plaintiffs, by any members of the Class, or by their attorneys, experts,
advisors, or representatives with respect to the Claims settled herein.  No
Defendant shall have responsibility or liability with respect to any fee and
expense allocation among Plaintiffs’ counsel.
 
 
 
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EFFECT OF RELEASE
 
25.  Plaintiffs acknowledge, and the members of the Class by operation of law
shall be deemed to have acknowledged, that they may discover facts in addition
to or different from those now known or believed to be true by them with respect
to the Settled Claims, but that it is the intention of Plaintiffs, and by
operation of law the intention of the members of the Class, to completely,
fully, finally and forever compromise, settle, release, discharge, extinguish,
and dismiss any and all Settled Claims, known or unknown, suspected or
unsuspected, contingent or absolute, accrued or unaccrued, apparent or
unapparent, which now exist, or heretofore existed, or may hereafter exist, and
without regard to the subsequent discovery of additional or different facts.
Plaintiffs acknowledge, and the members of the Class by operation of law shall
be deemed to have acknowledged, that “Unknown Claims” are expressly included in
the definition of “Settled Claims,” and that such inclusion was expressly
bargained for and was a key element of the Settlement and was relied upon by
each and all of the Released Persons in entering into this Stipulation. “Unknown
Claims” means any claim that Plaintiffs or any member of the Class does not know
or suspect exists in his, her or its favor at the time of the release of the
Settled Claims as against the Released Persons, including without limitation
those which, if known, might have affected the decision to enter into the
Settlement. With respect to any of the Settled Claims, the parties stipulate and
agree that upon Final Approval of the Settlement, Plaintiffs have expressly
waived, relinquished and released, and each member of the Class shall be deemed
to have, and by operation of the final order and judgment by the Court shall
have, expressly waived, relinquished and released any and all provisions, rights
and benefits conferred by or under Cal. Civ. Code § 1542 or any law of the
United States or any state of the United States or territory of the

 
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United States, or principle of common law, which is similar, comparable or
equivalent to Cal. Civ. Code § 1542, which provides:
 
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
 
BEST EFFORTS
 
26.  Plaintiffs, Defendants, and their attorneys agree to cooperate fully with
one another in seeking the Court’s approval of this Stipulation and the
Settlement, and to use their best efforts to effect, take, or cause to be taken
all actions, and to do, or cause to be done, all things reasonably necessary,
proper, or advisable under applicable laws, regulations, and agreements to
consummate and make effective, as promptly as practicable, this Stipulation and
the Settlement provided for hereunder (including, but not limited to, using
their best efforts to resolve any objections raised to the Settlement) and the
dismissal of the Actions with prejudice and without costs, fees or expenses to
any party (except as provided for by paragraph 18 above).
 
27.  Without further order of the Court, Plaintiffs and Defendants may agree to
reasonable extensions of time not expressly set forth by the Court in order to
carry out any provisions of this Stipulation.
 
STAY OF PROCEEDINGS
 
28.  Pending Final Approval of the Settlement by the Court, Plaintiffs and
Plaintiffs’ Counsel agree to stay this proceeding and not to initiate any and
all other proceedings other than those incident to the Settlement itself.

 
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29.  The parties will request the Court to order (in the Preliminary Approval
Order) that, pending final determination of whether the Settlement should be
approved, Plaintiffs in the Actions and all members of the Class, and any of
them are barred and enjoined from commencing, prosecuting, instigating or in any
way participating in the commencement or prosecution of any action asserting any
Settled Claims, either directly, representatively, derivatively, or in any other
capacity, against Defendants or any of the Released Persons.
 
STIPULATION NOT AN ADMISSION
 
30.  The provisions contained in this Stipulation shall not be deemed a
presumption, concession, or any admission by any Defendant in the Actions of any
fault, liability, or wrongdoing as to any facts or claims alleged or asserted in
the Actions, or any other actions or proceedings, and shall not be interpreted,
construed, deemed, invoked, offered, or received in evidence or otherwise used
by any person in the Actions, or in any other action or proceeding, whether
civil, criminal, or administrative, except for any litigation or judicial
proceeding arising out of or relating to this Stipulation or the Settlement
contemplated herein.  The provisions contained in this Stipulation shall not be
deemed a presumption, concession, or any admission by any of the Plaintiffs in
the Actions that their claims lack merit, or that any defense that has been or
may be asserted by Defendants is meritorious.
 
ENTIRE AGREEMENT; AMENDMENTS
 
31.  This Stipulation with exhibits constitutes the entire agreement among the
parties with respect to the subject matter hereof, and may be modified or
amended only by a writing signed by the signatories hereto.  The undersigned
hereby represent to the Court that there are no other agreements with respect to
the Settlement or the compromise
 
 
 
19
 
 
of the Action and agree to give notice to the Court of any amendment hereto or
additional agreement made in connection with the Settlement or the compromise of
the Action, as provided by Kentucky Rule of Civil Procedure 23.05(3).
 
COUNTERPARTS
 
32.  This Stipulation may be executed in multiple counterparts by any of the
signatories hereto, including by facsimile, and as so executed shall constitute
one agreement.
 
GOVERNING LAW
 
33.  This Stipulation and the Settlement contemplated by it shall be governed
by, and construed in accordance with, the laws of the State of Kentucky, without
regard to any conflict of law rules.
 
SUCCESSORS AND ASSIGNS
 
34.  This Stipulation, and all rights and powers granted hereby, shall be
binding upon and inure to the benefit of the parties and their respective
agents, executors, heirs, successors, affiliates and assigns. All parties agree
that the Released Persons are third party beneficiaries of the release
identified in paragraph 12 above.
 
AUTHORITY
 
35.  The undersigned attorneys represent and warrant that they have the
authority from their client(s) to enter into this Stipulation and bind their
client(s) thereto.
 
DELAWARE ACTION
 
45. Defendants shall execute a stipulation and proposed order in reasonably
acceptable form providing for dismissal of the Delaware Action with prejudice
and without costs to any party and Counsel for the Plaintiffs in the Delaware
Action shall
 
 
 
20
 
 
execute and cause such stipulation and proposed Order to be submitted to the
Delaware Court forthwith upon Final Approval.
 
DATED:  February 4, 2014

/s/ J. Gregory Joyner      
J. Gregory Joyner
Tyler F. Stebbins
Naber Joyner & Associates
462 S. Fourth Avenue, Suite 1730
Louisville, KY 40202
 
Liaison Counsel for Plaintiffs
 
/s/ Jared A. Cox          
Eric L. Ison
Margaret E. Keane
Jared A. Cox
Bingham Greenebaum Doll LLP
3500 National City Tower
101 S. Fifth Street
Louisville, KY 40202
 
Liaison Counsel for Defendants NTS Realty Holdings Limited Partnership and NTS
Realty Capital, Inc.

 
/s/ Ethan D. Wohl         
Ethan D. Wohl
Sara J. Wigmore
Wohl & Fruchter LLP
570 Lexington Avenue, 16th Floor
New York, NY 10022
 
Co-Lead Counsel for Plaintiffs in the Kentucky Action
 
 
/s/ James D. Wilson         
Cezar M. Froelich
James D. Wilson
Brett Nolan
Taft, Stettenius & Hollister, LLP
111 E. Wacker Drive, Suite 2800
Chicago, IL 60601
 
Counsel for Defendants NTS Realty Holdings Limited Partnership and NTS Realty
Capital, Inc.

 
/s/ Joseph E. Levi         
Joseph E. Levi
Shane Rowley
Levi & Korsinsky, LLP
30 Broad Street, 24th Floor
New York, NY 10004
 
Co-Lead Counsel for Plaintiffs in the Kentucky Action
 
 
/s/ Stephen H. Miller      
Stephen H. Miller
Jeffrey G. Stovall
Fore, Miller & Schwartz
Suite 700 North, First Trust Centre
200 S. Fifth Street
Louisville, KY 40202
 
Counsel for Defendants J. D. Nichols, Brian Lavin and NTS Merger Parent, LLC

 
 
 
21
 
 
 
/s/ Brian D. Long         
Seth D. Rigrodsky
Brian D. Long
Gina M. Serra
Rigrodsky & Long, P.A.
2 Righter Parkway, Suite 120
Wilmington, DE 19803
 
Lead Counsel for Plaintiffs in the Delaware Action
 
/s/ Charles J. Cronan, IV      
Charles J. Cronan, IV
Clark C. Johnson
Amber D. Nicely
Stites & Harbinson, PLLC
400 W. Market Street, Suite 1800
Louisville, KY 40202
 
Counsel for Defendants Mark Anderson, John Daly, Sr. and John Lenihan
     
/s/ Phillip Kim            
Phillip Kim
The Rosen Law Firm
275 Madison Street, 34th Floor
New York, NY 10016
 
Counsel for Plaintiff Gerald A. Wells
   

1265658_3.DOCX
 
 
22
 
 
 
 
 

 
EXHIBIT A

--------------------------------------------------------------------------------

AGREEMENT AND PLAN OF MERGER

among

NTS MERGER PARENT, LLC,

NTS MERGER SUB, LLC,

NTS REALTY CAPITAL, INC.,

and

NTS REALTY HOLDINGS LIMITED PARTNERSHIP

_________________________

Dated as of [___________], 2014

 
 
 
 
TABLE OF CONTENTS
 
 
 
 
 
ARTICLE I
 
 
 
 
THE MERGER
Page
 
3

 
 
Section 1.1 The Merger
3

 
Section 1.2 Closing
3

 
Section 1.3 Effective Time
3

 
Section 1.4 Effects of the Merger
3

 
Section 1.5 Partnership Agreement of the Surviving Entity
3

 
ARTICLE II
CONVERSION OF PARTNERSHIP INTERESTS; EXCHANGE OF CERTIFICATES
4

 
 
Section 2.1 Effect on Partnership Interests
4

 
Section 2.2 Exchange of Certificates
5

 
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP PARTIES
7

 
 
Section 3.1 Qualification, Organization, Subsidiaries, Etc.
8

 
Section 3.2 Capitalization
8

 
Section 3.3 Authority, No Violation; Consents and Approvals
9

 
Section 3.4 SEC Reports and Compliance
10

 
Section 3.5 No Undisclosed Liabilities
11

 
Section 3.6 Opinion of Financial Advisor
11

 
Section 3.7 State Takeover Laws
11

 
Section 3.8 Finders or Brokers
11

 
Section 3.9 No Other Representations or Warranties
11

 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES
12

 
 
Section 4.1 Qualification: Organization
12

 
Section 4.2 Authority; No Violation; Consents and Approvals
12

 
Section 4.3 Intentionally Omitted
13

 
Section 4.4 Solvency
13

 
Section 4.5 Ownership and Operations of Merger Sub
14

 
Section 4.6 Certain Arrangements
14

 
Section 4.7 No Third Party Transactions
14

 
Section 4.8 Finders or Brokers
14

 
Section 4.9 Access to Information; No Other Representations or Warranties;
Disclaimer
14

 
ARTICLE V
COVENANTS AND AGREEMENTS
15

 
 
Section 5.1 Intentionally Omitted
15

 
Section 5.2 Intentionally Omitted
15

 
Section 5.3 No Solicitation
15

 
Section 5.4 Preparation of Information Statement and Schedule 13E-3
16

 
Section 5.5 Efforts; Notification
17

 
 
 
 
 
-i-
 
 
 
TABLE OF CONTENTS
(continued)
 
 
 
 
 
 
Section 5.6 Publicity
Page
 
 
18

 
Section 5.7 Indemnification and Insurance
18

 
Section 5.8 Unitholder Litigation
19

 
Section 5.9 Delisting
19

 
Section 5.10 No Financing Commitment
19

 
Section 5.11 Section 16 Matters
19

 
ARTICLE VI
CONDITIONS TO THE MERGER
20

 
 
Section 6.1 Conditions to Each Party’s Obligation to Effect the Merger
20

 
Section 6.2 Conditions to Obligation of the Partnership Parties to Effect the
Merger
20

 
Section 6.3 Conditions to Obligation of the Parent Parties to Effect the Merger
21

 
Section 6.4 Frustration of Conditions
21

 
ARTICLE VII
TERMINATION
22

 
 
Section 7.1 Termination or Abandonment
22

 
Section 7.2 Effect of Termination
23

 
Section 7.3 Expenses
23

 
ARTICLE VIII
MISCELLANEOUS
23

 
 
Section 8.1 Nonsurvival of Representations, Warranties and Agreements
23

 
Section 8.2 Amendments; Waivers
23

 
Section 8.3 Notices
23

 
Section 8.4 Interpretation; Construction; Severability
25

 
Section 8.5 Governing Law; Jurisdiction
25

 
Section 8.6 WAIVER OF JURY TRIAL
26

 
Section 8.7 Specific Performance
26

 
Section 8.8 Assignment: Binding Effect
26

 
Section 8.9 Counterparts; Effectiveness
26

 
Section 8.10 Entire Agreement; No Third-Party Beneficiaries
26

 
Section 8.11 No Recourse
27

 
Section 8.12 Certain Definitions
27

 

 
 
-ii-
 
 
 
The Exhibits and Schedules referenced in this Agreement and Plan of Merger have
been omitted. The Partnership will make available these materials for inspection
and copying by any partner, or representative of a partner who is so designated
in writing, at its executive offices during regular business hours.

 
-iii-
 
 
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of [________], 2014 (this
“Agreement”), is entered into among NTS Merger Parent, LLC, a Delaware limited
liability company (“Parent”), NTS Merger Sub, LLC, a Delaware limited liability
company and a wholly-owned subsidiary of Parent (“Merger Sub” and, together with
Parent, the “Parent Parties”), NTS Realty Capital, Inc., a Delaware corporation
and the managing general partner of the Partnership (“Partnership Managing GP”),
and NTS Realty Holdings Limited Partnership, a Delaware limited partnership (the
“Partnership” and, together with the Partnership Managing GP, the “Partnership
Parties”).
 
WITNESSETH:
 
WHEREAS, on December 28, 2012, the Partnership announced that it and Partnership
Managing GP entered into an Agreement and Plan of Merger (the “Original Merger
Agreement”) with Parent and Merger Sub;
 
WHEREAS, upon consummation of the transactions proposed in the Original Merger
Agreement, Merger Sub was to merge with and into the Partnership and the
Partnership was to continue as the surviving entity (the “Original Merger”).
Upon consummation of the Original Merger, all of the Units, other than the
Remaining Interests, were to have been canceled and converted automatically into
the right to receive a cash payment equal to $7.50 per Unit (the “Original
Merger Consideration”);
 
WHEREAS, on January 25, 2013, Dannis, Stephen, et al. v. Nichols, J.D., et al.,
Case No. 13-CI-00452 (the “Kentucky Action”) was filed in the Court by
plaintiffs Stephen and Sharon Dannis alleging, among other things, that the
board of directors of Partnership Managing GP (the “Board of Directors”) had
breached their fiduciary duties in connection with their consideration and
approval of the Original Merger Agreement;
 
WHEREAS, between February 12, 2013 and February 15, 2013, two actions were filed
in the Delaware Court of Chancery (the “Delaware Court”) by Partnership
unitholders alleging, among other things, that the Board of Directors had
breached their fiduciary duties in connection with their consideration and
approval of the Original Merger Agreement. These actions, and their filing
dates, are as follows: R. Jay Tejera v. NTS Realty Holdings LP et al., C.A. No.
8302-VCP, filed February 12, 2013 and Gerald A. Wells v. NTS Realty Holdings LP
et al., C.A. No. 8322-VCP, filed February 15, 2013;
 
WHEREAS, on March 19, 2013, the Delaware Court consolidated the Tejera and Wells
actions under the consolidated case caption of In re NTS Realty Holdings Limited
Partnership Unitholders Litigation, Consol. CA. No. 8302-VCP (the “Delaware
Action”) and appointed the law firms of Rigrodsky & Long, P.A. and Wohl &
Fruchter LLP as Co-Lead Counsel for plaintiffs in the Delaware Action;
 
WHEREAS, after counsel for plaintiff Tejera advised of his intention to join in
prosecution of the Kentucky Action and plaintiffs Tejera and Stephen and Sharon
Dannis tendered a proposed Second Amended Complaint on May 24, 2013, the parties
submitted an

 
 
 

agreed order on May 31, 2013, allowing plaintiffs to file a Second Amended
Complaint, which order was entered June 7, 2013;
 
WHEREAS, on August 20-21, 2013, the parties to the Kentucky Action conducted two
days of in-person negotiations and continued to discuss settlement over the
following weeks;
 
WHEREAS, the Kentucky Action parties’ settlement negotiations were unsuccessful
and certain defendants named in the Kentucky Action issued notice to resume
briefing of motions to dismiss;
 
WHEREAS, the Original Merger Agreement provided that either the special
committee of independent directors of the Board of Directors (the “Special
Committee”) or the Parent Parties could terminate such agreement if the Original
Merger was not consummated by September 30, 2013, and on October 18, 2013, the
Special Committee delivered notice terminating the Original Merger Agreement;
 
WHEREAS, the parties to the Kentucky Action resumed settlement discussions in
early November 2013 and after a series of telephone discussions among counsel,
ultimately reached agreement to settle pursuant to the Settlement Agreement (as
hereinafter defined) for total per-unit Merger consideration of $9.25 in cash
(less attorneys’ fees and expenses, if any, approved by the Court), and on the
other terms set forth in this Agreement;
 
WHEREAS, the parties intend that Merger Sub be merged with and into the
Partnership, with the Partnership surviving that merger on the terms and subject
to the conditions set forth in this Agreement (the “Merger”);
 
WHEREAS, the Special Committee unanimously has (a) determined that it is fair to
and in the best interests of the Partnership and its Unitholders (other than the
Unitholders of the Units included among the Remaining Interests) to enter into
this Agreement and (b) recommended to the Board of Directors that it approve and
declare advisable this Agreement and the transactions contemplated hereby,
including the Merger;
 
WHEREAS, following the recommendation of the Special Committee, the Board of
Directors unanimously has (a) determined that it is fair to and in the best
interests of the Partnership and its Unitholders (other than the Unitholders of
the Units included among the Remaining Interests) to enter into this Agreement
and declared it advisable, (b) approved the execution, delivery and performance
by the Partnership of this Agreement and the consummation of the transactions
contemplated hereby, including the Merger, and (c) resolved to recommend
adoption of this Agreement by the Unitholders;
 
WHEREAS, the Purchasing Group beneficially and of record own Units and general
partner interests in the Partnership set forth on Section 2.1(b) of the Parent
Disclosure Schedule, constituting approximately 61.9% of the issued and
outstanding Units of the Partnership and all of the general partner interests in
the Partnership;
 
WHEREAS, the managers of each of Parent and Merger Sub have unanimously approved
this Agreement and declared it advisable for Parent and Merger Sub,
respectively, to enter into this Agreement; and

 
2
 

WHEREAS, the parties desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and the transactions
contemplated by this Agreement and also to prescribe certain conditions to the
Merger as specified herein.
 
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, and intending to be
legally bound hereby, Parent, Merger Sub, the Partnership and Partnership
Managing GP hereby agree as follows:
 
ARTICLE I
 
THE MERGER
 
Section 1.1 The Merger. At the Effective Time, upon the terms and subject to the
conditions set forth in this Agreement and in accordance with the applicable
provisions of the Delaware Revised Uniform Limited Partnership Act (“DRULPA”)
and the Delaware Limited Liability Company Act (“DLLCA”), Merger Sub shall be
merged with and into the Partnership, whereupon the separate existence of Merger
Sub shall cease, and the Partnership shall continue as the surviving entity in
the Merger (the “Surviving Entity”).
 
Section 1.2 Closing. Upon the terms and subject to the satisfaction or waiver of
the conditions contained in this Agreement, the closing of the transactions
contemplated by this Agreement (the “Closing”) shall take place at the offices
of the Partnership, 600 North Hurstbourne Parkway, Louisville, Kentucky at 9:00
a.m., local time, on the third Business Day following the day on which the last
of the conditions set forth in Article VI (other than those conditions that by
their nature are to be satisfied or waived at the Closing but subject to the
satisfaction or waiver of those conditions) shall been satisfied or waived in
accordance with this Agreement, or at such other time and place as the Parent
Parties and the Partnership Parties shall agree (the “Closing Date”).
 
Section 1.3 Effective Time. Subject to the terms and conditions of this
Agreement, at the Closing, the parties shall cause the Merger to be consummated
by executing and filing a certificate of merger (the “Certificate of Merger”)
with the Secretary of State of the State of Delaware in accordance with Section
17-211 of the DRULPA and Section 18-209 of the DLLCA. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware, or at such later date or time as
may be agreed by Parent and the Partnership Parties (acting through the Special
Committee) in writing and specified in the Certificate of Merger in accordance
with the DRULPA and the DLLCA (the time when the Merger becomes effective, the
“Effective Time”).
 
Section 1.4 Effects of the Merger. The Merger shall have the effects set forth
in this Agreement, the Partnership Agreement and the applicable provisions of
the DRULPA and DLLCA.
 
Section 1.5 Partnership Agreement of the Surviving Entity. The Partnership
Agreement, as in effect immediately prior to the Effective Time, shall remain
the partnership agreement of the Surviving Entity and shall continue in effect
until thereafter changed or amended in

 
3
 

accordance with the provisions of the Partnership Agreement, this Agreement and
applicable Law.
 
ARTICLE II

CONVERSION OF PARTNERSHIP INTERESTS; EXCHANGE OF CERTIFICATES
 
Section 2.1 Effect on Partnership Interests. At the Effective Time, by virtue of
the Merger and without any action on the part of the Partnership, Merger Sub or
the holders of any securities of the Partnership or Merger Sub:
 
(a) Conversion of Units. Subject to Sections 2.1(b) and 2.1(d), each Unit issued
and outstanding, each interest or former interest in a predecessor of the
Partnership that was or is exchangeable for Units and any right to such an
exchange immediately prior to the Effective Time, other than the Remaining
Interests, shall thereupon be converted automatically into and shall thereafter
represent the right to receive, subject to the terms and conditions set forth
herein, $7.50 plus a pro rata share of the Net Settlement Fund (as defined
below) without any interest thereon (the “Merger Consideration”). Immediately
prior to the Effective Time, each Unit deferred by any nonemployee member of the
Board of Directors pursuant to the Partnership Managing GP Directors Deferred
Compensation Plan (the “Directors Plan”) shall be issued to such nonemployee
member of the Board of Directors and shall thereupon be converted automatically
into and shall thereafter represent the right to receive the Merger
Consideration. All Units that have been converted into the right to receive the
Merger Consideration as provided in this Section 2.1 shall be automatically
cancelled and shall cease to exist, and the Unitholders of such Units
immediately prior to the Effective Time (whether certificated or
non-certificated and represented in book-entry form) shall cease to have any
rights with respect to such Units other than the right to receive the Merger
Consideration.
 
(b) Remaining Interests. As of the Effective Time, the Units and general partner
interests in the Partnership held by the Purchasing Group as set forth on
Section 2.1(b) of the Parent Disclosure Schedule (collectively, the “Remaining
Interests”) shall be unchanged and remain outstanding as Units or general
partner interests in the Partnership, as applicable, and no consideration shall
be delivered in respect thereof. Immediately after the Effective Time, the
Remaining Interests will constitute the only outstanding partnership interests
of the Surviving Entity.
 
(c) Conversion of Merger Sub Limited Liability Company Interests. At the
Effective Time, by virtue of the Merger and without any action on the part of
the holder thereof, each membership interest in Merger Sub issued and
outstanding immediately prior to the Effective Time shall cease to be
outstanding and automatically shall be cancelled and shall cease to exist, and
each holder of a membership interest in Merger Sub immediately prior to the
Effective Time shall cease to have any rights with respect thereto and no
consideration shall be delivered in exchange therefor.
 
(d) Adjustments. If between the date of this Agreement and the Effective Time,
the outstanding Units, including securities convertible or exchangeable into or
exercisable for Units, shall be changed into a different number of units or
other securities by reason of any split,

 
4
 

combination, merger, consolidation, reorganization, reclassification,
recapitalization or other similar transaction, or any distribution payable in
Units or other equity interests in the Partnership shall be declared thereon
with a record date within such period, the Merger Consideration shall be
appropriately adjusted to provide the Unitholders the same economic effect as
contemplated by this Agreement prior to such event; provided that nothing herein
shall be construed to permit the Partnership to take any action with respect to
its securities that is expressly prohibited by the terms of this Agreement.
 
Section 2.2 Exchange of Certificates.
 
(a) Paying Agent. Prior to the mailing of the Information Statement (as defined
herein), the Surviving Entity shall appoint Wells Fargo Shareowner Services to
act as paying agent (the “Paying Agent”) for the Unitholders (other than the
Purchasing Group) in connection with the Merger and to receive and pay out the
Merger Consideration to which such Unitholders shall become entitled pursuant to
Section 2.1. At or prior to the Effective Time, the Parent Parties or their
Affiliates shall cause to be deposited with the Paying Agent, for the benefit of
the Unitholders (other than the Purchasing Group), funds in an amount sufficient
to pay the aggregate Merger Consideration in exchange for all Units outstanding
immediately prior to the Effective Time (other than the Units included among the
Remaining Interests), payable upon due surrender of the certificates that
immediately prior to the Effective Time represented Units (“Certificates”) (or
delivery of affidavits of loss in lieu thereof pursuant to Section 2.2(g)) or
non-certificated Units represented in book-entry form (“Book-Entry Units”)
pursuant to the provisions of this Article II (such funds hereinafter referred
to as the “Exchange Fund”).
 
(b) Payment Procedures.
 
(i) As soon as reasonably practicable after the Effective Time and in any event
not later than the thirty (30) days following the Effective Time, the Surviving
Entity shall cause the Paying Agent to mail to each holder of record of Units
whose Units were converted into the Merger Consideration pursuant to Section
2.1(a), (A) a letter of transmittal (the “Letter of Transmittal”) (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates (or
affidavits of loss in lieu thereof pursuant to Section 2.2(g)) to the Paying
Agent or, in the case of Book-Entry Units, upon adherence to the procedures set
forth in the Letter of Transmittal, and shall be in such customary form and have
such other provisions as Parent and the Partnership Parties (acting through the
Special Committee) shall reasonably determine) and (B) instructions for use in
surrendering Certificates (or affidavits of loss in lieu thereof pursuant to
Section 2.2(g)) or Book-Entry Units in exchange for the Merger Consideration.
 
(ii) Upon (A) surrender of a Certificate (or an affidavit of loss in lieu
thereof pursuant to Section 2.2(g)) or Book-Entry Units to the Paying Agent,
accompanied by a properly completed Letter of Transmittal or (B) receipt of an
“agent’s message” by the Paying Agent (or such other evidence, if any, of
transfer as the Paying Agent may reasonably request) in the case of certain
Book-Entry Units represented by DTC participants for the benefit of certain
beneficial owners of Units that hold such Units in “street name”, the holder of
such Certificate or Book-Entry Units shall be entitled to receive promptly after
the Effective Time, but in any event within ten (10) Business Days after such
surrender, a check in an amount equal to the product of (x) the

 
5
 

number of Units represented by such holder’s properly surrendered Certificates
(or affidavits of loss in lieu thereof pursuant to Section 2.2(g)) or Book-Entry
Units multiplied by (y) the Merger Consideration. No interest shall be paid or
accrued for the benefit of holders of the Certificates or Book-Entry Units on
the Merger Consideration payable in respect of the Certificates or Book-Entry
Units. In the event of a transfer of ownership of Units that is not registered
in the unit transfer register of the Partnership, a check for any amount to be
paid upon due surrender of the Certificate may be paid to such a transferee if
the Certificate formerly representing such Units is presented to the Paying
Agent accompanied by all documents required to evidence and effect such transfer
and to evidence that any applicable unit transfer or other Taxes have been paid
or are not applicable.
 
(iii) Parent, the Surviving Entity and the Paying Agent shall be entitled to
deduct and withhold from the consideration otherwise payable under this
Agreement to any Unitholder such amounts as are required to be withheld or
deducted under the Internal Revenue Code of 1986, as amended (the “Code”), or
any provision of federal, state, local or foreign Tax Law with respect to the
making of such payment. To the extent that amounts are so withheld or deducted
and paid over to the applicable Governmental Entity, such withheld or deducted
amounts shall be treated for all purposes of this Agreement as having been paid
to the Unitholder in respect of which such deduction and withholding were made.
 
(c) Closing of Transfer Register. At the Effective Time, the unit transfer
register of the Partnership shall be closed, and there shall be no further
registration of transfers on the unit transfer register of the Surviving Entity
of Units (other than the Units included in the Remaining Interests) that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates or Book-Entry Units provided for in Section 2.1(a) are
presented to the Surviving Entity or Parent for transfer, they shall be
cancelled and exchanged for a check in the proper amount pursuant to and subject
to the requirements of this Article II.
 
(d) Termination of Exchange Fund. Any portion of the Exchange Fund (including
the proceeds of any investments thereof) that remains undistributed to the
former Unitholders for twelve months after the Effective Time shall be delivered
to the Surviving Entity upon demand and become the property of the Surviving
Entity, and any former Unitholders who have not surrendered their Certificates
or Book-Entry Units provided for in Section 2.1(a) in accordance with this
Section 2.2 shall thereafter look to the Surviving Entity only as general
creditors thereof for payment of their claim for the Merger Consideration,
without any interest thereon, upon due surrender of their Certificates (or
delivery of affidavits of loss in lieu thereof pursuant to Section 2.2(g)) or
Book-Entry Units in form, together with such properly completed letters of
transmittal or other documentation, as Parent or the Surviving Entity may
reasonably request.
 
(e) No Liability. Notwithstanding anything herein to the contrary, none of
Parent, Merger Sub, the Partnership Parties, the Surviving Entity or any other
person shall be liable to any former Unitholder for any amount properly
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar Law. Any amount of, or any right or claim, whether under Law
or applicable principles of equity, by or on behalf of any person, including any
owner or holder of any interest or former interest in a predecessor of the
Partnership that was or is exchangeable for Units and any right to such an
exchange, to receive any amount of, Merger Consideration with respect to which
(x) Certificates (or affidavits of loss in lieu thereof

 
6
 

pursuant to Section 2.2(g)) or Book-Entry Units have not been properly
surrendered and (y) a properly completed letter of transmittal or “agent’s
message,” together with any other documentation as Parent or the Surviving
Entity may reasonably request, has not been received, in each case, pursuant to
this Section 2.2 as of the earlier of (i) the twenty-four (24) month anniversary
of the Effective Time or (ii) the date that is immediately prior to such time as
such amounts would otherwise escheat to or become property of any Governmental
Entity shall, to the fullest extent permitted by applicable Law, become the
property of the Surviving Entity free and clear of any claims or interest of any
person previously entitled thereto. The opportunity to receive the Merger
Consideration in consideration of due surrender of any Certificates (or delivery
of affidavits of loss in lieu thereof pursuant to Section 2.2(g)) or Book-Entry
Units according to the terms of this Section 2.2 shall be deemed to be payment
in full satisfaction of all rights pertaining to the Units represented thereby.
 
(f) Investment of Exchange Fund. The Paying Agent shall invest the Exchange Fund
as reasonably directed by the Surviving Entity; provided, however, that any
investment of such Exchange Fund shall be limited to direct short-term
obligations of, or short-term obligations fully guaranteed as to principal and
interest by, the U.S. government and that no such investment or loss thereon
shall affect the amounts payable to Unitholders that are converted into the
right to receive the Merger Consideration pursuant to Section 2.1. Any interest
and other income resulting from such investments shall be paid to the Surviving
Entity pursuant to Section 2.2(d).
 
(g) Lost Certificates. In the event that any Certificate representing Units
provided for in Section 2.1(a) shall have been lost (and after diligent search,
not able to be found), stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such Certificate to be so lost, stolen or
destroyed that is reasonably deemed by Parent or the Paying Agent to be
effective and, if required by Parent or the Surviving Entity, the posting by
such person of a bond in customary amount as indemnity against any claim that
may be made against it with respect to such Certificate, the Surviving Entity
will issue in exchange for such lost, stolen or destroyed Certificate a check in
the amount of the number of Units represented by such lost, stolen or destroyed
Certificate multiplied by the Merger Consideration.
 
ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP PARTIES
 
Except as disclosed in the Partnership SEC Documents filed prior to the date of
this Agreement (excluding any disclosures included in any risk factor section of
such documents and any other disclosures in such documents to the extent that
they are cautionary, predictive or forward-looking in nature) or (b) in a
section of the disclosure schedule delivered concurrently herewith by the
Partnership Parties to Parent (the “Partnership Disclosure Schedule”)
corresponding to the applicable sections of this Article III to which such
disclosure applies (provided, however, that any information set forth in one
section of such Partnership Disclosure Schedule also shall be deemed to apply to
each other section of this Agreement to which its relevance is reasonably
apparent), the Partnership Parties hereby represent and warrant, jointly and
severally, to the Parent Parties as follows:
 

 
7
 
 
Section 3.1 Qualification, Organization, Subsidiaries, Etc.

(a) Intentionally Omitted.
 
(b) Each Partnership Party is a legal entity validly existing and in good
standing under the Laws of its respective jurisdiction of formation. Each
Partnership Party has all requisite limited partnership, limited liability
company or corporate, as the case may be, power and authority to own, lease and
operate its properties and assets and to carry on its business as presently
conducted, except where the failure to have such power and authority would not,
individually or in the aggregate, reasonably be expected to have a Partnership
Material Adverse Effect.
 
(c) Each Partnership Party is duly registered or qualified to do business and is
in good standing as a foreign limited partnership, limited liability company or
corporation, as the case may be, in each jurisdiction where the ownership,
leasing or operation of its assets or properties or the conduct of its business
requires such registration or qualification, except where the failure to be so
registered, qualified or in good standing would not, individually or in the
aggregate, have a Partnership Material Adverse Effect. The organizational or
governing documents of the Partnership Parties, as previously made available to
Parent, are in full force and effect. None of the Partnership Parties is in
violation of its organizational or governing documents.
 
Section 3.2 Capitalization.
 
(a) Partnership Managing GP and Partnership Non-Managing GP are general partners
of the Partnership. Partnership Managing GP is the sole managing general partner
of the Partnership. Partnership Managing GP and Partnership Non-Managing GP own
all of the general partner interests in the Partnership and such general partner
interests have been duly authorized and validly issued in accordance with
applicable Laws and the Partnership Agreement. Partnership Managing GP and
Partnership Non-Managing GP own all of the general partner interests free and
clear of any Encumbrances except pursuant to the organizational or governing
documents of any of the Partnership Parties.
 
(b) Intentionally Omitted.
 
(c) All of the outstanding equity interests of each Subsidiary of the
Partnership (i) have been duly authorized and validly issued in accordance with
applicable Laws and its organizational or governing documents and are fully paid
and nonassessable (except to the extent such nonassessability may be affected by
applicable Laws) and (ii) are owned directly or indirectly by the Partnership
free and clear of any Encumbrance except pursuant to the organizational or
governing documents of any of the Parent Group Entities and for Permitted
Encumbrances.
 
(d) All of the outstanding equity interests of each Partially Owned Entity of
the Partnership have been duly authorized and validly issued in accordance with
applicable Laws and its organizational or governing documents and are fully paid
and nonassessable (except to the extent such nonassessability may be affected by
applicable Laws).
 
(e) Except with respect to the ownership of any equity securities owned between
or among the Partnership Group Entities, none of the Partnership Parties owns or
will own at the Closing Date, directly or indirectly, any equity or long-term
debt securities of any corporation, partnership, limited liability company,
joint venture, association or other entity.

 
8
 

Section 3.3 Authority, No Violation; Consents and Approvals.
 
(a) Each of the Partnership Parties has all requisite limited liability company
or limited partnership power and authority to enter into this Agreement, to
carry out its obligations hereunder and, subject to the receipt of the
Unitholder Approval and the governmental filings and other matters referred to
in Section 3.3(e), to consummate the transactions contemplated hereby. The
execution, delivery and performance by each Partnership Party of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all requisite limited liability company or limited partnership
action on the part of such Partnership Party, except for (i) the Unitholder
Approval of this Agreement and the Merger and (ii) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware; and no other
vote or approval by any of (A) the Unitholders of the Partnership, (B)
stockholders of Partnership Managing GP or (C) other corporate, limited
liability company, partnership or other organizational votes, approvals or
proceedings in respect of the Partnership Parties are necessary to consummate
the transactions contemplated by this Agreement.
 
(b) This Agreement has been duly executed and delivered by each Partnership
Party and, assuming the due authorization, execution and delivery hereof by the
Parent Parties, constitutes a legal, valid and binding agreement of such
Partnership Party, enforceable against such Partnership Party in accordance with
its terms (except insofar as such enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting creditors’ rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law)).
 
(c) Partnership Managing GP has approved this Agreement and the transactions
contemplated by this Agreement and directed that this Agreement and the Merger
be submitted to a vote or written consent of Unitholders as required under
Section 17-211 of the DRULPA. The Board of Directors, upon the unanimous
recommendation of its Special Committee, at a meeting duly called and held, has,
(i) determined that this Agreement and the transactions contemplated hereby are
advisable, fair to and in the best interests of the Partnership and the
Unitholders (excluding the Purchasing Group), (ii) approved the Merger and this
Agreement and (iii) recommended that this Agreement and the Merger be approved
by the Unitholders (such recommendation, including the recommendation of the
Special Committee, the “Recommendation”).
 
(d) Except for matters expressly contemplated by this Agreement and matters
described in clauses (ii) and (iii) below that would not, individually or in the
aggregate, have a Partnership Material Adverse Effect, neither the execution and
delivery by the Partnership Parties of this Agreement, nor the consummation by
the Partnership Parties of the transactions contemplated hereby and the
performance by the Partnership Parties of this Agreement will (i) subject to
obtaining the Unitholder Approval, violate or conflict with any provision of the
organizational or governing documents of the Partnership Parties or the
Subsidiaries of the Partnership; (ii) result in any breach of or constitute a
default (or an event that, with notice or lapse of time or both, would become a
default) under, or give to others any right of termination, cancellation,
amendment or acceleration of any obligation or the loss of any benefit under any
Contract which any of the Partnership Parties or their respective Subsidiaries
is a party or by or to which any of their properties are bound; (iii) result in
the creation of an Encumbrance upon any of the assets of

 
9
 

any of the Partnership Parties or the Subsidiaries of the Partnership; or (iv)
subject to obtaining the Unitholder Approval and the governmental filings and
other matters referred to in Section 3.3(e), violate or conflict in any material
respect with any material Law applicable to the Partnership Parties or their
respective Subsidiaries.
 
(e) No consent, approval, order or authorization of, action by or in respect of,
or registration, declaration, notice to or filing with, any Governmental Entity
is required by or with respect to the Partnership Parties or the Subsidiaries of
the Partnership in connection with the execution and delivery of this Agreement
by the Partnership Parties or the consummation of the Merger or the other
transactions contemplated by this Agreement, except for (i) the filing with the
Securities and Exchange Commission (the “SEC”) of (A) an information statement
relating to the adoption by the Unitholders of this Agreement (as amended or
supplemented from time to time, the “Information Statement”) and a transaction
statement on Schedule 13E-3 (as amended or supplemented from time to time, the
“Schedule 13E-3”), and (B) such reports under the Securities Exchange Act of
1934, as amended (including the rules and regulations promulgated thereunder,
the “Exchange Act”), as may be required in connection with this Agreement and
the Merger and the other transactions contemplated by this Agreement, (ii) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware and appropriate documents with the relevant authorities of other states
in which the Partnership or any of its Subsidiaries is qualified to do business,
(iii) any filings with and approvals of the NYSE MKT, (iv) approval of the
Settlement Agreement by the Court and (v) such other consents, approvals,
orders, authorizations, actions, registrations, declarations, notices and
filings the failure of which to be obtained or made, individually or in the
aggregate, would not (A) reasonably be expected to have a Partnership Material
Adverse Effect or (B) prevent or materially impede, interfere with, hinder or
delay the consummation of the transactions contemplated by this Agreement.
 
Section 3.4 SEC Reports and Compliance.
 
(a) The Partnership has filed or furnished all forms, documents, statements and
reports required to be filed or furnished prior to the date hereof by them with
the SEC since January 1, 2013 (such documents, together with all exhibits and
schedules thereto and all information incorporated therein by reference, the
“Partnership SEC Documents”). As of their respective dates, or, if revised,
amended, supplemented or superseded by a later-filed Partnership SEC Document,
as of the date of the last such revision, amendment, supplement or superseding
filing, the Partnership SEC Documents complied in all material respects, to the
extent in effect at the time of such filing, with the requirements of the
Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act, and
the Sarbanes-Oxley Act of 2002 (including the rules and regulations promulgated
thereunder, “SOX”) applicable to such Partnership SEC Documents. None of the
Partnership SEC Documents so filed or furnished contained any untrue statement
of a material fact or omitted to state any 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.
 
(b) The consolidated financial statements (including all related notes and
schedules) of the Partnership included in or incorporated by reference into the
Partnership SEC Documents (the “Partnership Financial Statements”) fairly
present, in all material respects, the consolidated financial position of the
Partnership and its Subsidiaries as at the respective dates thereof, and the

 
10
 
 
results of their operations and their cash flows for the respective periods then
ended (subject, in the case of the unaudited statements, to normal year-end
audit adjustments and to any other adjustments described therein, including the
notes thereto) in conformity with United States generally accepted accounting
principles (“GAAP”) (except, in the case of the unaudited statements, as
permitted by the SEC) applied on a consistent basis during the periods involved
(except as may be specified therein or in the notes thereto).
 
Section 3.5 No Undisclosed Liabilities. Neither the Partnership nor any of its
Subsidiaries has any indebtedness or liability (whether absolute, accrued,
contingent or otherwise) of any nature that is not accrued or reserved against
in the Partnership Financial Statements filed prior to the execution of this
Agreement or reflected in the notes thereto, other than (a) liabilities incurred
or accrued in the ordinary course of business consistent with past practice
since December 31, 2012 or (b) liabilities of the Partnership or any of its
Subsidiaries that would not, individually or in the aggregate, reasonably be
expected to have a Partnership Material Adverse Effect.
 
Section 3.6 Opinion of Financial Advisor. The Special Committee has received the
written opinion of Centerboard Securities, LLC, dated as of the date of this
Agreement, to the effect that, as of such date, and subject to the assumptions
and qualifications set forth therein, the Merger Consideration is fair, from a
financial point of view, to the Unitholders (other than the Purchasing Group).
 
Section 3.7 State Takeover Laws. No approvals are required under state takeover
or similar laws in connection with the performance by the Partnership Parties or
their Affiliates of their obligations under this Agreement or the transactions
contemplated hereby or thereby.
 
Section 3.8 Finders or Brokers. Except for Centerboard Securities, LLC, none of
the Partnership Parties (including through its respective board of directors (or
similar governing body) or any committee thereof) has engaged any investment
banker, broker or finder in connection with the transactions contemplated by
this Agreement who would be entitled to any fee or any commission in connection
with or upon consummation of the Merger or the other transactions contemplated
hereby.
 
Section 3.9 No Other Representations or Warranties.
 
(a) Except for the representations and warranties contained in this Article III
and except as otherwise expressly set forth in this Agreement or in the
agreements or certificates entered into in connection herewith or contemplated
hereby, none of the Partnership Parties nor any other Person on behalf of the
Partnership Parties makes any other representation or warranty of any kind or
nature, express or implied, in connection with this Agreement or the
transactions contemplated by this Agreement.
 
(b) Except for the representations and warranties expressly set forth in this
Agreement or in the agreements or certificates entered into in connection
herewith or contemplated hereby, none of the Partnership Parties has relied on
any representation or warranty, express or implied, with respect to the Parent
Parties or with respect to any other information provided or made

 
11
 

available to the Partnership Parties in connection with the transactions
contemplated by this Agreement.
 
ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES
 
Except as disclosed in a section of the disclosure schedule delivered
concurrently herewith by Parent to the Partnership Parties immediately prior to
the execution of this Agreement (the “Parent Disclosure Schedule”) corresponding
to the applicable sections of this Article IV to which such disclosure applies
(provided, however, that any information set forth in one section of such Parent
Disclosure Schedule also shall be deemed to apply to each other section of this
Agreement to which its relevance is reasonably apparent), the Parent Parties
hereby represent and warrant, jointly and severally, to the Partnership Parties
as follows:
 
Section 4.1 Qualification: Organization.
 
(a) Each of the Parent Parties is a legal entity validly existing and in good
standing under the Laws of its respective jurisdiction of formation. Each of the
Parent Parties has all requisite limited partnership, limited liability company
or corporate, as the case may be, power and authority to own, lease and operate
its properties and assets and to carry on its business as presently conducted.
 
(b) Each of the Parent Parties is duly registered or qualified to do business
and is in good standing as a foreign limited partnership, limited liability
company or corporation, as the case may be, in each jurisdiction where the
ownership, leasing or operation of its assets or properties or the conduct of
its business requires such registration or qualification, except where the
failure to be so registered, qualified or in good standing would not,
individually or in the aggregate, have a Parent Material Adverse Effect. The
organizational or governing documents of the Parent Parties, as previously made
available to the Partnership Parties, are in full force and effect. None of the
Parent Parties is in violation of its organizational or governing documents.
 
Section 4.2 Authority; No Violation; Consents and Approvals.
 
(a) Each of the Parent Parties has all requisite limited liability company,
limited partnership or corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
each Parent Party of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite limited liability
company, limited partnership or corporate action on the part of such Parent
Party, and no other limited liability company, limited partnership or corporate
proceedings on the part of a Parent Party are necessary to consummate the
transactions contemplated by this Agreement.
 
(b) This Agreement has been duly executed and delivered by each Parent Party
and, assuming the due authorization, execution and delivery hereof by the
Partnership Parties, constitutes a legal, valid and binding agreement of such
Parent Party, enforceable against such Parent Party in accordance with its terms
(except insofar as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws

 
12
 

relating to or affecting creditors’ rights generally and by general principles
of equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law).
 
(c) Except for matters expressly contemplated by this Agreement and matters
described in clauses (ii) and (iii) below that would not, individually or in the
aggregate, have a Parent Material Adverse Effect, neither the execution and
delivery by the Parent Parties of this Agreement, nor the consummation by the
Parent Parties of the transactions contemplated hereby and the performance by
the Parent Parties of this Agreement will (i) violate or conflict with any
provision of the organizational or governing documents of the Parent Parties;
(ii) result in any breach of or constitute a default (or an event that, with
notice or lapse of time or both, would become a default) under, or give to
others any right of termination, cancellation, amendment or acceleration of any
obligation or the loss of any benefit under any Contract to which any of the
Parent Parties is a party or by or to which any of their properties are bound;
(iii) result in the creation of an Encumbrance upon any of the assets of any of
the Parent Parties; or (iv) violate or conflict in any material respect with any
material Law applicable to the Parent Parties.
 
(d) No consent, approval, order or authorization of, action by or in respect of,
or registration, declaration, notice to or filing with, any Governmental Entity
is required by or with respect to the Parent Parties in connection with the
execution and delivery of this Agreement by the Parent Parties or the
consummation of the Merger or the other transactions contemplated by this
Agreement, except for (i) the filing with the SEC of (A) the Information
Statement and the Schedule 13E-3, and (B) such reports under the Exchange Act as
may be required in connection with this Agreement and the Merger and the other
transactions contemplated by this Agreement, (ii) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the Partnership
or any of its subsidiaries is qualified to do business, (iii) any filings with
and approvals of the NYSE MKT, (iv) approval of the Settlement Agreement by the
Court and (v) such other consents, approvals, orders, authorizations, actions,
registrations, declarations, notices and filings the failure of which to be
obtained or made, individually or in the aggregate, would not (A) reasonably be
expected to have a Parent Material Adverse Effect or (B) prevent or materially
impede, interfere with, hinder or delay the consummation of the transactions
contemplated by this Agreement.
 
Section 4.3 Intentionally Omitted.
 
Section 4.4 Solvency. As of the Effective Time and immediately after the
consummation of the Merger, the Parent Parties and each of their Affiliates,
including the Partnership, shall be solvent. No transfer of property is being
made and no obligation is being incurred in connection with the transactions
contemplated by this Agreement with the intent to hinder, delay or defraud
either present or future creditors of any of the Parent Parties and each of
their Affiliates, including the Partnership. In connection with the transactions
contemplated hereby, the Parent Parties and their Affiliates have not incurred,
nor plan to incur, debts beyond its ability to pay as they become absolute and
matured. As of the Effective Time and immediately after the consummation of the
Merger, the remaining capital of the Parent Parties and their Affiliates will be
a reasonable amount for the business in which they are engaged.

 
13
 

Section 4.5 Ownership and Operations of Merger Sub. As of the date of this
Agreement, all of the issued and outstanding equity interests of Merger Sub are,
and at the Effective Time will be, owned by Parent, and such equity interests of
Merger Sub have been duly authorized and validly issued in accordance with
applicable Laws and the limited liability company agreement of Merger Sub and
are fully paid and nonassessable (except to the extent such nonassessability may
be affected by Sections 18-607 and 18-804 of DLLCA).
 
Section 4.6 Certain Arrangements. As of the date of this Agreement and except as
contemplated by this Agreement, there are no contracts or other agreements,
arrangements or understandings (whether oral or written) or commitments to enter
into agreements, arrangements or understandings (whether oral or written) (i)
between the Parent Parties or any of their respective Affiliates, on the one
hand, and any member of the Partnership Parties’ management or directors, on the
other hand, as of the date hereof that relate in any way to the Partnership
Parties’ or the Merger or (ii) between the Parent Parties or any of their
respective Affiliates, on the one hand, and any other Person, on the other hand,
pursuant to which any Unitholder of the Partnership would be entitled to receive
consideration of a different amount or nature than the Merger Consideration or
pursuant to which any Unitholder of the Partnership agrees to vote to adopt this
Agreement or the Merger or agrees to vote against any Alternative Proposal.
 
Section 4.7 No Third Party Transaction. Neither the Parent Parties nor any of
the respective Affiliates have entered into any agreement, arrangement or
understanding with any third party concerning the possible sale of the Surviving
Entity, equity interests in the Surviving Entity or all or substantially all the
assets of the Surviving Entity to a third party after the Merger has been
consummated.
 
Section 4.8 Finders or Brokers. None of the Parent Parties has engaged any
investment banker, broker or finder in connection with the transactions
contemplated by this Agreement who might be entitled to any fee or any
commission in connection with or upon consummation of the Merger or the other
transactions contemplated hereby.
 
Section 4.9 Access to Information; No Other Representations or Warranties;
Disclaimer.
 
(a) Each of Parent and Merger Sub has conducted its own investigations of the
Partnership Group Entities and acknowledges that it has been provided adequate
access to the personnel, properties, premises and records of the Partnership
Group Entities for such purpose.
 
(b) Except for the representations and warranties contained in this Article IV
and except as otherwise expressly set forth in this Agreement or in the
agreements or certificates entered into in connection herewith or contemplated
hereby, none of the Parent Parties nor any other Person on behalf of the Parent
Parties makes any other representation or warranty of any kind or nature,
express or implied, in connection with the transactions contemplated by this
Agreement.
 
(c) Except for the representations and warranties expressly set forth in this
Agreement or in the agreements or certificates entered into in connection
herewith or contemplated hereby, neither Parent nor Merger Sub has relied on any
representation or warranty, express or implied, with respect to the Partnership
Group Entities or with respect to any other information provided or made
available to Parent or Merger Sub in connection with the transactions
contemplated by

 
14
 

this Agreement. None of the Partnership Group Entities nor any other Person will
have or be subject to any liability or indemnification obligation to Parent,
Merger Sub or any other Person resulting from the distribution to Parent or
Merger Sub, or use by Parent or Merger Sub of any such information, including
any information, documents, projections, forecasts or other material made
available to Parent or Merger Sub or management presentations in expectation of
the transactions contemplated by this Agreement.
 
ARTICLE V
 
COVENANTS AND AGREEMENTS
 
Section 5.1 Intentionally Omitted.
 
Section 5.2 Intentionally Omitted.
 
Section 5.3 No Solicitation.
 
(a) The Partnership Parties agree that from and after the date hereof until the
Effective Time or, if earlier, the termination of this Agreement in accordance
with Article VII, the Partnership Parties shall not, and shall cause their
officers, directors, employees, agents and representatives (“Representatives”)
not to, directly or indirectly,
 
(i) initiate, solicit, encourage or facilitate any inquiries, proposals or
offers with respect to, or the making or completion of, an Alternative Proposal;
 
(ii) engage or participate in any negotiations concerning, or provide or cause
to be provided any non-public information or data relating to, the Partnership
Group Entities, in connection with, or have any discussions with any person
relating to, an Alternative Proposal, or otherwise encourage or facilitate any
effort or attempt to make or implement an Alternative Proposal, in each case,
other than with the Parent Parties;
 
(iii) approve, endorse or recommend, or propose publicly to approve, endorse or
recommend, or execute or enter into, any letter of intent, agreement in
principle, merger agreement, acquisition agreement, option agreement or other
similar agreement relating to any Alternative Proposal; or
 
(iv) resolve to propose or agree to do any of the foregoing.
 
(b) Intentionally Omitted.
 
(c) Intentionally Omitted.
 
(d) Intentionally Omitted.
 
(e) Neither the Board of Directors nor the Special Committee shall (i) withdraw,
modify or qualify in a manner adverse to Parent, or resolve to or publicly
propose to withdraw, modify or qualify in a manner adverse to Parent, the
Recommendation or (ii) approve, endorse or recommend (or publicly propose to
approve, endorse or recommend) any Alternative Proposal or

 
15
 

enter into a definitive agreement with respect to an Alternative Proposal (any
of the actions set forth in the foregoing clause (i) or clause (ii), whether
taken by the Board of Directors or any committee thereof, a “Change in
Recommendation”).
 
(f) Intentionally Omitted.
 
(g) Nothing contained in this Agreement shall prohibit the Partnership Parties,
the Board of Directors or the Special Committee from complying with the Exchange
Act, including disclosing to the Unitholders of the Partnership a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated thereunder.
 
(h) Intentionally Omitted.
 
(i) As used in this Agreement:
 
(i) “Alternative Proposal” shall mean any inquiry, proposal or offer from any
Person or group of Persons other than the Parent Parties relating to, or that
could reasonably be expected to lead to, in one transaction or a series of
related transactions, (i) a merger, tender or exchange offer, consolidation,
reorganization, reclassification, recapitalization, liquidation or dissolution,
or other business combination involving any Partnership Group Entity, (ii) the
issuance by the Partnership of (A) any general partner interest or (B) any class
of equity interest in the Partnership constituting more than 30% of such class
of equity interest in the Partnership or (iii) the acquisition in any manner,
directly or indirectly, of (A) any general partner interest of the Partnership,
(B) any class of equity interest in the Partnership constituting more than 30%
of such class of equity interest in the Partnership or (C) more than 30% of the
consolidated total assets of the Partnership Group Entities (including equity
interests in any Subsidiary or Partially Owned Entity of the Partnership), in
each case other than the Merger.
 
(ii) “Intervening Event” means a material event, change, development, effect,
fact, circumstance or occurrence that was not known or reasonably foreseeable to
the Board of Directors or the Special Committee as of the date of this
Agreement, which becomes known prior to the Unitholder Approval.
 
Section 5.4 Preparation of Information Statement and Schedule 13E-3.
 
(a) In cooperation with and subject to the review of the Special Committee,
promptly following the date of this Agreement, the Partnership Parties shall
prepare and file with the SEC the Information Statement, and the Partnership
Parties and Parent shall prepare and file with the SEC the Schedule 13E-3. The
Partnership Parties and Parent shall cooperate with each other in connection
with the preparation of the foregoing documents. The Partnership Parties will
use their commercially reasonable efforts to have the Information Statement, and
the Partnership Parties and Parent will use their commercially reasonable
efforts to have the Schedule 13E-3, cleared by the SEC as promptly as
practicable after such filing. The Partnership Parties will use their
commercially reasonable efforts to cause the Information Statement to be mailed
to the Unitholders of the Partnership as promptly as practicable after the
Information Statement is cleared by the SEC. The Partnership Parties shall as
promptly as practicable notify Parent of the receipt of any oral or written
comments from the SEC relating to the Information Statement or Schedule 13E-3.
The Partnership Parties shall cooperate and provide Parent with a reasonable

 
16
 

opportunity to review and comment on the draft of the Information Statement
(including each amendment or supplement thereto) and the Partnership Parties and
Parent shall cooperate and provide each other with a reasonable opportunity to
review and comment on the draft Schedule 13E-3 (including each amendment or
supplement thereto) and all responses to requests for additional information by
and replies to comments of the SEC, prior to filing such with or sending such to
the SEC, and the Partnership Parties and Parent will provide each other with
copies of all such filings made and correspondence with the SEC with respect
thereto. Partnership counsel shall, at the instruction of the Partnership
Parties, prepare and file with the SEC the Schedule 13E-3, Information Statement
and all other documents required to be filed in connection therewith.
 
(b) Each of the Partnership Parties and the Parent Parties agrees that none of
the information supplied or to be supplied by such party or its Affiliates for
inclusion or incorporation by reference (i) in the Information Statement will at
the time of the mailing of the Information Statement to the Unitholders and at
the time of any amendments thereof or supplements thereto, and (ii) in the
Schedule 13E-3 to be filed with the SEC concurrently with the filing of the
Information Statement, will, at the time of its filing with the SEC, and at the
time of any amendments thereof or supplements thereto, 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.
 
(c) Intentionally Omitted.
 
Section 5.5 Efforts; Notification.
 
(a) Subject to the terms and conditions set forth in this Agreement, each of the
parties hereto shall use their commercially reasonable efforts (subject to, and
in accordance with, applicable Law) to take promptly, or to cause to be taken,
all actions, and to do promptly, or to cause to be done, and to assist and to
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective the Merger and the other transactions
contemplated hereby, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings and the taking of all steps as
may be necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby and (iv) the execution and delivery of any additional instruments
reasonably necessary to consummate the transactions contemplated hereby.
 
(b) The Partnership Parties and Parent Parties shall cooperate with each other
in connection with the making of all such filings, including providing copies of
all such documents to the non-filing party and its advisors prior to filing and,
if requested, to accept all reasonable additions, deletions or changes suggested
in connection therewith. The Partnership Parties and Parent Parties shall use
their respective commercially reasonable efforts to furnish to each other all
information required for any application or other filing to be made pursuant to
the rules and

 
17
 

regulations of any applicable Law (including all information required to be
included in the Information Statement and the Schedule 13E-3) in connection with
the transactions contemplated by this Agreement.
 
(c) The Partnership Parties shall give prompt notice to Parent and the
Purchasing Group, and Parent and the Purchasing Group shall give prompt notice
to the Partnership Parties, of (i) the receipt of any notice or other
communication in writing from any person alleging that the consent or approval
of such third party is or may be required in connection with the transactions
contemplated by this Agreement; (ii) the receipt of any notice or other
communication from any Governmental Entity or the NYSE MKT (or any other
securities market) in connection with the transactions contemplated by this
Agreement; or (iii) the discovery of any fact or circumstance that, or the
occurrence or non-occurrence of any event the occurrence or non-occurrence of
which, would be reasonably likely to cause or result in any of the conditions
set forth in Article VII not being satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement or limit the remedies available to the party receiving such
notice.
 
Section 5.6 Publicity. The initial press release with respect to the execution
of this Agreement shall be a joint press release reasonably acceptable to Parent
and the Partnership Parties (acting through the Special Committee). Thereafter,
so long as this Agreement is in effect, none of the Partnership Parties or
Parent Parties, nor any of their respective Affiliates shall issue or cause the
publication of any press release or other announcement with respect to the
Merger, this Agreement or the other transactions contemplated hereby without the
prior consultation of the other parties, except as may be required by applicable
Law or by obligations pursuant to any listing agreement with any national
securities exchange.
 
Section 5.7 Indemnification and Insurance.
 
(a) The partnership agreement of the Surviving Entity shall, with respect to
indemnification of directors and officers, not be amended, repealed or otherwise
modified after the Effective Time in any manner that would adversely affect the
rights thereunder of the Persons who at any time prior to the Effective Time
were identified as prospective indemnitees under the Partnership Agreement in
respect of actions or omissions occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement).
 
(b) All rights to indemnification, advancement of expenses and exculpation from
liabilities for acts or omissions occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement) now existing in
favor of the Indemnified Parties as provided in the Partnership Agreement, under
applicable Delaware law, or otherwise, shall continue in full force and effect
in accordance with their terms after the Effective Time.
 
(c) For a period of five (5) years after the Effective Time, Parent and
Partnership Managing GP shall, and Parent and Partnership Managing GP shall
cause the Surviving Entity (and its successors or assigns) to, maintain
officers’ and directors’ liability insurance covering each person who is
immediately prior to the Effective Time, or has been at any time prior to the
Effective Time, an officer or director of any of the Partnership Group Entities
and each person

 
18
 

who immediately prior to the Effective Time is serving or prior to the Effective
Time has served at the request of any of the Partnership Group Entities as a
director, officer, trustee or fiduciary of another Person (collectively, the
“Indemnified Parties”) who are or at any time prior to the Effective Time were
covered by the existing officers’ and directors’ liability insurance applicable
to the Partnership Group Entities (“D&O Insurance”) on terms substantially no
less advantageous to the Indemnified Parties than such existing insurance with
respect to acts or omissions, or alleged acts or omissions, prior to the
Effective Time (whether claims, actions or other proceedings relating thereto
are commenced, asserted or claimed before or after the Effective Time). Parent
and the Partnership Managing GP shall have the right to cause coverage to be
extended under the D&O Insurance by obtaining a five-year “tail” policy on terms
and conditions no less advantageous than the existing D&O Insurance, and such
“tail” policy shall satisfy the provisions of this Section 5.7(c).
 
(d) The rights of each Indemnified Party hereunder shall be in addition to any
other rights such Indemnified Party may have under the governing documents of
any Partnership Group Entity, under applicable Delaware Law, under any
applicable agreements, by contract or otherwise. The provisions of this Section
5.7 shall survive the consummation of the Merger and expressly are intended to
benefit, and shall be enforceable by, each of the Indemnified Parties.
 
(e) In the event Parent, Partnership Managing GP or any of their respective
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving entity in such consolidation or merger
or (ii) transfers all or substantially all of its properties and assets to any
person, then and in either such case, Parent or Partnership Managing GP, as the
case may be, shall cause proper provision to be made so that its successors or
assigns shall assume the obligations set forth in this Section 5.7.
 
Section 5.8 Unitholder Litigation. The Partnership Parties shall give Parent the
opportunity to participate in the defense or settlement of any litigation
arising out of or related to the transactions contemplated by this Agreement
against any of the Partnership Parties and/or their respective directors
relating to the Merger or any other transactions contemplated hereby and no such
settlement shall in any event be agreed to without Parent’s consent (which shall
not be unreasonably withheld, conditioned or delayed).
 
Section 5.9 Delisting. The Partnership and Parent shall cooperate and use
reasonable best efforts to cause the delisting of the Units from the NYSE MKT
and the deregistration of such Units as promptly as practicable following the
Effective Time in compliance with applicable Law.
 
Section 5.10 No Financing Commitment. For the avoidance of doubt, it shall not
be a condition to the obligations of the Parent Parties to effect the Merger for
the Parent Parties to obtain financing to enable them to make payment of the
aggregate Merger Consideration and the Parent Parties’ related fees and expenses
or any other financing.
 
Section 5.11 Section 16 Matters. Prior to the Effective Time, the Partnership
Parties shall take such steps, to the extent required and permitted, to cause
the transactions contemplated by this Agreement, including any dispositions of
equity securities (including derivative securities) of the Partnership by each
individual who is or will be subject to the reporting requirements of

 
19
 

Section 16(a) of the Exchange Act with respect to the Partnership, to be exempt
under Rule 16b-3 promulgated under the Exchange Act.
 
ARTICLE VI
 
CONDITIONS TO THE MERGER
 
Section 6.1 Conditions to Each Party’s Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment (or waiver by all parties) at or prior to the Effective Time of
each of the following conditions:
 
(a) the Unitholder Approval of this Agreement and the Merger shall have been
obtained;
 
(b) Final Approval (as such term is defined in the Settlement Agreement) of the
Settlement Agreement;
 
(c) since the date hereof, there shall not have been any state of facts, event,
change, effect, development, condition or occurrence (or, with respect to facts,
events, changes, effects, developments, conditions, or occurrences existing
prior to the date hereof, any worsening thereof) that, individually or in the
aggregate, has had or would reasonably be expected to have a Partnership
Material Adverse Effect; and
 
(d) no order, injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition enacted or promulgated by
any Governmental Entity restraining, enjoining or otherwise prohibiting the
consummation of the Merger shall be in effect;
 
Section 6.2 Conditions to Obligation of the Partnership Parties to Effect the
Merger. The obligations of the Partnership Parties to effect the Merger are
further subject to the fulfillment at or prior to the Effective Time of each of
the following conditions, any one or more of which may be waived in whole or in
part by the Partnership Parties (acting through the Special Committee):
 
(a) the representations and warranties of the Parent Parties contained in
Section 4.1(a) (Qualification; Organization) and Section 4.2 (Authority; No
Violation; Consents and Approvals) shall be true and correct in all respects, in
each case at and as of the date of this Agreement and at and as of the Closing
Date as though made at and as of the Closing Date and (ii) the representations
and warranties of the Parent Parties set forth in this Agreement (other than
those referenced in clause (i) of this paragraph) shall be true and correct in
all respects (disregarding any materiality or Parent Material Adverse Effect
qualifiers therein) at and as of the date of this Agreement and at and as of the
Closing Date as though made at and as of the Closing Date, except where any
failures of such representations or warranties to be so true and correct would
not have, individually or in the aggregate, a Parent Material Adverse Effect;
provided, however, that, with respect to clauses (i) and (ii) of this paragraph,
representations and warranties that are made as of a particular date or period
shall be true and correct (in the manner set forth in clause (i) or (ii), as
applicable) only as of such date or period;
 
(b) the Parent Parties shall have performed all obligations and complied with
all covenants required by this Agreement to be performed or complied with by
them that are qualified by materiality or Parent Material Adverse Effect and
shall have in all material respects

 
20
 

performed all other obligations and complied with all other covenants required
by this Agreement to be performed or complied with by them; and
 
(c) Parent shall have delivered to the Partnership Parties a certificate, dated
the Effective Time and signed by its Chief Executive Officer or another senior
executive officer, certifying to the effect that the conditions set forth in
Sections 6.2(a) and 6.2(b) have been satisfied.
 
Section 6.3 Conditions to Obligation of the Parent Parties to Effect the Merger.
The obligations of the Parent Parties to effect the Merger are further subject
to the fulfillment at or prior to the Effective Time of each of the following
conditions, any one or more of which may be waived in whole or in part by the
Parent Parties:
 
(a) (i) the representations and warranties of the Partnership Parties contained
in Section 3.1(b) (Qualification, Organization, Subsidiaries, Etc.), Section 3.2
(Capitalization) and Section 3.3 (Authority; No Violation; Consents and
Approvals) shall be true and correct in all respects, except, in the case of
Section 3.2, for such inaccuracies as are de minimis in the aggregate, in each
case at and as of the date of this Agreement and at and as of the Closing Date
as though made at and as of the Closing Date and (ii) the representations and
warranties of the Partnership Parties set forth in this Agreement (other than
those referenced in clause (i) of this paragraph) shall be true and correct in
all respects (disregarding any materiality or Partnership Material Adverse
Effect qualifiers therein) as of the date of this Agreement and at and as of the
Closing Date as though made at and as of the Closing Date, except where any
failures of such representations or warranties to be so true and correct would
not have, individually or in the aggregate, a Partnership Material Adverse
Effect; provided, however, that, with respect to clauses (i) and (ii) of this
paragraph, representations and warranties that are made as of a particular date
or period shall be true and correct (in the manner set forth in clause (i) or
(ii), as applicable) only as of such date or period; provided, further, that the
representations and warranties referenced in clauses (i) and (ii) shall not be
deemed to be inaccurate to the extent that the Parent Parties, J.D. Nichols or
Brian Lavin had knowledge of such inaccuracy;
 
(b) the Partnership Parties shall have performed all obligations and complied
with all covenants required by this Agreement to be performed or complied with
by them that are qualified by materiality or Partnership Material Adverse Effect
and shall have in all material respects performed all other obligations and
complied with all other covenants required by this Agreement to be performed or
complied with by them; and
 
(c) the Partnership Parties shall have delivered to the Parent Parties a
certificate, dated the Effective Time and signed by an executive officer of the
Partnership Managing GP, certifying to the effect that the conditions set forth
in Sections 6.3(a) and 6.3(b) have been satisfied.
 
Section 6.4 Frustration of Conditions. No party may rely on the failure of any
condition set forth in Section 6.1, 6.2 or 6.3, as the case may be, to be
satisfied if such failure was caused by such party’s breach in any material
respect of any provision of this Agreement or failure to use commercially
reasonable efforts to consummate the Merger and the other transactions
contemplated hereby, as required by and subject to Section 5.5.

 
21
 
 
ARTICLE VII
 
TERMINATION
 
Section 7.1 Termination or Abandonment. Notwithstanding anything contained in
this Agreement to the contrary, this Agreement may be terminated and abandoned
at any time prior to the Effective Time, whether before or after any approval of
the matters presented in connection with the Merger by the Unitholders of the
Partnership:
 
(a) by the mutual written consent of the Partnership Parties (acting through the
Special Committee) and the Parent Parties;
 
(b) by either the Partnership Parties (acting through the Special Committee) or
the Parent Parties, if:
 
(i) the Effective Time shall not have occurred on or before September 30, 2014
(the “Outside Date”), unless the failure of the Closing to occur by the Outside
Date shall be due to the failure of the party seeking to terminate this
Agreement to perform or observe the covenants and agreements of such party set
forth in this Agreement;
 
(ii) an injunction, other legal restraint or order of any Governmental Entity
shall have been entered permanently restraining, enjoining or otherwise
prohibiting the consummation of the Merger and such injunction, other legal
restraint or order shall have become final and nonappealable; provided that the
party seeking to terminate this Agreement pursuant to this Section 7.1(b)(ii)
shall have complied in all material respects with its obligations in Section
5.5;
 
(iii) Intentionally Omitted; or
 
(iv) the Court does not grant Final Approval (as such term is defined in the
Settlement Agreement) of the Settlement Agreement;
 
(c) by the Partnership Parties (acting through the Special Committee), if the
Parent Parties shall have breached or failed to perform any of its
representations, warranties, covenants or other agreements contained in this
Agreement, which breach or failure to perform, either individually or in the
aggregate with other breaches by the Parent Parties, would result in, if
occurring or continuing on the Closing Date, the failure of the conditions set
forth in Section 6.2, and which is not curable or, if curable, is not cured by
the earlier of (A) the Outside Date and (B) 30 days following written notice of
such breach or failure to perform to the Parent Parties; provided that the right
to terminate this Agreement pursuant to this paragraph shall not be available to
the Partnership Parties if, at such time, a condition set forth in Section 6.3
is not capable of being satisfied; or
 
(d) by the Parent Parties, if any Partnership Party shall have breached or
failed to perform any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform,
either individually or in the aggregate with other breaches by the Partnership
Parties, would result in, if occurring or continuing on the Closing Date, the
failure of the conditions set forth in Section 6.3, and which is not curable or,
if curable, is not cured by the earlier of (A) the Outside Date and (B) 30 days
following written notice of

 
22
 

such breach or failure to perform to the Partnership Parties; provided that the
right to terminate this Agreement pursuant to this paragraph shall not be
available to the Parent Parties if, at such time, a condition set forth in
Section 6.2 is not capable of being satisfied.
 
Section 7.2 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 7.1, this Agreement shall terminate and become null and void
(except for the provisions of Sections 7.2 and 7.3 and Article VIII), and there
shall be no liability on the part of the Partnership Parties or the Parent
Parties to the other except as provided in Section 7.3 and Article VIII, except
that no such termination shall relieve any party from liability arising out of
any knowing, willful or intentional breach of any provision of this Agreement,
in which case the aggrieved party shall be entitled to all rights and remedies
available at law or in equity.
 
Section 7.3 Expenses. Except as provided in this Section 7.3 and except for (i)
the expenses in connection with printing and mailing the Information Statement
and (ii) all fees relating to SEC filings required by the transactions
contemplated herein (which fees and expenses shall be borne, in each case,
equally by the Partnership Parties and the Parent Parties), all fees and
expenses incurred by the parties hereto shall be borne solely by the party that
has incurred such fees and expenses.
 
ARTICLE VIII

MISCELLANEOUS
 
Section 8.1 Nonsurvival of Representations, Warranties, Covenants and
Agreements. None of the representations, warranties, covenants and agreements
set forth in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time, except for Section 5.7 and for those
other covenants and agreements contained in this Agreement that by their terms
apply or are to be performed in whole or in part after the Effective Time.
 
Section 8.2 Amendments; Waivers. At any time prior to the Effective Time, any
provision of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
the Partnership Parties (acting through the Special Committee) and the Parent
Parties, or in the case of a waiver, by the party against whom the waiver is to
be effective; provided, however, that after receipt of Unitholder Approval, if
any such amendment or waiver shall by the Partnership Agreement, applicable Law
or in accordance with the rules and regulations of the NYSE MKT require further
approval of the Unitholders of the Partnership, the effectiveness of such
amendment or waiver shall be subject to the approval of the Unitholders of the
Partnership. Notwithstanding the foregoing, no failure or delay by the
Partnership Parties or the Parent Parties in exercising any right hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise of any other right hereunder.
 
Section 8.3 Notices. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile or electronic transmission (with
confirmation by telephone or return facsimile or electronic transmission), by
reliable overnight delivery service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-class

 
23
 

postage prepaid), addressed as follows (or at such other address for a party as
shall be specified by like notice):
 
To Parent or Merger Sub:
 
NTS Realty Capital, Inc.
600 North Hurstbourne Parkway, Suite 300
Louisville, Kentucky 40222
Attention: Brian F. Lavin
Facsimile: (502) 426-4994
Email: blavin@ntsdevco.com

with copies to:
 
Fore, Miller & Schwartz
200 South Fifth Street, Suite 700 North
Louisville, KY 40202
Attention: Stephen H. Miller
Facsimile: (502) 589-1637
Email: smiller@stephenhmiller.com
 
To Partnership Managing GP, Partnership or Special Committee:
 
NTS Realty Capital, Inc.
600 North Hurstbourne Parkway, Suite 300
Louisville, Kentucky 40222
Attention: Mark D. Anderson
Email: mark@andersonrealestcap.com
 
with copies to:
 
Stites & Harbison PLLC
400 West Market Street, Suite 1800
Louisville, KY 40202
Attention: C. Craig Bradley, Jr.
Email: cbradley@stites.com
Facsimile: (502) 587-6391
 
and
 
Taft Stettinius & Hollister LLP
111 East Wacker Drive, Suite 2800
Chicago, IL 60601
Attention: Cezar M. Froelich
Facsimile: (312) 527-9897
Email: cfroelich@taftlaw.com

 
24
 
 
Section 8.4 Interpretation; Construction; Severability.
 
(a) When a reference is made in this Agreement to Articles, Sections, Exhibits
or Schedules, such reference shall be to an Article or Section of or Exhibit or
Schedule to this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words “include,” “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation.” The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The word “or” shall be deemed to mean “and/or.” The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. All schedules and exhibits hereto
shall be deemed part of this Agreement and included in any reference to this
Agreement.
 
(b) The parties have participated jointly in negotiating and drafting this
Agreement. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.
 
(c) If any term, provision, covenant or restriction contained in this Agreement
is held by a court or a federal or state regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions and covenants and restrictions contained in this Agreement shall
remain in full force and effect, and shall in no way be affected, impaired or
invalidated. If for any reason such court or regulatory agency determines that
any provision, covenant or restriction is invalid, void or unenforceable, it is
the express intention of the parties that such provision, covenant or
restriction be enforced to the maximum extent permitted.
 
(d) In the event of any conflict between this Agreement and the Settlement
Agreement or any Court Order relating thereto, the terms of the Settlement
Agreement or Court Order, as applicable, shall control.
 
Section 8.5 Governing Law; Jurisdiction. This Agreement, and all claims or
causes of action (whether at law, in contract or in tort) that may be based
upon, arise out of or relate to this Agreement or the negotiation, execution or
performance hereof, shall be governed by and construed in accordance with the
laws of the State of Delaware, without giving effect to any choice or conflict
of law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware. In addition, each of the parties hereto
irrevocably agrees that any legal action or proceeding with respect to this
Agreement and the rights and obligations arising hereunder, or for recognition
and enforcement of any judgment in respect of this Agreement and the rights and
obligations arising hereunder brought by the other party hereto or its
successors or assigns, shall be brought and determined exclusively in the
Delaware Court of Chancery (or a proper Delaware state court if the Court of
Chancery does not have subject matter jurisdiction) or the federal courts
sitting in the State of Delaware. Each of the parties hereto submits to the
jurisdiction of any such court in any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of, or in
connection with, this Agreement or the transactions contemplated hereby and
hereby irrevocably waives the benefit of jurisdiction derived from present or
future domicile or otherwise in such action or proceeding. Each party hereto
irrevocably waives, to the

 
25
 

fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
 
Section 8.6 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION, DIRECTLY OR INDIRECTLY, ARISING OUT OF, OR RELATING
TO, THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.6.
 
Section 8.7 Specific Performance. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in the Delaware Court of Chancery (or a proper Delaware state
court if the Court of Chancery does not have subject matter jurisdiction) or the
federal courts sitting in the State of Delaware, this being in addition to any
other remedy to which they are entitled at law or in equity. In connection with
any request for specific performance or equitable relief by any party hereto,
each of the other parties waive any requirement for the security or posting of
any bond in connection with such remedy.
 
Section 8.8 Assignment: Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
 
Section 8.9 Counterparts; Effectiveness. This Agreement may be executed in two
or more counterparts (including by facsimile or other electronic means), all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the parties and delivered to the
other party, it being understood that each party need not sign the same
counterpart.
 
Section 8.10 Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the schedules, documents and the instruments referred to in this
Agreement) constitutes the entire agreement and supersedes all other prior
agreements and understandings, both written and oral, between the parties, or
any of them, with respect to the subject matter hereof and thereof and, except
as set forth in Section 5.7 and except for the rights of Unitholders whose Units
are converted into the right to receive the Merger Consideration pursuant to
Section

 
26
 

2.1 to receive such Merger Consideration after the Effective Time, is not
intended to and shall not confer upon any person other than the parties hereto
any rights or remedies hereunder.
 
Section 8.11 No Recourse. This Agreement may only be enforced against, and any
claims or causes of action that may be based upon, arise out of or relate to
this Agreement, or the negotiation, execution or performance of this Agreement
may only be made against the entities that are expressly identified as parties
hereto and no past, present or future Affiliate, director, officer, employee,
incorporator, member, manager, partner, stockholder, agent, attorney or
representative of any party hereto shall have any liability for any obligations
or liabilities of the parties to this Agreement or for any claim based on, in
respect of, or by reason of, the transactions contemplated hereby.
 
Section 8.12 Certain Definitions. For purposes of this Agreement, the following
terms will have the following meanings when used herein:
 
(a) “Affiliates” means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term “control” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise. Notwithstanding the foregoing, for purposes of this Agreement (a)
each of the Parent Parties and their respective members and managers and their
Affiliates shall not be deemed to be an Affiliate of the Partnership or any of
the Subsidiaries of Partnership, and (b) none of the Partnership or any of the
Subsidiaries of Partnership shall be deemed to be an Affiliate of the Parent
Parties. In addition, for purposes of this Agreement, each member of the
Purchasing Group shall be treated as an Affiliate of the Parent Parties.
 
(b) “Business Day” means any day other than a Saturday, Sunday or a day on which
the banks in New York are authorized by law or executive order to be closed.
 
(c) “Contracts” means any contracts, agreements, licenses, notes, bonds,
mortgages, indentures, commitments, leases or other instruments or obligations,
whether written or oral.
 
(d) “Court” means the Jefferson County Circuit Court of the Commonwealth of
Kentucky.
 
(e) “Encumbrances” means pledges, restrictions on transfer, proxies and voting
or other agreements, liens, claims, charges, mortgages, security interests or
other legal or equitable encumbrances, limitations or restrictions of any nature
whatsoever.
 
(f) “Governmental Entity” means any (a) multinational, federal, national,
provincial, territorial, state, regional, municipal, local or other government,
governmental or public department, central bank, court, tribunal, arbitral body,
commission, administrative agency, board, bureau or agency, domestic or foreign,
(b) subdivision, agent, commission, board, or authority of any of the foregoing,
or (c) quasi-governmental or private body exercising any regulatory,
expropriation or taxing authority under, or for the account of, any of the
foregoing, in each case, which has jurisdiction or authority with respect to the
applicable party.

 
27
 

(g) “Knowledge” or “knowledge” means (i) with respect to Parent, the knowledge
of the individuals listed on Section 8.12(f)(i) of the Parent Disclosure
Schedule and (ii) with respect to the Partnership Parties, the knowledge of the
individuals listed on Section 8.12(f)(ii) of the Partnership Disclosure
Schedule.
 
(h) “Law” or “Laws” means all statutes, regulations, statutory rules, orders,
judgments, decrees and terms and conditions of any grant of approval,
permission, authority, permit or license of any court, Governmental Entity,
statutory body or self-regulatory authority (including the NYSE MKT).
 
(i) “Limited Partner” has the meaning set forth in the Partnership Agreement.
 
(j) “Net Settlement Fund” means Seven Million Four Hundred and One Thousand,
Four Hundred and Eighty-Seven Dollars ($7,401,487) less any and all amounts
payable in respect of attorneys’ fees and reimbursement of expenses to
plaintiffs’ counsel or an incentive award for plaintiffs.
 
(k) “Orders” or “orders” means any orders, judgments, injunctions, awards,
decrees or writs handed down, adopted or imposed by, including any consent
decree, settlement agreement or similar written agreement with, any Governmental
Entity.
 
(l) “organizational or governing documents” means, for a corporation, the
certificate of incorporation (or similarly-titled document of equivalent effect)
and bylaws; for a partnership, the certificate of limited partnership (or
similarly-titled document of equivalent effect) and partnership agreement; for a
limited liability company, the certificate of formation (or similarly-titled
document of equivalent effect) and limited liability company agreement; and for
other business entities, certificates and documents of equivalent effect.
 
(m) “Parent Material Adverse Effect” means any fact, circumstance, event,
change, effect or occurrence that, individually or in the aggregate with all
other facts, circumstances, events, changes, effects or occurrences, prevents or
materially delays or materially impairs or would be reasonably likely to prevent
or materially delay or materially impair the ability of Parent or Merger Sub to
consummate the Merger and the other transactions contemplated hereby.
 
(n) “Partially Owned Entity” means, with respect to a specified person, any
other person that is not a Subsidiary of such specified person but in which such
specified person, directly or indirectly, owns less than 100% of the equity
interests thereof (whether voting or non-voting and including beneficial
interests).
 
(o) “Partnership Agreement” means the Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of December 29, 2005, as amended from
time to time.
 
(p) “Partnership Group Entities” means the Partnership Parties and each direct
or indirect Subsidiary and Partially Owned Entity of the Partnership.
 
(q) “Partnership Material Adverse Effect” means any fact, circumstance, event,
change, effect or occurrence that, individually or in the aggregate with all
other facts, circumstances, events, changes, effects or occurrences, has had or
would be reasonably likely to have a material

 
28
 
 
 
adverse effect on (i) the business, condition (financial or otherwise) or
results of operations of the Partnership Parties and the Subsidiaries of the
Partnership, taken as a whole, or (ii) the ability of the Partnership Parties to
perform their obligations hereunder or to consummate the Merger and the other
transactions contemplated hereby; provided, however, that a Partnership Material
Adverse Effect shall not include (A) facts, circumstances, events, changes,
effects or occurrences (I) generally affecting the industries in which the
Partnership Parties operate, (II) generally affecting the economy or the
financial or securities markets in the United States or globally (including
interest rates), (III) generally affecting regulatory or political conditions in
the United States, (IV) caused by compliance with the terms of this Agreement
(including omissions required by this Agreement), (V) caused by the announcement
or pendency of the Merger (including litigation brought by any Unitholders of
the Partnership (on their own behalf or on behalf of the Partnership) or (VI)
caused by any action taken or omitted to be taken by an officer of a Partnership
Party at the direction of any of the Parent Parties or any member of the
Purchasing Group (except, with respect to each of J.D. Nichols and Brian Lavin,
(1) in his capacity as part of, (2) in accordance with authority delegated to
him by, or (3) as otherwise authorized by, the Board of Directors or any
committee thereof); (B) changes in applicable Laws or generally accepted
accounting principles after the date hereof, (C) a decrease in the market price
of the Units; (D) any failure by the Partnership Parties to meet any internal or
publicly disclosed projections, forecasts or estimates of revenue or earnings;
or (E) any decrease in distributions in respect of the Units; (F) geopolitical
conditions, the outbreak or escalation of hostilities, any acts of war, sabotage
or terrorism, or any escalation or worsening of any such acts of war, sabotage
or terrorism threatened or underway as of the date of this Agreement; or (J) any
hurricane, tornado, flood, earthquake or other natural disaster; except, in the
case of clauses (A)(I), (A)(II), (A)(III), (F) and (J) of this definition, for
any fact, circumstance, event, change, effect or occurrence that has a
disproportionate effect of the Partnership Parties and the Subsidiaries of the
Partnership, taken as a whole, relative to other participants in the industries
in which the Partnership Parties operate.
 
(r) “Partnership Non-Managing GP” means NTS Realty Partners, LLC, a Delaware
limited liability company.
 
(s) “Permitted Encumbrances” means (i) carriers’, warehousemens’, mechanics’,
materialmen’s, repairmen’s or other like liens imposed by law arising in the
ordinary course of business which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate proceeding, (ii)
pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance arrangements, (iii)
liens, security interests, charges or other encumbrances imposed by law for
Taxes not yet due and payable or which are being contested in good faith by
appropriate proceedings (provided that adequate reserves with respect thereto
are maintained on the books of such person or its subsidiaries, as the case may
be, in conformity with GAAP), (iv) deposits to secure the performance of bids,
trade contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business, (v) easements,
rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, do not materially interfere
with the ordinary conduct of the business by the relevant person and its
subsidiaries, and (vi) liens, title defects, preferential rights or other
encumbrances created

 
29
 
 
 
pursuant to construction, operating and maintenance agreements, space lease
agreements and other similar agreements, in each case having ordinary and
customary terms and entered into in the ordinary course of business by the
relevant person and its subsidiaries.
 
(t) “person” or “Person” means an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity, group
(as such term is used in Section 13 of the Exchange Act) or organization,
including a Governmental Entity, and any permitted successors and assigns of
such person.
 
(u) “Purchasing Group” means (i) J.D. Nichols; (ii) Brian Lavin; (iii) NTS
Realty Capital, Inc.; (iv) NTS Realty Partners, LLC; (v) ORIG, LLC; (vi) Ocean
Ridge Investments, Ltd.; (vii) BKK Financial, Inc.; (viii) The J.D. Nichols
Irrevocable Trust for My Daughters; (ix) The J.D. Nichols Irrevocable Trust for
My Grandchildren; (x) Kimberly Ann Nichols; (xi) Zelma Nichols; and (xii)
Brickwood, LLC.
 
(v) “Settlement Agreement” means that certain Stipulation and Agreement of
Compromise, Settlement and Release related to Dannis, Stephen, et al. v.
Nichols, J.D., et al., Case No. 13-CI-00452 pending in Jefferson County Circuit
Court of the Commonwealth of Kentucky, the entirety of which is incorporated by
reference into this Agreement.
 
(w) “Solvent” when used with respect to any Person, means that, as of any date
of determination (a) the amount of the “fair saleable value” of the assets of
such Person will, as of such date, exceed (i) the value of all “liabilities of
such Person, including contingent and other liabilities,” as of such date, as
such quoted terms are generally determined in accordance with applicable Laws
governing determinations of the insolvency of debtors, and (ii) the amount that
will be required to pay the probable liabilities of such Person on its existing
debts (including contingent and other liabilities) as such debts become absolute
and mature, (b) such Person will not have, as of such date, an unreasonably
small amount of capital for the operation of the businesses in which it is
engaged or proposed to be engaged following such date, and (c) such Person will
be able to pay its liabilities, including contingent and other liabilities, as
they mature. For purposes of this definition, “not have an unreasonably small
amount of capital for the operation of the businesses in which it is engaged or
proposed to be engaged” and “able to pay its liabilities, including contingent
and other liabilities, as they mature” means that such Person will be able to
generate enough cash from operations, asset dispositions or refinancing, or a
combination thereof, to meet its obligations as they become due.
 
(x) “Subsidiaries” of any person means any corporation, partnership,
association, trust or other form of legal entity of which (i) more than 50% of
the outstanding voting securities are directly or indirectly owned by such
person, or (ii) such person or any Subsidiary of such person is a general
partner.
 
(y) “Tax” or “Taxes” means any taxes, assessments, fees and other governmental
charges imposed by any Governmental Entity, including income, profits, gross
receipts, net proceeds, alternative or add-on minimum, ad valorem, value added,
goods and services, turnover, sales, use, property, personal property (tangible
and intangible), environmental, stamp, leasing, lease, user, excise, duty,
franchise, capital stock, transfer, registration, license, withholding, social
security (or similar), unemployment, disability, payroll, employment, fuel,
excess profits,

 
30
 

occupational, premium, windfall profit, severance, estimated, or other charge of
any kind whatsoever, including any interest, penalty, or addition thereto,
whether disputed or not.
 
(z) “Tax Return” means any return, declaration, report, election, designation,
notice, claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
 
(aa) “Unit” means has the meaning set forth in the Partnership Agreement or,
with respect to an interest or former interest in a predecessor of the
Partnership that was or is exchangeable for Units or any right to such an
exchange, such interest, former interest or right.
 
(bb) “Unitholder” means the holder of a Unit, an interest or former interest in
a predecessor of the Partnership that was or is exchangeable for Units or any
right to such an exchange, as applicable.
 
(cc) “Unitholder Approval” means approval of at least a majority of the
outstanding Units voting together as a single class.
 
(dd) Each of the following terms is defined in the Section set forth opposite
such term:
 
Agreement
Preamble
Alternative Proposal
Section 5.3(i)(i)
Board of Directors
Recitals
Book-Entry Units
Section 2.2(a)
Certificate of Merger
Section 1.3
Certificates
Section 2.2(a)
Change in Recommendation
Section 5.3(e)
Closing
Section 1.2
Closing Date
Section 1.2
Code
Section 2.2(b)(iii)
D&O Insurance
Section 5.7(c)
Delaware Action
Recitals
Delaware Court
Recitals
Directors Plan
Section 2.1(a)
DLLCA
Section 1.1
DRULPA
Section 1.1
Effective Time
Section 1.3
Exchange Act
Section 3.3
Exchange Fund
Section 2.2(a)
GAAP
Section 3.4(b)
Indemnified Parties
Section 5.7(c)
Information Statement
Section 3.3(e)
Intervening Event
Section 5.3(i)(ii)
Kentucky Action
Recitals
Letter of Transmittal
Section 2.2(b)(i)
Merger
Recitals
Merger Consideration
Section 2.1(a)

 
31
 

Merger Sub
Preamble
Outside Date
Section 7.1(b)(i)
Original Merger
Recitals
Original Merger Agreement
Recitals
Original Merger Consideration
Recitals
Parent
Preamble
Parent Disclosure Schedule
Article IV
Parent Parties
Preamble
Partnership
Preamble
Partnership Disclosure Schedule
Article III
Partnership Financial Statements
Section 3.4(b)
Partnership Managing GP
Preamble
Partnership Parties
Preamble
Paying Agent
Section 2.2(a)
Recommendation
Section 3.3(c)
Remaining Interests
Section 2.1(b)
Representatives
Section 5.3(a)
Schedule 13E-3
Section 3.3(e)
SEC
Section 3.3(e)
Securities Act
Section 3.4(a)
SOX
Section 3.4(a)
Special Committee
Recitals
Surviving Entity
Section 1.1

 
 
[Remainder of page intentionally left blank; signature page follows]

 
32
 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered on the date first above written.
 

 
NTS MERGER PARENT, LLC
 
 
By:               
Name: Brian F. Lavin
Title: Manager
     
NTS MERGER SUB, LLC
 
By:               
Name: Brian F. Lavin
Title: Manager
     
NTS REALTY HOLDINGS LIMITED
PARTNERSHIP
 
 
By: NTS REALTY CAPITAL, INC., its managing
       general partner
 
 
By:               
Name: Mark D. Anderson
Title: Chairman of the Special Committee
     
NTS REALTY CAPITAL, INC.
 
 
By:               
Name: Mark D. Anderson
Title: Chairman of the Special Committee

 
 
 
 
 
 
EXHIBIT B

--------------------------------------------------------------------------------

 
13-CI-00452
JEFFERSON CIRCUIT COURT
DIVISION FOUR (4)
HON. CHARLES L. CUNNINGHAM, JR.
 
STEPHEN J. DANNIS, et al.,
PLAINTIFFS
   
PRELIMINARY APPROVAL ORDER
 
J. D. NICHOLS, et al.
DEFENDANTS

 
Plaintiffs (“Plaintiffs”), by Plaintiffs’ Counsel and Defendants, NTS Realty
Holdings Limited Partnership, NTS Realty Capital, Inc., J. D. Nichols, Brian
Lavin, NTS Merger Parent, LLC, Mark Anderson, John Daly, Sr. and John Lenihan
(collectively, “Defendants,” and together with Plaintiffs, the “Parties”) having
applied pursuant to Kentucky Rule of Civil Procedure 23 for an order approving
the proposed settlement of the above-captioned class action (the “Action”) and
determining certain matters in connection with the proposed settlement of the
Action (the “Settlement”) and for dismissal of the Action with prejudice, in
accordance with the terms and conditions of the Stipulation and Agreement of
Compromise, Settlement and Release entered into by the Parties and dated
February ___, 2014 (the “Stipulation”).
 
Now, upon consent of the Parties after review and consideration of the
Stipulation and the Exhibits annexed thereto filed in the Jefferson Circuit
Court, Division Four (4), the Honorable Charles L. Cunningham presiding (the
“Court”) and after due deliberation:
 
IT IS HEREBY ORDERED, ADJUDGED AND DECREED, this ____ day of February, 2014
that:
 
1.  For settlement purposes only, and pending the Final Settlement Hearing
(defined below), the Action is temporarily certified as a non-opt out class
pursuant to Kentucky Rule of Civil Procedure 23, composed of any and all record
holders and beneficial owners of NTS

 
 
 

Partnership units, and any holder of any current or former right, upon due
surrender of any equity or interest in a predecessor partnership that was merged
with and into NTS and delivery of related documentation in connection with such
surrender, to exchange such equity or interest for NTS Partnership units, other
than the Excluded Unitholders (as that term is defined in the Stipulation),
their respective successors in interest, successors, predecessors in interest,
predecessors, representatives, trustees, executors, administrators, heirs,
assigns or transferees, immediate and remote, and any person or entity acting
for or on behalf of, or claiming under, any of them, and each of them together
with their predecessors and successors and assigns, who held units of NTS at any
time between December 28, 2012 and [the date of Final Approval] (the “Class”).
 
2.  A final settlement hearing (the “Final Settlement Hearing”) shall be held on
April 24, 2014 at 1:00 p.m. to:
 
a.  determine whether the preliminary class action certification herein should
be made final;
 
b.  determine whether the Settlement should be approved by the Court as fair,
reasonable, adequate and in the best interests of the Class;
 
c.  determine whether an Order and Final Judgment should be entered pursuant to
the Stipulation;
 
d.  consider Plaintiffs’ Counsel’s application for an award of attorneys’ fees
and expenses and an incentive award to Plaintiffs;
 
e.  rule on such other matters as the Court may deem appropriate.
 
3.  The Court reserves the right to adjourn the Final Settlement Hearing or any
adjournment thereof, including the consideration of the application for
attorneys’ fees and

 
2
 

reimbursement of legal expenses and an incentive award to Plaintiffs, without
further notice of any kind other than oral announcement at the Final Settlement
Hearing or any adjournment thereof.
 
4.  The Court reserves the right to approve the Settlement at or after the Final
Settlement Hearing with such modification(s) as may be consented to by the
Parties to the Stipulation and without further notice to the Class.
 
5.  Within thirty (30) days after the date of this Order, NTS shall cause a
notice of the Final Settlement Hearing, in substantially the form annexed as
Exhibit B to the Stipulation (the “Notice”) to be mailed to all unitholders of
record that are members of the Class at their last known address appearing in
the transfer records maintained by or on behalf of NTS. All unitholders of
record in the Class who were not also the beneficial owners of the units of NTS
held by them of record shall be requested to forward the Notice to such
beneficial owners of those units. NTS shall use reasonable efforts to give
notice to such beneficial owners by making additional copies of the Notice
available to any record holder who, prior to the Settlement Hearing, requests
the same for distribution to beneficial owners.
 
6.  The form and method of the Notice herein is the best notice practicable and
constitutes due and sufficient notice of the Final Settlement Hearing to all
persons entitled to receive such a Notice. Counsel for NTS, at least ten (10)
business days prior to the Final Settlement Hearing described herein, shall file
with the Court an appropriate affidavit with respect to the preparation, mailing
and publication of the Notice.
 
7.  All proceedings in the Action, other than continuing discovery as set forth
in the Stipulation and such proceedings as may be necessary to carry out the
terms and conditions of the Settlement, are hereby stayed and suspended until
further order of the Court. Pending final
 
 
3
 
 
 
determination of whether the Settlement should be approved, Plaintiffs, and all
members of the Class, are barred and enjoined from commencing or prosecuting any
action asserting either directly, representatively, derivatively, or in any
other capacity, any Released Claims as defined in the Stipulation.
 
8.  Any member of the Class who objects to the Settlement, the Order and Final
Judgment to be entered in the Action, and/or Plaintiffs’ Counsels’ application
for attorneys’ fees, or who otherwise wishes to be heard, may appear in person
or by such member’s attorney at the Final Settlement Hearing and present
evidence or argument that may be proper and relevant; provided, however, that,
except for good cause shown, no person shall be heard and no papers, briefs,
pleadings or other documents submitted by any person shall be considered by the
Court unless not later than ten (10) business days prior to the Final Settlement
Hearing such person files with the Court and serves upon counsel listed below:
(a) a written notice of intention to appear; (b) a statement of such person’s
objections to any matters before the Court; and (c) the grounds for such
objections and the reasons that such person desires to appear and be heard,
documentation evidencing membership in the class as well as all documents or
writings such person desires the Court to consider. Such filings shall be filed
with the Clerk of the Jefferson Circuit Court and served upon the following
counsel:
 
Ethan D. Wohl
Sara J. Wigmore
Wohl & Fruchter LLP
570 Lexington Avenue
16th Floor
New York, NY 10022
Co-Lead Counsel for Plaintiffs
Cezar M. Froelich
James D. Wilson
Brett Nolan
Taft Stettinius & Hollister LLP
111 East Wacker Drive
Suite 2800
Chicago, IL 60601
Counsel for NTS Realty Holdings Limited Partnership and NTS Realty Capital, Inc.

 
 
4
 
Shane Rowley
Justin Sherman
Levi & Korsinsky, LLP
30 Broad Street
24th Floor
New York, NY 10004
Co-Lead Counsel for Plaintiffs
Stephen H. Miller
Jeffrey G. Stovall
Fore, Miller & Schwartz
Suite 700 North, First Trust Centre
200 South Fifth Street
Louisville, KY 40202
Counsel for J. D. Nichols, Brian Lavin and NTS Merger Parent, LLC

 
J. Gregory Joyner
Tyler F. Stebbins
Naber Joyner & Associates
462 South Fourth Avenue
Suite 1730
Louisville, KY 40202
Liaison Counsel for Plaintiffs
Charles J. Cronan, IV
Clark C. Johnson
Amber D. Nicely
Stites & Harbinson, PLLC
400 West Market Street
Suite 1800
Louisville, KY 40202
Counsel for Mark Anderson, John Daly, Sr. and John Lenihan

 
 
 
Margaret E. Keane
Eric L. Ison
Jared A. Cox
Bingham, Greenebaum Doll, LLP
3500 National City Tower
101 South Fifth Street
Louisville, KY 40202
Liaison Counsel For Defendants NTS Realty Holdings Limited Partnership and NTS
Realty Capital, Inc.

 
9.  Unless the Court otherwise directs, no person shall be entitled to object to
the approval of the Settlement, any judgment entered thereon, the adequacy of
the representation of the Class by Plaintiffs’ Counsel, any award of attorneys’
fees, or otherwise be heard, except by serving and filing a written objection
and supporting papers and documents as described in Paragraph 8. Any person who
fails to object in the manner described above shall be deemed to have waived the
right to object (including any right of appeal) and shall be forever barred from
raising such objections in this or any other action or proceeding.
 
 
5
 
 
10.  If the Settlement, including any amendment made in accordance with the
Stipulation, is not approved by the Court or shall not become effective for any
reason whatsoever, the Settlement (including any modification thereof made with
the consent of the Parties as provided for in the Stipulation), and preliminary
Class certification herein and any actions taken or to be taken in connection
therewith (including this Order and any judgment entered herein) shall be
terminated and shall become void and of no further force or effect, except for
the obligation of NTS or its successor entity to pay for any expenses incurred
in connection with the Notice and administration provided for by this
Preliminary Approval Order. In that event, neither the Stipulation, nor any
provision contained in the Stipulation, nor any action undertaken pursuant
thereto, nor the negotiation thereof by any party shall be deemed an admission
or received as evidence in this or any other action or proceeding.
 

 
 
 
                  
 
Charles L. Cunningham, Jr.
Circuit Judge

 
1265641_3.DOCX
6
 
 
 
 
 
 
EXHIBIT C

--------------------------------------------------------------------------------

 
13-CI-00452
JEFFERSON CIRCUIT COURT
DIVISION FOUR (4)
HON. CHARLES L. CUNNINGHAM, JR.

STEPHEN J. DANNIS, et al.
 
 
 
PLAINTIFFS
   
NOTICE OF PENDENCY OF CLASS ACTION, PROPOSED SETTLEMENT, SETTLEMENT HEARING AND
RIGHT TO APPEAR
   
J. D. NICHOLS, et al.
DEFENDANTS
   

TO:
ALL RECORD AND BENEFICIAL OWNERS OF NTS REALTY HOLDINGS LIMITED PARTNERSHIP
(NYSE MKT:  NLP) UNITS AT ANY TIME BETWEEN AND INCLUDING DECEMBER 28, 2012 AND
FINAL APPROVAL OF THE SETTLEMENT HEREIN.

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY.  THIS NOTICE RELATES TO A
PROPOSED SETTLEMENT OF A LAWSUIT AND CONTAINS IMPORTANT INFORMATION.  YOUR
RIGHTS WILL BE AFFECTED BY THESE LEGAL PROCEEDINGS.  IF THE COURT APPROVES THE
PROPOSED SETTLEMENT OF THIS LAWSUIT, YOU WILL BE FOREVER BARRED FROM CONTESTING
THE FAIRNESS, REASONABLENESS, AND ADEQUACY OF THE PROPOSED SETTLEMENT AND
RELATED MATTERS, AND FROM PURSUING THE SETTLED CLAIMS (AS DEFINED HEREIN).
 
IF YOU WERE NOT THE BENEFICIAL OWNER OF NTS PARTNERSHIP UNITS BUT HELD SUCH
UNITS FOR A BENEFICIAL OWNER, PLEASE TRANSMIT THIS DOCUMENT PROMPTLY TO SUCH
BENEFICIAL OWNER.

 
 
 

* * * * *
 
The Purpose of this Notice
 
This Notice, which is sent pursuant to Rule 23 of the Kentucky Rules of Civil
Procedure and pursuant to an Order of the Jefferson Circuit Court (the “Court”)
entered in the above-captioned action, describes the proposed settlement of
class action lawsuits against NTS Realty Holdings Limited Partnership (“NTS” or
the “Company”), NTS Realty Capital, Inc., J. D. Nichols, Brian Lavin, NTS Merger
Parent, LLC, Mark Anderson, John Daly, Sr. and John Lenihan (collectively the
“Defendants”) whereby all of the NTS limited partnership units (the “Units”),
other than Units owned by Messrs. Nichols and Lavin and certain of their
affiliates (the “Purchasers”) would be canceled and automatically converted into
the right to receive a cash payment equal to $7.50 per Unit, plus a pro rata
share of the Net Settlement  Fund (as defined below) (the “Merger”).
 
The lawsuits (defined below as the “Action” or “Actions”) are brought on behalf
of a proposed class (the “Class”) consisting of all record holders and
beneficial owners of NTS Units (other than those owned or controlled by the
Purchasers) as well as their respective successors in interest, successors,
predecessors in interest, predecessors, representatives, trustees, executors,
administrators, heirs, assigns or transferees, immediate and remote, and any
person or entity acting for or on behalf of, or claiming under, any of them, and
each of them, together with their predecessors and successors and assigns, who
held such Units of NTS at any time between December 28, 2012 (the date NTS
announced the Original Merger Agreement) and final approval of the proposed
settlement herein.
 
The purpose of this Notice is to inform you of a proposed settlement (the
“Settlement”) of the Action and of a hearing to be held on April 24, 2014, at
1:00 p.m (the “Final Settlement Hearing”).  The purpose of the Final Settlement
Hearing is to determine: (a) whether the Court

 
2
 

should certify the Class for purposes of the Settlement; (b) whether the
proposed Settlement of the Action on the terms and conditions provided for in
the Stipulation and Agreement of Compromise, Settlement and Release (the
“Stipulation”) is fair, reasonable, adequate, and in the best interests of the
Class and should be approved by the Court; (c) whether the Order and Final
Judgment provided for in the Stipulation should be ordered thereon; (d) whether
the Court should grant the application of Plaintiffs’ Counsel for an award of
attorneys’ fees and reimbursement of litigation expenses and an incentive award
to Plaintiffs; and (e) such other matters as the Court may deem appropriate.
 
If you are a member of the Class, this Notice will inform you of how, if you so
choose, you may enter your appearance in the Action or object to the proposed
Settlement and have your objection heard at the Settlement Hearing.
 
THE FOLLOWING RECITATION DOES NOT CONSTITUTE FINDINGS OF THE COURT AND SHOULD
NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF THE COURT AS TO THE MERITS
OF ANY CLAIMS OR DEFENSES BY ANY OF THE PARTIES.  IT IS BASED ON STATEMENTS OF
THE PARTIES AND IS SENT FOR THE SOLE PURPOSE OF INFORMING YOU OF THE EXISTENCE
OF THIS ACTION AND OF A HEARING ON A PROPOSED SETTLEMENT SO THAT YOU MAY MAKE
APPROPRIATE DECISIONS AS TO STEPS YOU MAY, OR MAY NOT, WISH TO TAKE IN RELATION
TO THIS ACTION.
 
Background and Description of the Action
 
On December 28, 2012, NTS announced that it and NTS Realty Capital, Inc., NTS’s
managing general partner (“Realty Capital”), entered into an Agreement and Plan
of Merger (the “Original Merger Agreement”) with NTS Merger Parent, LLC
(“Parent”), an entity controlled by the Company’s founder and Realty Capital’s
Chairman, J.D. Nichols, and Realty Capital’s
 
 
3
 
 
President and Chief Executive Officer, Brian F. Lavin, and NTS Merger Sub, LLC
(“Merger Sub”), a wholly-owned subsidiary of Parent, and together with Mr.
Nichols, Mr. Lavin, Parent and certain of their respective affiliates, the
“Purchasers”).
 
Upon consummation of the transactions proposed in the Original Merger Agreement,
Merger Sub would merge with and into NTS and NTS would continue as the surviving
entity (the “Original Merger”).  Upon consummation of the Original Merger, all
of the NTS limited partnership units (“Units”), other than Units owned by the
Purchasers, would be canceled and converted automatically into the right to
receive a cash payment equal to $7.50 per Unit (the “Original Merger
Consideration”).
 
On January 25, 2013, the Kentucky Action was filed in the Court by NTS
unitholders alleging, among other things, that Realty Capital’s board of
directors had breached their fiduciary duties in connection with their
consideration and approval of the Original Merger Agreement.
 
On February 4, 2013, NTS filed a Preliminary Proxy Statement on Schedule 14A
with the Securities and Exchange Commission (“SEC”).
 
Between February 12, 2013 and February 15, 2013, two actions were filed in the
Delaware Court of Chancery by NTS unitholders alleging, among other things, that
Realty Capital’s board of directors had breached their fiduciary duties in
connection with their consideration and approval of the Original Merger
Agreement.  These actions, and their filing dates, are as follows:  R. Jay
Tejera v. NTS Realty Holdings LP et al., Civil Action No. 8302-VCP, filed
February 12, 2013 and Gerald A. Wells v. NTS Realty Holdings LP et al., Civil
Action No. 8322-VCP, filed February 15, 2013.
 
On March 13, 2013, Plaintiffs filed an amended complaint in the Kentucky Action.
 
 
4
 
 
On March 19, 2013, the Delaware Court of Chancery consolidated the Tejera and
Wells complaints under the Tejera case number and the consolidated case caption
of In Re NTS Realty Holdings Limited Partnership Unitholders Litigation (the
“Delaware Action,” and with the Kentucky Action, the “Actions”; unless otherwise
indicated “Plaintiffs” shall mean plaintiffs in both the Kentucky and Delaware
Actions).
 
On April 12, 2013, Defendants filed motions to dismiss the amended complaint in
the Kentucky Action.
 
On April 24, 2013, counsel appeared in the Kentucky Action and the court set a
briefing schedule for hearing on the Motions to Dismiss.  After further
consultation between counsel for all the parties in the Kentucky Action, counsel
prepared an agreed order on May 31, 2013, allowing Plaintiffs to file a Second
Amended Complaint, which order was entered June 7, 2013.
 
Pursuant to the June 7, 2013, order, the parties began discovery; wherein
thousands of documents have been exchanged and reviewed by the parties.
 
On June 12, 2013, the Delaware Chancery Court granted a Stipulation and Order of
Voluntary Dismissal as to Plaintiff R. Jay Tejera, dismissing the claims of
Plaintiff R. Jay Tejera, without prejudice, in the Delaware Action.
 
On June 17 and 20, Defendants filed their Motions to Dismiss the Second Amended
Complaint in the Kentucky Action.
 
On July 19, 2013, NTS filed an amended Preliminary Proxy Statement on Schedule
14A with the SEC.
 
In July 2013, Plaintiffs retained experts to review and investigate the values
of the properties held by the Company, including receiving independent
appraisals and valuations.
 
 
5
 
 
In August, 2013, the parties entered into an agreement to stay additional
discovery because of on-going negotiations.
 
During July and August, 2013, the Plaintiffs consulted with their experts and
provided Defendants with valuations.
 
In August, 2013, the parties engaged in two days of extensive face-to-face
negotiations with their experts present.  During those face-to-face
negotiations, the Defendants provided Plaintiffs access to the principals of
Centerboard Securities LLC (“Centerboard”) and allowed such individuals to be
questioned regarding the fairness opinion written by Centerboard.
 
When those negotiations were unsuccessful, certain Defendants moved to terminate
the hold on additional discovery on September 3, 2013.
 
On October 18, 2013, a special committee of Realty Capital’s board of directors
delivered notice to Parent and Merger Sub informing Parent and Merger Sub that
the special committee had determined to terminate the Original Merger Agreement.
 
In September, October and November, 2013 the Parties, through counsel, continued
to negotiate in both face-to-face meetings and via telephone.
 
On or about November 20, 2013, the Court set a hearing for January 9, 2014 on
Defendants’ Motions to Dismiss the Kentucky Action.
 
On the basis of all of the information produced, including publicly available
information, the discovery materials described herein, the additional discovery
described herein, and consultations with independent financial advisors retained
by counsel, Plaintiffs in the Kentucky Action have determined that the
Settlement described herein is fair, reasonable, adequate, and in the best
interests of the Plaintiffs and the Class (as defined herein).
 
 
6
 
 
Defendants each have denied, and continue to deny, that they have committed or
aided and abetted the commission of any violation of law or engaged in any of
the wrongful acts alleged in the Action, and expressly maintain that they
diligently and scrupulously complied with their fiduciary and other legal duties
in connection with the Merger and the Merger Agreement and are entering into
this Settlement solely to eliminate the burden and expense of further
litigation.
 
In connection with settlement discussions and negotiations leading to this
proposed Settlement, counsel for Plaintiffs and Defendants did not discuss the
appropriateness or amount of any application by counsel for the Plaintiffs for
an award of attorneys’ fees and expenses until the substantive terms of the
proposed settlement on behalf of and for the benefit of the proposed Class were
negotiated and agreed upon.
 
The Parties wish to settle and resolve the claims asserted by Plaintiffs and all
claims relating to or arising out of the Original Merger Agreement, the Original
Merger, the Amended Merger Agreement (as defined below) and related transactions
(the “Proposed Transactions”), and the parties have, following arm’s-length
negotiations, entered into a Stipulation and Agreement of Compromise, Settlement
and Release (the "Stipulation"), providing for the settlement of the Actions on
the terms and subject to the conditions set forth below, and the parties believe
the Settlement is in the best interests of the class.
 
Reasons for the Settlement
 
As set forth herein, the Settlement provides for the payment of additional per
share consideration in the amount of $1.75 per share, net of certain fees, costs
and expenses (as further discussed below).  After receiving discovery, including
detailed financial information concerning the Company, its operational results,
and future prospects, Plaintiffs believe that the settlement
 
 
7
 
 
consideration is an excellent result and constitutes a fair, reasonable, and
adequate basis upon which to resolve the claims asserted in the Action.
 
In reaching this determination, Plaintiffs determined that while the Purchasers
might ultimately be prepared to proceed with the Merger at a higher price, there
was a material risk that they would not, and that financial conditions could be
less favorable for a transaction in the future.  Plaintiffs took into account
that in the absence of a transaction, the remedies of Plaintiffs and the Class
would involve pursuing litigation against the Purchasers and the Special
Committee on the grounds that (i) ongoing payments by NTS to management
companies affiliated with the Purchasers were unfair and (ii) the Special
Committee had breached its fiduciary duties by terminating the Original Merger
Agreement.  Plaintiffs also took into account that the trading price of the
Units during the period after termination of the Original Merger Agreement was
generally below $5.00 per Unit, and that the last closing price of the Units
before the original offer by the Purchasers on August 31, 2012 was $3.07 per
Unit.  All Defendants deny and continue to deny that they have committed or
aided and abetted the commission of any unlawful or wrongful acts alleged in the
Action, and expressly maintain that they diligently and scrupulously complied
with their fiduciary duties and other legal duties.  Defendants state that they
have agreed to the Settlement solely because the Settlement will eliminate the
burden and expense of further litigation.
 
Settlement Terms
 
In consideration for the full settlement and release of all Settled Claims (as
defined below), NTS shall pay to each member of the Class, as hereinafter
defined, in connection with the closing of the merger contemplated in the
Amended Merger Agreement (“Merger”), (i) $7.50 per Unit, plus (ii) a share of
the Net Settlement Fund (as defined below), divided pro rata among
 
 
8
 
 
the Eligible Units (as defined below), at the time, subject to the conditions
and pursuant to the procedures set forth in Section 2.2(b) of the Amended Merger
Agreement.
 
The total number of Units held by the members of the Class is 4,229,421 (the
“Eligible Units”), and the settlement consideration payable hereunder is $1.75
per Unit, resulting in a total settlement payment of Seven Million Four Hundred
and One Thousand, Four Hundred and Eighty-Seven Dollars ($7,401,487) (the
“Settlement Payment”).  The Settlement Payment, less fees, expenses and
incentive award to Plaintiffs, if any awarded by the Court, shall constitute the
Net Settlement Fund (“Net Settlement Fund.”)  All Defendants acknowledge that
the prosecution of the Actions and the efforts of counsel for Plaintiffs
(collectively, “Plaintiffs’ Counsel”) were the sole causal factors that led to
the agreement to make the Settlement Payment.
 
Parent and Merger Sub, or their affiliates, shall pay the Original Merger
Consideration and the Settlement Payment to the Paying Agent at or before the
closing of the Merger.  The Paying Agent shall hold the Settlement Payment in
trust pending disbursement as provided in the Amended Merger Agreement.  The
Settlement Payment and the Original Merger Consideration shall not be due or
owing under this Stipulation or paid as provided herein until (i) the Court has
finally certified the Class; (ii) Final Approval of the Settlement has occurred;
(iii) the Court has approved a complete release of all Released Persons (defined
below), in the form customarily approved by the Court in connection with
settlements of this type; (iv) an Order dismissing the Kentucky Action with
prejudice has become final and no longer subject to appeal, whether by passage
of time or otherwise; (v) an Order dismissing the Delaware Action with prejudice
has become final and no longer subject to appeal, whether by passage of time or
otherwise; (vi) the Effective Time (as defined in the Amended Merger Agreement)
and (vii) with respect to any member of the Class, paid in compliance with the
procedures set forth in Section 2.2(b) of the
 
 
9
 
 
amended Merger Agreement by or on behalf of such member.  The Parent Parties and
the Surviving Entity (both as defined in the Amended Merger Agreement) shall be
responsible for the costs of making the Settlement Payment.
 
The Settlement Hearing And Your Right To Appear And Object
 
The Final Settlement Hearing shall be held on April 24, 2014, at 1:00 p.m., to
determine: (a) whether the Court should certify the Class for purposes of the
Settlement; (b) whether the proposed Settlement of the Action on the terms and
conditions provided for in the Stipulation is fair, reasonable, adequate and in
the best interests of the Class and should be approved by the Court; (c) whether
the Order and Final Judgment provided for in the Stipulation should be ordered
thereon; (d) whether the Court should grant the application of Plaintiffs’
Counsel for an award of attorneys’ fees and reimbursement of litigation expenses
and an incentive award to Plaintiffs; and (e) such other matters as the Court
may deem appropriate.
 
The Court has reserved the right to adjourn the Final Settlement Hearing or any
adjournment thereof, including the consideration of the application for
attorneys’ fees, without further notice of any kind other than oral announcement
at the Final Settlement Hearing or any adjournment thereof.
 
The Court has reserved the right to approve the Settlement at or after the Final
Settlement Hearing with such modification(s) as may be consented to by the
Parties to the Stipulation and without further notice to the Class.
 
Any member of the Class who objects to the Settlement, the Order and Final
Judgment to be entered in the Action as provided in the Stipulation, and/or
Plaintiffs’ Counsel’s application for attorneys’ fees, or who otherwise wishes
to be heard, may appear in person or by his attorney at the Final Settlement
Hearing and present evidence or argument that may be proper and relevant;
provided, however, that, except for good cause shown, no person shall be heard
and no
 
 
10
 
 
papers, briefs, pleadings or other documents submitted by any person shall be
considered by the Court unless not later than ten (10) calendar days prior to
the Final Settlement Hearing such person files with the Court and serves upon
counsel listed below: (a) a written notice of intention to appear; (b) a
statement of such person’s objections to any matters before the Court; and (c)
the grounds for such objections and the reasons that such person desires to
appear and be heard, documentation evidencing membership in the Class, as well
as all documents or writings such person desires the Court to consider.  Such
filings shall be filed with the Jefferson County Circuit Court and served upon
the following counsel:
 
Shane Rowley
Justin Sherman
Levi & Korsinsky, LLP
30 Broad Street, 24th Floor
New York, NY 10004
 
Co-Lead Counsel for Plaintiffs in the Kentucky Action
 
Margaret E. Keane
Jared A. Cox
Bingham, Greenebaum Doll, LLP
3500 National City Tower
101 S. Fifth Street
Louisville, KY 40101
 
Liaison Counsel For Defendants NTS Realty Holdings Limited Partnership and NTS
Realty Capital, Inc.

Unless the Court otherwise directs, no person shall be entitled to object to the
approval of the Settlement, any judgment entered thereon, the adequacy of the
representation of the Class by Plaintiffs and Plaintiffs’ Counsel, any award of
attorneys’ fees, or otherwise be heard, except by serving and filing a written
objection and supporting papers and documents as prescribed above.  Any person
who fails to object in the manner described above shall be deemed to have waived
the right to object (including any right of appeal) and shall be forever barred
from raising such objection in this or any other action or proceeding.
 
ANY MEMBER OF THE CLASS WHO DOES NOT OBJECT TO THE SETTLEMENT OR THE REQUEST BY
PLAINTIFFS’ COUNSEL FOR AN AWARD OF
 
 
11
 
 
ATTORNEYS’ FEES AND EXPENSES (DESCRIBED BELOW) OR TO ANY OTHER MATTER STATED
ABOVE NEED NOT DO ANYTHING.
 
The Final Order and Judgment
 
If the Court determines that the Settlement, as provided for in the Stipulation,
is fair, reasonable, adequate and in the best interests of the Class, the
parties to the Action will ask the Court to enter an Order and Final Judgment,
which will, among other things:
 
a.           approve the Settlement as fair, reasonable, adequate and in the
best interests of the Class and direct consummation of the Settlement in
accordance with its terms and conditions;
 
b.           permanently certify a non-opt out Class pursuant to Kentucky Rule
of Civil Procedure 23 and designate Plaintiffs in the Action as the class
representatives with Plaintiffs’ Counsel as class counsel;
 
c.           determine that the requirements of the rules of the Court and due
process have been satisfied in connection with this Notice;
 
d.           dismiss the Action with prejudice on the merits and grant the
releases more fully described below in accordance with the terms and conditions
of the Stipulation;
 
e.           permanently bar and enjoin Plaintiffs and all members of the Class
from instituting, commencing or prosecuting any of the Settled Claims against
any of the Released Persons (as defined below); and
 
f.           award attorneys’ fees and expenses to Plaintiffs’ Counsel and an
incentive award to Plaintiffs.
 
Releases
 
The Stipulation provides that upon Final Approval of the Settlement and in
consideration of the benefits provided by the Settlement:
 
 
12
 
 
a.           The Court’s Order and Final Judgment shall, among other things,
provide for the full and complete dismissal with prejudice of the Actions, and
the settlement and release of, and a permanent injunction barring, any claims,
demands, rights, actions, causes of action, liabilities, damages, losses,
obligations, judgments, duties, suits, costs, expenses, matters and issues known
or unknown, contingent or absolute, suspected or unsuspected, disclosed or
undisclosed, liquidated or unliquidated, matured or unmatured, accrued or
unaccrued, apparent or unapparent, that have been, could have been, or in the
future can or might be asserted in any court, tribunal or proceeding (including
but not limited to any claims arising under federal, state, foreign or common
law, including the federal securities laws and any state disclosure law), by or
on behalf of Plaintiffs or any member of the Class, whether individual, direct,
class, derivative, representative, legal, equitable, or any other type or in any
other capacity (collectively, the “Releasing Persons”) against NTS, Realty
Capital, NTS Realty Partners, LLC, J.D. Nichols, Brian F. Lavin, Parent, Merger
Sub, NTS Development Company, NTS Management Company, Mark D. Anderson, John P.
Daly, Sr., and John Lenihan,  or any of their families, parent entities,
controlling persons, associates, affiliates or subsidiaries and each and all of
their respective past or present officers, directors, stockholders, principals,
representatives, employees, attorneys, financial or investment advisors,
consultants, accountants, investment bankers, commercial bankers, entities
providing fairness opinions, underwriters, brokers, dealers, advisors or agents,
heirs, executors, trustees, general or limited partners or partnerships, limited
liability companies, members, managers, joint ventures, personal or legal
representatives, estates, administrators, predecessors, successors and assigns
(collectively, the “Released Persons”), which have arisen, could have arisen,
arise now or hereafter out of or relating in any manner to the acts, events,
facts, matters, transactions, occurrences, statements, representations,
misrepresentations or
 
 
13
 
 
omissions or any other matter whatsoever set forth in or otherwise related,
directly or indirectly, to the allegations in the Actions, claims of
mismanagement or self-dealing against the management of NTS, the Original Merger
Agreement, the Amended Merger Agreement, the Proposed Transactions, or
disclosures made in connection therewith (including the adequacy and
completeness of such disclosures) (collectively, the “Settled Claims”); however,
the Settled Claims shall not include any claims to enforce the Settlement.
 
b.           Defendants and their Released Persons shall be deemed to have, and
by operation of the judgment shall have, fully, finally, and forever released,
relinquished, and discharged Plaintiffs, each and all members of the Class, and
Plaintiffs’ Counsel from all claims (including unknown claims) arising out of,
relating to, or in connection with, the institution, prosecution, assertion,
settlement or resolution of the Actions or the Settled Claims.
 
c.           Plaintiffs acknowledge, and the members of the Class by operation
of law shall be deemed to have acknowledged, that they may discover facts in
addition to or different from those now known or believed to be true by them
with respect to the Settled Claims, but that it is the intention of Plaintiffs,
and by operation of law the intention of the members of the Class, to
completely, fully, finally and forever compromise, settle, release, discharge,
extinguish, and dismiss any and all Settled Claims, known or unknown, suspected
or unsuspected, contingent or absolute, accrued or unaccrued, apparent or
unapparent, which now exist, or heretofore existed, or may hereafter exist, and
without regard to the subsequent discovery of additional or different
facts.  Plaintiffs acknowledge, and the members of the Class by operation of law
shall be deemed to have acknowledged, that “Unknown Claims” are expressly
included in the definition of “Settled Claims,” and that such inclusion was
expressly bargained for and was a key element of the Settlement and was relied
upon by each and all of the Released Persons in entering into this
 
 
14
 
 
Stipulation.  “Unknown Claims” means any claim that Plaintiffs or any member of
the Class does not know or suspect exists in his, her or its favor at the time
of the release of the Settled Claims as against the Released Parties, including
without limitation those which, if known, might have affected the decision to
enter into the Settlement.  With respect to any of the Settled Claims, the
parties stipulate and agree that upon Final Approval of the Settlement,
Plaintiffs shall expressly and each member of the Class shall be deemed to have,
and by operation of the final order and judgment by the Court shall have,
expressly waived, relinquished and released any and all provisions, rights and
benefits conferred by or under Cal. Civ. Code § 1542 or any law of the United
States or any state of the United States or territory of the United States, or
principle of common law, which is similar, comparable or equivalent to Cal. Civ.
Code § 1542, which provides:
 
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
 
d.           Counsel for the Plaintiffs in the Delaware Action shall dismiss the
Delaware Action within five (5) business days of the date of Final Approval of
the Settlement.
 
Application for Attorneys’ Fees and Expenses, And Incentive Awards to Plaintiffs
 
Plaintiffs’ Counsel intend to apply for an award of attorneys’ fees in an amount
not to exceed 30% of the Settlement Payment, as well as to seek reimbursement of
their out of pocket expenses, subject to the Court’s approval.  The Parties
acknowledge and agree that any attorneys’ fees and expenses awarded by the Court
in the Consolidated Action to Plaintiffs’ counsel shall be paid solely from the
Settlement Payment.  
 
Defendants will not oppose an application for fees at or below 30% of the
Settlement Payment.  Counsel for Plaintiffs and Defendants did not discuss the
appropriateness or amount of
 
 
15
 
 
any application by counsel for the Plaintiffs for an award of attorneys’ fees
and expenses until the substantive terms of the proposed Settlement on behalf of
and for the benefit of the Class were negotiated and agreed upon.
 
All parties agree that the attorneys’ fees sought pursuant to the Stipulation
will be the only fees sought by Plaintiffs or Plaintiffs’ counsel in the Actions
in both the Kentucky and Delaware Actions.  No other application for attorneys’
fees and expenses, including any application in excess of the amount stated
above, shall be filed by counsel for Plaintiffs in the Actions, and counsel for
Plaintiffs expressly waive any right to seek any award of such fees and expenses
in connection with the Settlement of the Actions except as provided in this
paragraph. Further, Plaintiffs will seek up to a total of $50,000 in plaintiff
incentive awards in recognition of the Plaintiffs’ efforts on behalf of the
Class in creating the Settlement Payment. The Court may consider and rule upon
the fairness, reasonableness and adequacy of the Settlement independently of any
award of attorneys’ fees and expenses or Plaintiffs’ incentive awards.
 
Notice to Persons or Entities That Held Ownership On Behalf Of Others
 
Brokerage firms, banks and/or other persons or entities who held Units of NTS
during the period from and including December 28, 2012, for the benefit of
others are requested promptly to send this Notice to all of their respective
beneficial owners.  If additional copies of the Notice are needed for forwarding
to such beneficial owners, any requests for such copies may be made to Rita K.
Martin, NTS Investor Services, 600 North Hurstbourne Parkway, Suite 300,
Louisville, Kentucky 40222; phone:  502-426-4800 x544.
 
Scope of this Notice and Additional Information
 
This Notice is not all-inclusive.  The references in this Notice to the
pleadings in the Action, the Stipulation and other papers and proceedings are
only summaries and do not purport to be comprehensive.  For the full details of
the Action, the claims that have been asserted by the
 
 
16
 
 
 parties and the terms and conditions of the Settlement, including a complete
copy of the Stipulation and related Orders and proposed forms of Orders, members
of the Class are referred to the Court files for the Action.
 
Any questions you or your counsel have concerning this Notice may be directed to
Plaintiffs’ Counsel.
 
PLEASE DO NOT WRITE OR CALL THE COURT OTHER THAN FOR THE PURPOSES OF FILING
NOTICES OR MAKING OBJECTIONS AS SET FORTH IN THIS NOTICE.
 
Dated: February [__], 2014
 

 
              
Charles L. Cunningham, Jr.
   Circuit Judge

1266511_2.DOCX

 
17
 
 
EXHIBIT D

--------------------------------------------------------------------------------

 
Additional Disclosures to Provide to NTS Unitholders
 
1.  
The basis for Centerboard Securities’ (“Centerboard”) growth assumptions to
extrapolate NTS’ 2012 projections through 2017.

 
2.  
The multiples observed for each company considered in Centerboard’s Selected
Public Companies Analysis, as set forth on page 16 of the Centerboard fairness
presentation.

 
3.  
The calculation that Centerboard used to arrive at a per unit value range of
$6.00 to $9.75 in the Selected Public Companies Analysis, including the
reference ranges used.

 
4.  
Why Centerboard excluded Highwoods Properties, Inc. from the table summarizing
the observed trading multiples in the Selected Public Companies Analysis.

 
5.  
The specific analyst estimates that were used in connection with Centerboard’s
Discounted Cash Flow Analysis.

 
6.  
Centerboard’s “assumptions concerning growth in general and administrative costs
and required maintenance capital expenditures and net working capital,” for the
Discounted Cash Flow Analysis.

 
7.  
Why J.D. Nichols or another member of the Control Group did not inform the
Special Committee about Messrs. A and B’s interest in pursuing a potential
transaction until December 5, 2012 even though Nichols received an email from
Messrs. A and B on November 26, 2012.

 

1265742_1

 
 
 
 
EXHIBIT E

--------------------------------------------------------------------------------

13-CI-00452
JEFFERSON CIRCUIT COURT
DIVISION FOUR (4)
HON. CHARLES L. CUNNINGHAM, JR.

STEPHEN J. DANNIS, et al.,
 
PLAINTIFFS
   
ORDER AND FINAL JUDGMENT
J. D. NICHOLS, et al.
DEFENDANTS
   

 
The Stipulation and Agreement of Compromise, Settlement and Release, dated
February __, 2014 (the “Stipulation”), of the above class action (the “Action”),
and the settlement contemplated thereby (the “Settlement”) having been presented
at the Final Settlement Hearing on April 24, 2014, pursuant to the Preliminary
Approval Order entered herein on February ____, 2014 (the “Preliminary Approval
Order”), which Stipulation was entered into by plaintiffs in the Action (the
“Plaintiffs”), through Plaintiffs’ Counsel, and by defendants NTS Realty
Holdings Limited Partnership (“NTS” or the “Company”), NTS Realty Capital, Inc.,
J. D. Nichols, Brian Lavin, NTS Merger Parent, LLC, Mark Anderson, John Daly
Sr., and John Lenihan (collectively “Defendants,” and together with Plaintiffs,
the “Parties”) in the Action and which is incorporated herein by reference; and
the Jefferson Circuit Court (the “Court”) having determined that notice of said
hearing was given to the Class in accordance with the Preliminary Approval Order
and that said notice was adequate and sufficient; and the Parties having
appeared by their attorneys of record; and the attorneys for the respective
Parties having been heard in support of the Settlement of the Action, and an
opportunity to be heard having been given to all other persons desiring to be
heard as provided in the notice; and the entire matter of the Settlement having
been considered by the Court;
 
IT IS HEREBY ORDERED, ADJUDGED AND DECREED, this ___________ day of ___________,
2014, that:

 
 
 
 
1.  The Notice of Pendency of Consolidated Class Action, Proposed Settlement of
Consolidated Class Action, Settlement Hearing and Right to Appear (“Notice”) has
been given to the Class (as defined below) pursuant to and in the manner
directed by the Preliminary Approval Order, proof of the mailing of the Notice
has been filed with the Court and a full opportunity to be heard has been
offered to all parties to the Action, the Class and persons in interest. The
form and manner of the Notice is hereby determined to have been the best notice
practicable under the circumstances and to have been given in full compliance
with each of the requirements of Kentucky Rule of Civil Procedure 23 and due
process, and it is further determined that all members of the Class are bound by
the Order and Final Judgment herein.
 
2.  The Court hereby finds, pursuant to the Kentucky Rules of Civil Procedure
23.01 and 23.02, as follows:
 
a.  that (i) the Class, as defined below, is so numerous that joinder of all
members is impracticable, (ii) there are questions of law and fact common to the
Class, (iii) the claims of Plaintiffs are typical of the claims of the Class,
and (iv) Plaintiffs and Plaintiffs’ Lead Counsel have fairly and adequately
protected the interests of the Class;
 
b.  that the requirements of Kentucky Rules of Civil Procedures 23.01 and
23.02(a) and 23.02(b) have been satisfied;
 
c.  that the requirements of the Kentucky Rules of Civil Procedure and due
process have been satisfied in connection with the Notice;
 
d.  that the Action is hereby certified as a non-opt out class pursuant to
Kentucky Rules of Civil Procedure 23.01, 23.02(a) and 23.02(b), defined as:  Any
and all record holders and beneficial owners of NTS Units, and any holder of any
current or former right, upon due surrender of any equity or interest in a
predecessor partnership that was merged with and
 
 
2
 
 
into NTS and delivery of related documentation in connection with such
surrender, to exchange such equity or interest for NTS Units, other than the
Excluded Unitholders, their respective successors in interest, successors,
predecessors in interest, predecessors, representatives, trustees, executors,
administrators, heirs, assigns or transferees, immediate and remote, and any
person or entity acting for or on behalf of, or claiming under, any of them, and
each of them, together with their predecessors and successors and assigns, who
held Units of NTS and such rights at any time between December 31, 2012 and the
date of final approval; and
 
e.  that Plaintiffs are hereby certified as the Class representatives, and
Counsel are certified as Lead Class Counsel.
 
3.  The Settlement is found to be fair, reasonable and adequate and in the best
interests of the Class, and it is hereby approved. The Parties are hereby
authorized and directed to comply with and to consummate the Settlement in
accordance with its terms and provisions.
 
4.  This Order and Final Judgment shall not constitute any evidence or admission
by any of the Parties herein that any acts of wrongdoing have been committed by
any of the Parties to the Action and should not be deemed to create any
inference that there is any liability therefor.
 
5.  The Action is hereby dismissed with prejudice in its entirety as to the
Defendants and against Plaintiffs and all other members of the Class on the
merits and, except as provided in the Stipulation, without costs.
 
6.  This Order provides for the full and complete dismissal with prejudice of
the Actions, and the settlement and release of, and a permanent injunction
barring, any claims, demands, rights, actions, causes of action, liabilities,
damages, losses, obligations, judgments, duties, suits, costs, expenses, matters
and issues known or unknown, contingent or absolute, suspected or unsuspected,
disclosed or undisclosed, liquidated or unliquidated, matured or
 
 
 
3
 
 
unmatured, accrued or unaccrued, apparent or unapparent, that have been, could
have been, or in the future can or might be asserted in any court, tribunal or
proceeding (including but not limited to any claims arising under federal,
state, foreign or common law, including the federal securities laws and any
state disclosure law), by or on behalf of Plaintiffs or any member of the Class,
whether individual, direct, class, derivative, representative, legal, equitable,
or any other type or in any other capacity (collectively, the “Releasing
Persons”) against NTS, Realty Capital, NTS Realty Partners, LLC, J.D. Nichols,
Brian F. Lavin, Parent, Merger Sub, NTS Development Company, NTS Management
Company, Mark D. Anderson, John P. Daly, Sr., and John Lenihan,  or any of their
families, parent entities, controlling persons, associates, affiliates or
subsidiaries and each and all of their respective past or present officers,
directors, stockholders, principals, representatives, employees, attorneys,
financial or investment advisors, consultants, accountants, investment bankers,
commercial bankers, entities providing fairness opinions, underwriters, brokers,
dealers, advisors or agents, heirs, executors, trustees, general or limited
partners or partnerships, limited liability companies, members, managers, joint
ventures, personal or legal representatives, estates, administrators,
predecessors, successors and assigns (collectively, the “Released Persons”),
which have arisen, could have arisen, arise now or hereafter out of or relating
in any manner to the acts, events, facts, matters, transactions, occurrences,
statements, representations, misrepresentations or omissions or any other matter
whatsoever set forth in or otherwise related, directly or indirectly, to the
allegations in the Actions, claims of mismanagement or self-dealing against the
management of NTS, the Original Merger Agreement, the Amended Merger Agreement,
the Proposed Transactions, or disclosures made in connection therewith
(including the adequacy and completeness of such disclosures)
 
 
4
 
 
(collectively, the “Settled Claims”); however, the Settled Claims shall not
include any claims to enforce the Settlement.
 
7.  Defendants and their Released Persons are deemed to have, and by operation
of this Order and Final Judgment have, fully, finally and forever released,
relinquished and discharged Plaintiffs, each and all members of the Class, and
Plaintiffs’ counsel from all claims (including unknown claims) arising out of,
relating to, or in connection with the institution, prosecution, assertion,
settlement or resolution of the Actions or the Settled Claims.
 
8.  The release contemplated by this Stipulation extends to claims that
Plaintiffs, for themselves and on behalf of the Class, do not know or suspect to
exist at the time of the release, which if known, might have affected the
decision to enter into the release or to object or not to object to the
Settlement. Plaintiffs and each member of the Class, shall be deemed to waive,
and shall waive and relinquish to the fullest extent permitted by law, any and
all provisions, rights and benefits conferred by any law of the United States or
any state or territory of the United States, or principle of common law, or any
other law, which governs or limits a person’s release of unknown claims; further
that (i) the Plaintiffs, for themselves and on behalf of the Class, shall be
deemed to waive, and shall waive and relinquish, to the fullest extent permitted
by law, the provisions, rights and benefits of Section 1542 of the California
Civil Code which provides as follows:
 
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR
 
(ii) Plaintiffs, for themselves and on behalf of the Class, also shall be deemed
to waive any and all provisions, rights and benefits conferred by any law of any
state or territory of the United States, or principle of common law, or any
other law, which is similar, comparable or equivalent
 
 
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to California Civil Code § 1542; and (iii) Plaintiffs, for themselves and on
behalf of the Class, acknowledge that members of the Class may discover facts in
addition to or different from those that they now know or believe to be true
with respect to the subject matter of this release, but that it is their
intention, as Plaintiffs and on behalf of the Class, to fully, finally and
forever settle and release any and all claims released hereby, known or unknown,
suspected or unsuspected, which now exist, or heretofore existed, or may
hereafter exist, and without regard to the subsequent discovery or existence of
such additional or different facts.
 
9.  Plaintiffs’ Counsel are hereby awarded attorneys’ fees in the amount of
$_________________, which amount the Court finds to be fair and reasonable, and
reimbursement of Plaintiffs’ Counsel’s expenses in the amount of
$_________________ is hereby approved, which amounts shall be paid in accordance
with the terms of the Stipulation.
 
10.  Plaintiffs’ application for incentive awards is granted in the amount of
$_________________, in recognition of Plaintiffs’ efforts in assisting in the
creation of the Settlement Payment. The award shall be divided as follows:
plaintiff  R. Jay Tejera is awarded $_________________, plaintiff Gerald A.
Wells is awarded $_________________ and plaintiffs Stephen and Sharon Dannis are
awarded a total of $_________________.
 
 

   
                         
Hon. Charles L. Cunningham, Jr.
Circuit Judge

 
1265643_3.DOCX
 
 
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