Exhibit 99.03
FORM OF
LOCK-UP AGREEMENT
This Lock-Up Agreement (the "AGREEMENT") is made and entered into this ___
day of ____________, 2004, by and between NTS REALTY HOLDINGS LIMITED
PARTNERSHIP, a Delaware limited partnership (the "PARTNERSHIP"), and each of the
executive officers of NTS Realty Capital, Inc., a Delaware corporation and a
general partner of the Partnership, that are listed on the attached SCHEDULE A
(each a "UNITHOLDER" and, collectively, the "UNITHOLDERS"), under the following
circumstances:
A. The Unitholders currently own limited partnership interests or
membership interests in one more of NTS-Properties III, NTS-Properties IV,
NTS-Properties V, a Maryland limited partnership, NTS-Properties VI, a Maryland
limited partnership and NTS-Properties VII, Ltd. (collectively, the "PREDECESSOR
PARTNERSHIPS") and ORIG LLC ("ORIG").
B. On December 12, 2001, a putative class of current and former owners
of interests in the Predecessor Partnerships (the "CLASS") filed a lawsuit
captioned XXXXXXXX, ET AL. V. NTS-PROPERTIES ASSOCIATES, ET AL., Case No. C
01-05090, in the Superior Court of the State of California (the "LITIGATION").
The Class's claims arise out of alleged acts, errors, omissions and practices in
connection with the operation and management of the Predecessor Partnerships.
Certain of the Unitholders or affiliates of the Unitholders are included as
defendants in the Litigation.
C. The Class entered into that certain Stipulation and Agreement of
Settlement dated December 5, 2003 (the "LITIGATION SETTLEMENT"), in connection
with the Litigation.
D. Pursuant to the terms of the Litigation Settlement, and in connection
with either or both of: (i) the Agreement and the Plan of Merger dated February
3, 2004, among the Partnership and the Predecessor Partnerships (the "MERGER
AGREEMENT"), or (ii) the Contribution Agreement dated February 3, 2004, between
the Partnership and ORIG (the "CONTRIBUTION AGREEMENT"), each Unitholder will
receive units in the Partnership (the "UNITS").
E. As part of the consideration provided to the Class for entering into
the Litigation Settlement, each Unitholder has agreed that the Units will be
subject to certain restrictions as set forth below.
NOW THEREFORE, in consideration of the issuance by the Partnership of the
Units to the Unitholder and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Unitholder hereby
agrees as follows:
1. The Unitholder hereby agrees that for a period ending on the earlier
of: (i) the date which is two years after the Closing Date (as defined in the
Merger Agreement and the Contribution Agreement) or (ii) the date on which
Class's special membership interest in ORIG is terminated as provided in Section
2.6(a) of the Litigation Settlement (the "LOCK-UP PERIOD"),
the Unitholder will not directly or indirectly: (i) issue, offer, agree to offer
to sell, sell, grant an option for the purchase or sale of, transfer, assign,
hypothecate, distribute or otherwise encumber or dispose of any Units (whether
pursuant to Rule 144 of the General Rules and Regulations under the Securities
Act of 1933, as amended, or otherwise) or (ii) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of the Units. Notwithstanding the
foregoing, if applicable to the Unitholder, this PARAGRAPH 1 shall not prohibit:
(a) a bona fide gift or gifts of all or a portion of the Units, provided that
the Unitholder provides written notice of such gifts to the Partnership and the
donee or donees thereof agree in writing to be bound by the terms and conditions
of this Agreement; (b) transfers upon the death of the Unitholder to his
executors, administrators, testamentary trustees, legatees or beneficiaries and
(c) transfers made by the Unitholder to a trust or custodianship, the
beneficiaries of which include the Unitholder, his spouse or descendants
(biological or adoptive); provided that the transferee or transferees agree in
writing to be bound by the terms and conditions of this Agreement. In
furtherance of the foregoing, the Partnership and its transfer agent are hereby
authorized to decline to make any transfer of the Units if such transfer would,
or could be reasonably expected to, constitute a violation or breach of this
Agreement.
2. The Unitholder hereby represents and warrants that he, she or it has
full capacity to enter into this Agreement and that, upon request, the
Unitholder will execute and deliver any additional documents reasonably
necessary in connection with the enforcement hereof. Any obligations of the
Unitholder shall be binding upon the heirs, personal representatives, successors
and assigns of the Unitholder.
3. The Unitholder hereby consents to the placing of legends or
stop-transfer orders with the transfer agent of the Partnership with respect to
any of the Units registered in the name of the Unitholder or beneficially owned
by the Unitholder.
4. All notices, demands, consents, requests, instructions and other
communications to be given or delivered or permitted under or by reason of the
provisions of this Agreement, or in connection with the transactions
contemplated hereby and thereby, shall be in writing and shall be deemed to be
delivered and received by the intended recipient as follows: (a) if personally
delivered, on the business day of such delivery (as evidenced by the receipt of
the personal delivery service); (b) if mailed by certified or registered mail,
return receipt requested, four (4) business days after the aforesaid mailing;
(c) if delivered by overnight courier (with all charges having been prepaid), on
the second business day of such delivery (as evidenced by the receipt of the
overnight courier service of recognized standing); or (d) if delivered by
facsimile transmission, on the business day of such delivery if sent by 6:00
p.m. in the time zone of the recipient, or if sent after that time, on the next
succeeding business day (as evidenced by the printed confirmation of delivery
generated by the sending party's telecopier machine). If any notice, demand,
consent, request, instruction or other communication cannot be delivered because
of a changed address of which no notice was given (in accordance with this
PARAGRAPH 4), or the refusal to accept same, the notice shall be deemed received
on the business day the notice is sent (as evidenced by a sworn affidavit of the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers as
applicable:
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If to the Unitholder:
At the address set forth on the signature page to this Agreement.
If to the Partnership:
NTS Realty Holdings Limited Partnership
00000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Or to such other address as a party may have furnished to the other parties
in writing in accordance herewith. Any notice consent, direction, approval,
instruction, request or other communication given in accordance with this
PARAGRAPH 4 shall be effective after it is received by the intended recipient.
5. This Agreement shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Delaware (without giving
effect to the provisions thereof relating to conflicts of law that would defer
to the substantive laws of another jurisdiction).
6. This Agreement may be executed in two (2) or more counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.
[SIGNATURE PAGE FOLLOWS IMMEDIATELY]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
PARTNERSHIP:
NTS REALTY HOLDINGS LIMITED
PARTNERSHIP, a Delaware limited partnership
By:
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Its:
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UNITHOLDER:
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By:
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Address:
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Facsimile:
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SCHEDULE A
X.X. Xxxxxxx
Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
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