Item 1.01. Entry into a Material Definitive Agreement.
On June 6, 2014, NLP, through its wholly-owned subsidiaries - NLP Willows, LLC,
NLP Castle Creek, LLC, NLP Swift Creek, LLC, NLP Richland, LLC, and NLP
Whitworth, LLC - entered into five supplemental mortgage loans (the
"Supplemental Loans") with Holliday Fenoglio Fowler, L.P. ("HFF") under the
Federal Home Loan Mortgage Company ("Freddie Mac") CME Program having an
aggregate principal amount of $31,000,000. The Supplemental Loans contain
customary representations and warranties and covenants and are secured by a
mortgage on the following NLP properties: The Willows of Plainview Apartments
located in Louisville, KY, Castle Creek Apartments located in Indianapolis, IN,
Swift Creek Apartments located in Richmond, VA, and The Grove at Richland
Apartments and The Grove at Whitworth Apartments located in Nashville,
Tennessee. The Supplemental Loans are junior in priority to the existing senior
mortgage loans outstanding on each of the properties. Each Supplemental Loan is
(i) cross-collateralized and cross-defaulted with the other Supplemental Loans,
and (ii) cross-defaulted with the existing senior mortgage loans and the
existing mortgage loans of three additional wholly-owned subsidiaries of NLP,
namely, NLP Lake Clearwater, LLC, NLP Park Place, LLC and NLP Willow Lake,
LLC. The Supplemental Loans carry a 4.69% fixed rate of interest, have a 30-year
amortization and mature on January 1, 2020, the maturity date of the existing
senior mortgage loans. Additionally, in connection with each Supplemental Loan,
Mr. J.D. Nichols issued personal guarantees pursuant to which Mr. Nichols
guarantees losses (if any) incurred by the lender(s) as a result of the
respective borrower's failure to perform certain covenants contained in the loan
agreements. Under such guarantees, in the event of an occurrence of certain
covenant breaches, Mr. Nichols could be liable for the full value of the
NLP used proceeds of the Supplemental Loans to fund a portion of the merger
consideration payable to NLP unitholders under the terms of the Merger Agreement
as well as paying costs and expenses relating to the merger and owed under the
Settlement Agreement and obtaining the Supplemental Loans. Additionally, as
previously reported by NLP on its Current Report on form 8-K filed with the SEC
on June 5, 2014, on May 30, 2014, NLP increased the availability on its line of
credit with PNC Bank, National Association from $10 million to $16 million,
subject to certain terms and conditions. NLP used some of the availability under
the line of credit to fund a portion of the merger consideration payable to NLP
unitholders under the terms of the Merger Agreement as well as paying costs and
expenses relating to the merger and owed under the Settlement Agreement.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet arrangement of a Registrant.
The information provided under Item 1.01 of this Current Report on Form 8-K is
hereby incorporated by reference under this Item 2.03.
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
Promptly after the Effective Time, NLP notified the NYSE MKT of the closing of
the merger and requested that the NYSE MKT effect a halt of trading of NLP's
Units as of the close of trading on June 10, 2014
and a trading suspension of
NLP's Units effective prior to the opening of the market on June 11, 2014
also requested that the NYSE MKT file a Form 25 with the SEC
to delist NLP's
Units from the NYSE MKT and to deregister NLP's Units under Section 12(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Upon the
effectiveness of the Form 25, NLP will file a Certification and Notice of
Termination on Form 15 with the SEC
to withdraw NLP's Units from registration
under Section 15(d) of the Exchange Act and to suspend NLP's reporting
obligations under Sections 13 and 15(d) of the Exchange Act in reliance on Rule
12h-3(b)(1)(i). NLP intends to file the Form 15 on or about June 23, 2014
Item 3.03. Material Modification to Rights of Security Holders.
On June 10, 2014
, at the Effective Time, pursuant to the terms of the Merger
Agreement, each NLP Unit (other than those Units owned by the Excluded
Unitholders) was converted into the right to receive $8.68
Item 5.02. Departure of Directors or Certain Officers; Election of Director;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 10, 2014
, at the Effective Time, each of Mark D. Anderson
, John P. Daly
and John S. Lenihan
, resigned from their positions as members of the Board of
Directors of NTS Realty Capital
, the managing general partner of NLP. J.D.
Nichols, our founder and Chairman, and Brian Lavin
, our President and CEO,
continue to serve as members of the Board of Directors of NTS Realty Capital
Item 8.01. Other Events.
NLP issued a press release on June 10, 2014
announcing the consummation of the
merger. A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired: N/A
(b) Pro Forma Financial Information: N/A
(c) Shell Company Transactions: N/A
99.1 Press release of NTS Realty Holdings Limited Partnership, dated June 10,