SC 14D9/A

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14D-9/A
Amendment No. 1

Solicitation/Recommendation Statement under Section 14(d)(4)
of the Securities Exchange Act of 1934

METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,

a California Limited Partnership

(Name of Subject Company)

METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.

a California Limited Partnership

(Names of Persons Filing Statement)

LIMITED PARTNERSHIP ASSIGNEE UNITS

(Title of Class of Securities)

59159T 10 1

(CUSIP Number of Class of Securities)

Herman Howerton
SSR Realty Advisors, Inc.
One California Street, Suite 1400
San Francisco, CA 94111
Telephone Number: (415) 678-2000

(Name, address and telephone numbers of persons authorized to receive notices and
communications on behalf of the persons filing statement)

With a copy to:

Reed Smith Crosby Heafey LLP
Attention: Kenneth J. Philpot
Two Embarcadero Center, Suite 2000
San Francisco, CA 94111
Telephone Number: (415) 543-8700

o   Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer

TABLE OF CONTENTS

	Item 8. Additional Information.
	Item 9. Exhibits
SIGNATURE
Exhibit (a)(4)
Exhibit (a)(5)
Exhibit (a)(6)
Exhibit (a)(7)
Exhibit (a)(8)

     This Amendment No. 1 amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission on May 28, 2003 (the “Schedule 14D-9”) by Metric Partners Growth Suite Investors, L.P., a California Limited Partnership (the “Partnership”) relating to the tender offer by Kenneth E. Nelson (the “Offeror”) to purchase 30,000 Units of the Partnership, at $86.00 for each Unit, net to the seller in cash, less the amounts of any distributions declared or paid from any source by the Partnership with respect to the Units after January 1, 2003 (without regard to the record date), plus a release of certain litigation claims, upon the terms and conditions set forth in an Offer to Purchase and related Agreement of Sale and Assignment which were attached as Exhibits to the Tender Offer Statement on Schedule TO dated May 14, 2003, as such Schedule TO was amended by Amendment No. 1 dated June 25, 2003 as filed with the Securities and Exchange Commission on June 26, 2003 (as amended, the “Schedule TO”). Capitalized terms used but not defined herein have the meanings ascribed to them in the Schedule 14D-9.

Item 8. Additional Information.

     Item 8 is hereby amended by amending and restating the section under the heading “Tender Offer Litigation” as follows:

     Tender Offer Litigation

     In light of the inaccuracies and material misstatements and omissions in the Offer documents and in the Solicitation Statement and the inherent unfairness of the proposed Offer, the Partnership filed an action on May 28, 2003 in the United States District Court, Northern District of California, in San Francisco, California against the Offeror requesting the Court to enjoin the consent solicitation and the Offer under the present terms until such time as the Offeror has revised his disclosure and the structure of the Offer to be not misleading and not unfair to the Unit holders. A copy of the complaint filed in the action is filed as Exhibit (a)(5) and is incorporated herein by this reference. On June 3, 2003 the Partnership filed an ex parte application for a temporary restraining order and order to show cause why a preliminary injunction should not issue with respect to the Offer and the consent solicitation. A copy of the ex parte application and the related Memorandum of Points and Authorities in support of the ex parte application are filed as Exhibits (a)(6) and (a) (7), respectively, and are incorporated herein by this reference. A hearing on the motion was held by the Court on June 20, 2003. At the hearing the Court found that the Offer and the consent solicitations violated the provisions of the Limited Partnership Agreement that required a written request of Unit holders holding at least 10 percent of the Units to call for a vote of the Unit holders. On June 27, 2003 the Court issued a formal order enjoining the Offeror from taking any further action in support of his Offer and consent solicitations, except that the Offeror is permitted to attempt to convene a vote of Limited Partners in accordance with the terms of the Limited Partnership Agreement. A copy of the Court order is filed as Exhibit (a)(8) and is incorporated herein by this reference.

Item 9. Exhibits

     Item 9 is amended by adding the following exhibits:

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Exhibit Number	Description
(a)(4)	Letter to Unit holders, dated June 30, 2003.
(a)(5)	Complaint filed by Metric Partners Growth Suite Investors, L.P. on May 28, 2003 in the United States District Court, Northern District of California, against Kenneth E. Nelson.
(a)(6)	ExParte Application filed by Metric Partners Growth Suite Investors, L.P. on June 3, 2003 in the United States District Court, Northern District of California.
(a)(7)	Memorandum of Points and Authorities in support of ex parte application filed by Metric Partners Growth Suite Investors, L.P. on June 3, 2003 in the United States District Court, Northern District of California.
(a)(8)	Temporary Restraining Order issued in the United States District Court, Northern District of California against Kenneth E. Nelson, dated June 27, 2003.

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SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: June 30, 2003	METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., a California Limited Partnership
	By:	Metric Realty, an Illinois general partnership,      its Managing General Partner

By: SSR Realty Advisors, Inc.,
a Delaware corporation,
     its Managing General Partner

By:	/s/Herman H. Howerton
	Herman H. Howerton      its Managing Director, General Counsel

-4- EX-99.(A)(4) 3 f90550a1exv99wxayx4y.txt EXHIBIT (A)(4) Exhibit (a)(4) METRIC PARTNERS GROWTH SUITE INVESTORS, L.P. June 30, 2003 Dear Metric Partners Growth Suite Investors, L.P. Unit holder: In connection with the tender offer made by Kenneth Nelson, we previously advised you that the Partnership intended to file a lawsuit against Mr. Nelson requesting the Court to enjoin Mr. Nelson's offer and his consent solicitations. On May 28, 2003, the Partnership filed its lawsuit in the United States District Court, Northern District of California, in San Francisco, California. On June 3, 2003 the Partnership filed an ex-parte application for a temporary restraining order with respect to the tender offer and the consent solicitations. A hearing on the motion was held by the Court on June 20, 2003. At the hearing the Court found that Mr. Nelson's tender offer and consent solicitations violated the provisions of the Partnership's Partnership Agreement that required a written request of Unit holders holding at least 10 percent of the Partnership's Units to call for a vote of the Unit holders. On June 27, 2003 the Court issued a formal order enjoining Mr. Nelson from taking any further action in support of his tender offer and consent solicitations except that he is permitted to attempt to convene a vote of limited partners in accordance with the terms of the Partnership's Partnership Agreement. The Partnership has filed with the Securities and Exchange Commission an amendment to its Recommendation Statement on Schedule 14D-9 in light of the above development. A copy of the Partnership's complaint against Mr. Nelson, the ex-parte application for the temporary restraining order, the Memorandum of Points and Authorities in support of the ex-parte application, and the Court's June 27, 2003 order have been filed as exhibits to the Schedule 14D-9 amendment. A copy of Amendment No. 1 to the Partnership's Schedule 14D-9 (including the exhibits to the Amendment) may be obtained from our information agent, Georgeson Shareholder, or at the website of the Securities and Exchange Commission at www.sec.gov. One California Street, Suite 1400 -- San Francisco, CA 94111-5415 If you have any questions, please contact our information agent, Georgeson Shareholder (toll-free) at (800) 849-6648. Sincerely, METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., a California Limited Partnership, By: Metric Realty, an Illinois general partnership, its Managing General Partner By: SSR Realty Advisors, Inc., a Delaware corporation, its Managing General Partner By: /s/ Herman H. Howerton Herman H. Howerton Its Managing Director, General Counsel EX-99.(A)(5) 4 f90550a1exv99wxayx5y.txt EXHIBIT (A)(5) Exhibit (a)(5) REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Kenneth J. Philpot (State Bar No. 62401) Heather Lenhardt (State Bar No. 217580) REED SMITH CROSBY HEAFEY LLP Two Embarcadero Center, Suite 2000 San Francisco, CA 94111 MAILING ADDRESS: P.O. Box 7936 San Francisco, CA 94120-7936 Telephone: 415.543.8700 Facsimile: 415.391.8269 Attorneys for Plaintiff Metric Partners Growth Suite Investors, L.P. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA METRIC PARTNERS GROWTH No. SUITE INVESTORS, L.P., a California limited partnership, METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.'S COMPLAINT FOR: Plaintiff, (1) VIOLATIONS OF SECURITIES EXCHANGE ACT AND THE RULES AND REGULATIONS vs. PROMULGATED THEREUNDER (2) VIOLATION OF PARTNERSHIP AGREEMENT KENNETH E. NELSON AND ASSIGNMENT AGREEMENT (3) TORTIOUS INTERFERENCE WITH Defendant. CONTRACTUAL RELATIONS (4) BREACH OF FIDUCIARY DUTY (5) SOLICITING, AIDING AND ABETTING BREACH OF FIDUCIARY DUTY AND FOR DECLARATORY AND INJUNCTIVE RELIEF No. - 1 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. PRELIMINARY STATEMENT 1. Plaintiff Metric Partners Growth Suite Investors, L.P. (the "Partnership") brings this action to enjoin preliminarily, temporarily and permanently, an on-going tender offer by defendant Kenneth E. Nelson ("Nelson") through which Nelson is attempting to fraudulently induce thousands of holders of limited partnership interests in the Partnership ("Unit Holders") into giving Nelson control of the Partnership so that he can engage in gross self-dealing with the Partnership's assets. 2. For the past 10 years, Nelson has battled the Partnership in litigation that has thus far culminated in a judgment awarding Nelson zero dollars, which he has appealed. Having struck out thus far in the courts, he instead recently has crafted his fraudulent tender offer in an attempt to dupe and coerce unwitting Unit Holders into handing him the litigation award that has thus far eluded him. On May 14, 2003, he filed a proxy solicitation and a tender offer statement with the SEC for dissemination to the 4,000 plus Unit Holders of the Partnership. In those statements and offer, Nelson seeks to obtain the consent of the majority of the Unit Holders to proposals under which Nelson would (a)"purchase" just over 50% of Metric's units, (b) remove the general partners and appoint himself its managing general partner, (c) approve a $10 million judgment against the Partnership, in favor of a Nelson-related entity (GP Credit) to settle his lawsuits against the Partnership, (d) immediately pay GP Credit $4 million of the "settlement," and (e) then use $2.8 million loaned to him by GP Credit from its settlement money to pay for his "purchase" of the Partnership units. In other words, he proposes to use the Partnership's own assets to pay himself an outrageous sum to settle litigation whose probable value is nothing. No. - 1 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 3. Nelson seeks to accomplish this by evading the requirements in the Partnership agreement for calling a vote of the Unit Holders and by defrauding the Unit Holders. Although the Partnership Agreement only permits a vote of the Unit Holders upon request of the Managing General Partner or 10% of the Unit Holders, Nelson simply initiated his proxy solicitation statements and tender offer to each Unit Holder without disclosing that he had not complied with the Partnership's procedure for calling a vote of the Unit Holders. Nelson's failure to follow the procedures set forth in the Assignment Agreement and the Partnership Agreement render all of his consent solicitations invalid and make immediate declaratory and injunctive relief appropriate in order to halt the confusion that his invalid offer may otherwise cause among the unsuspecting Unit Holders. 4. Moreover, in violation of multiple securities laws, Nelson's consent solicitations and tender offer are riddled with deceptive statements or material omissions that are likely to deceive the Unit Holders into failing to realize that Nelson is proposing a raw deal. The defects and deficiencies in Nelson's disclosures warrant injunctive relief against continuation and consummation of the coercive tender offer pending fair and complete corrective disclosures and the passage of a reasonable time thereafter. 5. In addition, Nelson's takeover proposals are structured to enable Nelson and a majority of the Unit Holders to breach their fiduciary duty to minority Unit Holders. Nelson's proposal provides that he will become the Partnership's general partner and cause it to settle his lawsuits against the Partnership. Thus, Nelson will owe the Partnership and the Unit Holders a fiduciary duty when he deals himself a settlement favorable to himself but fundamentally unfair to the Partnership. In addition, Nelson's plan is No. - 2 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. coercive because his plan offers value only to the just over 50% of units that he proposes to buy, he threatens the Unit Holders with exposure to personal liability unless they agree to tender their units to him, and yet he fails to provide any factual analysis or legal support to the Unit Holders so that can assess the validity of his claims and threats against them. Accordingly, the Unit Holders may believe that unless they join a tendering majority now, they will become part of a minority that is stuck with units that are essentially worthless while continuing as defendants in a lawsuit Nelson has already filed. 6. Nelson's tender offer is the latest in a series of dubious schemes that he has orchestrated in an attempt to manipulate the results of 10 plus years of litigation in which he has been embroiled. The Partnership is concerned at even the possibility that its Unit Holders might be duped into joining with a person whose history and current proposal all reek of impending disaster for the Partnership. Under these circumstances, Nelson should not be permitted to conduct, let alone consummate, an abusive and coercive tender offer that threatens to deplete the Partnership's assets for his own benefit, to settle pending lawsuits without justification, and to impose disastrous financial consequences on the remaining minority Unit Holders. Accordingly, the Partnership by and through its attorneys, hereby alleges as its Complaint against Nelson as follows: JURISDICTION AND VENUE 7. This is an action to enjoin, preliminarily, temporarily and permanently, conduct in violation of the Securities Exchange Act of 1934, No. - 3 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. including Sections 14(a), (d) and 14(e) of the Exchange Act and the rules and regulations promulgated thereunder. The jurisdiction of this Court is invoked pursuant to 28 U.S.C. Section 1332 (federal question jurisdiction) and 15 U.S.C. Section 78aa (jurisdiction over claims arising under the Securities Exchange Act of 1934). 8. This action is also brought for violations of the laws of the State of California, including tortious interference with contractual relations, breach of fiduciary duty, and soliciting, aiding and abetting breach of fiduciary duty. These claims are related to, and form part of the case or controversy that arises under the federal securities laws. The Court's jurisdiction over the state claims is supplemental to its jurisdiction over the federal securities laws. The jurisdiction of this Court is invoked pursuant to 28 U.S.C. Section 1367 (supplemental jurisdiction). 9. This Court has personal jurisdiction over non-resident Defendants pursuant to the California long-arm statute, California Code of Civil Procedure Section 410.10. 10. Venue is appropriate in the Northern District of California pursuant to 28 U.S.C. Section 1391(b) because a substantial part of the events giving rise to this complaint and a substantial part of the property that is the subject of this action is situated in this district. Venue also lies in this district under 15 U.S.C. Section 78aa because Nelson mailed proxy solicitation statements to the residences of Unit Holders of the Partnership located in this district. In addition, the general partners of the Partnership are headquartered in this district. No. - 4 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. PARTIES 11. Plaintiff Partnership is a California limited partnership and subject to the registration and reporting requirements of the federal securities laws. There are approximately 4,000 Unit Holders in the Partnership who own 59,919 Partnership Units. The Partnership, which commenced business in 1984, was created for the purpose of investing in, acquiring, managing and ultimately selling commercial hotel properties. 12. Defendant Nelson is an individual, and, upon information and belief, is a resident and citizen of the State of Wisconsin. Nelson is the bidder in the unlawful tender offer, and accompanying consent solicitations statements, that seeks majority control of the Partnership. FACTS A. Partnership Agreement and Assignment Agreement 13. Paragraph 4 of the Assignment Agreement provides that Metric Assignor, Inc. (the "Assignor Limited Partner") will vote the units assigned to Assignee Holders in accordance with written instructions received from the Assignee Holders, with respect to any matter to which a vote of Limited Partners is taken "in accordance with the Partnership Agreement." 14. Paragraph 16.3 of the Partnership Agreement sets forth the mechanisms for a vote of the Limited Partners. Pursuant to such paragraph, the Managing General Partner of the Partnership may call a meeting of the Limited Partners or call for a vote of the Limited Partners without a meeting No. - 5 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. on matters on which the Limited Partners are entitled to vote. Paragraph 16.3 of the Partnership Agreement also provides that the Managing General Partner shall call for a vote of the Limited Partners following receipt of a written request therefor by Limited Partners holding ten percent or more of the Units held by all Limited Partners as of the date of receipt of such written request. 15. The last sentence of Paragraph 4 of the Assignment Agreement provides that the Assignor Limited Partner shall request that the Managing General Partner submit a matter to the Limited Partners without a meeting pursuant to the Partnership Agreement upon written request of Assignee Holders owning Units which represent in the aggregate ten percent or more of all of the outstanding Units. 16. Thus, a vote of the Limited Partners may be called only upon the request of the Managing General Partner or upon the written request of ten percent of the Unit Holders. The Managing General Partner has not called for a vote of the matters identified in Nelson's proxy solicitation statement and the Managing General Partner has not received a written request therefor by Unit Holders holding ten percent or more of the Units. 17. The Partnership is informed and believes and on such information and belief alleges that Nelson is and was at all relevant times aware of the Partnership Agreement and Assignment Agreement. 18. Nelson solicited the breach of the Partnership Agreement and Assignment Agreement without disclosing to the recipient Unit Holders that he had not followed the Partnership's procedure for calling a vote of the No. - 6 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. limited partners. In his consent solicitation statement, Nelson solicited the Unit Holders to sign the attached consents to give direction to the Assignor Limited Partner of the Partnership as to how to vote on four separate proposals. Nelson solicited the Unit Holder vote and recommended approval of the four following proposals: (a) amendment to Paragraph 12.3 of the Partnership Agreement that would allow a purchaser to acquire control of the Partnership; (b) removal of the Managing General Partner and the Associate General Partner; (c) election of Nelson as the sole general partner of the Partnership; and (d) settlement of certain pending litigation between Nelson, Nashville Lodging Co. ("Nashville Lodging"), GP Credit Co. L.L.C. ("GP Credit") and the Partnership "by means of entry of a judgment in favor of GP Credit against the Partnership for $10 million." Nelson's tender offer statement also makes Unit Holder approval of these four solicited proposals a precondition to his tender offer. Nelson's consent solicitations are also confusing and misleading because he uses two different record dates for the Unit Holders whose approval he is soliciting. 19. In connection with Nelson's solicitation of the Unit Holders' written consents of his delineated proposals, Nelson attached consent cards to his filing material for the Unit Holders to vote for the proposals. Nelson also states that he provided the Unit Holders with postage-paid return envelopes for their "convenience" in returning the consent cards. B. Nelson's Tender Offer 20. Nelson is not currently a Unit Holder. Nelson's wife owns five Partnership Units. No. - 7 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 21. On May 14, 2003, Nelson initiated consent solicitations and a tender offer to the Partnership's Unit Holders.. On that same day, Nelson filed his tender offer statement on Schedule TO pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act ("Nelson's Offer"). By his Offer, Nelson seeks to acquire 30,000 of 59,919 Partnership Units, representing just over 50% control of the Partnership, at $86 for each Unit. A true and correct copy of Nelson's Tender Offer Statement Pursuant to Section 14(d)(1) and attached Exhibits ("Nelson's Offer") is attached as Exhibit "A" and is specifically incorporated herein in its entirety by this reference. 22. Nelson's Offer to purchase is expressly conditioned upon Unit Holder approval of four proposals: (a) a vote by the Limited Partners to amend the Partnership Agreement to allow the transfer of more than 5% of the Units in a calendar year or 50% of the Units in a twelve month period, (b) removal of the current general partners, (c) Nelson's election as sole general partner of the Partnership and (d) the settlement of specified litigation pending between Nelson, Nashville Lodging, and GP Credit and the Partnership. (See Nelson's Offer, Exhibit (a)(1) at p. 5, 10, 19-20). These four proposals are set forth in greater detail below. Approval of each of these proposals is a condition to Nelson's Offer for 30,000 of 59,919 Partnership Units at $86 per unit. 23. Under the terms of Nelson's Offer, he has ten business days after acceptance of all the preconditions, which include transfer of control to him and approval of his proposed settlement, before he is obligated to pay the tendering Unit Holders for their Units. No. - 8 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. C. Conditions of Nelson's Offer - Nelson's Proposals 24. Nelson filed a proxy solicitation statement seeking consent of the Unit Holders for the approval of four separate proposals. Approval of all of the following proposals is a precondition to Nelson proceeding with the purchase of the Units he seeks pursuant to his tender offer. AMENDMENT PROPOSAL 25. Nelson's first proposal repeats the recent proposal of the Managing General Partner to amend the Partnership Agreement to remove the provision that a maximum of five percent of the units may be transferred in any given year and a maximum of 50% transferred in a twelve month period (the "Amendment Proposal"). This provision was based on certain Internal Revenue Code provisions which provided that, if more than five percent of the units were transferred in any given calendar year or more than 50 percent were transferred in a 12 month period, the Partnership could be terminated or reclassified as a publicly traded partnership, with certain potential adverse tax consequences for the Unit Holders. Given that the Partnership was no longer actively involved in real estate operations, the Managing General Partner, with the consultation and advice from its legal counsel, determined there was no longer a risk that it and its Unit Holders would suffer adverse tax consequences if this restriction were lifted. Accordingly, in order to give the Unit Holders more freedom to sell their Units, the Managing General Partner recommended amending the Partnership Agreement to delete these restrictions. However, only 36.7 percent of the Unit Holders voted to approve this amendment by the May 8, 2003 deadline for submission of consents, so it has failed. As one of his four conditions, Nelson now renews No. - 9 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. the proposal and adopts the prior discussion of the issue that management previously presented to the Unit Holders. Without this change in the Partnership Agreement Nelson would be unable to acquire 50% of the units in one transaction. MANAGEMENT REMOVAL AND ELECTION PROPOSALS 26. Nelson's second and third proposals involve his self-declared plan to take over control of the Partnership by removing the existing General Partners and electing himself in their place. SETTLEMENT PROPOSAL 27. Nelson's fourth proposal seeks approval for the terms of a settlement of certain litigation between himself and the Partnership in accordance with a pre-drafted settlement agreement that he attaches to his filing materials. In this settlement agreement, the Partnership would purportedly settle all of the lawsuits, discussed more fully below, that Nelson has waged with the Partnership for the past ten years. 28. Under the terms of the proposed settlement, the Partnership would stipulate to a $10 million judgment against it and in favor of a Nelson related company called GP Credit. From existing cash reserves, the Partnership would immediately pay GP Credit $4 million. GP Credit would agree to defer collection of the remaining $6 million for three years to allow the Partnership to try to increase its assets by pursuing a breach of fiduciary duty lawsuit against the removed Managing General Partner and potential others that assisted the Managing General Partner. Nelson would use No. - 10 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Partnership assets to fund the litigation, but GP Credit would reimburse the Partnership for those expenses only if, and to the extent, the Partnership was successful in that litigation. Otherwise, the Partnership would absorb all of the costs and legal expenses. 29. Nelson's proposed settlement provides, "GP Credit further agrees that following such three-year period it will not attempt to collect more from Metric than an amount which would leave Metric with Two Million Dollars . . .. immediately prior to liquidation." (Emphasis added) 30. Under the proposed settlement, the Partnership would release Nelson, GP Credit and Nashville Lodging from any liability. In turn, these parties would release the Partnership from liability, but expressly reserve their rights as to all other persons. In his Offer materials, Nelson acknowledges that his protracted litigation battle with the Partnership presents a conflict of interest. Nelson claims that settlement of all litigation between the Partnership and him and his affiliated entities will solve this problem. D. Financing of Nelson's Offer 31. In his tender offer statement, Nelson recites that he will pay for the units he is purchasing with the proceeds of a loan from GP Credit, an entity that his wife manages. Nelson also discloses that he has a negative net worth in excess of $10 million and that most of his outstanding financial obligations are to GP Credit. Nelson further discloses that he will pledge all of his Partnership Units as security for his purchase of the Units. But Nelson does not disclose details of his relationship with GP Credit that would enable No. - 11 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. the Unit Holders to determine whether or not the Partnership's own assets are effectively funding Nelson's purchase. E. Background and History of the Partnership's Litigation With Nelson 32. For the past ten years, the Partnership and/or its Managing General Partner have been engaged in several protracted lawsuits with Nelson and/or his related entities, Nashville Lodging, and GP Credit. These include: Metric Partners Growth Suite Investors, L.P. v. Nelson, Superior Court of California, San Francisco County, Case No. 928065; Nashville Lodging Co. v. Metric Partners Growth Suite Investors, L.P. et al., Circuit Court, State of Wisconsin, Case No. 94CV001212 (inactive); Orlando Residence, Ltd. v. 2300 Elm Hill Pike, Inc. and Nashville Lodging Co. v. Metric Partners Growth Suite Investors, L.P., Chancery Court for Davidson County, Nashville, Tennessee, Case No. 94-1911-I; Metric Partners Growth Suite Investors, L.P. v. Nashville Lodging Co. et al., Chancery Court for Davidson County, Nashville, Tennessee, Case No. 96-1405-III; Nelson and Nashville Lodging Co. v. Metric Realty et al., Chancery Court for Davidson County, Nashville, Tennessee, Case No. 97-2189-III; ; GP Credit Co., LLC v. Metric Partners Growth Suite Investors, L.P. et al., Superior Court of California, San Francisco County, Case No. CGC-02-403301. The lawsuits stem from a disputed settlement agreement that the parties failed to finalize in 1993. The history of the Partnership's litigation with Nelson is long and complicated. 33. The Tennessee Court of Appeals recently summarized the background in Nelson v. Metric Realty, (referenced above as Chancery Court for Davidson County, Nashville, Tennessee, Case No. 97-2189-III) 2002 WL 31126649, *1-3, 2002 Lexis 698, *2-9 (Tenn. Ct. App. 2002), as follows: No. - 12 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. "This case is another chapter in the continuing saga of Kenneth E. Nelson, Nashville Lodging Co., Orlando Residence, Ltd., and [the Partnership]. "The seeds of the present dispute were sown in 1981 when Samuel H. Hardige [the correct spelling is Hardage] hired Kenneth E. Nelson to oversee one of his businesses. Mr. Hardige (sic) fired Mr. Nelson a short time later, thereby precipitating considerable litigation between Mr. Nelson and various business entities owned by Mr. Hardige. (sic) When the litigation was eventually settled, Nashville Residence Corporation (`Nashville Residence'), of which Mr. Nelson was the principal stockholder, received a tract of land at 2300 Elm Hill Pike in Nashville. In return, Nashville Residence and two sureties executed a $250,000 note to Orlando Residence, Ltd. ("Orlando Residence"), a limited partnership with Mr. Hardige (sic) as the general partner. Thereafter, Nashville Lodging Company (`Nashville Lodging'), a Tennessee-based limited partnership with Nashville Residence as its general partner, built a Marriott Hotel on the Elm Hill Property. "Nashville Residence defaulted on the note to Orlando Residence. In December 1986, Orlando Residence sued Nashville Residence in the United States District Court for the Middle District of Tennessee. Shortly after Orlando Residence filed suit, Nashville Residence quitclaimed the No. - 13 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Elm Hill property to Nashville Lodging. In 1989, Nashville Lodging sold the hotel and leased the property to [the Partnership]. In March 1990, Orlando Residence obtained a judgment in federal court against Nashville Residence for $250,000 plus interest. "Armed with its $250,000 judgment, Orlando Residence filed suit in the Chancery Court for Davidson County against Nashville Residence, Nashville Lodging, Mr. Nelson, and [the Partnership] attacking the conveyance of the Elm Hill property as a fraudulent conveyance. Orlando Residence eventually succeeded with its claim and was awarded $501,934 in compensatory and $850,000 in punitive damages from Nashville Residence and Nashville Lodging. "[T]his court reversed Orlando Residence's judgment and remanded the case for a new trial.... "On the second trial of the fraudulent conveyance action. . ., the jury again found the conveyance from Nashville Resident to Nashville Lodging in 1986 to have been fraudulent and on appeal, this Court affirmed the judgment. "The foregoing factual background, relative to the Nashville property, is essential to a proper understanding of the parallel litigation in California.... No. - 14 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. "The disputes between Nelson and [the Partnership] began in the late 1980's when [the Partnership] acquired certain Residence Inn hotels from entities controlled by Nelson. [The Partnership] acquired both the Residence Inn in Nashville, Tennessee and the Residence Inn in Ontario, California. For a time, Nelson continued to provide management services at these Residence Inn hotels, including the Ontario hotel in California, which was managed by Nelson from April 1988 to February 1991. [The Partnership] believed that Nelson breached his management agreement for the Ontario hotel. [The Partnership] gave notice of termination of the agreement and filed suit in the superior court of California in and for the city and county of San Francisco in January 1991, seeking damages and declaratory and injunctive relief against Nelson. A counter-claim was filed by Nelson seeking damages and declaratory relief." Nelson, 2002 WL 31126649, *1-3, 2002 Lexis 698, *2-9. 34. Shortly before the San Francisco action was to proceed to trial, the parties conducted a settlement conference. In the lawsuit, the Partnership was seeking approximately $250,000 from Nelson, but its lawyers were concerned that Nelson was judgment proof. Nelson in turn had filed a cross-complaint against the Partnership, which the Partnership's lawyers concluded had little chance of success. During the settlement discussions, Nelson offered the Partnership the opportunity to purchase the land at 2300 Elm Hill Pike, which was under the Partnership's Nashville No. - 15 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Residence Inn; this appeared to be Nelson's only valuable asset. Accordingly, at a court supervised settlement conference, the parties agreed to settle by Nelson transferring this land to the Partnership in return for a note from the Partnership and the Partnership releasing its claims against Nelson. 35. A few weeks after the settlement conference, the Partnership's Tennessee lawyer advised the Managing General Partner that acceptance of ownership of the Nashville land from Nelson could have potentially disastrous consequences for the Partnership with regard to Nelson's ongoing litigation with Hardage and Orlando Residence in Tennessee. In that litigation, Hardage and Orlando Residence had sued Nelson for fraudulent conveyance, as set forth above. Up to that point, the Partnership had been able to argue that it was a "bona fide purchaser" from Nelson of its interest in the Hotel and would not be subject to Hardage's and Orlando Residence's claims. However, the lawyer advised that if the Partnership accepted the settlement offer and took control of the land from Nelson, there was a substantial risk that a court might find the Partnership had conspired with Nelson to defraud his creditors and that the Partnership's interest in the land and the Hotel would be found to have merged. This could then result in the Partnership being subject to any lien that Hardage obtained in his litigation against Nelson and the Partnership thereby losing its interest in the hotel. Faced with that advice, the Partnership's management determined that it could not consummate the settlement with Nelson until it received clarification that Nelson was solely responsible for the fraudulent conveyance action that Hardage and Orlando Residence were pursuing against Nelson. 36. Nelson responded by claiming that the Partnership was in breach of the settlement agreement. He then sued the Partnership in lawsuits in No. - 16 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. California, Wisconsin and Tennessee. All are based on the same basic facts--that the Partnership breached its contract with Nelson and that Nelson consequently suffered a substantial loss. He also later filed a separate fraudulent conveyance lawsuit in California against the Partnership, its Managing Partners and a putative class of Unit Holders who received distributions from the Partnership. Nelson alleges that these prior Partnership distributions were fraudulent because they drained the Partnership of assets necessary to pay a judgment in his favor should he be successful in his damage claims against the Partnership for breach of the aborted settlement agreement. 37. At this point in the parties' protracted litigation, there has been a determination in the principal action that the Partnership did breach its settlement agreement with Nelson but that he suffered no damages as a result. These findings are now on appeal. 38. For purposes of his tender offer, and accompanying consent solicitations, Nelson claims that his damages arising from the Partnership's failure to consummate the settlement are $12 million, and Nelson uses that number to justify the Partnership stipulating to a $10 million judgment against it and in favor of Nelson and a related company. 39. Nelson also contends that the Partnership should pursue breach of fiduciary claims against its Managing General Partner and others, stemming from their responsibility for and "mistakes they made" concerning the aborted settlement agreement. He states his "feeling" that these claims could be worth millions of dollars. But Nelson fails to disclose that he has already sued the Managing General Partners and others for tortious No. - 17 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. interference in conjunction with the aborted settlement agreement and he lost. Those claims were summarily dismissed by the Tennessee trial court and affirmed on appeal, with the appellate court also finding that the claims were barred by the statute of limitations. He also does not disclose that if the appellate court affirms the judgment that has awarded him zero damages for the Partnership's purported breach of the settlement agreement, any breach of fiduciary duty claims that the Partnership might bring against the Managing General Partners or others arising out of the aborted settlement would have minimal value. 40. Hardage and Orlando Residence continue to try to recover against Nelson on their fraudulent conveyance judgment. In August 2001, a Tennessee court specifically found that there were "elements of fraud" affecting Nelson's attempts to avoid payment of his obligations. The court found that one of these fraudulent elements was Nelson's purported transfer to GP Credit of the rights and obligations previously held by Nelson and Nashville Lodging Company. Based on these findings, the court appointed a receiver to take possession of any proceeds that Nelson might obtain in his claims against the Partnership. In summarizing Nelson's legal maneuverings, the court concluded: What all of the foregoing have in common are attempts by [Nashville Lodging Company] and Mr. Nelson to avoid collection of judgments. That a jury determined one such attempt was fraudulent, that Chancellor Brandt found another attempt was contemptuous and that there is yet another post-judgment conveyance in issue all cause the Court to conclude that there are sufficient 'elements of No. - 18 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. fraud affecting the remedy at law' such that appointment of a receiver to take possession of proceeds in the Metric lawsuit is necessary. Orlando Residence, Ltd. v. Nashville Lodging Co., Tennessee Chancery Court, Davidson County, Nashville, Case No. 92-3086-III (unpublished opinion Aug. 15, 2001). FIRST CLAIM FOR RELIEF ( For Violation of Sections 14(d) and 14(e) Of the Exchange Act And The Rules And Regulations Promulgated Thereunder) 41. The Partnership repeats and realleges the allegations of the preceding paragraphs as if fully set forth herein. 42. Sections 14(a), (d) and (e) of the Exchange Act, 15 U.S.C. Section 78n(d)-(e), require that in connection with any request or invitation for tenders or any solicitation of security holders, full disclosure must be made of the information specified in Section 14(d) and the rules and regulations promulgated thereunder, and make it unlawful to engage in any fraudulent, deceptive or manipulative act in connection with any form of proxy solicitation and/or tender offer. 43. Sections 14(a), (d) and (e) of the Exchange Act, 15 U.S.C. Section 78n(d)-(e), also require that in connection with any tender offer or any solicitation of shareholders, full disclosure must be made of the information specified in Section 14(d), and the rules and regulations promulgated thereunder, and make it unlawful to engage in any fraudulent, No. - 19 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. deceptive or manipulative act in connection with any form of proxy solicitation and/or tender offer. 44. Sections 14(a), (d) and (e) and the SEC regulations thereunder are thus intended to insure that security holders confronted with a proxy solicitation and/or tender offer are provided with all the information about the proposed shareholder votes and tender offer and the qualifications and intentions of the offeror necessary for them to make an informed investment decision with regard to the proposed vote on whether to tender or hold their securities. 45. Nelson made the following statements in his tender offer and proxy solicitation materials: (a) "The Offer is also conditioned upon: (i) settlement of all outstanding litigation against the Partnership . . .; (ii) a vote by the Limited Partners to amend the Agreement of Limited Partnership to permit the transfer of more than 5% of the Units in a year . . .; and (iii) my election as general partner of the Partnership and the resignation or removal of the current general partners." (b) "If you tender your Units, you will receive both cash and certain non-cash consideration for them. You will receive $86 in cash . . . You will also receive a release in certain litigation against you. GP Credit has filed a fraudulent transfer action against the Partnership, the class of all persons who were Limited Partners as of January 13, 1998, the Managing General Partner, and others affiliated with the Managing General Partner. If successful, GP Credit will obtain a judgment against each Limited Partner No. - 20 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. who is a member of that class in an amount equal to the distribution made to such Limited Partner as of January 13, 1998, or $275 per Unit. In that event, GP Credit would likely attempt to collect on such judgment by all means permitted by law, which could include placing liens upon your property. However, GP Credit has agreed, in exchange for certain consideration from me, to release you from liability in that lawsuit if you tender all of your Units to me, and if I purchase any of your Units." (c) "Except as otherwise provided in this Section 4, tenders of Units made pursuant to the Offer are irrevocable. Units tendered pursuant to the Offer may be withdrawn by or on behalf of the depositor at any time until the expiration of seven days after the date of the Offer, or May 21, 2003, and at any time after sixty days from the date of the Offer, or July 13, 2003." (d) "In the event that the Offer is extended beyond the Expiration Date, the Units tendered may be withdrawn at any time prior to the end of the extension period." (e) "Tendering Limited Partners will additionally have withdrawal rights as provided under Exchange Act 14(d)(5)." (f) "My asset review focused upon other assets of the Partnership, in particular upon the claim of the Partnership against James Reuben ("Reuben"), an attorney who represented the Partnership in connection with the 1993 settlement of certain litigation, and also upon possible claims against others who may have failed to fulfill their obligations No. - 21 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. to the Partnership. . . . If the Offer is successful, I believe that such claims have substantial value." (g) "I believe any claims against the Managing General Partner have no value to the Partnership unless the Managing General Partner is removed from control. . . . It is my feeling at this time . . that such claims may be worth millions of dollars." (h) "Because of the uncertainty concerning the duration and the ultimate outcome of the lawsuits, the Purchaser was unable to determine a liquidation value for the Partnership." (i) "[T]he Partnership no longer calculates an estimated Net Asset Value ("NAV") for Units because of the uncertainty of the litigation against the Partnership." (j) "Should a review determine that the Partnership does in fact have viable claims against the Managing General Partner or others, I presently intend to cause the Partnership to offer such persons the chance to have such claims decided in binding arbitration . . . Alternatively, I presently intent to cause the Partnership to pursue any such claims in the appropriate courts. Such pursuit may take a number of years, which would delay liquidation of the Partnership." (k) "Following the resolution of the claims against third parties, . . . I presently intend to cause the Partnership to be liquidated." No. - 22 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. (l) "[I]f I have control of the Partnership, I believe that such claims [against those who may have breached their duties to the Partnership] have sufficient value to the Partnership to allow me to profit from my purchase of Units." (m) "The Purchaser does not have the financial wherewithal to purchase the tendered Units, but will obtain such funds by means of a loan (the "Loan") from GP Credit, an entity of which my wife is the manager. . . The Loan will be secured by any Units purchased by me . . . Purchaser plans to repay the Loan with proceeds from the liquidation of the Partnership." (n) "Most of my obligations are to GP Credit." (o) "Entities which are related to me are the plaintiffs in such [outstanding litigation with the Partnership], thereby causing me to presently have a conflict of interest with the Partnership. One of my objectives in making the Offer conditional upon such settlement is to eliminate that conflict of interest." (p) "The general terms of the settlement are that the Partnership will agree to entry of a judgment in favor of GP Credit against the Partnership for $10 million. The Partnership will immediately pay $4 million to GP Credit, and GP Credit will agree that it will not attempt to collect more than $4 million of such judgment for a period of three years following entry of the judgment." (q) "GP Credit will further agree that following such three-year period it will not attempt to collect more from the Partnership than an amount No. - 23 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. which would leave the Partnership with $2 million (including amounts owed by the current general partners due to the negative balances in their capital accounts) immediately prior to liquidation." (r) "A suit in San Francisco seeks to force you to return $275 per Unit that was distributed in January 1998. You will be released from liability if you sell your Units to me." (s) "My offer gives limited partners a rare chance to sell this investment. . . .The Partnership hotels have been sold, but litigation has prevented cash distributions." (t) "The Managing General Partner is recommending approval of a proposed amendment to the partnership agreement which would allow a purchaser to acquire control of the Partnership." (u) "The holders of Units are being asked to sign a consent card to give direction to the Assignor Limited Partner of the Partnership . . . as to how to vote on the Proposals." (v) "The Partnership has stated on several occasions that a mistake (the "Mistake") was made in connection with the Partnership entering into a 1993 settlement agreement. However, the Managing General Partner has never advised the Limited Partners of the existence of the Mistake, the nature of the Mistake, or who was responsible for the Mistake. The Partnership has sued James Reuben, an attorney who represented the Partnership in connection with the 1993 settlement agreement, alleging that Reuben failed to advise the Partnership of the risks of agreeing to purchase No. - 24 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. the land under the Residence Inn--Nashville subject to certain litigation. However, the Partnership would not have been harmed by Reuben's failure to advise the Partnership of such risks had the Managing General Partner not also failed to advise the Partnership of such risks. Thus, the Managing General Partner may be jointly liable with Reuben for failing to advise the Partnership of such risks." (w) "The three-year forbearance period will allow the Partnership the opportunity to attempt to recover from the current general partners, and others who have advised the Partnership, for damages caused by any wrongs done by them. Since as much as $6 million of any such recovery will go to GP Credit, GP Credit has agreed to reimburse the Partnership for its expenses in attempting such recovery, up to the amount such attempts benefit GP Credit. In the event that the Partnership is able to recover the full amount it has agreed to pay GP Credit, $10 million, then the Partnership will effectively be made whole. In the event that the Partnership is able to recover punitive damages from such third parties, such as for the breach of fiduciary duties, then the Partnership may be able to recover more than it has agreed to pay GP Credit." (x) "The litigation has lasted for a decade, and could last for a number of years more. The litigation has prevented the liquidation of the Partnership." (y) "I believe that the Partnership will ultimately be found liable for damages in excess of $12 million from its breach of the 1993 settlement agreement." No. - 25 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. (z) "The Proposed Settlement Agreement permits the Partnership to pay only a fraction of the amount for which it may be held liable, and obligates it to pay more only if it is able to recover from third parties on its claims against such third parties." (aa) "By executing and delivering the Agreement of Sale, a tendering Limited Partner (who does not properly withdraw acceptance of the Offer prior to the Expiration Date) irrevocably appoints the Purchaser as that Limited Partner's proxy, with full power of substitution. All proxies are irrevocable and coupled with an interest in the tendered Units and empower the Purchaser to exercise all voting and other rights of such Limited Partner as it in its sole discretion may deem proper at any meeting of Limited Partners." (bb) "By executing and delivering the Agreement of Sale, a tendering Limited Partner also irrevocably constitutes and appoints the Purchaser and its designees as the Limited Partner's attorneys-in-fact. This appointment will be effective upon Purchaser's payment for the Units." (cc) Exhibit (a)(3) of Nelson's Offer, Agreement of Sale and Assignment ("Agreement of Sale") states: "Seller, upon execution of this Agreement, hereby irrevocably constitutes and appoints Purchaser as its true and lawful agent and attorney-in-fact with respect to the Units being sold hereby with full power of substitution." 46. In his tender offer and consent solicitation material, Nelson omitted to state material facts necessary in order to make other statements, such as those quoted above, not false or misleading. The tender offer and No. - 26 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. consent solicitation material, both in presentation and discussion, are coercive, materially false, misleading and omit facts necessary in order to make them not materially misleading in the following respects: (a) Nelson fails to disclose that there is no guarantee that the tendering Unit Holders will actually be paid for the units they tender. There are many unanswered questions about Nelson's and GP Credit's ability and willingness to pay, and Nelson's tender offer is carefully structured so that he can impose the $10 million settlement and $4 million cash payment to GP Credit before any payment to the Unit Holders. (b) Nelson fails to disclose that although Nelson's tender offer price for a majority of the units is $86 a unit, when all factors are taken into account and all contingencies resolved, the ultimate recovery that the Unit Holders would receive for all of their units is likely to be substantially lower. (i). Nelson proposes to acquire 30,000 units for $86 a unit. At least 30,000 units (which collectively constitute just more than 50 percent of the total units in the Partnership) must be tendered for Nelson's offer to be accepted. If more than 30,000 of the units are tendered, however, Nelson proposes to purchase only a pro-rata share of units from the tendering Unit Holders, meaning that Unit Holders will continue to hold units in the Partnership even though they tendered all their units. For example, if 75 percent of the units are tendered, because Nelson will purchase only 30,000 Units, a Unit Holder who holds 100 units will end up selling slightly more than 66-2/3 units and retaining slightly fewer than 33-1/3. Of course, non-tendering Unit Holders would retain all of their Units. No. - 27 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. (ii). Accordingly, each Unit holder needs to evaluate the potential effect of a successful tender and be aware of the consequences if more than 50 percent of the units are tendered. In other words, for a tendering Unit Holder to evaluate the effect of Nelson's offer, each Unit Holder must determine the likely sum to be obtained upon a sale of a portion of his or her units and the potential value of his or her remaining units if Nelson gains control of the Partnership. (iii). Under Nelson's proposal for settling the pending lawsuits and then pursuing claims against the Managing General Partner and others, all remaining Partnership assets will likely end up being paid to Nelson or his related entities with the possible exception of the $2 million minimum liquidation reserve that he claims will be left in the Partnership. (And, of course, one-half of that $2 million will go to Nelson because he will then own half the units.) (iv). Indeed, assuming Nelson obtains all but $1 million of the Partnership's assets, the remaining Unit Holders--i.e., those who did not tender and those who retained units as the result of a tender of more than 50 percent of all units--would receive at most $33 a unit upon liquidation. (This is calculated by dividing $1 million by the 29,919 units remaining after Nelson's 30,000 unit purchase.) For this reason, the tendering Unit Holders must determine if they are prepared to sell a majority of their units to Nelson for $86 a unit and then be left with units for which they will likely receive at most $33 upon liquidation. (c) Nelson fails to disclose facts relevant to the timing of liquidation of the Partnership and what its assets could likely be at that time. No. - 28 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. As justification for the $86 unit price he is offering, Nelson points out that the Partnership has ceased to calculate an estimated Net Asset Value for units. The reason is that the pendency of the Nelson-related lawsuits makes uncertain the date of liquidation and the amounts available for distribution when all litigation has been resolved and all litigation expenses have been deducted. However, Nelson fails to disclose facts that demonstrate that he presently has the ability to control the timing of the Partnership's liquidation. His lawsuits are the sole reason why the Partnership assets remain tied up. If his tender offer is accepted and he obtains control as managing General Partner, he alone will have the power to decide when to cease future litigation and liquidate the Partnership. These facts are necessary for the Unit Holders to determine on their own the value they are likely to receive upon liquidation. (i). The Partnership has liquidated its properties and as of March 31, 2003, had $6,918,000 in cash. Assuming that the Partnership receives the $525,000 payment from the Reuben case settlement due on June 2, 2003 and that the general partners pay the amount due from them upon liquidation of $914,000, the Partnership could distribute approximately $8,357,00 or $139 per unit upon liquidation (adjusted for interest income and expenses since March 31). (ii). Based on the present progress of the related Nelson lawsuits, the Tennessee appellate court will likely decide the Nelson-related appeal in nine to twelve months. If the appellate court affirms the trial court's final judgment that Nelson suffered no damage from the Partnership's failure to finalize the disputed settlement, Nelson's justification for tying up the partnership's assets will cease to exist and his collateral claim that the No. - 29 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Partnership wrongfully distributed assets to the Unit Holders will fail. On the other hand, if the appellate court reverses the trial court's determination that Nelson suffered no damage, the duration of the lawsuits cannot be estimated. Although the above information and analysis is crucial to a fair evaluation of Nelson's tender offer, Nelson omitted such facts from his disclosures. (d) Nelson fails to disclose that his proposed takeover is structured so he is not required to pay for the Units being tendered until he has already used those units to pass his proposals to obtain majority control, to remove the General Partner, to elect himself General Partner, to settle the lawsuits, and to pay himself immediately $4 million of the $10 million judgment he plans to impose on the Partnership. (e) Under the terms of Nelson's Offer, he has ten business days after acceptance of all the preconditions, which include transfer of control to him and approval of his proposed settlement, before he is obligated to pay the tendering Unit Holders for their Units. At that point, with $4 million of Partnership assets in his pocket, Nelson will be in a position to pay $2,580,000 to the Unit Holders who tendered the 30,000 units. Nelson thus fails to disclose that he has manipulated the timing and sequence of events to limit any financial exposure to him or the entities related to him. (f) Nelson fails to disclose that there is nothing in his tender offer that protects the Unit Holders should GP Credit decide not to proceed with its loan to Nelson. Because his agreement to pay for the tendering units does not take effect until ten business days after his proposals regarding the partnership are approved, he has taken over as Managing General Partner AND No. - 30 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. $4 million has been paid to GP Credit, it is only at that point that GP Credit would have to loan him the money. But Nelson would be unable to proceed with his purchase should GP Credit breach the terms of its loan agreement with Nelson. Because the Unit Holders are not a party to that agreement, their ability to force GP Credit and Nelson in turn, to proceed with the purchase of their shares would be unclear and would likely involve more litigation--with the prospects of relief clouded by Nelson's debts and the undisclosed financial health of GP Credit. In other words, Nelson has carefully crafted his proposals to protect himself from having to pay anything until all of the changes and actions he desires with regard to the Partnership have taken place. However, there are no protections for the Unit Holders that makes the settlement pay-out conditional on their actually receiving the payments that Nelson is promising to them. (i). What Nelson says about the timing of the consent solicitations and his tender offer purchase is telling: Nelson will have been elected the sole general partner prior to completion of his purchase of a majority of Units. If the Election Proposal and the Removal Proposal are approved, Nelson will have been elected as the sole general partner of the Partnership prior to his purchase of any Units. To alleviate this risk, Nelson agrees to resign as general partner should he fail to fulfill his obligations under the Offer. (ii). Significantly, Nelson ignores the fact that if he is successful in his consent solicitations, his Settlement Proposal will also have been approved prior to his purchase of any Units. But he offers no protections to the Partnership regarding the $10 million judgment and the $4 million pay-out to GP Credit "should he fail to fulfill his obligations under the Offer." No. - 31 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. (g) Nelson asserts that his claims against the Partnership are worth $12 million and that the Unit Holders would benefit from a release of his claims against them. Other than this unsupported assertion, Nelson offers no justification for the Partnership to pay him $10 million. A thorough factual and legal analysis would show that Nelson's claims lack merit, the proposed release is inadequate, and there is no consideration for Nelson's proposed settlement. Nelson fails to offer any information that would allow the Unit Holders to make a meaningful assessment of these claims. This omission is particularly significant because, in assessing Nelson's claims, it is important to know that the Tennessee trial court has already entered a judgment against him concluding that he suffered no damages. Since Nelson offers no explanation or justification for his belief that the Partnership will be potentially liable for $10 million, it is impossible, based on Nelson's disclosure, for the Unit Holders to assess whether the settlement proposal bears a reasonable relationship to the Partnership's ultimate litigation exposure. (h) Nelson fails to disclose that the proposed settlement will not protect the Partnership or the Unit Holders from further litigation. The settlement agreement does not protect the Partnership or Unit Holders from third-party claims arising out of or relating to the underlying facts and causes of action that are being settled. It also does not provide for dismissals of the claims that Nelson proposed to settle. To protect the Partnership from claims relating to the events that have given rise to this protracted litigation, the settling parties should be required to indemnify (and to demonstrate the financial capability to provide such an indemnity) and hold the Partnership harmless from any subsequent No. - 32 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. claims brought against the Partnership arising out of the events encompassed in the various Nelson-related lawsuits. Moreover, because Nelson proposes to file new claims related to these events against the General Partner and others, the settlement agreement must provide protection for cross-claims back against the Partnership arising out of those new lawsuits. Given Nelson's assurances that the settlement will end the underlying litigation and release the Unit Holders and Partnership, his failure to discuss any of these gaping holes in the litigation-preclusion provisions in the settlement agreement is an unlawful material omission. (i) Nelson proposes that GP Credit will receive the $10 million judgment proceeds and deliver releases to the Partnership and its Unit Holders. However, Nelson fails to disclose any financial background information regarding GP Credit. Nelson does not disclose who owns GP Credit and what its resources are, whether GP Credit has the financial wherewithal to lend another $3 million to a borrower who is already more than $10 million in debt to it, whether GP Credit is the beneficial owner of the claims stemming from the failed settlement, and whether GP Credit is legally able to deliver releases to the Unit Holders. Additionally, Nelson fails to disclose why GP Credit agreed to release those Unit Holders who tender their shares to Nelson. Nelson states that he is giving GP Credit consideration for such releases, but he discloses no details regarding that transaction. (j) Nelson fails to disclose that in a separate Tennessee court action, the court held that Nelson was under an obligation to a third party who had the right to recover from Nelson any sums that he should receive as a result of his litigation with the Partnership. The court specifically found No. - 33 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. that there were "elements of fraud" affecting Nelson's attempts to avoid payment of his obligations. Nelson also fails to disclose that the court found that one of these fraudulent elements was Nelson's purported transfer to GP Credit of the rights and obligations previously held by Nelson and Nashville Lodging Company. Based on these findings, the court appointed a receiver to take possession of any recovery Nelson might obtain in his litigation against the Partnership and issued an injunction preventing Nelson from taking possession of any such proceeds. Disclosure of these facts is necessary in order to enable the Unit Holders to appreciate the risk that their approval of Nelson's tender offer might expose the Partnership to a finding that it conspired with Nelson to help him evade the Tennessee court's order. But Nelson neither discloses these facts nor discusses the fact that his proposed settlement provides no protection to the Partnership should there be a subsequent finding by the Tennessee court that Nelson and the Partnership conspired to violate the court's order by distributing Partnership funds to GP Credit. (k) Nelson's description of his proposed settlement is misleading because it fails to explain that the likely effect will be to deplete most of the Partnership's assets for the benefit of Nelson and his related company. (l) Nelson's proposed settlement provision stating, "GP Credit further agrees that following such three-year period it will not attempt to collect more from Metric than an amount which would leave Metric with Two Million Dollars . . . immediately prior to liquidation" is ambiguous and misleading. Because the Partnership Agreement requires the Partnership to satisfy the debts of its creditors before the Unit Holders can receive any No. - 34 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. return upon liquidation, this provision, literally applied, would allow GP Credit to collect the $2 million reserve upon liquidation because Nelson promises only to defer collection for three years "immediately prior" to liquidation. Nelson's explanation of this provision suggests an erroneous and misleading interpretation. In his overview of the proposed settlement, Nelson suggests that "[e]ven after the three-year period, GP Credit agrees not to collect so much as to leave the Partnership with less than $2 million when the Partnership liquidates." (Emphasis added) Under this interpretation, Nelson would attempt to create a $2 million reserve, $1 million of which he would receive upon liquidation and the other $1 million of which would go to the remaining minority Unit Holders. However, Nelson's interpretation is not what the proposed settlement says. (m) Nelson's description of potential claims by the Partnership against the General Partner and others misrepresents the basis for the claims, omits facts necessary to allow the Unit Holders to assess their merits, fails to disclose that he has already prosecuted analogous claims based on the same underlying facts and he lost and that a court would in all likelihood hold that any such claims are barred by the statute of limitations, and fails to disclose that the claims would have little or no value if the courts were to affirm the judgment awarding Nelson zero dollars for his claim against the Partnership for breach of the 1993 settlement agreement. (n) Nelson's proxy statement is misleading in that it holds out the prospect of future recovery for the benefit of the Partnership against the present General Partner and others, based on his "feeling" that those claims "may be worth millions of dollars." Nelson offers no supporting facts or legal analysis. In fact, if Nelson later determines that those claims have little or no No. - 35 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. value to the Partnership, he can proceed to claim all remaining Partnership assets, with the possible exception of the $2 million liquidation reserve (one half of which he will own) as payment for the remaining portion of his $10 million judgment. (o) Nelson fails to disclose that if he became General Partner he would have an irreconcilable conflict of interest with regard to the prosecution of the lawsuits that he proposes to bring on the Partnership's behalf. (p) Nelson fails to disclose facts that call into question his ability to fulfill his obligations as a fiduciary. (q) Nelson misrepresents the purpose of the proposed amendment to the Partnership Agreement. Nelson asserts in his proxy statement that the purpose of the amendment was to allow a purchaser to acquire control of the Partnership. Contrary to this assertion, the Managing General Partner recommended amending the Partnership Agreement to delete the five and 50 percent restrictions in order to give the Unit Holders more freedom to sell their Units. (r) In the tender offer materials Nelson misrepresents the Unit Holders' withdrawal rights and fails to disclose that he has structured the purchase agreement with the Unit Holders to give him irrevocable rights prior to payment. Nelson fails to disclose the existence of Securities and Exchange Commission Rule 14d-7 (as promulgated under the Act) which provides that in addition to the provisions of Section 14(d)(5) of the Act, any person who has deposited securities pursuant to a tender offer has the right No. - 36 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. to "withdraw any such securities during the period such offer request or invitation remains open." As a result of this material omission holders of Units who have tendered their Units to Nelson have done so without realizing they can change their mind once they receive the position of the Partnership on the tender offer. (s) Nelson's tender offer materials disclose certain proxy rights which are given to Nelson upon execution of the Agreement of Sale, or upon purchase of the Units, while the Agreement of Sale provides differently. The discrepancy between the disclosure and the actual agreement works to give Nelson power with respect to the Units in a way that a tendering Unit Holder could not have anticipated. Nelson's tender offer materials disclose that by executing and delivering an Agreement of Sale, a tendering Unit Holder (who does not properly withdraw acceptance of Nelson's Offer prior to the Expiration Date), irrevocably appoints Nelson as that Unit Holder's proxy. The Agreement of Sale provides that the power of attorney granted is irrevocable and does not provide that it terminates (as to voting the Units) upon withdrawal of the tender. As a result, Nelson, under the terms of his Agreement of Sale can vote the Units of a person who at one time tendered and has subsequently withdrawn and now does not want the Nelson proposal to go forward (even though the disclosure says otherwise). The tender offer materials further describe that by executing and delivering the Agreement of Sale, the tendering Unit Holder also irrevocably constitutes and appoints Nelson as the Unit Holder's attorney-in-fact. This appointment is only to be effective upon Nelson's payment for the Units. The Agreement of Sale has no such carve out. In fact, based on the actual language in the Agreement of Sale, Nelson could transfer the Units to his name without paying for the Units under the terms of the Agreement of Sale. To the extent Nelson intended to No. - 37 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. have these powers, the tender offer materials must disclose this and also disclose the risks inherent in these provisions. (s) Nelson's tender offer materials fail to disclose that he has proceeded even though the Managing General Partner has not called for a vote on his offer and 10% of the Unit Holders have not requested such a vote. Unit Holders thus are not aware that any consent solicitations that they return are invalid. 47. Nelson's omissions and misrepresentations are material and relevant to an informed assessment of Nelson's tender offer and are necessary for the Unit Holders to determine the viability of the Offer and the value they are likely to receive upon liquidation. 48. By making the material misstatements set forth above and failing to disclose the material facts described above, Nelson violated the Securities Exchange Act of 1934, including Sections 14(a), (d) and 14(e) of the Exchange Act and the rules and regulations promulgated thereunder. 49. As a result of Nelson's unlawful conduct, The Partnership and its Unit Holders have sustained and will sustain great and irreparable injury to their voting and property rights in that Nelson's unlawful conduct presents the Partnership's Unit Holders with consent solicitation and tender offer materials and requests several votes without providing the Unit Holders with the requisite information about the proposed votes and tender offer, and the qualifications and intentions of the offeror necessary for them to make an informed investment decision with regard to the proposed votes or whether to tender or hold their Units. No. - 38 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 50. By reason of the foregoing, Nelson should be preliminarily and permanently enjoined from continuing or consummating the tender offer for a majority of the Partnership units until he disseminates amended material containing full, fair and complete supplemental disclosures with respect to each false, misleading and misleadingly omissive statement contained in his proxy solicitation statement, Schedule TO and unit holder mailings, and for a reasonable time (and in no event less than 60 days) thereafter to permit investors to consider and evaluate the contents of such curative and corrective disclosures. 51. The The Partnership and its Unit Holders have no adequate remedy at law. SECOND CLAIM FOR RELIEF ( Pendant State Law Claims For Declaratory Relief that Nelson's Consent Solicitations Violate The Express Terms Of The Partnership Agreement and Assignment Agreement) 52. The Partnership repeats and realleges the allegations of the preceding paragraphs as if fully set forth herein. 53. An actual controversy has arisen and now exists between the Partnership and Nelson relating to the legal rights and duties of the Partnership, its Unit Holders, and Nelson under the Partnership Agreement and the Assignment Agreement for which the Partnership desires a declaration of rights. No. - 39 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 54. Paragraph 4 of the Assignment Agreement provides that the Assignor Limited Partner will vote the units assigned to Assignee Holders in accordance with written instructions received from the Assignee Holders, with respect to any matter to which a vote of Unit Holders is taken "in accordance with the Partnership Agreement." 55. Paragraph 16.3 of the Partnership Agreement sets forth the mechanisms for a vote of the Unit Holders. Pursuant to such paragraph, only the Managing General Partner of the Partnership may call a meeting of the Unit Holders or call for a vote of the Unit Holders without a meeting on matters on which the Unit Holders are entitled to vote. Paragraph 16.3 of the Partnership Agreement also provides that the Managing General Partner shall call for a vote of the Unit Holders following receipt of a written request therefor by Unit Holders holding ten percent or more of the Units held by all Unit Holders as of the date of receipt of such written request. 56. The last sentence of Paragraph 4 of the Assignment Agreement provides that the Assignor Limited Partner shall request that the Managing General Partner submit a matter to the Unit Holders without meeting pursuant to the Partnership Agreement upon written request of Assignee Holders owning Units which represent in the aggregate 10 percent or more of all of the outstanding Units. 57. The Managing General Partner has not called for a vote of the matters identified in Nelson's proxy solicitation statement as required to call for a vote under the Partnership Agreement and the Assignment Agreement. No. - 40 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 58. The Managing General Partner also has not received a written request therefor by Unit Holders holding ten percent or more of the Units as required to call for a vote under the Partnership Agreement and the Assignment Agreement. 59. Nelson has distributed thousands of consent solicitation statements to the Partnership's Unit Holders without either the Managing General Partner or the required 10% of Unit Holders written request calling for a vote. Without following the procedural formalities delineated above, Nelson, in his consent solicitation statement and correlated tender offer materials, calls for a Unit Holder vote and recommends approval of the four proposals he is submitting. 60. Nelson's tender offer expressly makes Unit Holder approval of these four proposals a precondition to his tender offer. 61. A declaratory judgment is necessary in that the Partnership contends and Nelson denies that Nelson's actions of directly soliciting Unit Holders and calling for a vote in the above described manner violate the express terms of the Partnership Agreement and the Assignment Agreement and that Nelson's failure to follow the procedures set forth in the Assignment Agreement and the Partnership Agreement render all of his consent solicitations invalid. THIRD CLAIM FOR RELIEF (Pendant State Law Claim for Tortious Interference With Contractual Relations) No. - 41 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 62. The Partnership repeats and realleges the allegations of the preceding paragraphs as if fully set forth herein. 63. A valid Partnership Agreement and Assignment Agreement exist governing the operations and internal procedures of the Partnership. 64. The Partnership is informed and believes and upon that information and belief alleges that Nelson is aware of the above referenced agreements. 65. The Partnership is informed and believes and upon that information and belief alleges that Nelson purposely engaged in conduct (including by passing the procedure in the Partnership Agreement for calling a vote of the Unit Holders), unlawfully soliciting the partners to breach their fiduciary duties and coercing Unit Holders to approve his proposals through threat of litigation) specifically intended to harm and disrupt the above-referenced agreements and the contractual relationship between the Unit Holders and the Partnership's management and to ultimately dissolve this relationship. 66. The Partnership is informed and believes and upon that information and belief alleges that the conduct by Nelson was neither privileged nor justified. 67. Nelson disrupted the above-mentioned agreements among the Unit Holders and management of the Partnership. The Partnership is informed and believes and upon that information and belief alleges that Unit Holders have tendered or will likely tender units in response to Nelson's No. - 42 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. tender offer and breach the Partnership Agreement by responding to Nelson's solicitation utilizing the attached form and approving the amendment to the Partnership Agreement in violation of that Agreement and in breach of their fiduciary duties. 68. Nelson's acts and conduct in disrupting the Partnership Agreement and Assignment Agreement and encouraging the breach of said agreements caused and continue to cause the Partnership and its Unit Holders irreparable injury. 69. The Partnership and its Unit Holders have no adequate remedy at law. FOURTH CLAIM FOR RELIEF (Pendant State Law Claim For Declaratory Relief--Breach of Fiduciary Duty) 70. The Partnership repeats and realleges the allegations of the preceding paragraphs as if fully set forth herein. 71. An actual controversy has arisen and now exists between the Partnership and Nelson relating to the legal rights and duties of the Partnership, its Unit Holders, and Nelson for which the Partnership desires a declaration of rights. 72. Managing partners of a partnership owe the partnership and its unit holders a fiduciary duty, including duties of loyalty and due care. A partnership's majority unit holders owe the partnership's minority unit holders a fiduciary duty. No. - 43 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 73. Nelson's takeover proposals ask the majority of Unit Holders to make him the Managing General Partner. In that capacity, and in his capacity as majority Unit Holder, he will owe the Partnership and the Unit Holders a fiduciary duty. He is also proposing that they approve a transaction between himself and the Partnership in which he is a fiduciary and where he has an obvious conflict of interest. That transaction will constitute a breach of Nelson's fiduciary duty to the Partnership and its minority Unit Holders because it is fundamentally unfair to the interests of the Partnership and the interests of the minority Unit Holders. The consideration that the Partnership will be receiving for Nelson's proposed settlement agreement is totally inadequate and the effect of the transaction will be to deplete the assets of the Partnership for the benefit of Nelson and to the substantial detriment of the minority Unit Holders. Nelson cannot escape his fiduciary responsibility by asking the majority of Unit Holders to consent to his breach of fiduciary duty. 74. Since Nelson will be a fiduciary at the time the proposed settlement agreement takes place, the burden is on him to disclose fully every element of the transaction and to justify its fairness. Full disclosure of Nelson's proposals would thus require him to make clear to the Unit Holders that there is no legal justification for the Partnership to settle all of its litigation with Nelson for $10 million and there is no legal justification for the Partnership pursuing further litigation based on Nelson's "feelings" that such litigation is worth millions of dollars. And full disclosure requires Nelson to explain that under the terms of his settlement, the minority Unit Holders will in all likelihood receive inadequate value for their units on liquidation. Instead of presenting this information in his tender offer materials, Nelson's disclosures are misleading and misrepresent the benefit of the proposed No. - 44 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. transactions to himself and the effect of these transactions on the minority Unit Holders. Moreover, Nelson's disclosures are inherently coercive in that they threaten vigorous pursuit of litigation (which is in fact meritless) against the Unit Holders unless the Unit Holders extricate themselves from this precarious fate by approving his proposals and tendering their Units. 75. A declaratory judgment is necessary in that the Partnership contends and Nelson denies that the transaction will constitute a breach of his fiduciary duty to the Partnership as it is fundamentally unfair to the Partnership's interests and the interests of its minority Unit Holders and it is based on misrepresentations and misleading disclosures. 76. As a result of Nelson's conduct described above, the Partnership and its Unit Holders will sustain great and irreparable harm from Nelson's breaches of fiduciary duty unless Nelson is enjoined from proceeding with such breaches. 77. The Partnership and its Unit Holders have no adequate remedy at law. FIFTH CLAIM FOR RELIEF (Pendent State Law Claim for Soliciting, Aiding And Abetting Breach of Fiduciary Duty) No. - 45 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 78. The Partnership repeats and realleges the allegations of the preceding paragraphs as if fully set forth herein. 79. A partnership's majority shareholders owe the partnership's minority shareholders a fiduciary duty. 80. Here, the Partnership's majority Unit Holders owe the minority Unit Holders a fiduciary duty. In its simplest terms, this means that the majority cannot use their power to unfairly benefit themselves to the exclusion of the rights of the minority. For example, the majority shareholders of a corporation or partnership cannot legally approve or authorize a transaction that would sell off majority control of the entity and give disproportionate value to the minority shareholders. That however is the essence of Nelson's consent solicitations and takeover strategy. He is proposing that a majority of the Unit Holders authorize and approve a series of transactions that will have the effect of giving most of the value in the Partnership to him and his related company and leave the minority Unit Holders in a position where their rights will be virtually worthless. In addition, under the terms of the proposed tender, Nelson is requiring the majority Unit Holders to approve his proposed settlement transaction as a condition to enable them to cash-out their interests in the Partnership. Because Nelson is limiting his offer to a purchase of $30,000 units (or just over 50%) of the Partnership's units), the effect of that transaction, however, will be that only the majority Unit Holders will receive fair value for their interests. Nelson, by the express terms of his tender offer materials and consent solicitation, is not only proposing to breach his fiduciary duty once he obtains majority control, he is actively aiding, abetting and soliciting the current Majority Unit Holders to breach their fiduciary duties to the minority. No. - 46 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 81. The Partnership is informed and believes and upon that information and belief alleges that Unit Holders have tendered or will likely tender units in response to Nelson's tender offer and breach their fiduciary duties by responding to Nelson's solicitation utilizing that attached form and approving the amendment to the Partnership Agreement in violation of that Agreement and in breach of their fiduciary duties. 82. The Partnership is informed and believes and upon that information and belief alleges that Nelson is aware that his conduct is aiding, abetting and soliciting a breach of a duty. 83. By seeking to induce Unit Holders to engage in such prohibited acts, Nelson is intentionally participating in, aiding and abetting and soliciting such breaches of fiduciary duty. 84. Nelson substantially assisted and enabled, and continues to substantially assist and enable, the Unit Holders' breach of fiduciary duty by (among other things) proffering a transaction that will result in a breach of the majority Unit Holders' duties to the minority Unit Holders, coercing the Unit Holders to approve his proposals and the unlawful transaction through threats of personal liability and judgment execution proceedings, threats to prevent any liquidation of the Partnership by continuing his litigation against the Partnership until all litigation options end, and an offer of disproportionate value to the purchased majority units in comparison to the unpurchased minority units, and calling for and soliciting the vote. No. - 47 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 85. Nelson's aiding, abetting and soliciting of such breaches of fiduciary duty will cause the Partnership and its Unit Holders irreparable injury unless Nelson is enjoined from proceeding. 86. The Partnership and its Unit Holders have no adequate remedy at law. RELIEF REQUESTED WHEREFORE the Partnership respectfully demands judgement: 1. Declaring that Nelson has violated Section 14(d) and (e) of the Securities Exchange Act of 1934, 15 U.S.C. Sections 78n(d)-(e), and the SEC Rules promulgated thereunder in connection with his commencement and continuation of the tender offer for the Partnership on and after May 14, 2003. 2. Declaring that Nelson's consent solicitations, which are an express precondition of the tender offer, violate the Partnership Agreement and Assignment Agreement. 3. Granting the Partnership injunctive relief against Nelson and his respective employees, agents, and affiliates, and all other persons acting in concert with Nelson or on his behalf, directly or indirectly: (a) enjoining them from committing any further violations of the Securities and Exchange Act and SEC tender offer rules in connection with the Partnership and its affiliates; No. - 48 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. (b) enjoining them from continuing or consummating the pending tender offer, which was commenced in violation of Rule 14d-2 and the Partnership Agreement, and enjoining them from commencing any new tender offer for the Partnership for a reasonable period (not less than 60 days) to dissipate the effects of Nelson's unlawful conduct; (c) in the alternative, enjoining them from continuing or consummating the tender offer pending accurate and complete corrective disclosure with respect to each and every false, misleading and/or omissive matter contained in Nelson's Schedule TO and tender offer materials disseminated to unit holders; (d) in the alternative, permanently enjoining them from continuing or consummating the unfair and inherently coercive tender offer. 4. Requiring Nelson and his affiliates to divest themselves of all the Partnership units beneficially owned by them, acquired after the start of the unlawful solicitation statement and tender offer and the filing of the false and misleading Schedule TO; 5. Declaring that Nelson's takeover proposals would breach his fiduciary duty as the Partnership's new Managing General Partner and as majority Unit Holder if the consent solicitations were approved by a majority of the Unit Holders; 6. Granting the Partnership such other and further relief as the Court may deem just and proper, together with costs, disbursements and attorneys' fees in this action. No. - 49 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. DATED: May 28, 2003. REED SMITH CROSBY HEAFEY LLP By /s/ Kenneth J. Philpot ------------------------------ Kenneth J. Philpot Attorneys for Plaintiff Metric Partners Growth Suite Investors, L.P. No. - 50 - Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson EX-99.(A)(6) 5 f90550a1exv99wxayx6y.txt EXHIBIT (A)(6) Exhibit (a)(6) REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Kenneth J. Philpot (State Bar No. 62401) Raymond A. Cardozo (State Bar No. 173263) Heather Lenhardt (State Bar No. 217580) REED SMITH CROSBY HEAFEY LLP Two Embarcadero Center, Suite 2000 San Francisco, CA 94111 MAILING ADDRESS: P.O. Box 7936 San Francisco, CA 94120-7936 Telephone: 415.543.8700 Facsimile: 415.391.8269 Attorneys for Plaintiff Metric Partners Growth Suite Investors, L.P. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA METRIC PARTNERS GROWTH SUITE No. C03-2523-CRB INVESTORS, L.P., a California limited partnership, METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.'S EX PARTE Plaintiff, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO vs. SHOW CAUSE WHY A PRELIMINARY INJUNCTION SHOULD NOT ISSUE KENNETH E. NELSON, Date: As Soon As Court May Hear Matter Defendant. Time: See Above Place: See Above Compl. Filed: May 28, 2003 Honorable Charles R. Breyer Filed With: (1) Memorandum Of Points & Authorities; (2) Declaration Of Kenneth J. Philpot [Attaching Complaint And Other Pertinent Documents]; [proposed] Order Granting TRO And Issuing OSC Why A Preliminary Injunction Should Not Issue Plaintiff Metric Partners Growth Suite Investors, L.P.'s (Metric) hereby applies ex parte for a temporary restraining order (TRO) enjoining defendant Kenneth Nelson (Nelson) forthwith from taking any further action to support a tender offer and consent solicitations that he No. C03-2523-CRB - 1 - EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE WHY A PRELIMINARY INJUNCTION SHOULD NOT ISSUE REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. has submitted to the holders of limited partnership interests in Metric (unit holders) in violation of (1) the provisions in Metric's Partnership Agreement that set forth the procedure for submitting such an offer and solicitations to Metric's unit holders and the matters that may be presented in such an offers or solicitation, (2) the disclosure requirements of the federal securities laws, and (3) California breach of fiduciary duty law. This TRO Application is made to preserve the status quo and prevent Metric from suffering irreparable injury from Nelson's unlawful action before Nelson can be heard in opposition and before the Court can hear and decide a motion for a preliminary injunction. Metric further requests that the Court set for hearing a motion for a preliminary injunction at the earliest possible time, not to exceed 10 days from the entry of a TRO, that the Court deem these application papers as a motion for preliminary injunction upon setting such a hearing, and that the Court thereafter grant a preliminary injunction enjoining Nelson's invalid tender offer and consent solicitations. Metric advised Nelson on May 28, 2003 that it would seek injunctive relief if he did not refrain from his unlawful conduct. Nelson requested, and Metric granted, him until the afternoon of June 2, 2003 to indicate whether he would cease the challenged conduct. Nelson advised on the afternoon of June 2 that he would not cease his conduct, and Metric advised at that time that it would be filing this TRO application the next day. The next day, Metric served this TRO application by hand on Nelson's counsel before filing it in this Court. Nelson has advised that he intends to oppose the application. This application is based on this application, the accompanying memorandum of points and authorities, the Declaration of Kenneth J. Philpot filed herewith, the Complaint on file in this action (attached as Exhibit 1 to the Declaration of Kenneth J. Philpot), the proposed temporary restraining order and order to show cause filed herewith, and any other papers or No. C03-2523-CRB - 2 - REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. arguments that the parties may present in connection with this application or ensuing preliminary injunction motion proceedings. DATED: June 3, 2003. REED SMITH CROSBY HEAFEY LLP By /s/ Kenneth J. Philpot ------------------------------ Kenneth J. Philpot Attorneys for Plaintiff Metric Partners Growth Suite Investors, L.P. No. C03-2523-CRB - 3 - EX-99.(A)(7) 6 f90550a1exv99wxayx7y.txt EXHIBIT (A)(7) Exhibit (a)(7) REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Kenneth J. Philpot (State Bar No. 62401) Raymond A. Cardozo (State Bar No. 173263) Heather Lenhardt (State Bar No. 217580) REED SMITH CROSBY HEAFEY LLP Two Embarcadero Center, Suite 2000 San Francisco, CA 94111 MAILING ADDRESS: P.O. Box 7936 San Francisco, CA 94120-7936 Telephone: 415.543.8700 Facsimile: 415.391.8269 Attorneys for Plaintiff METRIC GROWTH SUITE INVESTORS, L.P. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA METRIC GROWTH SUITE INVESTORS, No. C03-2523-CRB L.P., A California Limited Partnership, MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF EX PARTE APPLICATION FOR Plaintiff, TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE WHY A PRELIMINARY INJUNCTION vs. SHOULD NOT ISSUE KENNETH E. NELSON, Date: As Soon As Court May Hear Matter Time: See Above Defendant. Place: See Above Compl. Filed: May 28, 2003 Trial Date: Not Yet Set Honorable Charles R. Breyer No. C03-2523-CRB - 1 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. I INTRODUCTION In this action, plaintiff Metric Partners Growth Suite Investors, L.P. (Metric) will show that defendant Kenneth Nelson's (Nelson) tender offer to purchase a bare majority of the limited partnership units of the Metric partnership violates federal securities law and California fiduciary duty law. For purposes of this application, Metric will show that Nelson's tender offer, and accompanying consent solicitations, is causing and will cause immediate irreparable harm to Metric and its unit holders unless enjoined by this Court. Nelson is a career litigant who has spent the past 20 years pursuing litigation schemes that have been uniformly unsuccessful. Multiple juries and jurists have questioned his honesty and integrity. For the past 10 of those years he has waged litigation against Metric in the courts of California, Wisconsin and Tennessee. The lawsuits all stem from a disputed settlement agreement that the parties failed to finalize in 1993. Metric has largely prevailed in these matters by establishing that it has no damages liability to Nelson and his related entities. Facing likely defeat in the courts, Nelson has embarked on a new strategy to attempt to turn the tide. He has concocted a scheme, proposing a tender offer to "purchase" just over 50% of Metric's units, appoint himself as its managing partner, approve a $10 million settlement of his lawsuits against Metric, and then use funds from that settlement to pay for his "purchase" of the Metric units. He also plans to use Metric's assets to file new lawsuits against Metric's current management based on its handling of the litigation adverse to him. In other words, he proposes to deplete Metric's assets to pay himself an outrageous sum to settle a lawsuit whose probable value is nothing, and to use additional Metric assets to pursue his personal vendetta against Metric's management. Nelson's proposals and supporting disclosures to Metric's unit holders, however, (1) breach the Partnership Agreement's provisions governing a vote of the unit holders, (2) mislead the unit holders in his tender offer and consent solicitations and (3) coerce a majority of No. C03-2523-CRB - 1 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Metric's unit holders to join him in a breach of his and the majority's fiduciary duty to minority unit holders. Metric's Partnership Agreement and companion Assignment Agreement 1 provide that only its Managing General Partner may call for a vote of the unit holders. The Managing General Partner is required to call for a vote following the receipt of a written request therefor from unit holders holding 10% or more of the Partnership units. Yet, Nelson has distributed thousands of consent solicitations directly to Metric's unit holders without the Managing General Partner or the required 10% or more of unit holders calling for a vote of his takeover proposals. Accordingly, although Nelson's consent solicitations are invalid, Metric's unit holders may not be aware of this and may have returned or may soon return consents on Nelson's proposal. Moreover, although Metric has notified Nelson that it is not recognizing his consent solicitations because he has not followed the Partnership Agreement and asked him to modify his proposals to comply with that Agreement, he has refused to recall his solicitations. Nelson is also violating Metric's Partnership Agreement in a second way. Had Nelson purchased a controlling share of Metric units and then attempted to implement his self-dealing proposals, no court would uphold his actions because he would have an irreconcilable conflict in settling Metric's litigation against himself and his related entities. Nelson seeks to avoid this conflict by obtaining the "approval" of a bare majority of outgoing Metric unit holders who must agree to his terms as condition to cash out their holdings. But Metric's Partnership Agreement forbids the submission of a self-dealing transaction for unit holder "approval" and only allows a vote of the unit holders on other specified matters. The Court should prevent both of Nelson's end runs on the Partnership Agreement from getting off the ground by entering a TRO that orders Nelson to conduct his offer according to the Agreement's terms. - ----------------------- 1 Metric's limited partnership interests are held by unit holders that hold units in a single entity that serves as the limited partner. There are a total of 59,919 units held by approximately 4,000 unit holders. No. C03-2523-CRB - 2 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Moreover, in violation of the federal securities laws, Nelson's consent solicitation and tender offer statements are riddled with material misstatements and omissions that are likely to deceive Metric's unit holders into failing to realize that he is proposing a raw deal. Among other things, although his litigation against Metric has resulted in a judgment of zero dollars, he tells the unit holders in his consent solicitation that he "believes" his claims against Metric could result in an award of $12 million or more. He also does not disclose the nature of the relationship between himself and an entity, GP Credit, through which he proposes to funnel the settlement and his units purchase. And he fails to disclose other litigation in which he is involved that, in the event his tender offer is approved, could lead to a determination that Metric colluded with him through his tender offer to help Nelson avoid other judgment creditors. Because of the difficulty of undoing such widely disseminated fraudulent materials and the irreparable harm that such fraud inflicts, a TRO is a settled basis for preventing this kind of fraud. Nelson also seeks to coerce a breach of fiduciary duty by a majority of Metric's unit holders against the minority. Nelson proposes to purchase just over 50% of Metric's units--no matter how many units are tendered. After he uses that controlling share to raid Metric's assets to pay himself and to pursue new meritless claims (the operative facts of which have been known for over ten years and the substance of which has been litigated adverse to Nelson) against Metric's management, the remaining units will be virtually worthless. Thus, although Nelson is proposing to buy just over 50% of the units for a price that is a significant discount from the assets' present liquidation value, he is obviously hoping that his deficient tender price will be perceived as better than the dregs left for the remaining minority unit holders. Worse still, he threatens any unit holders that do not tender with personal liability and also emphasizes that he will litigate to the end of the earth to delay a distribution of the partnership assets if his offer does not succeed. Under the circumstances, Nelson's proposal may coerce enough Metric's unit holders to accept his limited buyout and takeover plan in order to "cash out" and avoid being one of the minority unit holders who risk being left out in the cold. The Court should enjoin the offer No. C03-2523-CRB - 3 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. now to ensure that a breach of fiduciary duty is not consummated in the interim between now and when the Court can adjudicate the lawfulness of Nelson's audacious takeover scheme. All three violations--the violations of the Partnership Agreement's voting provisions, the dissemination of fraudulent material, and the breach of fiduciary duty--are continuing daily and causing irreparable harm. Thus, an immediate TRO on minimum notice is warranted to preserve the status quo pending a hearing on a motion for a preliminary injunction. II FACTUAL BACKGROUND A. NELSON WAGES A 10-YEAR LOSING LITIGATION BATTLE AGAINST METRIC Nelson's tender offer has its roots in protracted litigation in Tennessee, California and Wisconsin state courts, between Nelson, Nelson-related entities and Metric, which in turn followed 10-years of litigation between Nelson and others. The Tennessee Court of Appeals summarized this "continuing saga" in Nelson v. Metric Realty, 2002 Tenn. App. LEXIS 698, (attached as Ex. 2 to Philpot Decl.). The seeds of the dispute were sown in 1981 when a Samuel Hardage fired Nelson, who was overseeing one of Hardage's businesses, precipitating litigation between Nelson and various Hardage-owned entities. (Philpot Decl., Ex. 2 at 5) The parties eventually settled with a Nelson-controlled entity, Nashville Residence Corporation ("Nashville Residence"), receiving land at 2300 Elm Hill Pike in Nashville in exchange for its execution of a $250,000 note to Orlando Residence, Ltd. ("Orlando Residence"), a Hardage-controlled limited partnership. (Id.) Nashville Lodging Company ("Nashville Lodging"), a limited partnership with Nashville Residence as its general partner, then built a hotel on the Elm Hill Property. (Id.) In December 1986, Orlando Residence sued Nashville Residence in federal court to enforce the note. (Id. at 6) Nashville Residence promptly quitclaimed the Elm Hill property to Nashville Lodging. (Id.) In 1989, Nashville Lodging sold the hotel and leased the property to No. C03-2523-CRB - 4 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Metric. In March 1990, Orlando Residence obtained a federal court judgment against Nashville Residence for $250,000 plus interest. (Id.) Orlando Residence then filed suit in Tennessee state court against Nashville Residence, Nashville Lodging, Nelson, and Metric, attacking the conveyance of the Elm Hill property as fraudulent. (Id.) Orlando Residence was awarded $1.35 million in compensatory and punitive damages from Nashville Residence and Nashville Lodging in that action, but the Tennessee court of appeals reversed and remanded for a new trial. (Id.) On the second trial, a jury again found Nashville Residence's 1986 conveyance to Nashville Lodging to have been fraudulent and on appeal, the court of appeals affirmed the judgment. (Id. at 7) That background is essential to understand the parallel litigation in California between Nelson and Metric. In the late 1980's, Metric acquired from Nelson both the hotel and lease at the Elm Hill property in Nashville and another Residence Inn in Ontario, California. (Id.) For a time, Nelson continued to provide management services at these hotels. (Id.) In 1991, however, Metric terminated the management agreement and sued Nelson in California state court in San Francisco, claiming breach of contract and seeking damages, declaratory and injunctive relief. Nelson counter-claimed for damages and declaratory relief. (Id.) In the California lawsuit, Metric was seeking approximately $250,000 from Nelson, but was concerned that he was judgment proof. (Philpot Decl., Ex. 5 at 4) Shortly before trial, Nelson offered to settle by giving Metric the opportunity to purchase the land under Metric's hotel at the Elm Hill property in Nashville. (Id.) This appeared to be Nelson's only valuable asset. (Id.) Accordingly, at a court supervised settlement conference, the parties agreed to settle by Nelson transferring this land to Metric in return for a note and release from Metric. (Id.) A few weeks later, however, Metric's Tennessee lawyer advised its Managing General Partner that if Metric accepted the settlement and took control of the Nashville land, there was a substantial risk that a court might find that Metric's interest in the land and the hotel would be found to have merged which could cause Metric to be subject to any judgment lien that Hardage and Orlando Residence might ultimately obtain against Nelson. (Id.) In addition, Metric's lawyer advised that No. C03-2523-CRB - 5 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. a court might also find that Metric and Nelson had conspired to defraud the creditors who had challenged Nelson's 1989 transfer of the Elm Hill hotel to Metric. Up to then, Metric had successfully argued that it was a "bona fide purchaser." (Id.) Rejection of that argument could result in Metric losing its entire interest in the hotel. (Id.) Faced with that advice, Metric's management determined that it could not consummate the settlement until it received clarification that Nelson was solely responsible for the fraudulent conveyance action that Hardage and Orlando Residence were pursuing against Nelson and his companies. (Id.) Nelson responded with lawsuits in California, Wisconsin and Tennessee that all rested on the same allegations--that Metric had breached its settlement contract with Nelson, causing him substantial damages. (Id.) These include Nashville Lodging Co. v. Metric Partners Growth Suite Investors, L.P. et al., Circuit Court, State of Wisconsin, No. 94CV001212 (inactive); Orlando Residence, Ltd. v. 2300 Elm Hill Pike, Inc. and Nashville Lodging Co. v. Metric Partners Growth Suite Investors, L.P., Chancery Court for Davidson Co., Tennessee, No. 94-1911-I; Metric Partners Growth Suite Investors, L.P. v. Nashville Lodging Co. et al., Chancery Court for Davidson Co., Tennessee, No. 96-1405-III; Nelson and Nashville Lodging Co. v. Metric Realty et al., Chancery Court for Davidson Co., Tennessee, No. 97-2189-III; GP Credit Co., LLC v. Metric Partners Growth Suite Investors, L.P. et al., Superior Court of California, San Francisco Co., No. CGC-02-403301. (Philpot Decl., Ex. 1 at 12) Nelson also filed a separate fraudulent conveyance lawsuit in California against Metric, its Managing Partners and a putative class of unit holders who received partnership distributions. (Id., Ex. 5 at 4) He alleges that these distributions were fraudulent because they drained Metric of assets necessary to pay a judgment in his favor should he be successful in his claims for breach of the aborted settlement. (Id.) In one of his lawsuits, Nelson also brought claims against the Managing General Partner, claiming it improperly induced Metric to breach the settlement agreement. Nelson lost that lawsuit and it has been affirmed on appeal. (Id. at 5) At this point, there has been a determination in the principal action in Tennessee that Metric's failure No. C03-2523-CRB - 6 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. to consummate the settlement agreement was a breach, but that Nelson suffered no damages as a result. (Id.) These findings are now on appeal. (Id.) Meanwhile, in August 2001, a Tennessee court found that there were "elements of fraud" in Nelson's attempts to avoid payment of Hardage's and Orlando Residence's fraudulent conveyance judgment. (Orlando Residence, Ltd. v. Nashville Lodging Co., Tennessee Chancery Ct, Davidson Co., No. 92-3086-III (unpublished opinion Aug. 15, 2001) at 2, attached as Ex. 3 to Philpot Decl.) The court found that one of these fraudulent elements was Nelson's purported transfer to GP Credit, an entity that his wife owns, of the rights and obligations previously held by Nelson and Nashville Lodging Company. (Id. at 3) Accordingly, the court appointed a receiver to take possession of any proceeds that Nelson might obtain in his claims against Metrics, stating: What all of the foregoing have in common are attempts by [Nashville Lodging Company] and Mr. Nelson to avoid collection of judgments. That a jury determined one such attempt was fraudulent, that Chancellor Brandt found another attempt was contemptuous and that there is yet another post-judgment conveyance in issue all cause the Court to conclude that there are sufficient "elements of fraud affecting the remedy at law" such that appointment of a receiver to take possession of proceeds in the Metric lawsuit is necessary. (Id.) B. TO FUND HIS LITIGATION VENDETTAS AND TO REVERSE HIS IN-COURT RESULTS, NELSON VIOLATES THE PROVISIONS IN METRIC'S PARTNERSHIP AGREEMENT THAT GOVERN VOTES OF THE LIMITED PARTNERS AND PRESENTS ITS LIMITED PARTNERS WITH AN INVALID, MISLEADING AND COERCIVE TENDER OFFER 1. NELSON'S VIOLATIONS OF THE PARTNERSHIP AGREEMENT Paragraph 4 of Metric's Assignment Agreement provides that Metric's designated voting representative will vote the units assigned to holders of limited partnership assignee units (unit holders) of Metric in accordance with written instructions received from the unit holders with respect to any matter upon which a vote of Limited Partners is taken "in accordance with the Partnership Agreement." (Philpot Decl, Ex. 7) Metric's Partnership Agreement specifies only two valid methods to call such a vote of the Limited Partners. First, under paragraph 16.3 of that No. C03-2523-CRB - 7 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Agreement, the Managing General Partner may call for a vote of the Limited Partners. (Id., Ex. 6) Under paragraph 16.3 of the Partnership Agreement or Paragraph 4 of the Assignment Agreement, a vote may be submitted to the Limited Partners upon the written request of persons owning units which represent ten percent or more of the outstanding units. (Id., Exs. 6-7) Moreover, as detailed, post, the Partnership Agreement prohibits a limited partner vote to "approve" a self-dealing transaction and limits the matters that can be submitted to a limited partner vote to specified subjects, none of which are at issue. (Id. Ex. 6,Sections 15.1.7, 15.3.39, 16.2) The Managing General Partner has not called for a vote of any of the matters identified in Nelson's proxy solicitation statement and tender offer and the Managing General Partner has not received a written request for such a vote by unit holders holding ten percent or more of the units. (Id., Ex. 5 at Ex. (a)(2)) Nevertheless, on May 14, 2003, Nelson--who holds no Metric units of his own--filed with the SEC and disseminated to each Metric unit holder consent solicitation statements and a tender offer. (Philpot Decl., Ex. 4) 2. NELSON SUBMITS MISLEADING AND COERCIVE OFFER AND SOLICITATIONS TO USE METRIC'S OWN ASSETS TO "PURCHASE" FOR NELSON CONTROL OF METRIC SO THAT HE CAN CAUSE METRIC TO AWARD HIMSELF A GENEROUS LITIGATION SETTLEMENT Although, as detailed below, Nelson's materials misleadingly describe his offer, the actual, salient offer terms are as follows. Nelson has offered to purchase 30,000 of the 59,919 Metric units at $86 a unit. (Philpot Decl., Ex. 4 at 14, 17) The offer is effective only if at least 30,000 units are tendered. (Id. at 17) If more than 30,000 are tendered, Nelson will purchase only a pro-rata share from the tendering unit holders so that his total purchase is limited to 30,000 units. (Id. at 14, 67) Nelson's offer is also conditioned on the acceptance of four proposals: (a) an amendment to the Partnership Agreement that would allow a purchaser to acquire control of the Partnership; (b) removal of the Managing General Partners; (c) election of Nelson as the sole general partner; and (d) settlement of pending litigation between Nelson, Nashville Lodging, GP No. C03-2523-CRB - 8 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Credit and Metric by entry of a judgment in favor of GP Credit against Metric for $10 million, of which $4 million must be immediately paid to GP Credit. (Id. at 17, 26, 34, 63) Within 10 business days after all these conditions occur, Nelson proposes to pay $2.85 million to purchase the 30,000 units at $86 per unit. (Id. at 12, 32, 34-35, 39) He states that he will use a loan from GP Credit--whom Metric will have paid $4 million by that point--to fund the purchase. (Id. at 32, 34) Thus, Nelson's offer permits him to pay for the units that he proposes to purchase using Metric's own assets. He may then further deplete its assets--and satisfy any lingering vendettas--by bringing new lawsuits against the current Managing General Partner or others. (Id. at 25, 34) Although GP Credit would be entitled to claim proceeds from such lawsuits to satisfy its $10 million judgment balance, it would only be obligated to reimburse Metric the expenses of such lawsuits up to the amount recovered in them. (Id. at 63) Alternatively, Nelson would be able to liquidate Metric and use its remaining assets to satisfy the balance of GP Credit's judgment. Assuming no further litigation expenses, Metric would have approximately $4.4 million remaining upon liquidation before it paid GP Credit's judgment balance--$6.9 million in current cash holdings, a $525,000 settlement payment due on June 2, 2003, $914,000 due from the general partners upon liquidation, less the $4 million it would have already paid to GP Credit as a precondition of the tender offer. (Id., Ex. 5 (cover letter)) Nelson's proposed settlement provides, "GP Credit further agrees that . . . it will not attempt to collect more from Metric than an amount which would leave Metric with Two Million Dollars . . . immediately prior to liquidation." (Id., Ex. 4 at 63) GP Credit could argue that this language no longer applies once Metric enters liquidation. This would enable GP Credit to seize the entire $4.4 million in remaining Metric assets to satisfy its judgment, leaving $0 in distributions for the 29,919 units that Nelson does not intend to buy. Even assuming that GP Credit would leave Metric with a $2 million reserve that Nelson generally described in his materials, upon liquidation, over $ 1 million of that sum would go to Nelson as a 50 percent plus unit holder, leaving at most $33 per unit for the remaining 29,919 units. (Id., Ex. 5 at 14) No. C03-2523-CRB - 9 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Conversely, if Metric's unit holders were to reject Nelson's offer, and if the Tennessee court affirmed the zero damages judgment in Nelson's lawsuit against Metric, the $8.4 million in total Metric assets could be distributed upon liquidation at the rate of approximately $139 a unit for all 59,919 Metric units. (Id. (cover letter)) Nelson's offering materials also emphasize that he has been in litigation against Metric for years and that such litigation could continue for years--and prevent distributions to the unit holders--if his offer is not accepted. (Id., Ex. 4 at 24-25, 37-38, 59-60) He adds that if he succeeds, those who did not tender likely will have to endure multiple additional bouts of litigation that he will initiate if he obtains control of Metric. (Id. at 10, 23, 25-27) He also emphasizes that the unit holders are defendants in a lawsuit that seeks to force them to return past distributions and that if his offer does not succeed or for those who do not tender, those limited partners will be pursued personally. (Id. at 8, 12, 15, 17, 37) Worse still, Nelson's offer was riddled with misstatements and material omissions, which we recite in detail, post. C. METRIC OBJECTS TO NELSON'S ATTEMPTED END-RUN ON THE PARTNERSHIP AGREEMENT AND GIVES HIM NOTICE THAT IT WILL SEEK AN INJUNCTION IF HE DOES NOT CURE THE VIOLATIONS; NELSON REFUSES, SO METRIC GIVES NOTICE OF THIS APPLICATION On May 28, 2003, Metric's Managing General Partner advised Nelson in writing that his tender offer and proxy solicitation were invalid because he had failed to comply with the Partnership Agreement's procedure for calling a vote of the Limited Partners. (Philpot Decl, Ex. 5 at Ex. (a)(2)) Metric requested that he withdraw his invalid offer and solicitations and proceed anew in compliance with the Agreement and stated that it would seek an injunction if Nelson did not agree to do so within two days. (Id.) The next day, Nelson's counsel requested an additional 3 days, or until June 2, 2003, to respond. (Id., 4) On the afternoon of June 2, 2003, Nelson refused to withdraw his invalid offer and solicitations. (Id.) Metric immediately gave notice that No. C03-2523-CRB - 10 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. it would be filing this TRO application the next day in this Court. (Id.) Nelson advised that he would be filing an opposition. (Id.) III LEGAL ANALYSIS The Federal Rules of Civil Procedure and the Williams Act grant courts the power and authority to issue both an ex parte TRO and preliminary injunction in cases just such as this.(2) To prevail on a motion for a TRO or a preliminary injunction, the moving party must show either (1) a combination of probable success on the merits and the possibility of irreparable injury if relief is not granted, or (2) the existence of serious questions on the merits and that the balance of hardships tips in its favor. GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1204-05 (9th Cir. 2000); Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987); Wininger v. SI Management L.P., 32 F. Supp. 2d 1144, 1146-47 (N. D. Cal. 1997). These are not separate tests, but rather "opposite ends of a single `continuum in which the required showing of harm varies inversely with the required showing of meritoriousness.'" Rodeo Collection, 812 F.2d at 1217 (citations omitted). To balance the moving party's rights against the defendant's right to be heard, Rule 65 authorizes a court to issue an immediate TRO ex parte and to fix a hearing on a motion for a preliminary injunction within 10 days thereafter. Fed. R. Civ. Proc. 65(b). Metric demonstrates below that it is likely to succeed on the merits and is suffering immediate and continuing irreparable harm. It respectfully submits that its TRO application should be granted forthwith and the Court should issue an order to show cause why a preliminary injunction should not issue that sets the matter for hearing within 10 days of entry of the TRO. - ------------------------- (2) Rule 65(b) provides for an ex parte TRO to prevent "immediate and irreparable injury, loss or damage [which] will result to the applicant before the adverse party or the party's attorney can be heard in opposition." Moreover, upon a showing of violation of the federal securities laws, the Court has broad powers to fashion an appropriate remedy. Mills v. Electric Auto-Lite Co., 396 U.S. 375, 391 (1970). Courts therefore may and do issue immediate TROs followed by preliminary injunctions to restrain defective tender offers. See, e.g. Marathon Oil v. Mobil Corp., 35o F. Supp. 315 (N. D. Ohio) aff'd 669 F.2d 378 (6th Cir. 1981) and cases cited, post. No. C03-2523-CRB - 11 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. A. METRIC'S CLAIM THAT NELSON'S OFFER VIOLATES METRIC'S PARTNERSHIP AGREEMENT ESTABLISHES A LIKELIHOOD OF SUCCESS AND IRREPARABLE HARM 1. NELSON'S FAILURE TO FOLLOW THE AGREEMENT'S VOTING PROCEDURE IS A CRYSTAL CLEAR VIOLATION THAT PROVIDES A SETTLED BASIS FOR A TRO Metric's Partnership and Assignment Agreements are unambiguous that Nelson could only submit his consent proposals to a vote of the limited partners by first obtaining the written request of 10% of the unit holders or the approval of the Managing General Partner to call such a vote. And it is undisputed that he failed to do so. Because his tender offer is preconditioned on acceptance of his invalid consents, there is no point in allowing his invalid offer and solicitations to proceed. Doing so would only create confusion among Metric's limited partners, would cause the loss of the costs expended on the invalid offer and solicitation efforts and inevitable legal challenges, and could also produce the unseemly result of having votes cast that could not be counted due to Nelson's violation of the Partnership Agreement. Therefore, Nelson's invalid solicitations should be restrained immediately. See Pennwalt Corp. v. Centaur Partners, 710 F. Supp. 111, 117 (E. D. Pa. 1989) (issuing TRO followed by preliminary injunction to restrain consent solicitation where solicitor had no authority to call special shareholder meeting; "It is beyond cavil that to permit the shareholder's meeting to go forward when there is no proper authority to call the meeting would cause irreparable harm."); C.A. Cavendes , S. Sociedad Finaciera v. Florida Nat. Banks Of Fla., 556 F. Supp. 254, 259 (M. D. Fla. 1982) (failure to follow voting procedure in company's bylaws causes irreparable injury; voiding election held in violation of bylaws and issuing preliminary injunction). Indeed, "once a tender offer has been consummated, it becomes difficult and sometimes virtually impossible for a court to `unscramble the eggs.'" Sonesta International Hotels Corp. v. Wellington Associates, 483 F.2d 247, 250 (2d Cir. 1970); Consolidated Gold Fields PLC v. Minorco, S.A., 871 F.2d 252, 261 (2d Cir. 1989) (injunction is "remedy of choice" where it is difficult to unscramble transaction after it has been consummated). Moreover, an No. C03-2523-CRB - 12 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. after-the-fact invalidation causes irreparable harm and confusion for those shareholders who have cast votes, only to see those votes go unrecognized. Thus, "in the normal situation, when it appears likely that the offer may contain materially misleading statements or omissions as made, the interests of the shareholders and of the public in full disclosure of relevant circumstances renders preliminary injunctive relief an appropriate method of remedying the deficiencies in disclosure before the offer is consummated." Ronson Corp. v. Liquifin Atkiegesellschaft, 483 F.2d 846, 851 (3rd Cir. 1973); accord Koppers Co. v. American Express Co., 689 F. Supp. 1371, 1382 (W. D. Pa. 1988) (immediate injunction is a "particularly useful remedy to prevent violations of the disclosure requirements of the securities laws."). That logic also warrants an immediate injunction here to restrain Nelson's continuing violation of the Partnership Agreement before Nelson scrambles the eggs of his invalid offer and solicitation any further. Because Nelson's violation of the Partnership Agreement is crystal clear and beyond dispute, it is difficult to imagine what he might say in response. The only defense he has asserted to Metric is that his solicitations should be deemed an attempt to merely canvass the limited partners to gauge the level of support for his proposals. But allowing such "canvassing" would in and of itself confuse Metric's unit holders and violate the securities laws because Nelson did not inform the unit holders that he was merely "canvassing" but that he has not followed the required Partnership Agreement procedure for calling a vote of the unit holders. Indeed, Nelson's failure to obtain preliminary 10% unit holder approval and failure to disclose that he lacks such approval unfairly enables him to boost his chances of success. Each unit holder has no idea how her fellow limited partners will vote but may be tempted to approve by the erroneous belief that at least 10% must have given preliminary approval, since the matter has been submitted for a vote. Worse still, Nelson makes misleading statements in his offering materials that imply that over 10% of the voting units support his proposal. (Philpot Decl, Ex. 4 at 13) Because acceptance of Nelson's offer will likely destroy the value of any units not purchased, a unit holder's erroneous belief that Nelson has cleared the No. C03-2523-CRB - 13 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. initial hurdle to success gives Nelson a large boost in getting votes from unit holders who fear being left out in the cold. Thus, as discussed further, post, Nelson's failure to disclose that he has not obtained the required approval of 10% of the units to call a vote on his proxy proposals is itself a material omission that invalidates his tender offer. Allowing him to proceed in violation of the Partnership Agreement only compounds the problems with his offer. The better approach is to enjoin the offer now and require him to comply with the Agreement. 2. NELSON'S PROPOSED CONSENTS ALSO VIOLATE THE PARTNERSHIP AGREEMENT PROVISIONS THAT PROHIBIT A LIMITED PARTNER VOTE TO "APPROVE" A SELF-DEALING TRANSACTION Nelson openly admits that he would have a disabling conflict of interest if he had acquired control of Metric then caused it to settle its litigation against him. He states in his offering materials that it is his "objective" to sanitize that conflict by obtaining the "approval" of a majority of the limited partners for his self-dealing proposals. (Philpot Decl, Ex. 4 at 34) But Metric's Partnership Agreement does not allow such limited partner "approval" of self-dealing. Paragraph 15.1.7 of the Partnership Agreement prohibits the Managing General Partner from using or permitting another to use any Partnership assets "in any manner except for the exclusive benefit of the Partnership." (Philpot Decl., Ex. 6) Under paragraph 15.3.39, the General Partner may not "cause the Partnership to permit a Unit Holder to contract away the fiduciary duty owed by the General Partners to the Unit Holder under common law." (Id.) And paragraph 16.2 provides that limited partners shall have the right by majority vote "to vote only upon the following matters": removal of the General Partners and election of a successor, dissolution and termination of the Partnership, amendment of the Partnership Agreement, extension of the Partnership term, and any proposal to sell all or substantially all of the Partnership's assets." (Id. (emph. added)) The list of permissible voting matters does not include No. C03-2523-CRB - 14 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. a vote to "approve" a self-dealing transaction that an incoming General Partner anticipates. (Id.) Rather, as noted, section 15.3.39 prohibits any such vote. Again, because the Partnership Agreement unambiguously prohibits the preapproval on which Nelson's offer is conditioned, the time to enjoin the offer is now. B. METRIC'S CLAIMS THAT NELSON HAS VIOLATED THE DISCLOSURE REQUIREMENTS OF THE SECURITIES LAWS ALSO ESTABLISHES A LIKELIHOOD OF SUCCESS AND IRREPARABLE HARM 1. VIOLATION OF THE SECURITIES LAWS CAUSES IRREPARABLE HARM TO A COMPANY AND ITS UNIT HOLDERS Sections 14(a), (d) and (e) of the Securities and Exchange Act of 1934 (the anti-fraud provision of the Williams Act, 15 U.S.C. Section 78n(a), (d)-(e)), and SEC Rule 14a-9, prohibit in any form of proxy solicitation or tender offer (1) the omission of any material fact that is necessary to make statements made in the solicitation or offer not misleading, or (2) any other statement or act that is "fraudulent, deceptive or manipulative." An omitted fact is "material" if there is "a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote." TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449 (1976). The purpose of these rules is to provide the shareholder confronted with a tender offer "with complete and truthful information about the offeror [and] the terms and probable consequences of the offer." Applied Digital Data Systems v. Milgo Electronic, 425 F. Supp. 1145, 1152 (S.D.N.Y. 1977). "It was felt that in a tender offer situation, the stockholders of the target corporation should have complete information concerning the persons seeking to assume control." Berman v. Gerber Products Co., 454 F. Supp. 1310, 1322-23 (W. D. Mich. 1978). Similarly, the proxy rules promote "the free exercise of the voting rights of shareholders" by ensuring that proxies would be solicited with "explanation to the stockholder of the real nature of No. C03-2523-CRB - 15 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. the questions for which authority to cast his vote is sought." Mills, 396 U.S. at 381 (1970) (quoting H. R. Rep. No. 1383, 73d Cong., 2d Sess., 14; S Rep. No. 792, 73d Cong., 2d Sess., 12) Because there is no guarantee that shareholders will read responsive opposition statements, the securities laws place an affirmative duty on any offeror or proxy solicitor to provide a complete and candid disclosure. See Santa Fe Industries, Inc. v. Green, 430 U.S. 462, 477-78 (1977) ("the Court repeatedly has described the `fundamental purpose' of the [1934] act as implementing a `philosophy of full disclosure.'"). Accordingly, disclosures made in statements opposing the offer or proxy solicitation therefore do not cure misleading disclosures in an offering statement or proxy solicitation. Cf. Koppers, 689 F. Supp. at 1407 (upon finding that defendants' tender offer materials violated securities laws, court found it unnecessary to review claims concerning management's responsive Schedule 14D-9). Violation of these rules causes irreparable injury because security holders are denied the ability to make investment decisions on the basis of adequate information. See General Aircraft Corp. v. Lampert, 556 F.2d 90, 96 (1st Cir. 1977) (affirming finding that shareholders would suffer irreparable harm if injunction requiring defendant to comply with securities laws was not issued); Kaufman v. Cooper Companies, Inc., 719 F. Supp. 174, 178 (S.D.N.Y. 1989) (irreparable injury results from violation of federal proxy rules, as "the purposes of the securities laws is to provide information to investors so that they have the opportunity to make informed choices"); Riggs Nat'l Bank v. Allbritton, 561 F. Supp. 164, 181 (D.D.C. 1981) (rejecting defense argument that shareholders had adequate remedy in damages); see also Mills, 396 U.S. at 383 (stating that use of solicitation that is materially misleading violates securities laws and injunctive relief is appropriate to remedy such a defect). These cases recognize that the injury inflicted upon a shareholder's voting rights is a distinct injury from the economic harm inflicted by the passage of a proposed tender offer or proxy solicitation. Id; see also Diceon Electronics, Inc. v. Calvary Partners, L.P., 772 F. Supp. 859, 869 (D. Del. 1991) (damages inadequate remedy for harm to voting rights caused by misleading tender offer). No. C03-2523-CRB - 16 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. Eisenberg v. Chicago Miwaukee Corp., 537 A. 2d 1051, 1062 (Del. Ch. 1987) explains why an injunction is required, and money damages inadequate in such cases: [A]t issue is the shareholders' right to make an informed, uncoerced decision. That right is specific, and its enforcement requires a specific, not a substitutional remedy. As this Court has recognized, to permit a deficient offer to go forward might forever deprive the tendering and non-tendering shareholders of their right to be treated fairly. In that event, the harm could not easily be undone, and given the nature of the shareholder interests at stake, damages would not be a meaningful or adequate remedy. Therefore, the threatened harm is irreparable. An injunction is the remedy most likely to achieve disclosure of the information necessary to achieve an informed decision and to eliminate the offer's coercive aspects. Moreover, because it is impossible to assess the extent of the taint from a misleading disclosure, a court must void any acceptances or consents returned. See Kaufman, 719 F. Supp. at 185-86 (invalidating proxies tainted by misleading statements). Thus, as noted above, an immediate injunction is preferable to an attempt to "unscramble the eggs." 2. NELSON'S DISCLOSURES VIOLATE THE SECURITIES LAWS AND ARE CAUSING CONTINUING IRREPARABLE HARM Nelson's tender offer statement and consent solicitations made numerous statements that are misleading in light of the material facts that he omitted to mention. These misleading statements and material omissions are recited fully in Metric's complaint and include: (1) He fails to disclose that he has proceeded even though neither the Managing General Partner nor 10% of the voting units have called for a vote on his offer. Given that the Partnership Agreement requires such preapproval and that Nelson misleadingly suggests he has obtained the support of more than 10% of the unit holders, the unit holders are likely to be deceived into failing to realize that his offer has been compromised by a fatal procedural error. It is hard to imagine a more material omission than a failure to inform a shareholder that his or her vote will be invalid. Moreover, as noted, Nelson's misleading of the unit holders as to his failure No. C03-2523-CRB - 17 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. to obtain 10% approval also is material because his prospects of success will be critical to any unit holders assessment of whether to take the risk of not tendering. (2) Nelson states he does not believe his financial condition is relevant to his offer because he will be funding the purchase with a loan from GP Credit, but that in any event, he has a negative net worth in excess of $10 million. Philpot Decl., Ex. 4 at 9. He does not however, disclose GP Credit's financial condition; nor does he disclose that there is nothing in his offer that protects the unit holders should GP Credit decide not to proceed with its loan to him. Because Nelson is not obligated to pay for the tendered units until 10 business days after Metric approves the settlement and pays GP Credit $4 million, the lack of protection for Metric's unit holders if GP Credit reneges on its loan commitment, and GP Credit's ability to satisfy any judgment in an action to recover the $4 million payment are critical to an assessment of the offer. This is particularly true because Nelson's $10 million negative net worth makes it unlikely that Metric would be able to recover from him if GP Credit reneges. Accordingly, Nelson's failure to disclose GP Credit's financial condition and the lack of protection if it reneges constitute material omissions. Cf. Pabst Brewing Co. v. Kalmanovitz, 551 F. Supp. 882, 891-92 (D. De. 1982) (financial information about two businessmen who were providing necessary funding for tender offer was required to be disclosed); Koppers, 689 F. Supp. at 1390-91 (failure to disclose financial condition of investment bank, "one of the principal planners and players in this transaction," was material omission and warranted preliminary injunction against tender offer). (3) Similarly, Nelson discloses that his wife is a "manager" of GP Credit. (Philpot Decl., Ex. 4 at 9) But he apparently told a Tennessee court that she owned GP Credit, and that court recited her ownership as a fact. (Id., Ex. 3 at 2-3) He also discloses no information concerning how or why GP Credit acquired the litigation rights and obligations of the Nelson-related entities, whether it can legally deliver effective releases or what precisely is the nature of his relationship with GP Credit. Given GP Credit's essential role, these omitted facts are material. Cf. Schedule 14D-Item 7 (requiring disclosure in tender offer of any contracts, No. C03-2523-CRB - 18 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. arrangements or understandings between the bidder and any other person with respect to the target's securities); Koppers, 689 F. Supp. at 1395 (because of creditor's key role in offer, further disclosure concerning offeror's obligations to creditor was required); Riggs, 516 F. Supp. at 173-75 (offeror required to disclose information concerning his ability to repay financing for offer). (4) He also fails to disclose that a Tennessee state court has cited his purported transfer to GP Credit of his litigation rights and obligations as evidence of the "elements of fraud" in his schemes to evade Hardage's and Orlando Residence's Tennessee judgment against him. (Philpot Decl., Ex. 3 at 2-3) A disclosure of this fact is necessary to evaluate the risk that Metric's approval of Nelson's offer might be viewed as evidence of a Metric conspiracy with Nelson to defraud Hardage and Orlando Residence and the Tennessee court. In deciding how to vote, a reasonable shareholder would certainly consider it important to know that he or she might be considered a party to a fraud if he or she voted for the proposal. Moreover, it is settled that information reflecting a takeover bidder's competence and integrity is material--particularly where the offer will leave a substantial number of minority shares untouched. See Life Investors, Inc. v. AGO Holding, N.V., Fed. Sec. L. Rep. (CCH) 98,356 (8th Cir. 1981) ("Where, as here, the partial offer means that a substantial minority will necessarily remain, the shareholder must weigh staying with the company and the bidder as part of the minority bloc"; ordering injunction pending appeal where tender offer did not fully disclose financial condition of bidder ); Berman, 454 F. Supp. at 1322-23 ("Congress in enacting the Williams Act clearly intended that information with respect to the integrity of the tender offeror's management be disclosed"), quoting H. R. No. 171, 90th Cong., 2d Sess. ("The competence and integrity of . . . the persons who seek management positions are of vital importance to the stockholder"). (5) Nelson states that he is offering to pay $86 for each unit. (Philpot Decl, Ex. 4 at 8) But he fails to disclose that when all factors are taken into account, the unit holders' recovery is likely to be substantially lower. If more than 30,000 of the units are tendered, Nelson proposes to purchase only a pro-rata share from the tendering unit holders. For example, if No. C03-2523-CRB - 19 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 50,000 units are tendered, because Nelson will purchase only 30,000 units, a unit holder who tenders 100 units will end up selling 60 units and retaining 40. Accordingly, to evaluate Nelson's offer, each unit holder must determine not only the likely sum to be obtained on the portion of units Nelson purchases, but also the potential value of his or her remaining units if Nelson's offer succeeds. Under Nelson's proposal, all remaining Metric assets will likely end up being paid to Nelson or his related entities, or in the best-case, a $2 million liquidation reserve will be left. (And, even then, one-half of that $2 million will go to Nelson because he will then own half the units.) Thus, as noted, the remaining 29,919 units --held either by those who did not tender or those who retained units as the result of a tender of more than 50 percent of all units--are likely to receive somewhere between nothing, or at most $33 a unit. Nelson does not, however, disclose the devastating effect on the value of the units that he declines to buy if his offer succeeds. (6) He states "I believe the Partnership will ultimately be found liable for damages in excess of $12 million from its breach of the 1993 settlement agreement" and that "the Proposed Settlement Agreement permits the Partnership to pay only a fraction of the amount for which it may be held liable." (Philpot Decl, Ex. 4 at 60) But he offers no factual or legal analysis in support. He also states that a Tennessee judge "decided that the Partnership's breach caused no damages. I believe he made a mistake. How the appellate courts will view the matters cannot be known with certainty." (Id.) But he nowhere states that appellate reversals are the exception, not the rule. It is impossible based on Nelson's selective disclosure for the unit holders to assess whether his proposal bears a reasonable relationship to Metric's litigation exposure. (7) Similarly, he states his "feeling" that breach of fiduciary claims against the present General Partner and others based on their purported mishandling of the settlement agreement "may be worth millions of dollars." (Id. at 25) But he offers no supporting facts or legal analysis to enable unit holders to evaluate this claim. He also fails to disclose that he has already lost analogous tortious interference claims, that a court would likely find the proposed claims barred by the statute of limitations, and that his proposed claims for management's No. C03-2523-CRB - 20 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. purported mishandling of the settlement would have little or no value if the Tennessee appellate court were to affirm the judgment awarding Nelson zero dollars for his aborted settlement claim. (8) Nelson states that his "objective" in seeking to settle his lawsuits against Metric as a precondition to his offer is to eliminate the conflict of interest between himself and Metric. (Id. at 34) But he fails to disclose that he will continue to have an irreconcilable post-acceptance conflict of interest with regard to prosecution of the lawsuits that he proposes to bring on Metric's behalf. GP Credit is not obligated to reimburse the expenses of the proposed lawsuits unless those expenses are less than the amount paid to GP Credit in addition to its initial $4 million recovery. (Id. at 63) Because Nelson owes GP Credit millions, he would have an interest in satisfying it by pursuing lawsuits that would be unjustified under a cost-benefits analysis for Metric, but that might be in GP Credit's interests (since it only pays if the lawsuits succeed). His failure to disclose these "delicate ethical issues" is a material omission. Cf. Koppers, 689 F. Supp. at 1391 (disclosure of ramifications of potential conflict of interest issues posed by broker-dealer's involvement in tender offer would be material to stockholders) (9) Nelson fails to disclose the existence of Securities and Exchange Commission Rule 14d-7 which provides that any person who has deposited securities pursuant to a tender offer has the right to "withdraw any such securities during the period such offer request or invitation remains open." As a result of this material omission, any unit holders who have tendered have done so without realizing they can change their mind once they receive Metric's position on the tender offer. Similarly, Nelson's materials state that by executing and delivering an Agreement of Sale, a tendering unit holder (who does not properly withdraw acceptance of Nelson's Offer prior to the Expiration Date), irrevocably appoints Nelson as that unit holder's proxy. But the Agreement of Sale states that the power of attorney granted is irrevocable and does not state that it terminates (as to voting the units) upon withdrawal of the tender. As a result, Nelson, contrary to his offer characterization but under the terms of his Agreement of Sale, can vote the units of a person who at one time tendered and has subsequently withdrawn and now No. C03-2523-CRB - 21 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. does not want the Nelson proposal to go forward. In addition, the tender offer materials state that by executing and delivering the Agreement of Sale, the tendering unit holder also irrevocably appoints Nelson as the unit holder's attorney-in-fact, to be effective only upon Nelson's payment for the units. But the Agreement of Sale has no such carve out, and in fact, has language that would permit Nelson to transfer the units to his name without paying for them. To the extent Nelson intended to have these powers, the tender offer materials must disclose this and also disclose the risks inherent in these provisions. Cf. Calumet Industries v. MacClure, 464 F. Supp. 19, 27-28 (N.D. Ill. 1978) (enjoining defendants from exercising shareholders' consents where defendants had misrepresented that consents were irrevocable). C. ENJOINING NELSON NOW IS PREFERABLE TO PERMITTING HIS TAINTED OFFER TO PROCEED Nelson's fraud will eventually require the invalidation of any acceptances or solicitations that Metric's limited partners return. Kaufman, 719 F. Supp. at 185-86. The difficulty of "unscrambling the eggs," however, could prove insurmountable because Nelson's offer calls for an immediate payout of $4 million to a third party--GP Credit--without any security for the transferred assets. After-the-fact invalidation raises the unseemly spectre of shareholders who have cast votes, only to see those votes go unrecognized. And, of course, voiding the election at the end of the day results in a loss of the considerable expenses associated with the vote tally and legal challenge--a loss which Metric is unlikely to recover from Nelson, given his $10 million negative net worth. Thus, the wiser course is to enjoin the offer and solicitation immediately and order Nelson to comply with the securities laws going forward. D. THE HARM TO NELSON IN MERELY REQUIRING HIM TO FOLLOW THE LAW AND METRIC'S PARTNERSHIP AGREEMENT IS MINIMAL WHEN COMPARED TO METRIC'S INJURY Although Nelson has a right to freely compete in tender offer situations [see, e.g., Jewel Companies, Inc. v. Pay Less Drug Stores Northwest, Inc., 510 F. Supp. 1006 (N.D. Cal. No. C03-2523-CRB - 22 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. 1981)], he has no right to disregard the Partnership Agreement provisions that govern votes of the limited partners, to violate the securities laws, to wrongfully interfere with Metric's contractual relationship with its limited partners or to enlist those partners to join him in committing a breach of fiduciary duty to minority interests. Nelson thus will suffer little or no cognizable "harm" from merely being ordered to comply with the Agreement and the law. See Studebaker Corp. v. Gittlin, 360 F. 2d 692, 696 (2d Cir. 1966). Indeed, forcing Nelson to comply now will benefit him and all other interested persons by eliminating the flaws in his invalid offer, while permitting Metric's unit holders to make a free and informed choice should Nelson submit a proper offer to them in accordance with Metric's Partnership Agreement and the law. E. NELSON'S VIOLATIONS OF CALIFORNIA LAW ALSO WARRANT A TRO Although the Court need not go further, there is little doubt that Nelson's offer and solicitation are also tortious violations of California law and are causing irreparable harm. Nelson's conduct is a breach of his fiduciary duty and aiding and abetting the breach of fiduciary duty by Metric unit holders. Had Nelson attempted to implement his proposed settlement once he obtained control, his self-dealing would easily be struck down as a breach of his management fiduciary duties. As noted, Nelson essentially admits as much and asks for a bare majority of Metric's unit holders to approve his proposals as a condition to cash out their shares. But unit holders who choose to cash out have little incentive to protect the Partnership and remaining minority interests and thus may not give "preapproval" to a self-dealing incoming director's breach of fiduciary duty. Setting forth a broad fiduciary duty protection, California law provides that in any transaction where control of the corporation is material, the conduct of directors and shareholders is governed by a comprehensive requirement of "good faith and inherent fairness" to the minority. Jones v. H.F. Ahmanson & Co., 1 Cal. 3d 93, 1001 (1969); see also Fisher v. Pennsylvania Life Co., 69 Cal. App. 3d 506 (1977). As the California Supreme Court explained: "[T]he burden is No. C03-2523-CRB - 23 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. on the director or stockholder not only to prove the good faith of the transaction but also to show its inherent fairness from the viewpoint of the corporation . . . . The essence of the test is whether or not under all the circumstances the transaction carries the earmarks of an arm's length bargain. If it does not, equity will set it aside." Jones, 1 Cal. 3d at 108. Here, however, Nelson's offer has none of the "earmarks of an arm's length bargain." If he does not obtain an appellate reversal of his zero damages judgment against Metric, there would be no basis for Metric to pay anything to settle the lawsuit, much less pay $10 million. As a general rule, appellate reversals are the rare exception, and not the rule--particularly after a trial, as Nelson obtained in Tennessee. The number of $0 damages judgments following a trial that turn into $10 million awards thanks to an appeal are even rarer. Apart from Nelson's deception as to what he is offering, the only reason any rational unit holder would vote for this deal would be to avoid Nelson's intent to destroy the value of the non-tendering units and his threat to delay any cash distribution on those units for years. Given the broad scope of California's fiduciary duty law, such coerced tenders cannot suffice to validate a self-dealing transaction that would never fly if Nelson had attempted it after obtaining control. IV CONCLUSION The Court should issue an immediate TRO restraining Nelson from any further action in support of his invalid tender offer and consent solicitations and should set the matter for No. C03-2523-CRB - 24 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. a preliminary injunction hearing within 10 days of the TRO (per Rule 65(b). DATED: June 2, 2003. REED SMITH CROSBY HEAFEY LLP By /s/ Kenneth J. Philpot ---------------------------------- Kenneth J. Philpot Attorneys for Plaintiff Metric Growth Suite Investors, L.P. No. C03-2523-CRB - 25 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. TABLE OF CONTENTS (CONTINUED)

PAGE I INTRODUCTION......................................................................................................... 2 II FACTUAL BACKGROUND.................................................................................................. 5 A. Nelson Wages A 10-Year Losing Litigation Battle Against Metric.................................... 5 B. To Fund His Litigation Vendettas And To Reverse His In-Court Results, Nelson Violates The Provisions In Metric's Partnership Agreement That Govern Votes Of The Limited Partners And Presents Its Limited Partners With An Invalid, Misleading And Coercive Tender Offer.............................................................. 8 1. Nelson's Violations Of The Partnership Agreement........................................ 8 2. Nelson Submits Misleading And Coercive Offer And Solicitations To Use Metric's Own Assets To "Purchase" For Nelson Control Of Metric So That He Can Cause Metric To Award Himself A Generous Litigation Settlement................................................................... 9 C. Metric Objects To Nelson's Attempted End-Run On The Partnership Agreement And Gives Him Notice That It Will Seek An Injunction If He Does Not Cure The Violations; Nelson Refuses, So Metric Gives Notice Of This Application.................................................................. 11 III LEGAL ANALYSIs..................................................................................................... 12 A. Metric's Claim That Nelson's Offer Violates Metric's Partnership Agreement Establishes A Likelihood Of Success And Irreparable Harm.............................................................................................. 13 1. Nelson's Failure To Follow The Agreement's Voting Procedure Is A Crystal Clear Violation That Provides A Settled Basis For A TRO............................................................................... 13 2. Nelson's Proposed Consents Also Violate The Partnership Agreement Provisions That Prohibit A Limited Partner Vote To "Approve" A Self-Dealing Transaction............................................ 15 B. Metric's Claims That Nelson Has Violated The Disclosure Requirements Of The Securities Laws Also Establishes A Likelihood Of Success And Irreparable Harm.................................................................................. 16 1. Violation Of The Securities Laws Causes Irreparable Harm To A Company And Its Unit Holders.......................................................... 16 2. Nelson's Disclosures Violate The Securities Laws And Are Causing Continuing Irreparable Harm.................................................... 18 C. Enjoining Nelson Now Is Preferable To Permitting His Tainted Offer To Proceed.......................................................................................... 23

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PAGE D. The Harm To Nelson In Merely Requiring Him To Follow The Law And Metric's Partnership Agreement Is Minimal When Compared To Metric's Injury............................................................................................ 23 E. Nelson's Violations Of California Law Also Warrant A TRO.......................................... 24 IV CONCLUSION.......................................................................................................... 25

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PAGE(S) CASES Applied Digital Data Systems v. Milgo Electronic, 425 F. Supp. 1145 (S.D.N.Y. 1977) ........................................................... 15 Berman v. Gerber Products Co., 454 F. Supp. 1310 (W. D. Mich. 1978) ........................................................ 15, 19 C.A. Cavendes, S. Sociedad Finaciera v. Florida Nat. Banks of Fla., 556 F. Supp. 254 (M. D. Fla. 1982) .......................................................... 12 Calumet Industries v. MacClure, 464 F. Supp. 19 (N.D. Ill. 1978) ............................................................ 22 Consolidated Gold Fields PLC v. Minorco, S.A., 871 F.2d 252 (2d Cir. 1989) ................................................................. 12 Eisenberg v. Chicago Miwaukee Corp., 537 A.2d 1051 (Del. Ch. 1987) ............................................................... 17 Fisher v. Pennsylvania Life Co., 69 Cal. App. 3d 506 (1977) .................................................................. 23 GP Credit Co., LLC v. Metric Partners Growth Suite Investors, L.P. et al., Superior Court of California, San Francisco Co., No. CGC-02-403301 ........................................................................... 6 General Aircraft Corp. v. Lampert, 556 F.2d 90 (1st Cir. 1977) ................................................................. 16 GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199 (9th Cir. 2000) ............................................................... 11 I ; see also Diceon Electronics, Inc. v. Calvary Partners, L.P., 772 F. Supp. 859 (D. Del. 1991) ............................................................. 16 Jewel Companies, Inc. v. Pay Less Drug Stores Northwest, Inc., 510 F. Supp. 1006 (N.D. Cal. 1981)] ........................................................ 22 Jones v. H.F. Ahmanson & Co., 1 Cal. 3d 93 (1969) ......................................................................... 23, 24 Kaufman v. Cooper Companies, Inc., 719 F. Supp. 174 (S.D.N.Y. 1989) ............................................................ 16, 17, 22 Koppers Co. v. American Express Co., 689 F. Supp. 1371 (W. D. Pa. 1988) .......................................................... 13, 16, 18, 19, 21 Life Investors, Inc. v. AGO Holding, N.V., Fed. Sec. L. Rep. (CCH) 98 (8th Cir. 1981) .................................................. 19

- iii - Mem. Of Points And Authorities In Support Of Ex Parte Application For Tro And Osc Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. TABLE OF CONTENTS (CONTINUED)

PAGE(S) Marathon Oil v. Mobil Corp., 35o F. Supp. 315 (N. D. Ohio) aff'd 669 F.2d 378 (6th Cir. 1981) ............................ 11 Metric Partners Growth Suite Investors, L.P. v. Nashville Lodging Co. et al., Chancery Court for Davidson Co., Tennessee, No. 96-1405-III ............................................................................. 6 Metric Partners Growth Suite Investors, L.P. v. Nelson, Superior Court of California, San Francisco Co., No. 928065 .................................................................................. 6 Mills v. Electric Auto-Lite Co., 396 U.S. 375 (1970) ......................................................................... 11, 16 Nashville Lodging Co. v. Metric Partners Growth Suite Investors, L.P., Chancery Court for Davidson Co., Tennessee, No. 94-1911-I ............................................................................... 6 Nashville Lodging Co. v. Metric Partners Growth Suite Investors, L.P. et al., Circuit Court, State of Wisconsin, No. 94CV001212 (inactive) ................................................................... 6 Nelson and Nashville Lodging Co. v. Metric Realty et al., Chancery Court for Davidson Co., Tennessee, No. 97-2189-III ............................................................................. 6 Nelson v. Metric Realty, 2002 Tenn. App. LEXIS 698 ................................................................... 4 Orlando Residence, Ltd. v. Nashville Lodging Co., Tennessee Chancery Ct, Davidson Co., No. 92-3086-III.............................................................................. 7 Pabst Brewing Co. v. Kalmanovitz, 551 F. Supp. 882 (D. De. 1982) .............................................................. 18 Pennwalt Corp. v. Centaur Partners, 710 F. Supp. 111 (E. D. Pa. 1989) ........................................................... 12 Riggs Nat'l Bank v. Allbritton, 561 F. Supp. 164 (D.D.C. 1981) .............................................................. 16, 19 Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215 (9th Cir. 1987) ............................................................... 11 Ronson Corp. v. Liquifin Atkiegesellschaft, 483 F.2d 846 (3rd Cir. 1973) ................................................................ 13 Santa Fe Industries, Inc. v. Green, 430 U.S. 462 (1977) ......................................................................... 16

- iv - Mem. Of Points And Authorities In Support Of Ex Parte Application For Tro And Osc Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. TABLE OF CONTENTS (CONTINUED)

PAGE(S) Sonesta International Hotels Corp. v. Wellington Associates, 483 F.2d 247 (2d Cir. 1970) ................................................................. 12 Studebaker Corp. v. Gittlin, 360 F.2d 692 (2d Cir. 1966) ................................................................. 23 TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976) ......................................................................... 15 Wininger v. SI Management L.P., 32 F. Supp. 2d 1144 (N. D. Cal. 1997) ....................................................... 11 STATUTES California Code of Civil Procedure section 527(c) .................................................. 11 Fed. R. Civ. Proc. 65(b) ........................................................................... 11 SEC Rule 14a-9 ..................................................................................... 15 Williams Act, 15 U.S.C.Section 78n(a), (d)-(e) ..................................................... 15

- v - Mem. Of Points And Authorities In Support Of Ex Parte Application For Tro And Osc Why A Preliminary Injunction Should Not Issue REED SMITH CROSBY HEAFEY LLP A limited liability partnership formed in the State of Delaware. "Reed Smith" and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities. WARNING: This section retains the original formatting, including headers and footers, of the main document. If you delete the section break above this message, any special formatting, including headers and footers for the Table of Contents/Authorities section will be lost. If you delete the section break above the Table of Contents/Authorities, you will overwrite the headers and footers of the main document with Table of Contents/Authorities headers and footers. To delete the Table of Contents/Authorities, begin your selection at the section break above the TOC/TOA section and continue through the end of this message. No C03-2523-CRB - 1 - Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And OSC Why A Preliminary Injunction Should Not Issue EX-99.(A)(8) 7 f90550a1exv99wxayx8y.txt EXHIBIT (A)(8) Exhibit (a)(8) IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA METRIC PARTNERS GROWTH, NO. C 03-02523 CRB Plaintiff, TEMPORARY RESTRAINING ORDER V. KENNETH E. NELSON, Defendant. / - ---------------------------------- For the reasons stated at oral argument on plaintiffs motion for a temporary restraining order on June 20, 2003, defendant Kenneth E. Nelson, is hereby enjoined from taking any further action in support of his tender offer and consent solicitations, except that defendant may attempt to convene a vote of the limited partners in accordance with the partnership agreement. Plaintiff shall file a bond in the amount of $25,000.00 within three business days of the date of this order. IT IS SO ORDERED. Dated: June 27, 2003 /s/ Charles R. Breyer ---------------------------- CHARLES R. BREYER UNITED STATES DISTRICT JUDGE -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.(A)(4)

                                                                 Exhibit (a)(4)



                 METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.




June 30, 2003





Dear Metric Partners Growth Suite Investors, L.P. Unit holder:

        In connection with the tender offer made by Kenneth Nelson, we
previously advised you that the Partnership intended to file a lawsuit against
Mr. Nelson requesting the Court to enjoin Mr. Nelson's offer and his consent
solicitations.   On May 28, 2003, the Partnership filed its lawsuit in the
United States District Court, Northern District of California, in San
Francisco, California.  On June 3, 2003 the Partnership filed an ex-parte
application for a temporary restraining order with respect to the tender offer
and the consent solicitations.  A hearing on the motion was held by the Court
on June 20, 2003.  At the hearing the Court found that Mr. Nelson's tender
offer and consent solicitations violated the provisions of the Partnership's
Partnership Agreement that required a written request of Unit holders holding
at least 10 percent of the Partnership's Units to call for a vote of the Unit
holders.

        On June 27, 2003 the Court issued a formal order enjoining Mr. Nelson
from taking any further action in support of his tender offer and consent
solicitations except that he is permitted to attempt to convene a vote of
limited partners in accordance with the terms of the Partnership's Partnership
Agreement.

        The Partnership has filed with the Securities and Exchange Commission
an amendment to its Recommendation Statement on Schedule 14D-9 in light of the
above development.  A copy of the Partnership's complaint against Mr. Nelson,
the ex-parte application for the temporary restraining order, the Memorandum of
Points and Authorities in support of the ex-parte application, and the Court's
June 27, 2003 order have been filed as exhibits to the Schedule 14D-9
amendment.  A copy of Amendment No. 1 to the Partnership's Schedule 14D-9
(including the exhibits to the Amendment) may be obtained from our information
agent, Georgeson Shareholder, or at the website of the Securities and Exchange
Commission at www.sec.gov.







      One California Street, Suite 1400 -- San Francisco, CA 94111-5415






If you have any questions, please contact our information agent, Georgeson
Shareholder (toll-free) at (800) 849-6648.

                                        Sincerely,

                                        METRIC PARTNERS GROWTH SUITE
                                        INVESTORS, L.P.,
                                        a California Limited Partnership,

                                        By:     Metric Realty,
                                        an Illinois general partnership,
                                        its Managing General Partner

                                        By:     SSR Realty Advisors, Inc.,
                                        a Delaware corporation,
                                        its Managing General Partner


                                        By: /s/ Herman H. Howerton

                                                Herman H. Howerton
                                                Its Managing Director, General
                                                Counsel

EX-99.(A)(5)

                                                                 Exhibit (a)(5)



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

Kenneth J. Philpot (State Bar No. 62401)
Heather Lenhardt (State Bar No. 217580)
REED SMITH CROSBY HEAFEY LLP
Two Embarcadero Center, Suite 2000
San Francisco, CA  94111

MAILING ADDRESS:
P.O. Box 7936
San Francisco, CA  94120-7936

Telephone:     415.543.8700
Facsimile:     415.391.8269

Attorneys for Plaintiff
Metric Partners Growth Suite Investors, L.P.

                          UNITED STATES DISTRICT COURT

                         NORTHERN DISTRICT OF CALIFORNIA

METRIC PARTNERS GROWTH                  No.
SUITE INVESTORS, L.P., a
California limited partnership,         METRIC PARTNERS GROWTH SUITE INVESTORS,
                                        L.P.'S COMPLAINT FOR:

                  Plaintiff,            (1)  VIOLATIONS OF SECURITIES EXCHANGE
                                        ACT AND THE RULES AND REGULATIONS
               vs.                      PROMULGATED THEREUNDER

                                        (2)  VIOLATION OF PARTNERSHIP AGREEMENT
KENNETH E. NELSON                       AND ASSIGNMENT AGREEMENT

                                        (3)  TORTIOUS INTERFERENCE WITH
                  Defendant.            CONTRACTUAL RELATIONS

                                        (4)  BREACH OF FIDUCIARY DUTY

                                        (5)  SOLICITING, AIDING AND ABETTING
                                        BREACH OF FIDUCIARY DUTY
                                        AND FOR DECLARATORY AND INJUNCTIVE
                                        RELIEF

No.                                   - 1 -

    Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                              PRELIMINARY STATEMENT

         1.       Plaintiff Metric Partners Growth Suite Investors, L.P. (the
"Partnership") brings this action to enjoin preliminarily, temporarily and
permanently, an on-going tender offer by defendant Kenneth E. Nelson ("Nelson")
through which Nelson is attempting to fraudulently induce thousands of holders
of limited partnership interests in the Partnership ("Unit Holders") into giving
Nelson control of the Partnership so that he can engage in gross self-dealing
with the Partnership's assets.

         2.       For the past 10 years, Nelson has battled the Partnership in
litigation that has thus far culminated in a judgment awarding Nelson zero
dollars, which he has appealed. Having struck out thus far in the courts, he
instead recently has crafted his fraudulent tender offer in an attempt to dupe
and coerce unwitting Unit Holders into handing him the litigation award that has
thus far eluded him. On May 14, 2003, he filed a proxy solicitation and a tender
offer statement with the SEC for dissemination to the 4,000 plus Unit Holders of
the Partnership. In those statements and offer, Nelson seeks to obtain the
consent of the majority of the Unit Holders to proposals under which Nelson
would (a)"purchase" just over 50% of Metric's units, (b) remove the general
partners and appoint himself its managing general partner, (c) approve a $10
million judgment against the Partnership, in favor of a Nelson-related entity
(GP Credit) to settle his lawsuits against the Partnership, (d) immediately pay
GP Credit $4 million of the "settlement," and (e) then use $2.8 million loaned
to him by GP Credit from its settlement money to pay for his "purchase" of the
Partnership units. In other words, he proposes to use the Partnership's own
assets to pay himself an outrageous sum to settle litigation whose probable
value is nothing.

No.                                   - 1 -

    Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

         3.       Nelson seeks to accomplish this by evading the requirements in
the Partnership agreement for calling a vote of the Unit Holders and by
defrauding the Unit Holders. Although the Partnership Agreement only permits a
vote of the Unit Holders upon request of the Managing General Partner or 10% of
the Unit Holders, Nelson simply initiated his proxy solicitation statements and
tender offer to each Unit Holder without disclosing that he had not complied
with the Partnership's procedure for calling a vote of the Unit Holders.
Nelson's failure to follow the procedures set forth in the Assignment Agreement
and the Partnership Agreement render all of his consent solicitations invalid
and make immediate declaratory and injunctive relief appropriate in order to
halt the confusion that his invalid offer may otherwise cause among the
unsuspecting Unit Holders.

         4.       Moreover, in violation of multiple securities laws, Nelson's
consent solicitations and tender offer are riddled with deceptive statements or
material omissions that are likely to deceive the Unit Holders into failing to
realize that Nelson is proposing a raw deal. The defects and deficiencies in
Nelson's disclosures warrant injunctive relief against continuation and
consummation of the coercive tender offer pending fair and complete corrective
disclosures and the passage of a reasonable time thereafter.

         5.       In addition, Nelson's takeover proposals are structured to
enable Nelson and a majority of the Unit Holders to breach their fiduciary duty
to minority Unit Holders. Nelson's proposal provides that he will become the
Partnership's general partner and cause it to settle his lawsuits against the
Partnership. Thus, Nelson will owe the Partnership and the Unit Holders a
fiduciary duty when he deals himself a settlement favorable to himself but
fundamentally unfair to the Partnership. In addition, Nelson's plan is

No.                                   - 2 -

    Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

coercive because his plan offers value only to the just over 50% of units that
he proposes to buy, he threatens the Unit Holders with exposure to personal
liability unless they agree to tender their units to him, and yet he fails to
provide any factual analysis or legal support to the Unit Holders so that can
assess the validity of his claims and threats against them. Accordingly, the
Unit Holders may believe that unless they join a tendering majority now, they
will become part of a minority that is stuck with units that are essentially
worthless while continuing as defendants in a lawsuit Nelson has already filed.

         6.       Nelson's tender offer is the latest in a series of dubious
schemes that he has orchestrated in an attempt to manipulate the results of 10
plus years of litigation in which he has been embroiled. The Partnership is
concerned at even the possibility that its Unit Holders might be duped into
joining with a person whose history and current proposal all reek of impending
disaster for the Partnership. Under these circumstances, Nelson should not be
permitted to conduct, let alone consummate, an abusive and coercive tender offer
that threatens to deplete the Partnership's assets for his own benefit, to
settle pending lawsuits without justification, and to impose disastrous
financial consequences on the remaining minority Unit Holders.

                  Accordingly, the Partnership by and through its attorneys,
hereby alleges as its Complaint against Nelson as follows:

                             JURISDICTION AND VENUE

         7.       This is an action to enjoin, preliminarily, temporarily and
permanently, conduct in violation of the Securities Exchange Act of 1934,

No.                                  - 3 -

Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

including Sections 14(a), (d) and 14(e) of the Exchange Act and the rules and
regulations promulgated thereunder. The jurisdiction of this Court is invoked
pursuant to 28 U.S.C. Section 1332 (federal question jurisdiction) and 15 U.S.C.
Section 78aa (jurisdiction over claims arising under the Securities Exchange Act
of 1934).

         8.       This action is also brought for violations of the laws of the
State of California, including tortious interference with contractual relations,
breach of fiduciary duty, and soliciting, aiding and abetting breach of
fiduciary duty. These claims are related to, and form part of the case or
controversy that arises under the federal securities laws. The Court's
jurisdiction over the state claims is supplemental to its jurisdiction over the
federal securities laws. The jurisdiction of this Court is invoked pursuant to
28 U.S.C. Section 1367 (supplemental jurisdiction).

         9.       This Court has personal jurisdiction over non-resident
Defendants pursuant to the California long-arm statute, California Code of Civil
Procedure Section 410.10.

         10.      Venue is appropriate in the Northern District of California
pursuant to 28 U.S.C. Section 1391(b) because a substantial part of the events
giving rise to this complaint and a substantial part of the property that is the
subject of this action is situated in this district. Venue also lies in this
district under 15 U.S.C. Section 78aa because Nelson mailed proxy solicitation
statements to the residences of Unit Holders of the Partnership located in this
district. In addition, the general partners of the Partnership are headquartered
in this district.

No.                                  - 4 -

    Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                                     PARTIES

         11.      Plaintiff Partnership is a California limited partnership and
subject to the registration and reporting requirements of the federal securities
laws. There are approximately 4,000 Unit Holders in the Partnership who own
59,919 Partnership Units. The Partnership, which commenced business in 1984, was
created for the purpose of investing in, acquiring, managing and ultimately
selling commercial hotel properties.

         12.      Defendant Nelson is an individual, and, upon information and
belief, is a resident and citizen of the State of Wisconsin. Nelson is the
bidder in the unlawful tender offer, and accompanying consent solicitations
statements, that seeks majority control of the Partnership.

                                      FACTS

A.       Partnership Agreement and Assignment Agreement

         13.      Paragraph 4 of the Assignment Agreement provides that Metric
Assignor, Inc. (the "Assignor Limited Partner") will vote the units assigned to
Assignee Holders in accordance with written instructions received from the
Assignee Holders, with respect to any matter to which a vote of Limited Partners
is taken "in accordance with the Partnership Agreement."

         14.      Paragraph 16.3 of the Partnership Agreement sets forth the
mechanisms for a vote of the Limited Partners. Pursuant to such paragraph, the
Managing General Partner of the Partnership may call a meeting of the Limited
Partners or call for a vote of the Limited Partners without a meeting

No.                                  - 5 -

    Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

on matters on which the Limited Partners are entitled to vote. Paragraph 16.3 of
the Partnership Agreement also provides that the Managing General Partner shall
call for a vote of the Limited Partners following receipt of a written request
therefor by Limited Partners holding ten percent or more of the Units held by
all Limited Partners as of the date of receipt of such written request.

         15.      The last sentence of Paragraph 4 of the Assignment Agreement
provides that the Assignor Limited Partner shall request that the Managing
General Partner submit a matter to the Limited Partners without a meeting
pursuant to the Partnership Agreement upon written request of Assignee Holders
owning Units which represent in the aggregate ten percent or more of all of the
outstanding Units.

         16.      Thus, a vote of the Limited Partners may be called only upon
the request of the Managing General Partner or upon the written request of ten
percent of the Unit Holders. The Managing General Partner has not called for a
vote of the matters identified in Nelson's proxy solicitation statement and the
Managing General Partner has not received a written request therefor by Unit
Holders holding ten percent or more of the Units.

         17.      The Partnership is informed and believes and on such
information and belief alleges that Nelson is and was at all relevant times
aware of the Partnership Agreement and Assignment Agreement.

         18.      Nelson solicited the breach of the Partnership Agreement and
Assignment Agreement without disclosing to the recipient Unit Holders that he
had not followed the Partnership's procedure for calling a vote of the

No.                                  - 6 -

    Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

limited partners. In his consent solicitation statement, Nelson solicited the
Unit Holders to sign the attached consents to give direction to the Assignor
Limited Partner of the Partnership as to how to vote on four separate proposals.
Nelson solicited the Unit Holder vote and recommended approval of the four
following proposals: (a) amendment to Paragraph 12.3 of the Partnership
Agreement that would allow a purchaser to acquire control of the Partnership;
(b) removal of the Managing General Partner and the Associate General Partner;
(c) election of Nelson as the sole general partner of the Partnership; and (d)
settlement of certain pending litigation between Nelson, Nashville Lodging Co.
("Nashville Lodging"), GP Credit Co. L.L.C. ("GP Credit") and the Partnership
"by means of entry of a judgment in favor of GP Credit against the Partnership
for $10 million." Nelson's tender offer statement also makes Unit Holder
approval of these four solicited proposals a precondition to his tender offer.
Nelson's consent solicitations are also confusing and misleading because he uses
two different record dates for the Unit Holders whose approval he is soliciting.

         19.      In connection with Nelson's solicitation of the Unit Holders'
written consents of his delineated proposals, Nelson attached consent cards to
his filing material for the Unit Holders to vote for the proposals. Nelson also
states that he provided the Unit Holders with postage-paid return envelopes for
their "convenience" in returning the consent cards.

B.       Nelson's Tender Offer

         20.      Nelson is not currently a Unit Holder. Nelson's wife owns five
Partnership Units.

No.                                  - 7 -

    Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson


                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

         21.      On May 14, 2003, Nelson initiated consent solicitations and a
tender offer to the Partnership's Unit Holders.. On that same day, Nelson filed
his tender offer statement on Schedule TO pursuant to Rule 14d-3 of the General
Rules and Regulations under the Exchange Act ("Nelson's Offer"). By his Offer,
Nelson seeks to acquire 30,000 of 59,919 Partnership Units, representing just
over 50% control of the Partnership, at $86 for each Unit. A true and correct
copy of Nelson's Tender Offer Statement Pursuant to Section 14(d)(1) and
attached Exhibits ("Nelson's Offer") is attached as Exhibit "A" and is
specifically incorporated herein in its entirety by this reference.

         22.      Nelson's Offer to purchase is expressly conditioned upon Unit
Holder approval of four proposals: (a) a vote by the Limited Partners to amend
the Partnership Agreement to allow the transfer of more than 5% of the Units in
a calendar year or 50% of the Units in a twelve month period, (b) removal of the
current general partners, (c) Nelson's election as sole general partner of the
Partnership and (d) the settlement of specified litigation pending between
Nelson, Nashville Lodging, and GP Credit and the Partnership. (See Nelson's
Offer, Exhibit (a)(1) at p. 5, 10, 19-20). These four proposals are set forth in
greater detail below. Approval of each of these proposals is a condition to
Nelson's Offer for 30,000 of 59,919 Partnership Units at $86 per unit.

         23.      Under the terms of Nelson's Offer, he has ten business days
after acceptance of all the preconditions, which include transfer of control to
him and approval of his proposed settlement, before he is obligated to pay the
tendering Unit Holders for their Units.

No.                                  - 8 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

C.       Conditions of Nelson's Offer - Nelson's Proposals

         24.      Nelson filed a proxy solicitation statement seeking consent of
the Unit Holders for the approval of four separate proposals. Approval of all of
the following proposals is a precondition to Nelson proceeding with the purchase
of the Units he seeks pursuant to his tender offer.

                  AMENDMENT PROPOSAL

         25.      Nelson's first proposal repeats the recent proposal of the
Managing General Partner to amend the Partnership Agreement to remove the
provision that a maximum of five percent of the units may be transferred in any
given year and a maximum of 50% transferred in a twelve month period (the
"Amendment Proposal"). This provision was based on certain Internal Revenue Code
provisions which provided that, if more than five percent of the units were
transferred in any given calendar year or more than 50 percent were transferred
in a 12 month period, the Partnership could be terminated or reclassified as a
publicly traded partnership, with certain potential adverse tax consequences for
the Unit Holders. Given that the Partnership was no longer actively involved in
real estate operations, the Managing General Partner, with the consultation and
advice from its legal counsel, determined there was no longer a risk that it and
its Unit Holders would suffer adverse tax consequences if this restriction were
lifted. Accordingly, in order to give the Unit Holders more freedom to sell
their Units, the Managing General Partner recommended amending the Partnership
Agreement to delete these restrictions. However, only 36.7 percent of the Unit
Holders voted to approve this amendment by the May 8, 2003 deadline for
submission of consents, so it has failed. As one of his four conditions, Nelson
now renews

No.                                  - 9 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

the proposal and adopts the prior discussion of the issue that management
previously presented to the Unit Holders. Without this change in the Partnership
Agreement Nelson would be unable to acquire 50% of the units in one transaction.

                  MANAGEMENT REMOVAL AND ELECTION PROPOSALS

         26.      Nelson's second and third proposals involve his self-declared
plan to take over control of the Partnership by removing the existing General
Partners and electing himself in their place.

                  SETTLEMENT PROPOSAL

         27.      Nelson's fourth proposal seeks approval for the terms of a
settlement of certain litigation between himself and the Partnership in
accordance with a pre-drafted settlement agreement that he attaches to his
filing materials. In this settlement agreement, the Partnership would
purportedly settle all of the lawsuits, discussed more fully below, that Nelson
has waged with the Partnership for the past ten years.

         28.      Under the terms of the proposed settlement, the Partnership
would stipulate to a $10 million judgment against it and in favor of a Nelson
related company called GP Credit. From existing cash reserves, the Partnership
would immediately pay GP Credit $4 million. GP Credit would agree to defer
collection of the remaining $6 million for three years to allow the Partnership
to try to increase its assets by pursuing a breach of fiduciary duty lawsuit
against the removed Managing General Partner and potential others that assisted
the Managing General Partner. Nelson would use

No.                                  - 10 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

Partnership assets to fund the litigation, but GP Credit would reimburse the
Partnership for those expenses only if, and to the extent, the Partnership was
successful in that litigation. Otherwise, the Partnership would absorb all of
the costs and legal expenses.

         29.      Nelson's proposed settlement provides, "GP Credit further
agrees that following such three-year period it will not attempt to collect more
from Metric than an amount which would leave Metric with Two Million Dollars . .
.. immediately prior to liquidation." (Emphasis added)

         30.      Under the proposed settlement, the Partnership would release
Nelson, GP Credit and Nashville Lodging from any liability. In turn, these
parties would release the Partnership from liability, but expressly reserve
their rights as to all other persons. In his Offer materials, Nelson
acknowledges that his protracted litigation battle with the Partnership presents
a conflict of interest. Nelson claims that settlement of all litigation between
the Partnership and him and his affiliated entities will solve this problem.

D.       Financing of Nelson's Offer

         31.      In his tender offer statement, Nelson recites that he will pay
for the units he is purchasing with the proceeds of a loan from GP Credit, an
entity that his wife manages. Nelson also discloses that he has a negative net
worth in excess of $10 million and that most of his outstanding financial
obligations are to GP Credit. Nelson further discloses that he will pledge all
of his Partnership Units as security for his purchase of the Units. But Nelson
does not disclose details of his relationship with GP Credit that would enable


No.                                  - 11 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

the Unit Holders to determine whether or not the Partnership's own assets are
effectively funding Nelson's purchase.

E.       Background and History of the Partnership's Litigation With Nelson

         32.      For the past ten years, the Partnership and/or its Managing
General Partner have been engaged in several protracted lawsuits with Nelson
and/or his related entities, Nashville Lodging, and GP Credit. These include:
Metric Partners Growth Suite Investors, L.P. v. Nelson, Superior Court of
California, San Francisco County, Case No. 928065; Nashville Lodging Co. v.
Metric Partners Growth Suite Investors, L.P. et al., Circuit Court, State of
Wisconsin, Case No. 94CV001212 (inactive); Orlando Residence, Ltd. v. 2300 Elm
Hill Pike, Inc. and Nashville Lodging Co. v. Metric Partners Growth Suite
Investors, L.P., Chancery Court for Davidson County, Nashville, Tennessee, Case
No. 94-1911-I; Metric Partners Growth Suite Investors, L.P. v. Nashville Lodging
Co. et al., Chancery Court for Davidson County, Nashville, Tennessee, Case No.
96-1405-III; Nelson and Nashville Lodging Co. v. Metric Realty et al., Chancery
Court for Davidson County, Nashville, Tennessee, Case No. 97-2189-III; ; GP
Credit Co., LLC v. Metric Partners Growth Suite Investors, L.P. et al., Superior
Court of California, San Francisco County, Case No. CGC-02-403301. The lawsuits
stem from a disputed settlement agreement that the parties failed to finalize in
1993. The history of the Partnership's litigation with Nelson is long and
complicated.

         33.      The Tennessee Court of Appeals recently summarized the
background in Nelson v. Metric Realty, (referenced above as Chancery Court for
Davidson County, Nashville, Tennessee, Case No. 97-2189-III) 2002 WL 31126649,
*1-3, 2002 Lexis 698, *2-9 (Tenn. Ct. App. 2002), as follows:

No.                                  - 12 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  "This case is another chapter in the continuing saga of
                  Kenneth E. Nelson, Nashville Lodging Co., Orlando Residence,
                  Ltd., and [the Partnership].

                  "The seeds of the present dispute were sown in 1981 when
                  Samuel H. Hardige [the correct spelling is Hardage] hired
                  Kenneth E. Nelson to oversee one of his businesses. Mr.
                  Hardige (sic) fired Mr. Nelson a short time later, thereby
                  precipitating considerable litigation between Mr. Nelson and
                  various business entities owned by Mr. Hardige. (sic) When the
                  litigation was eventually settled, Nashville Residence
                  Corporation (`Nashville Residence'), of which Mr. Nelson was
                  the principal stockholder, received a tract of land at 2300
                  Elm Hill Pike in Nashville. In return, Nashville Residence and
                  two sureties executed a $250,000 note to Orlando Residence,
                  Ltd. ("Orlando Residence"), a limited partnership with Mr.
                  Hardige (sic) as the general partner. Thereafter, Nashville
                  Lodging Company (`Nashville Lodging'), a Tennessee-based
                  limited partnership with Nashville Residence as its general
                  partner, built a Marriott Hotel on the Elm Hill Property.

                  "Nashville Residence defaulted on the note to Orlando
                  Residence. In December 1986, Orlando Residence sued Nashville
                  Residence in the United States District Court for the Middle
                  District of Tennessee. Shortly after Orlando Residence filed
                  suit, Nashville Residence quitclaimed the

No.                                  - 13 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  Elm Hill property to Nashville Lodging. In 1989, Nashville
                  Lodging sold the hotel and leased the property to [the
                  Partnership]. In March 1990, Orlando Residence obtained a
                  judgment in federal court against Nashville Residence for
                  $250,000 plus interest.

                  "Armed with its $250,000 judgment, Orlando Residence filed
                  suit in the Chancery Court for Davidson County against
                  Nashville Residence, Nashville Lodging, Mr. Nelson, and [the
                  Partnership] attacking the conveyance of the Elm Hill property
                  as a fraudulent conveyance. Orlando Residence eventually
                  succeeded with its claim and was awarded $501,934 in
                  compensatory and $850,000 in punitive damages from Nashville
                  Residence and Nashville Lodging.

                  "[T]his court reversed Orlando Residence's judgment and
                  remanded the case for a new trial....

                  "On the second trial of the fraudulent conveyance action. . .,
                  the jury again found the conveyance from Nashville Resident to
                  Nashville Lodging in 1986 to have been fraudulent and on
                  appeal, this Court affirmed the judgment.

                  "The foregoing factual background, relative to the Nashville
                  property, is essential to a proper understanding of the
                  parallel litigation in California....

No.                                  - 14 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  "The disputes between Nelson and [the Partnership] began in
                  the late 1980's when [the Partnership] acquired certain
                  Residence Inn hotels from entities controlled by Nelson. [The
                  Partnership] acquired both the Residence Inn in Nashville,
                  Tennessee and the Residence Inn in Ontario, California. For a
                  time, Nelson continued to provide management services at these
                  Residence Inn hotels, including the Ontario hotel in
                  California, which was managed by Nelson from April 1988 to
                  February 1991. [The Partnership] believed that Nelson breached
                  his management agreement for the Ontario hotel. [The
                  Partnership] gave notice of termination of the agreement and
                  filed suit in the superior court of California in and for the
                  city and county of San Francisco in January 1991, seeking
                  damages and declaratory and injunctive relief against Nelson.
                  A counter-claim was filed by Nelson seeking damages and
                  declaratory relief."

Nelson, 2002 WL 31126649, *1-3, 2002 Lexis 698, *2-9.

         34.      Shortly before the San Francisco action was to proceed to
trial, the parties conducted a settlement conference. In the lawsuit, the
Partnership was seeking approximately $250,000 from Nelson, but its lawyers were
concerned that Nelson was judgment proof. Nelson in turn had filed a
cross-complaint against the Partnership, which the Partnership's lawyers
concluded had little chance of success. During the settlement discussions,
Nelson offered the Partnership the opportunity to purchase the land at 2300 Elm
Hill Pike, which was under the Partnership's Nashville

No.                                  - 15 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

Residence Inn; this appeared to be Nelson's only valuable asset. Accordingly, at
a court supervised settlement conference, the parties agreed to settle by Nelson
transferring this land to the Partnership in return for a note from the
Partnership and the Partnership releasing its claims against Nelson.

         35.      A few weeks after the settlement conference, the Partnership's
Tennessee lawyer advised the Managing General Partner that acceptance of
ownership of the Nashville land from Nelson could have potentially disastrous
consequences for the Partnership with regard to Nelson's ongoing litigation with
Hardage and Orlando Residence in Tennessee. In that litigation, Hardage and
Orlando Residence had sued Nelson for fraudulent conveyance, as set forth above.
Up to that point, the Partnership had been able to argue that it was a "bona
fide purchaser" from Nelson of its interest in the Hotel and would not be
subject to Hardage's and Orlando Residence's claims. However, the lawyer advised
that if the Partnership accepted the settlement offer and took control of the
land from Nelson, there was a substantial risk that a court might find the
Partnership had conspired with Nelson to defraud his creditors and that the
Partnership's interest in the land and the Hotel would be found to have merged.
This could then result in the Partnership being subject to any lien that Hardage
obtained in his litigation against Nelson and the Partnership thereby losing its
interest in the hotel. Faced with that advice, the Partnership's management
determined that it could not consummate the settlement with Nelson until it
received clarification that Nelson was solely responsible for the fraudulent
conveyance action that Hardage and Orlando Residence were pursuing against
Nelson.

         36.      Nelson responded by claiming that the Partnership was in
breach of the settlement agreement. He then sued the Partnership in lawsuits in

No.                                  - 16 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

California, Wisconsin and Tennessee. All are based on the same basic facts--that
the Partnership breached its contract with Nelson and that Nelson consequently
suffered a substantial loss. He also later filed a separate fraudulent
conveyance lawsuit in California against the Partnership, its Managing Partners
and a putative class of Unit Holders who received distributions from the
Partnership. Nelson alleges that these prior Partnership distributions were
fraudulent because they drained the Partnership of assets necessary to pay a
judgment in his favor should he be successful in his damage claims against the
Partnership for breach of the aborted settlement agreement.

         37.      At this point in the parties' protracted litigation, there has
been a determination in the principal action that the Partnership did breach its
settlement agreement with Nelson but that he suffered no damages as a result.
These findings are now on appeal.

         38.      For purposes of his tender offer, and accompanying consent
solicitations, Nelson claims that his damages arising from the Partnership's
failure to consummate the settlement are $12 million, and Nelson uses that
number to justify the Partnership stipulating to a $10 million judgment against
it and in favor of Nelson and a related company.

         39.      Nelson also contends that the Partnership should pursue breach
of fiduciary claims against its Managing General Partner and others, stemming
from their responsibility for and "mistakes they made" concerning the aborted
settlement agreement. He states his "feeling" that these claims could be worth
millions of dollars. But Nelson fails to disclose that he has already sued the
Managing General Partners and others for tortious

No.                                  - 17 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

interference in conjunction with the aborted settlement agreement and he lost.
Those claims were summarily dismissed by the Tennessee trial court and affirmed
on appeal, with the appellate court also finding that the claims were barred by
the statute of limitations. He also does not disclose that if the appellate
court affirms the judgment that has awarded him zero damages for the
Partnership's purported breach of the settlement agreement, any breach of
fiduciary duty claims that the Partnership might bring against the Managing
General Partners or others arising out of the aborted settlement would have
minimal value.

         40.      Hardage and Orlando Residence continue to try to recover
against Nelson on their fraudulent conveyance judgment. In August 2001, a
Tennessee court specifically found that there were "elements of fraud" affecting
Nelson's attempts to avoid payment of his obligations. The court found that one
of these fraudulent elements was Nelson's purported transfer to GP Credit of the
rights and obligations previously held by Nelson and Nashville Lodging Company.
Based on these findings, the court appointed a receiver to take possession of
any proceeds that Nelson might obtain in his claims against the Partnership. In
summarizing Nelson's legal maneuverings, the court concluded:

                  What all of the foregoing have in common are attempts by
                  [Nashville Lodging Company] and Mr. Nelson to avoid collection
                  of judgments. That a jury determined one such attempt was
                  fraudulent, that Chancellor Brandt found another attempt was
                  contemptuous and that there is yet another post-judgment
                  conveyance in issue all cause the Court to conclude that there
                  are sufficient 'elements of

No.                                  - 18 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  fraud affecting the remedy at law' such that appointment of a
                  receiver to take possession of proceeds in the Metric lawsuit
                  is necessary.

Orlando Residence, Ltd. v. Nashville Lodging Co., Tennessee Chancery Court,
Davidson County, Nashville, Case No. 92-3086-III (unpublished opinion Aug. 15,
2001).

                             FIRST CLAIM FOR RELIEF

 ( For Violation of Sections 14(d) and 14(e) Of the Exchange Act And The Rules
                    And Regulations Promulgated Thereunder)

         41.      The Partnership repeats and realleges the allegations of the
preceding paragraphs as if fully set forth herein.

         42.      Sections 14(a), (d) and (e) of the Exchange Act, 15 U.S.C.
Section 78n(d)-(e), require that in connection with any request or invitation
for tenders or any solicitation of security holders, full disclosure must be
made of the information specified in Section 14(d) and the rules and regulations
promulgated thereunder, and make it unlawful to engage in any fraudulent,
deceptive or manipulative act in connection with any form of proxy solicitation
and/or tender offer.

         43.      Sections 14(a), (d) and (e) of the Exchange Act, 15 U.S.C.
Section 78n(d)-(e), also require that in connection with any tender offer or any
solicitation of shareholders, full disclosure must be made of the information
specified in Section 14(d), and the rules and regulations promulgated
thereunder, and make it unlawful to engage in any fraudulent,

No.                                  - 19 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

deceptive or manipulative act in connection with any form of proxy solicitation
and/or tender offer.

         44.      Sections 14(a), (d) and (e) and the SEC regulations thereunder
are thus intended to insure that security holders confronted with a proxy
solicitation and/or tender offer are provided with all the information about the
proposed shareholder votes and tender offer and the qualifications and
intentions of the offeror necessary for them to make an informed investment
decision with regard to the proposed vote on whether to tender or hold their
securities.

         45.      Nelson made the following statements in his tender offer and
proxy solicitation materials:

                  (a)      "The Offer is also conditioned upon: (i) settlement
of all outstanding litigation against the Partnership . . .; (ii) a vote by the
Limited Partners to amend the Agreement of Limited Partnership to permit the
transfer of more than 5% of the Units in a year . . .; and (iii) my election as
general partner of the Partnership and the resignation or removal of the current
general partners."

                  (b)      "If you tender your Units, you will receive both cash
and certain non-cash consideration for them. You will receive $86 in cash . . .
You will also receive a release in certain litigation against you. GP Credit has
filed a fraudulent transfer action against the Partnership, the class of all
persons who were Limited Partners as of January 13, 1998, the Managing General
Partner, and others affiliated with the Managing General Partner. If successful,
GP Credit will obtain a judgment against each Limited Partner

No.                                  - 20 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

who is a member of that class in an amount equal to the distribution made to
such Limited Partner as of January 13, 1998, or $275 per Unit. In that event, GP
Credit would likely attempt to collect on such judgment by all means permitted
by law, which could include placing liens upon your property. However, GP Credit
has agreed, in exchange for certain consideration from me, to release you from
liability in that lawsuit if you tender all of your Units to me, and if I
purchase any of your Units."

                  (c)      "Except as otherwise provided in this Section 4,
tenders of Units made pursuant to the Offer are irrevocable. Units tendered
pursuant to the Offer may be withdrawn by or on behalf of the depositor at any
time until the expiration of seven days after the date of the Offer, or May 21,
2003, and at any time after sixty days from the date of the Offer, or July 13,
2003."

                  (d)      "In the event that the Offer is extended beyond the
Expiration Date, the Units tendered may be withdrawn at any time prior to the
end of the extension period."

                  (e)      "Tendering Limited Partners will additionally have
withdrawal rights as provided under Exchange Act 14(d)(5)."

                  (f)      "My asset review focused upon other assets of the
Partnership, in particular upon the claim of the Partnership against James
Reuben ("Reuben"), an attorney who represented the Partnership in connection
with the 1993 settlement of certain litigation, and also upon possible claims
against others who may have failed to fulfill their obligations

No.                                  - 21 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

to the Partnership. . . . If the Offer is successful, I believe that such claims
have substantial value."

                  (g)      "I believe any claims against the Managing General
Partner have no value to the Partnership unless the Managing General Partner is
removed from control. . . . It is my feeling at this time . . that such claims
may be worth millions of dollars."

                  (h)      "Because of the uncertainty concerning the duration
and the ultimate outcome of the lawsuits, the Purchaser was unable to determine
a liquidation value for the Partnership."

                  (i)      "[T]he Partnership no longer calculates an estimated
Net Asset Value ("NAV") for Units because of the uncertainty of the litigation
against the Partnership."

                  (j)      "Should a review determine that the Partnership does
in fact have viable claims against the Managing General Partner or others, I
presently intend to cause the Partnership to offer such persons the chance to
have such claims decided in binding arbitration . . . Alternatively, I presently
intent to cause the Partnership to pursue any such claims in the appropriate
courts. Such pursuit may take a number of years, which would delay liquidation
of the Partnership."

                  (k)      "Following the resolution of the claims against third
parties, . . . I presently intend to cause the Partnership to be liquidated."

No.                                  - 22 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  (l)      "[I]f I have control of the Partnership, I believe
that such claims [against those who may have breached their duties to the
Partnership] have sufficient value to the Partnership to allow me to profit from
my purchase of Units."

                  (m)      "The Purchaser does not have the financial
wherewithal to purchase the tendered Units, but will obtain such funds by means
of a loan (the "Loan") from GP Credit, an entity of which my wife is the
manager. . . The Loan will be secured by any Units purchased by me . . .
Purchaser plans to repay the Loan with proceeds from the liquidation of the
Partnership."

                  (n)      "Most of my obligations are to GP Credit."

                  (o)      "Entities which are related to me are the plaintiffs
in such [outstanding litigation with the Partnership], thereby causing me to
presently have a conflict of interest with the Partnership. One of my objectives
in making the Offer conditional upon such settlement is to eliminate that
conflict of interest."

                  (p)      "The general terms of the settlement are that the
Partnership will agree to entry of a judgment in favor of GP Credit against the
Partnership for $10 million. The Partnership will immediately pay $4 million to
GP Credit, and GP Credit will agree that it will not attempt to collect more
than $4 million of such judgment for a period of three years following entry of
the judgment."

                  (q)      "GP Credit will further agree that following such
three-year period it will not attempt to collect more from the Partnership than
an amount

No.                                  - 23 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

which would leave the Partnership with $2 million (including amounts owed by the
current general partners due to the negative balances in their capital accounts)
immediately prior to liquidation."

                  (r)      "A suit in San Francisco seeks to force you to return
$275 per Unit that was distributed in January 1998. You will be released from
liability if you sell your Units to me."

                  (s)      "My offer gives limited partners a rare chance to
sell this investment. . . .The Partnership hotels have been sold, but litigation
has prevented cash distributions."

                  (t)      "The Managing General Partner is recommending
approval of a proposed amendment to the partnership agreement which would allow
a purchaser to acquire control of the Partnership."

                  (u)      "The holders of Units are being asked to sign a
consent card to give direction to the Assignor Limited Partner of the
Partnership . . . as to how to vote on the Proposals."

                  (v)      "The Partnership has stated on several occasions that
a mistake (the "Mistake") was made in connection with the Partnership entering
into a 1993 settlement agreement. However, the Managing General Partner has
never advised the Limited Partners of the existence of the Mistake, the nature
of the Mistake, or who was responsible for the Mistake. The Partnership has sued
James Reuben, an attorney who represented the Partnership in connection with the
1993 settlement agreement, alleging that Reuben failed to advise the Partnership
of the risks of agreeing to purchase

No.                                  - 24 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

the land under the Residence Inn--Nashville subject to certain litigation.
However, the Partnership would not have been harmed by Reuben's failure to
advise the Partnership of such risks had the Managing General Partner not also
failed to advise the Partnership of such risks. Thus, the Managing General
Partner may be jointly liable with Reuben for failing to advise the Partnership
of such risks."

                  (w)      "The three-year forbearance period will allow the
Partnership the opportunity to attempt to recover from the current general
partners, and others who have advised the Partnership, for damages caused by any
wrongs done by them. Since as much as $6 million of any such recovery will go to
GP Credit, GP Credit has agreed to reimburse the Partnership for its expenses in
attempting such recovery, up to the amount such attempts benefit GP Credit. In
the event that the Partnership is able to recover the full amount it has agreed
to pay GP Credit, $10 million, then the Partnership will effectively be made
whole. In the event that the Partnership is able to recover punitive damages
from such third parties, such as for the breach of fiduciary duties, then the
Partnership may be able to recover more than it has agreed to pay GP Credit."

                  (x)      "The litigation has lasted for a decade, and could
last for a number of years more. The litigation has prevented the liquidation of
the Partnership."

                  (y)      "I believe that the Partnership will ultimately be
found liable for damages in excess of $12 million from its breach of the 1993
settlement agreement."

No.                                  - 25 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  (z)      "The Proposed Settlement Agreement permits the
Partnership to pay only a fraction of the amount for which it may be held
liable, and obligates it to pay more only if it is able to recover from third
parties on its claims against such third parties."

                  (aa)     "By executing and delivering the Agreement of Sale, a
tendering Limited Partner (who does not properly withdraw acceptance of the
Offer prior to the Expiration Date) irrevocably appoints the Purchaser as that
Limited Partner's proxy, with full power of substitution. All proxies are
irrevocable and coupled with an interest in the tendered Units and empower the
Purchaser to exercise all voting and other rights of such Limited Partner as it
in its sole discretion may deem proper at any meeting of Limited Partners."

                  (bb)     "By executing and delivering the Agreement of Sale, a
tendering Limited Partner also irrevocably constitutes and appoints the
Purchaser and its designees as the Limited Partner's attorneys-in-fact. This
appointment will be effective upon Purchaser's payment for the Units."

                  (cc)     Exhibit (a)(3) of Nelson's Offer, Agreement of Sale
and Assignment ("Agreement of Sale") states: "Seller, upon execution of this
Agreement, hereby irrevocably constitutes and appoints Purchaser as its true and
lawful agent and attorney-in-fact with respect to the Units being sold hereby
with full power of substitution."

         46.      In his tender offer and consent solicitation material, Nelson
omitted to state material facts necessary in order to make other statements,
such as those quoted above, not false or misleading. The tender offer and

No.                                  - 26 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

consent solicitation material, both in presentation and discussion, are
coercive, materially false, misleading and omit facts necessary in order to make
them not materially misleading in the following respects:

                  (a)      Nelson fails to disclose that there is no guarantee
that the tendering Unit Holders will actually be paid for the units they tender.
There are many unanswered questions about Nelson's and GP Credit's ability and
willingness to pay, and Nelson's tender offer is carefully structured so that he
can impose the $10 million settlement and $4 million cash payment to GP Credit
before any payment to the Unit Holders.

                  (b)      Nelson fails to disclose that although Nelson's
tender offer price for a majority of the units is $86 a unit, when all factors
are taken into account and all contingencies resolved, the ultimate recovery
that the Unit Holders would receive for all of their units is likely to be
substantially lower.

                  (i). Nelson proposes to acquire 30,000 units for $86 a unit.
At least 30,000 units (which collectively constitute just more than 50 percent
of the total units in the Partnership) must be tendered for Nelson's offer to be
accepted. If more than 30,000 of the units are tendered, however, Nelson
proposes to purchase only a pro-rata share of units from the tendering Unit
Holders, meaning that Unit Holders will continue to hold units in the
Partnership even though they tendered all their units. For example, if 75
percent of the units are tendered, because Nelson will purchase only 30,000
Units, a Unit Holder who holds 100 units will end up selling slightly more than
66-2/3 units and retaining slightly fewer than 33-1/3. Of course, non-tendering
Unit Holders would retain all of their Units.

No.                                  - 27 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  (ii). Accordingly, each Unit holder needs to evaluate the
potential effect of a successful tender and be aware of the consequences if more
than 50 percent of the units are tendered. In other words, for a tendering Unit
Holder to evaluate the effect of Nelson's offer, each Unit Holder must determine
the likely sum to be obtained upon a sale of a portion of his or her units and
the potential value of his or her remaining units if Nelson gains control of the
Partnership.

                  (iii). Under Nelson's proposal for settling the pending
lawsuits and then pursuing claims against the Managing General Partner and
others, all remaining Partnership assets will likely end up being paid to Nelson
or his related entities with the possible exception of the $2 million minimum
liquidation reserve that he claims will be left in the Partnership. (And, of
course, one-half of that $2 million will go to Nelson because he will then own
half the units.)

                  (iv). Indeed, assuming Nelson obtains all but $1 million of
the Partnership's assets, the remaining Unit Holders--i.e., those who did not
tender and those who retained units as the result of a tender of more than 50
percent of all units--would receive at most $33 a unit upon liquidation. (This
is calculated by dividing $1 million by the 29,919 units remaining after
Nelson's 30,000 unit purchase.) For this reason, the tendering Unit Holders must
determine if they are prepared to sell a majority of their units to Nelson for
$86 a unit and then be left with units for which they will likely receive at
most $33 upon liquidation.

                  (c)   Nelson fails to disclose facts relevant to the timing of
liquidation of the Partnership and what its assets could likely be at that time.

No.                                  - 28 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

As justification for the $86 unit price he is offering, Nelson points out that
the Partnership has ceased to calculate an estimated Net Asset Value for units.
The reason is that the pendency of the Nelson-related lawsuits makes uncertain
the date of liquidation and the amounts available for distribution when all
litigation has been resolved and all litigation expenses have been deducted.
However, Nelson fails to disclose facts that demonstrate that he presently has
the ability to control the timing of the Partnership's liquidation. His lawsuits
are the sole reason why the Partnership assets remain tied up. If his tender
offer is accepted and he obtains control as managing General Partner, he alone
will have the power to decide when to cease future litigation and liquidate the
Partnership. These facts are necessary for the Unit Holders to determine on
their own the value they are likely to receive upon liquidation.

                  (i). The Partnership has liquidated its properties and as of
March 31, 2003, had $6,918,000 in cash. Assuming that the Partnership receives
the $525,000 payment from the Reuben case settlement due on June 2, 2003 and
that the general partners pay the amount due from them upon liquidation of
$914,000, the Partnership could distribute approximately $8,357,00 or $139 per
unit upon liquidation (adjusted for interest income and expenses since March
31).

                  (ii). Based on the present progress of the related Nelson
lawsuits, the Tennessee appellate court will likely decide the Nelson-related
appeal in nine to twelve months. If the appellate court affirms the trial
court's final judgment that Nelson suffered no damage from the Partnership's
failure to finalize the disputed settlement, Nelson's justification for tying up
the partnership's assets will cease to exist and his collateral claim that the

No.                                  - 29 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

Partnership wrongfully distributed assets to the Unit Holders will fail. On the
other hand, if the appellate court reverses the trial court's determination that
Nelson suffered no damage, the duration of the lawsuits cannot be estimated.
Although the above information and analysis is crucial to a fair evaluation of
Nelson's tender offer, Nelson omitted such facts from his disclosures.

                  (d)      Nelson fails to disclose that his proposed takeover
is structured so he is not required to pay for the Units being tendered until he
has already used those units to pass his proposals to obtain majority control,
to remove the General Partner, to elect himself General Partner, to settle the
lawsuits, and to pay himself immediately $4 million of the $10 million judgment
he plans to impose on the Partnership.

                  (e)      Under the terms of Nelson's Offer, he has ten
business days after acceptance of all the preconditions, which include transfer
of control to him and approval of his proposed settlement, before he is
obligated to pay the tendering Unit Holders for their Units. At that point, with
$4 million of Partnership assets in his pocket, Nelson will be in a position to
pay $2,580,000 to the Unit Holders who tendered the 30,000 units. Nelson thus
fails to disclose that he has manipulated the timing and sequence of events to
limit any financial exposure to him or the entities related to him.

                  (f)      Nelson fails to disclose that there is nothing in his
tender offer that protects the Unit Holders should GP Credit decide not to
proceed with its loan to Nelson. Because his agreement to pay for the tendering
units does not take effect until ten business days after his proposals regarding
the partnership are approved, he has taken over as Managing General Partner AND

No.                                  - 30 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

$4 million has been paid to GP Credit, it is only at that point that GP Credit
would have to loan him the money. But Nelson would be unable to proceed with his
purchase should GP Credit breach the terms of its loan agreement with Nelson.
Because the Unit Holders are not a party to that agreement, their ability to
force GP Credit and Nelson in turn, to proceed with the purchase of their shares
would be unclear and would likely involve more litigation--with the prospects of
relief clouded by Nelson's debts and the undisclosed financial health of GP
Credit. In other words, Nelson has carefully crafted his proposals to protect
himself from having to pay anything until all of the changes and actions he
desires with regard to the Partnership have taken place. However, there are no
protections for the Unit Holders that makes the settlement pay-out conditional
on their actually receiving the payments that Nelson is promising to them.

                  (i). What Nelson says about the timing of the consent
solicitations and his tender offer purchase is telling:

                  Nelson will have been elected the sole general partner prior
                  to completion of his purchase of a majority of Units. If the
                  Election Proposal and the Removal Proposal are approved,
                  Nelson will have been elected as the sole general partner of
                  the Partnership prior to his purchase of any Units. To
                  alleviate this risk, Nelson agrees to resign as general
                  partner should he fail to fulfill his obligations under the
                  Offer.

                  (ii). Significantly, Nelson ignores the fact that if he is
successful in his consent solicitations, his Settlement Proposal will also have
been approved prior to his purchase of any Units. But he offers no protections
to the Partnership regarding the $10 million judgment and the $4 million pay-out
to GP Credit "should he fail to fulfill his obligations under the Offer."

No.                                  - 31 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  (g)      Nelson asserts that his claims against the
Partnership are worth $12 million and that the Unit Holders would benefit from a
release of his claims against them. Other than this unsupported assertion,
Nelson offers no justification for the Partnership to pay him $10 million. A
thorough factual and legal analysis would show that Nelson's claims lack merit,
the proposed release is inadequate, and there is no consideration for Nelson's
proposed settlement. Nelson fails to offer any information that would allow the
Unit Holders to make a meaningful assessment of these claims. This omission is
particularly significant because, in assessing Nelson's claims, it is important
to know that the Tennessee trial court has already entered a judgment against
him concluding that he suffered no damages. Since Nelson offers no explanation
or justification for his belief that the Partnership will be potentially liable
for $10 million, it is impossible, based on Nelson's disclosure, for the Unit
Holders to assess whether the settlement proposal bears a reasonable
relationship to the Partnership's ultimate litigation exposure.

                  (h)      Nelson fails to disclose that the proposed settlement
will not protect the Partnership or the Unit Holders from further litigation.
The settlement agreement does not protect the Partnership or Unit Holders from
third-party claims arising out of or relating to the underlying facts and causes
of action that are being settled. It also does not provide for dismissals of the
claims that Nelson proposed to settle.

                  To protect the Partnership from claims relating to the events
that have given rise to this protracted litigation, the settling parties should
be required to indemnify (and to demonstrate the financial capability to provide
such an indemnity) and hold the Partnership harmless from any subsequent

No.                                  - 32 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

claims brought against the Partnership arising out of the events encompassed in
the various Nelson-related lawsuits. Moreover, because Nelson proposes to file
new claims related to these events against the General Partner and others, the
settlement agreement must provide protection for cross-claims back against the
Partnership arising out of those new lawsuits. Given Nelson's assurances that
the settlement will end the underlying litigation and release the Unit Holders
and Partnership, his failure to discuss any of these gaping holes in the
litigation-preclusion provisions in the settlement agreement is an unlawful
material omission.

                  (i)      Nelson proposes that GP Credit will receive the $10
million judgment proceeds and deliver releases to the Partnership and its Unit
Holders. However, Nelson fails to disclose any financial background information
regarding GP Credit. Nelson does not disclose who owns GP Credit and what its
resources are, whether GP Credit has the financial wherewithal to lend another
$3 million to a borrower who is already more than $10 million in debt to it,
whether GP Credit is the beneficial owner of the claims stemming from the failed
settlement, and whether GP Credit is legally able to deliver releases to the
Unit Holders. Additionally, Nelson fails to disclose why GP Credit agreed to
release those Unit Holders who tender their shares to Nelson. Nelson states that
he is giving GP Credit consideration for such releases, but he discloses no
details regarding that transaction.

                  (j)      Nelson fails to disclose that in a separate Tennessee
court action, the court held that Nelson was under an obligation to a third
party who had the right to recover from Nelson any sums that he should receive
as a result of his litigation with the Partnership. The court specifically found

No.                                  - 33 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

that there were "elements of fraud" affecting Nelson's attempts to avoid payment
of his obligations. Nelson also fails to disclose that the court found that one
of these fraudulent elements was Nelson's purported transfer to GP Credit of the
rights and obligations previously held by Nelson and Nashville Lodging Company.
Based on these findings, the court appointed a receiver to take possession of
any recovery Nelson might obtain in his litigation against the Partnership and
issued an injunction preventing Nelson from taking possession of any such
proceeds. Disclosure of these facts is necessary in order to enable the Unit
Holders to appreciate the risk that their approval of Nelson's tender offer
might expose the Partnership to a finding that it conspired with Nelson to help
him evade the Tennessee court's order. But Nelson neither discloses these facts
nor discusses the fact that his proposed settlement provides no protection to
the Partnership should there be a subsequent finding by the Tennessee court that
Nelson and the Partnership conspired to violate the court's order by
distributing Partnership funds to GP Credit.

                  (k)      Nelson's description of his proposed settlement is
misleading because it fails to explain that the likely effect will be to deplete
most of the Partnership's assets for the benefit of Nelson and his related
company.

                  (l)      Nelson's proposed settlement provision stating, "GP
Credit further agrees that following such three-year period it will not attempt
to collect more from Metric than an amount which would leave Metric with Two
Million Dollars . . . immediately prior to liquidation" is ambiguous and
misleading. Because the Partnership Agreement requires the Partnership to
satisfy the debts of its creditors before the Unit Holders can receive any

No.                                  - 34 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

return upon liquidation, this provision, literally applied, would allow GP
Credit to collect the $2 million reserve upon liquidation because Nelson
promises only to defer collection for three years "immediately prior" to
liquidation. Nelson's explanation of this provision suggests an erroneous and
misleading interpretation. In his overview of the proposed settlement, Nelson
suggests that "[e]ven after the three-year period, GP Credit agrees not to
collect so much as to leave the Partnership with less than $2 million when the
Partnership liquidates." (Emphasis added) Under this interpretation, Nelson
would attempt to create a $2 million reserve, $1 million of which he would
receive upon liquidation and the other $1 million of which would go to the
remaining minority Unit Holders. However, Nelson's interpretation is not what
the proposed settlement says.

                  (m)      Nelson's description of potential claims by the
Partnership against the General Partner and others misrepresents the basis for
the claims, omits facts necessary to allow the Unit Holders to assess their
merits, fails to disclose that he has already prosecuted analogous claims based
on the same underlying facts and he lost and that a court would in all
likelihood hold that any such claims are barred by the statute of limitations,
and fails to disclose that the claims would have little or no value if the
courts were to affirm the judgment awarding Nelson zero dollars for his claim
against the Partnership for breach of the 1993 settlement agreement.

                  (n)      Nelson's proxy statement is misleading in that it
holds out the prospect of future recovery for the benefit of the Partnership
against the present General Partner and others, based on his "feeling" that
those claims "may be worth millions of dollars." Nelson offers no supporting
facts or legal analysis. In fact, if Nelson later determines that those claims
have little or no

No.                                  - 35 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

value to the Partnership, he can proceed to claim all remaining Partnership
assets, with the possible exception of the $2 million liquidation reserve (one
half of which he will own) as payment for the remaining portion of his $10
million judgment.

                  (o)      Nelson fails to disclose that if he became General
Partner he would have an irreconcilable conflict of interest with regard to the
prosecution of the lawsuits that he proposes to bring on the Partnership's
behalf.

                  (p)      Nelson fails to disclose facts that call into
question his ability to fulfill his obligations as a fiduciary.

                  (q)      Nelson misrepresents the purpose of the proposed
amendment to the Partnership Agreement. Nelson asserts in his proxy statement
that the purpose of the amendment was to allow a purchaser to acquire control of
the Partnership. Contrary to this assertion, the Managing General Partner
recommended amending the Partnership Agreement to delete the five and 50 percent
restrictions in order to give the Unit Holders more freedom to sell their Units.

                  (r)      In the tender offer materials Nelson misrepresents
the Unit Holders' withdrawal rights and fails to disclose that he has structured
the purchase agreement with the Unit Holders to give him irrevocable rights
prior to payment. Nelson fails to disclose the existence of Securities and
Exchange Commission Rule 14d-7 (as promulgated under the Act) which provides
that in addition to the provisions of Section 14(d)(5) of the Act, any person
who has deposited securities pursuant to a tender offer has the right

No.                                  - 36 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

to "withdraw any such securities during the period such offer request or
invitation remains open." As a result of this material omission holders of Units
who have tendered their Units to Nelson have done so without realizing they can
change their mind once they receive the position of the Partnership on the
tender offer.

                  (s)      Nelson's tender offer materials disclose certain
proxy rights which are given to Nelson upon execution of the Agreement of Sale,
or upon purchase of the Units, while the Agreement of Sale provides differently.
The discrepancy between the disclosure and the actual agreement works to give
Nelson power with respect to the Units in a way that a tendering Unit Holder
could not have anticipated. Nelson's tender offer materials disclose that by
executing and delivering an Agreement of Sale, a tendering Unit Holder (who does
not properly withdraw acceptance of Nelson's Offer prior to the Expiration
Date), irrevocably appoints Nelson as that Unit Holder's proxy. The Agreement of
Sale provides that the power of attorney granted is irrevocable and does not
provide that it terminates (as to voting the Units) upon withdrawal of the
tender. As a result, Nelson, under the terms of his Agreement of Sale can vote
the Units of a person who at one time tendered and has subsequently withdrawn
and now does not want the Nelson proposal to go forward (even though the
disclosure says otherwise). The tender offer materials further describe that by
executing and delivering the Agreement of Sale, the tendering Unit Holder also
irrevocably constitutes and appoints Nelson as the Unit Holder's
attorney-in-fact. This appointment is only to be effective upon Nelson's payment
for the Units. The Agreement of Sale has no such carve out. In fact, based on
the actual language in the Agreement of Sale, Nelson could transfer the Units to
his name without paying for the Units under the terms of the Agreement of Sale.
To the extent Nelson intended to

No.                                  - 37 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

have these powers, the tender offer materials must disclose this and also
disclose the risks inherent in these provisions.

                  (s)      Nelson's tender offer materials fail to disclose that
he has proceeded even though the Managing General Partner has not called for a
vote on his offer and 10% of the Unit Holders have not requested such a vote.
Unit Holders thus are not aware that any consent solicitations that they return
are invalid.

         47.      Nelson's omissions and misrepresentations are material and
relevant to an informed assessment of Nelson's tender offer and are necessary
for the Unit Holders to determine the viability of the Offer and the value they
are likely to receive upon liquidation.

         48.      By making the material misstatements set forth above and
failing to disclose the material facts described above, Nelson violated the
Securities Exchange Act of 1934, including Sections 14(a), (d) and 14(e) of the
Exchange Act and the rules and regulations promulgated thereunder.

         49.      As a result of Nelson's unlawful conduct, The Partnership and
its Unit Holders have sustained and will sustain great and irreparable injury to
their voting and property rights in that Nelson's unlawful conduct presents the
Partnership's Unit Holders with consent solicitation and tender offer materials
and requests several votes without providing the Unit Holders with the requisite
information about the proposed votes and tender offer, and the qualifications
and intentions of the offeror necessary for them to make an informed investment
decision with regard to the proposed votes or whether to tender or hold their
Units.

No.                                  - 38 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

         50.      By reason of the foregoing, Nelson should be preliminarily and
permanently enjoined from continuing or consummating the tender offer for a
majority of the Partnership units until he disseminates amended material
containing full, fair and complete supplemental disclosures with respect to each
false, misleading and misleadingly omissive statement contained in his proxy
solicitation statement, Schedule TO and unit holder mailings, and for a
reasonable time (and in no event less than 60 days) thereafter to permit
investors to consider and evaluate the contents of such curative and corrective
disclosures.

         51.      The The Partnership and its Unit Holders have no adequate
remedy at law.

                             SECOND CLAIM FOR RELIEF

     ( Pendant State Law Claims For Declaratory Relief that Nelson's Consent
           Solicitations Violate The Express Terms Of The Partnership
                       Agreement and Assignment Agreement)

         52.      The Partnership repeats and realleges the allegations of the
preceding paragraphs as if fully set forth herein.

         53.      An actual controversy has arisen and now exists between the
Partnership and Nelson relating to the legal rights and duties of the
Partnership, its Unit Holders, and Nelson under the Partnership Agreement and
the Assignment Agreement for which the Partnership desires a declaration of
rights.

No.                                  - 39 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

         54.      Paragraph 4 of the Assignment Agreement provides that the
Assignor Limited Partner will vote the units assigned to Assignee Holders in
accordance with written instructions received from the Assignee Holders, with
respect to any matter to which a vote of Unit Holders is taken "in accordance
with the Partnership Agreement."

         55.      Paragraph 16.3 of the Partnership Agreement sets forth the
mechanisms for a vote of the Unit Holders. Pursuant to such paragraph, only the
Managing General Partner of the Partnership may call a meeting of the Unit
Holders or call for a vote of the Unit Holders without a meeting on matters on
which the Unit Holders are entitled to vote. Paragraph 16.3 of the Partnership
Agreement also provides that the Managing General Partner shall call for a vote
of the Unit Holders following receipt of a written request therefor by Unit
Holders holding ten percent or more of the Units held by all Unit Holders as of
the date of receipt of such written request.

         56.      The last sentence of Paragraph 4 of the Assignment Agreement
provides that the Assignor Limited Partner shall request that the Managing
General Partner submit a matter to the Unit Holders without meeting pursuant to
the Partnership Agreement upon written request of Assignee Holders owning Units
which represent in the aggregate 10 percent or more of all of the outstanding
Units.

         57.      The Managing General Partner has not called for a vote of the
matters identified in Nelson's proxy solicitation statement as required to call
for a vote under the Partnership Agreement and the Assignment Agreement.

No.                                  - 40 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

         58.      The Managing General Partner also has not received a written
request therefor by Unit Holders holding ten percent or more of the Units as
required to call for a vote under the Partnership Agreement and the Assignment
Agreement.

         59.      Nelson has distributed thousands of consent solicitation
statements to the Partnership's Unit Holders without either the Managing General
Partner or the required 10% of Unit Holders written request calling for a vote.
Without following the procedural formalities delineated above, Nelson, in his
consent solicitation statement and correlated tender offer materials, calls for
a Unit Holder vote and recommends approval of the four proposals he is
submitting.

         60.      Nelson's tender offer expressly makes Unit Holder approval of
these four proposals a precondition to his tender offer.

         61.      A declaratory judgment is necessary in that the Partnership
contends and Nelson denies that Nelson's actions of directly soliciting Unit
Holders and calling for a vote in the above described manner violate the express
terms of the Partnership Agreement and the Assignment Agreement and that
Nelson's failure to follow the procedures set forth in the Assignment Agreement
and the Partnership Agreement render all of his consent solicitations invalid.

                             THIRD CLAIM FOR RELIEF

       (Pendant State Law Claim for Tortious Interference With Contractual
                                   Relations)

No.                                  - 41 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

         62.      The Partnership repeats and realleges the allegations of the
preceding paragraphs as if fully set forth herein.

         63.      A valid Partnership Agreement and Assignment Agreement exist
governing the operations and internal procedures of the Partnership.

         64.      The Partnership is informed and believes and upon that
information and belief alleges that Nelson is aware of the above referenced
agreements.

         65.      The Partnership is informed and believes and upon that
information and belief alleges that Nelson purposely engaged in conduct
(including by passing the procedure in the Partnership Agreement for calling a
vote of the Unit Holders), unlawfully soliciting the partners to breach their
fiduciary duties and coercing Unit Holders to approve his proposals through
threat of litigation) specifically intended to harm and disrupt the
above-referenced agreements and the contractual relationship between the Unit
Holders and the Partnership's management and to ultimately dissolve this
relationship.

         66.      The Partnership is informed and believes and upon that
information and belief alleges that the conduct by Nelson was neither privileged
nor justified.

         67.      Nelson disrupted the above-mentioned agreements among the Unit
Holders and management of the Partnership. The Partnership is informed and
believes and upon that information and belief alleges that Unit Holders have
tendered or will likely tender units in response to Nelson's

No.                                  - 42 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

tender offer and breach the Partnership Agreement by responding to Nelson's
solicitation utilizing the attached form and approving the amendment to the
Partnership Agreement in violation of that Agreement and in breach of their
fiduciary duties.

         68.      Nelson's acts and conduct in disrupting the Partnership
Agreement and Assignment Agreement and encouraging the breach of said agreements
caused and continue to cause the Partnership and its Unit Holders irreparable
injury.

         69.      The Partnership and its Unit Holders have no adequate remedy
at law.

                             FOURTH CLAIM FOR RELIEF

   (Pendant State Law Claim For Declaratory Relief--Breach of Fiduciary Duty)

         70.      The Partnership repeats and realleges the allegations of the
preceding paragraphs as if fully set forth herein.

         71.      An actual controversy has arisen and now exists between the
Partnership and Nelson relating to the legal rights and duties of the
Partnership, its Unit Holders, and Nelson for which the Partnership desires a
declaration of rights.

         72.      Managing partners of a partnership owe the partnership and its
unit holders a fiduciary duty, including duties of loyalty and due care. A
partnership's majority unit holders owe the partnership's minority unit holders
a fiduciary duty.

No.                                  - 43 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

         73.      Nelson's takeover proposals ask the majority of Unit Holders
to make him the Managing General Partner. In that capacity, and in his capacity
as majority Unit Holder, he will owe the Partnership and the Unit Holders a
fiduciary duty. He is also proposing that they approve a transaction between
himself and the Partnership in which he is a fiduciary and where he has an
obvious conflict of interest. That transaction will constitute a breach of
Nelson's fiduciary duty to the Partnership and its minority Unit Holders because
it is fundamentally unfair to the interests of the Partnership and the interests
of the minority Unit Holders. The consideration that the Partnership will be
receiving for Nelson's proposed settlement agreement is totally inadequate and
the effect of the transaction will be to deplete the assets of the Partnership
for the benefit of Nelson and to the substantial detriment of the minority Unit
Holders. Nelson cannot escape his fiduciary responsibility by asking the
majority of Unit Holders to consent to his breach of fiduciary duty.

         74.      Since Nelson will be a fiduciary at the time the proposed
settlement agreement takes place, the burden is on him to disclose fully every
element of the transaction and to justify its fairness. Full disclosure of
Nelson's proposals would thus require him to make clear to the Unit Holders that
there is no legal justification for the Partnership to settle all of its
litigation with Nelson for $10 million and there is no legal justification for
the Partnership pursuing further litigation based on Nelson's "feelings" that
such litigation is worth millions of dollars. And full disclosure requires
Nelson to explain that under the terms of his settlement, the minority Unit
Holders will in all likelihood receive inadequate value for their units on
liquidation. Instead of presenting this information in his tender offer
materials, Nelson's disclosures are misleading and misrepresent the benefit of
the proposed

No.                                  - 44 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

transactions to himself and the effect of these transactions on the minority
Unit Holders. Moreover, Nelson's disclosures are inherently coercive in that
they threaten vigorous pursuit of litigation (which is in fact meritless)
against the Unit Holders unless the Unit Holders extricate themselves from this
precarious fate by approving his proposals and tendering their Units.

         75.      A declaratory judgment is necessary in that the Partnership
contends and Nelson denies that the transaction will constitute a breach of his
fiduciary duty to the Partnership as it is fundamentally unfair to the
Partnership's interests and the interests of its minority Unit Holders and it is
based on misrepresentations and misleading disclosures.

         76.      As a result of Nelson's conduct described above, the
Partnership and its Unit Holders will sustain great and irreparable harm from
Nelson's breaches of fiduciary duty unless Nelson is enjoined from proceeding
with such breaches.

         77.      The Partnership and its Unit Holders have no adequate remedy
at law.

                             FIFTH CLAIM FOR RELIEF

     (Pendent State Law Claim for Soliciting, Aiding And Abetting Breach of
                                 Fiduciary Duty)

No.                                  - 45 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

         78.      The Partnership repeats and realleges the allegations of the
preceding paragraphs as if fully set forth herein.

         79.      A partnership's majority shareholders owe the partnership's
minority shareholders a fiduciary duty.

         80.      Here, the Partnership's majority Unit Holders owe the minority
Unit Holders a fiduciary duty. In its simplest terms, this means that the
majority cannot use their power to unfairly benefit themselves to the exclusion
of the rights of the minority. For example, the majority shareholders of a
corporation or partnership cannot legally approve or authorize a transaction
that would sell off majority control of the entity and give disproportionate
value to the minority shareholders. That however is the essence of Nelson's
consent solicitations and takeover strategy. He is proposing that a majority of
the Unit Holders authorize and approve a series of transactions that will have
the effect of giving most of the value in the Partnership to him and his related
company and leave the minority Unit Holders in a position where their rights
will be virtually worthless. In addition, under the terms of the proposed
tender, Nelson is requiring the majority Unit Holders to approve his proposed
settlement transaction as a condition to enable them to cash-out their interests
in the Partnership. Because Nelson is limiting his offer to a purchase of
$30,000 units (or just over 50%) of the Partnership's units), the effect of that
transaction, however, will be that only the majority Unit Holders will receive
fair value for their interests. Nelson, by the express terms of his tender offer
materials and consent solicitation, is not only proposing to breach his
fiduciary duty once he obtains majority control, he is actively aiding, abetting
and soliciting the current Majority Unit Holders to breach their fiduciary
duties to the minority.

No.                                  - 46 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

         81.      The Partnership is informed and believes and upon that
information and belief alleges that Unit Holders have tendered or will likely
tender units in response to Nelson's tender offer and breach their fiduciary
duties by responding to Nelson's solicitation utilizing that attached form and
approving the amendment to the Partnership Agreement in violation of that
Agreement and in breach of their fiduciary duties.

         82.      The Partnership is informed and believes and upon that
information and belief alleges that Nelson is aware that his conduct is aiding,
abetting and soliciting a breach of a duty.

         83.      By seeking to induce Unit Holders to engage in such prohibited
acts, Nelson is intentionally participating in, aiding and abetting and
soliciting such breaches of fiduciary duty.

         84.      Nelson substantially assisted and enabled, and continues to
substantially assist and enable, the Unit Holders' breach of fiduciary duty by
(among other things) proffering a transaction that will result in a breach of
the majority Unit Holders' duties to the minority Unit Holders, coercing the
Unit Holders to approve his proposals and the unlawful transaction through
threats of personal liability and judgment execution proceedings, threats to
prevent any liquidation of the Partnership by continuing his litigation against
the Partnership until all litigation options end, and an offer of
disproportionate value to the purchased majority units in comparison to the
unpurchased minority units, and calling for and soliciting the vote.

No.                                  - 47 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

         85.      Nelson's aiding, abetting and soliciting of such breaches of
fiduciary duty will cause the Partnership and its Unit Holders irreparable
injury unless Nelson is enjoined from proceeding.

         86.      The Partnership and its Unit Holders have no adequate remedy
at law.

                                RELIEF REQUESTED

WHEREFORE the Partnership respectfully demands judgement:

                  1.       Declaring that Nelson has violated Section 14(d) and
(e) of the Securities Exchange Act of 1934, 15 U.S.C. Sections 78n(d)-(e), and
the SEC Rules promulgated thereunder in connection with his commencement and
continuation of the tender offer for the Partnership on and after May 14, 2003.

                  2.       Declaring that Nelson's consent solicitations, which
are an express precondition of the tender offer, violate the Partnership
Agreement and Assignment Agreement.

                  3.       Granting the Partnership injunctive relief against
Nelson and his respective employees, agents, and affiliates, and all other
persons acting in concert with Nelson or on his behalf, directly or indirectly:

                           (a)      enjoining them from committing any further
violations of the Securities and Exchange Act and SEC tender offer rules in
connection with the Partnership and its affiliates;

No.                                  - 48 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                           (b)      enjoining them from continuing or
consummating the pending tender offer, which was commenced in violation of Rule
14d-2 and the Partnership Agreement, and enjoining them from commencing any new
tender offer for the Partnership for a reasonable period (not less than 60 days)
to dissipate the effects of Nelson's unlawful conduct;

                           (c)      in the alternative, enjoining them from
continuing or consummating the tender offer pending accurate and complete
corrective disclosure with respect to each and every false, misleading and/or
omissive matter contained in Nelson's Schedule TO and tender offer materials
disseminated to unit holders;

                           (d)      in the alternative, permanently enjoining
them from continuing or consummating the unfair and inherently coercive tender
offer.

                  4.       Requiring Nelson and his affiliates to divest
themselves of all the Partnership units beneficially owned by them, acquired
after the start of the unlawful solicitation statement and tender offer and the
filing of the false and misleading Schedule TO;

                  5.       Declaring that Nelson's takeover proposals would
breach his fiduciary duty as the Partnership's new Managing General Partner and
as majority Unit Holder if the consent solicitations were approved by a majority
of the Unit Holders;

                  6.       Granting the Partnership such other and further
relief as the Court may deem just and proper, together with costs, disbursements
and attorneys' fees in this action.

No.                                  - 49 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

     DATED: May 28, 2003.

                                               REED SMITH CROSBY HEAFEY LLP

                                               By   /s/ Kenneth J. Philpot
                                                  ------------------------------
                                                  Kenneth J. Philpot
                                                  Attorneys for Plaintiff
                                                  Metric Partners Growth Suite
                                                  Investors, L.P.

No.                                  - 50 -

     Metric Partners Growth Suite Investors Complaint Against Kenneth Nelson

EX-99.(A)(6)

                                                                 Exhibit (a)(6)



                          REED SMITH CROSBY HEAFEY LLP

A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

Kenneth J. Philpot (State Bar No. 62401)
Raymond A. Cardozo (State Bar No. 173263)
Heather Lenhardt (State Bar No. 217580)
REED SMITH CROSBY HEAFEY LLP
Two Embarcadero Center, Suite 2000
San Francisco, CA 94111

MAILING ADDRESS:
P.O. Box 7936
San Francisco, CA  94120-7936

Telephone:     415.543.8700
Facsimile:     415.391.8269

Attorneys for Plaintiff
Metric Partners Growth Suite Investors, L.P.

                          UNITED STATES DISTRICT COURT

                         NORTHERN DISTRICT OF CALIFORNIA

METRIC PARTNERS GROWTH SUITE          No. C03-2523-CRB
INVESTORS, L.P., a California limited
partnership,                          METRIC PARTNERS GROWTH SUITE
                                      INVESTORS, L.P.'S EX PARTE
           Plaintiff,                 APPLICATION FOR TEMPORARY
                                      RESTRAINING ORDER AND ORDER TO
       vs.                            SHOW CAUSE WHY A PRELIMINARY
                                       INJUNCTION SHOULD NOT ISSUE
KENNETH E. NELSON,
                                      Date: As Soon As Court May Hear Matter
           Defendant.                 Time: See Above
                                      Place: See Above
                                      Compl. Filed:       May 28, 2003

                                      Honorable Charles R. Breyer

                                      Filed With: (1) Memorandum Of Points &
                                      Authorities; (2) Declaration Of Kenneth J.
                                      Philpot [Attaching Complaint And Other
                                      Pertinent Documents]; [proposed] Order
                                      Granting TRO And Issuing OSC Why A
                                      Preliminary Injunction Should Not Issue

                  Plaintiff Metric Partners Growth Suite Investors, L.P.'s
(Metric) hereby applies ex parte for a temporary restraining order (TRO)
enjoining defendant Kenneth Nelson (Nelson) forthwith from taking any further
action to support a tender offer and consent solicitations that he

No. C03-2523-CRB                    - 1 -

  EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE
                 WHY A PRELIMINARY INJUNCTION SHOULD NOT ISSUE



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

has submitted to the holders of limited partnership interests in Metric (unit
holders) in violation of (1) the provisions in Metric's Partnership Agreement
that set forth the procedure for submitting such an offer and solicitations to
Metric's unit holders and the matters that may be presented in such an offers or
solicitation, (2) the disclosure requirements of the federal securities laws,
and (3) California breach of fiduciary duty law.

                  This TRO Application is made to preserve the status quo and
prevent Metric from suffering irreparable injury from Nelson's unlawful action
before Nelson can be heard in opposition and before the Court can hear and
decide a motion for a preliminary injunction. Metric further requests that the
Court set for hearing a motion for a preliminary injunction at the earliest
possible time, not to exceed 10 days from the entry of a TRO, that the Court
deem these application papers as a motion for preliminary injunction upon
setting such a hearing, and that the Court thereafter grant a preliminary
injunction enjoining Nelson's invalid tender offer and consent solicitations.

                  Metric advised Nelson on May 28, 2003 that it would seek
injunctive relief if he did not refrain from his unlawful conduct. Nelson
requested, and Metric granted, him until the afternoon of June 2, 2003 to
indicate whether he would cease the challenged conduct. Nelson advised on the
afternoon of June 2 that he would not cease his conduct, and Metric advised at
that time that it would be filing this TRO application the next day. The next
day, Metric served this TRO application by hand on Nelson's counsel before
filing it in this Court. Nelson has advised that he intends to oppose the
application.

                  This application is based on this application, the
accompanying memorandum of points and authorities, the Declaration of Kenneth J.
Philpot filed herewith, the Complaint on file in this action (attached as
Exhibit 1 to the Declaration of Kenneth J. Philpot), the proposed temporary
restraining order and order to show cause filed herewith, and any other papers
or

No. C03-2523-CRB                     - 2 -



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

arguments that the parties may present in connection with this application or
ensuing preliminary injunction motion proceedings.

         DATED: June 3, 2003.

                                      REED SMITH CROSBY HEAFEY LLP

                                      By   /s/ Kenneth J. Philpot
                                         ------------------------------
                                         Kenneth J. Philpot
                                         Attorneys for Plaintiff
                                         Metric Partners Growth Suite Investors,
                                         L.P.

No. C03-2523-CRB                     - 3 -

EX-99.(A)(7)

                                                                 Exhibit (a)(7)



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

Kenneth J. Philpot (State Bar No. 62401)
Raymond A. Cardozo (State Bar No. 173263)
Heather Lenhardt (State Bar No. 217580)
REED SMITH CROSBY HEAFEY LLP
Two Embarcadero Center, Suite 2000
San Francisco, CA 94111

MAILING ADDRESS:
P.O. Box 7936
San Francisco, CA  94120-7936

Telephone: 415.543.8700
Facsimile: 415.391.8269

Attorneys for Plaintiff
METRIC GROWTH SUITE INVESTORS, L.P.

                          UNITED STATES DISTRICT COURT

                         NORTHERN DISTRICT OF CALIFORNIA

METRIC GROWTH SUITE INVESTORS,        No. C03-2523-CRB
L.P., A California Limited
Partnership,                          MEMORANDUM OF POINTS AND AUTHORITIES IN
                                      SUPPORT OF EX PARTE APPLICATION FOR
                  Plaintiff,          TEMPORARY RESTRAINING ORDER AND ORDER TO
                                      SHOW CAUSE WHY A PRELIMINARY INJUNCTION
      vs.                             SHOULD NOT ISSUE

KENNETH E. NELSON,                    Date: As Soon As Court May Hear Matter
                                      Time: See Above
                  Defendant.          Place: See Above
                                      Compl. Filed: May 28, 2003
                                      Trial Date: Not Yet Set

                                      Honorable Charles R. Breyer

No. C03-2523-CRB                     - 1 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                                 I INTRODUCTION

                  In this action, plaintiff Metric Partners Growth Suite
Investors, L.P. (Metric) will show that defendant Kenneth Nelson's (Nelson)
tender offer to purchase a bare majority of the limited partnership units of the
Metric partnership violates federal securities law and California fiduciary duty
law. For purposes of this application, Metric will show that Nelson's tender
offer, and accompanying consent solicitations, is causing and will cause
immediate irreparable harm to Metric and its unit holders unless enjoined by
this Court.

                  Nelson is a career litigant who has spent the past 20 years
pursuing litigation schemes that have been uniformly unsuccessful. Multiple
juries and jurists have questioned his honesty and integrity. For the past 10 of
those years he has waged litigation against Metric in the courts of California,
Wisconsin and Tennessee. The lawsuits all stem from a disputed settlement
agreement that the parties failed to finalize in 1993. Metric has largely
prevailed in these matters by establishing that it has no damages liability to
Nelson and his related entities. Facing likely defeat in the courts, Nelson has
embarked on a new strategy to attempt to turn the tide. He has concocted a
scheme, proposing a tender offer to "purchase" just over 50% of Metric's units,
appoint himself as its managing partner, approve a $10 million settlement of his
lawsuits against Metric, and then use funds from that settlement to pay for his
"purchase" of the Metric units. He also plans to use Metric's assets to file new
lawsuits against Metric's current management based on its handling of the
litigation adverse to him. In other words, he proposes to deplete Metric's
assets to pay himself an outrageous sum to settle a lawsuit whose probable value
is nothing, and to use additional Metric assets to pursue his personal vendetta
against Metric's management.

                  Nelson's proposals and supporting disclosures to Metric's unit
holders, however, (1) breach the Partnership Agreement's provisions governing a
vote of the unit holders, (2) mislead the unit holders in his tender offer and
consent solicitations and (3) coerce a majority of

No. C03-2523-CRB                      - 1 -

      Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
                And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

Metric's unit holders to join him in a breach of his and the majority's
fiduciary duty to minority unit holders.

                  Metric's Partnership Agreement and companion Assignment
Agreement 1 provide that only its Managing General Partner may call for a vote
of the unit holders. The Managing General Partner is required to call for a vote
following the receipt of a written request therefor from unit holders holding
10% or more of the Partnership units. Yet, Nelson has distributed thousands of
consent solicitations directly to Metric's unit holders without the Managing
General Partner or the required 10% or more of unit holders calling for a vote
of his takeover proposals. Accordingly, although Nelson's consent solicitations
are invalid, Metric's unit holders may not be aware of this and may have
returned or may soon return consents on Nelson's proposal. Moreover, although
Metric has notified Nelson that it is not recognizing his consent solicitations
because he has not followed the Partnership Agreement and asked him to modify
his proposals to comply with that Agreement, he has refused to recall his
solicitations.

                  Nelson is also violating Metric's Partnership Agreement in a
second way. Had Nelson purchased a controlling share of Metric units and then
attempted to implement his self-dealing proposals, no court would uphold his
actions because he would have an irreconcilable conflict in settling Metric's
litigation against himself and his related entities. Nelson seeks to avoid this
conflict by obtaining the "approval" of a bare majority of outgoing Metric unit
holders who must agree to his terms as condition to cash out their holdings. But
Metric's Partnership Agreement forbids the submission of a self-dealing
transaction for unit holder "approval" and only allows a vote of the unit
holders on other specified matters. The Court should prevent both of Nelson's
end runs on the Partnership Agreement from getting off the ground by entering a
TRO that orders Nelson to conduct his offer according to the Agreement's terms.

- -----------------------
1    Metric's limited partnership interests are held by unit holders that hold
units in a single entity that serves as the limited partner. There are a total
of 59,919 units held by approximately 4,000 unit holders.

No. C03-2523-CRB                      - 2 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  Moreover, in violation of the federal securities laws,
Nelson's consent solicitation and tender offer statements are riddled with
material misstatements and omissions that are likely to deceive Metric's unit
holders into failing to realize that he is proposing a raw deal. Among other
things, although his litigation against Metric has resulted in a judgment of
zero dollars, he tells the unit holders in his consent solicitation that he
"believes" his claims against Metric could result in an award of $12 million or
more. He also does not disclose the nature of the relationship between himself
and an entity, GP Credit, through which he proposes to funnel the settlement and
his units purchase. And he fails to disclose other litigation in which he is
involved that, in the event his tender offer is approved, could lead to a
determination that Metric colluded with him through his tender offer to help
Nelson avoid other judgment creditors. Because of the difficulty of undoing such
widely disseminated fraudulent materials and the irreparable harm that such
fraud inflicts, a TRO is a settled basis for preventing this kind of fraud.

                  Nelson also seeks to coerce a breach of fiduciary duty by a
majority of Metric's unit holders against the minority. Nelson proposes to
purchase just over 50% of Metric's units--no matter how many units are tendered.
After he uses that controlling share to raid Metric's assets to pay himself and
to pursue new meritless claims (the operative facts of which have been known for
over ten years and the substance of which has been litigated adverse to Nelson)
against Metric's management, the remaining units will be virtually worthless.
Thus, although Nelson is proposing to buy just over 50% of the units for a price
that is a significant discount from the assets' present liquidation value, he is
obviously hoping that his deficient tender price will be perceived as better
than the dregs left for the remaining minority unit holders. Worse still, he
threatens any unit holders that do not tender with personal liability and also
emphasizes that he will litigate to the end of the earth to delay a distribution
of the partnership assets if his offer does not succeed. Under the
circumstances, Nelson's proposal may coerce enough Metric's unit holders to
accept his limited buyout and takeover plan in order to "cash out" and avoid
being one of the minority unit holders who risk being left out in the cold. The
Court should enjoin the offer

No. C03-2523-CRB                      - 3 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

now to ensure that a breach of fiduciary duty is not consummated in the interim
between now and when the Court can adjudicate the lawfulness of Nelson's
audacious takeover scheme.

                  All three violations--the violations of the Partnership
Agreement's voting provisions, the dissemination of fraudulent material, and the
breach of fiduciary duty--are continuing daily and causing irreparable harm.
Thus, an immediate TRO on minimum notice is warranted to preserve the status quo
pending a hearing on a motion for a preliminary injunction.

                              II FACTUAL BACKGROUND

A.       NELSON WAGES A 10-YEAR LOSING LITIGATION BATTLE AGAINST METRIC

                  Nelson's tender offer has its roots in protracted litigation
in Tennessee, California and Wisconsin state courts, between Nelson,
Nelson-related entities and Metric, which in turn followed 10-years of
litigation between Nelson and others. The Tennessee Court of Appeals summarized
this "continuing saga" in Nelson v. Metric Realty, 2002 Tenn. App. LEXIS 698,
(attached as Ex. 2 to Philpot Decl.). The seeds of the dispute were sown in 1981
when a Samuel Hardage fired Nelson, who was overseeing one of Hardage's
businesses, precipitating litigation between Nelson and various Hardage-owned
entities. (Philpot Decl., Ex. 2 at 5) The parties eventually settled with a
Nelson-controlled entity, Nashville Residence Corporation ("Nashville
Residence"), receiving land at 2300 Elm Hill Pike in Nashville in exchange for
its execution of a $250,000 note to Orlando Residence, Ltd. ("Orlando
Residence"), a Hardage-controlled limited partnership. (Id.) Nashville Lodging
Company ("Nashville Lodging"), a limited partnership with Nashville Residence as
its general partner, then built a hotel on the Elm Hill Property. (Id.)

                  In December 1986, Orlando Residence sued Nashville Residence
in federal court to enforce the note. (Id. at 6) Nashville Residence promptly
quitclaimed the Elm Hill property to Nashville Lodging. (Id.) In 1989, Nashville
Lodging sold the hotel and leased the property to

No. C03-2523-CRB                       - 4 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

Metric. In March 1990, Orlando Residence obtained a federal court judgment
against Nashville Residence for $250,000 plus interest. (Id.) Orlando Residence
then filed suit in Tennessee state court against Nashville Residence, Nashville
Lodging, Nelson, and Metric, attacking the conveyance of the Elm Hill property
as fraudulent. (Id.) Orlando Residence was awarded $1.35 million in compensatory
and punitive damages from Nashville Residence and Nashville Lodging in that
action, but the Tennessee court of appeals reversed and remanded for a new
trial. (Id.) On the second trial, a jury again found Nashville Residence's 1986
conveyance to Nashville Lodging to have been fraudulent and on appeal, the court
of appeals affirmed the judgment. (Id. at 7)

                  That background is essential to understand the parallel
litigation in California between Nelson and Metric. In the late 1980's, Metric
acquired from Nelson both the hotel and lease at the Elm Hill property in
Nashville and another Residence Inn in Ontario, California. (Id.) For a time,
Nelson continued to provide management services at these hotels. (Id.) In 1991,
however, Metric terminated the management agreement and sued Nelson in
California state court in San Francisco, claiming breach of contract and seeking
damages, declaratory and injunctive relief. Nelson counter-claimed for damages
and declaratory relief. (Id.)

                  In the California lawsuit, Metric was seeking approximately
$250,000 from Nelson, but was concerned that he was judgment proof. (Philpot
Decl., Ex. 5 at 4) Shortly before trial, Nelson offered to settle by giving
Metric the opportunity to purchase the land under Metric's hotel at the Elm Hill
property in Nashville. (Id.) This appeared to be Nelson's only valuable asset.
(Id.) Accordingly, at a court supervised settlement conference, the parties
agreed to settle by Nelson transferring this land to Metric in return for a note
and release from Metric. (Id.) A few weeks later, however, Metric's Tennessee
lawyer advised its Managing General Partner that if Metric accepted the
settlement and took control of the Nashville land, there was a substantial risk
that a court might find that Metric's interest in the land and the hotel would
be found to have merged which could cause Metric to be subject to any judgment
lien that Hardage and Orlando Residence might ultimately obtain against Nelson.
(Id.) In addition, Metric's lawyer advised that

No. C03-2523-CRB                       - 5 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

a court might also find that Metric and Nelson had conspired to defraud the
creditors who had challenged Nelson's 1989 transfer of the Elm Hill hotel to
Metric. Up to then, Metric had successfully argued that it was a "bona fide
purchaser." (Id.) Rejection of that argument could result in Metric losing its
entire interest in the hotel. (Id.) Faced with that advice, Metric's management
determined that it could not consummate the settlement until it received
clarification that Nelson was solely responsible for the fraudulent conveyance
action that Hardage and Orlando Residence were pursuing against Nelson and his
companies. (Id.)

                  Nelson responded with lawsuits in California, Wisconsin and
Tennessee that all rested on the same allegations--that Metric had breached its
settlement contract with Nelson, causing him substantial damages. (Id.) These
include Nashville Lodging Co. v. Metric Partners Growth Suite Investors, L.P. et
al., Circuit Court, State of Wisconsin, No. 94CV001212 (inactive); Orlando
Residence, Ltd. v. 2300 Elm Hill Pike, Inc. and Nashville Lodging Co. v. Metric
Partners Growth Suite Investors, L.P., Chancery Court for Davidson Co.,
Tennessee, No. 94-1911-I; Metric Partners Growth Suite Investors, L.P. v.
Nashville Lodging Co. et al., Chancery Court for Davidson Co., Tennessee, No.
96-1405-III; Nelson and Nashville Lodging Co. v. Metric Realty et al., Chancery
Court for Davidson Co., Tennessee, No. 97-2189-III; GP Credit Co., LLC v. Metric
Partners Growth Suite Investors, L.P. et al., Superior Court of California, San
Francisco Co., No. CGC-02-403301. (Philpot Decl., Ex. 1 at 12)

                  Nelson also filed a separate fraudulent conveyance lawsuit in
California against Metric, its Managing Partners and a putative class of unit
holders who received partnership distributions. (Id., Ex. 5 at 4) He alleges
that these distributions were fraudulent because they drained Metric of assets
necessary to pay a judgment in his favor should he be successful in his claims
for breach of the aborted settlement. (Id.) In one of his lawsuits, Nelson also
brought claims against the Managing General Partner, claiming it improperly
induced Metric to breach the settlement agreement. Nelson lost that lawsuit and
it has been affirmed on appeal. (Id. at 5) At this point, there has been a
determination in the principal action in Tennessee that Metric's failure

No. C03-2523-CRB                      - 6 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

to consummate the settlement agreement was a breach, but that Nelson suffered no
damages as a result. (Id.) These findings are now on appeal. (Id.)

                  Meanwhile, in August 2001, a Tennessee court found that there
were "elements of fraud" in Nelson's attempts to avoid payment of Hardage's and
Orlando Residence's fraudulent conveyance judgment. (Orlando Residence, Ltd. v.
Nashville Lodging Co., Tennessee Chancery Ct, Davidson Co., No. 92-3086-III
(unpublished opinion Aug. 15, 2001) at 2, attached as Ex. 3 to Philpot Decl.)
The court found that one of these fraudulent elements was Nelson's purported
transfer to GP Credit, an entity that his wife owns, of the rights and
obligations previously held by Nelson and Nashville Lodging Company. (Id. at 3)
Accordingly, the court appointed a receiver to take possession of any proceeds
that Nelson might obtain in his claims against Metrics, stating:

         What all of the foregoing have in common are attempts by [Nashville
         Lodging Company] and Mr. Nelson to avoid collection of judgments. That
         a jury determined one such attempt was fraudulent, that Chancellor
         Brandt found another attempt was contemptuous and that there is yet
         another post-judgment conveyance in issue all cause the Court to
         conclude that there are sufficient "elements of fraud affecting the
         remedy at law" such that appointment of a receiver to take possession
         of proceeds in the Metric lawsuit is necessary. (Id.)

B.       TO FUND HIS LITIGATION VENDETTAS AND TO REVERSE HIS IN-COURT RESULTS,
         NELSON VIOLATES THE PROVISIONS IN METRIC'S PARTNERSHIP AGREEMENT THAT
         GOVERN VOTES OF THE LIMITED PARTNERS AND PRESENTS ITS LIMITED PARTNERS
         WITH AN INVALID, MISLEADING AND COERCIVE TENDER OFFER

         1.       NELSON'S VIOLATIONS OF THE PARTNERSHIP AGREEMENT

                  Paragraph 4 of Metric's Assignment Agreement provides that
Metric's designated voting representative will vote the units assigned to
holders of limited partnership assignee units (unit holders) of Metric in
accordance with written instructions received from the unit holders with respect
to any matter upon which a vote of Limited Partners is taken "in accordance with
the Partnership Agreement." (Philpot Decl, Ex. 7) Metric's Partnership Agreement
specifies only two valid methods to call such a vote of the Limited Partners.
First, under paragraph 16.3 of that

No. C03-2523-CRB                      - 7 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

Agreement, the Managing General Partner may call for a vote of the Limited
Partners. (Id., Ex. 6) Under paragraph 16.3 of the Partnership Agreement or
Paragraph 4 of the Assignment Agreement, a vote may be submitted to the Limited
Partners upon the written request of persons owning units which represent ten
percent or more of the outstanding units. (Id., Exs. 6-7) Moreover, as detailed,
post, the Partnership Agreement prohibits a limited partner vote to "approve" a
self-dealing transaction and limits the matters that can be submitted to a
limited partner vote to specified subjects, none of which are at issue. (Id. Ex.
6,Sections 15.1.7, 15.3.39, 16.2)

                  The Managing General Partner has not called for a vote of any
of the matters identified in Nelson's proxy solicitation statement and tender
offer and the Managing General Partner has not received a written request for
such a vote by unit holders holding ten percent or more of the units. (Id., Ex.
5 at Ex. (a)(2)) Nevertheless, on May 14, 2003, Nelson--who holds no Metric
units of his own--filed with the SEC and disseminated to each Metric unit holder
consent solicitation statements and a tender offer. (Philpot Decl., Ex. 4)

         2.       NELSON SUBMITS MISLEADING AND COERCIVE OFFER AND SOLICITATIONS
                  TO USE METRIC'S OWN ASSETS TO "PURCHASE" FOR NELSON CONTROL OF
                  METRIC SO THAT HE CAN CAUSE METRIC TO AWARD HIMSELF A GENEROUS
                  LITIGATION SETTLEMENT

                  Although, as detailed below, Nelson's materials misleadingly
describe his offer, the actual, salient offer terms are as follows. Nelson has
offered to purchase 30,000 of the 59,919 Metric units at $86 a unit. (Philpot
Decl., Ex. 4 at 14, 17) The offer is effective only if at least 30,000 units are
tendered. (Id. at 17) If more than 30,000 are tendered, Nelson will purchase
only a pro-rata share from the tendering unit holders so that his total purchase
is limited to 30,000 units. (Id. at 14, 67) Nelson's offer is also conditioned
on the acceptance of four proposals: (a) an amendment to the Partnership
Agreement that would allow a purchaser to acquire control of the Partnership;
(b) removal of the Managing General Partners; (c) election of Nelson as the sole
general partner; and (d) settlement of pending litigation between Nelson,
Nashville Lodging, GP

No. C03-2523-CRB                       - 8 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

Credit and Metric by entry of a judgment in favor of GP Credit against Metric
for $10 million, of which $4 million must be immediately paid to GP Credit. (Id.
at 17, 26, 34, 63)

                  Within 10 business days after all these conditions occur,
Nelson proposes to pay $2.85 million to purchase the 30,000 units at $86 per
unit. (Id. at 12, 32, 34-35, 39) He states that he will use a loan from GP
Credit--whom Metric will have paid $4 million by that point--to fund the
purchase. (Id. at 32, 34) Thus, Nelson's offer permits him to pay for the units
that he proposes to purchase using Metric's own assets. He may then further
deplete its assets--and satisfy any lingering vendettas--by bringing new
lawsuits against the current Managing General Partner or others. (Id. at 25, 34)
Although GP Credit would be entitled to claim proceeds from such lawsuits to
satisfy its $10 million judgment balance, it would only be obligated to
reimburse Metric the expenses of such lawsuits up to the amount recovered in
them. (Id. at 63)

                  Alternatively, Nelson would be able to liquidate Metric and
use its remaining assets to satisfy the balance of GP Credit's judgment.
Assuming no further litigation expenses, Metric would have approximately $4.4
million remaining upon liquidation before it paid GP Credit's judgment
balance--$6.9 million in current cash holdings, a $525,000 settlement payment
due on June 2, 2003, $914,000 due from the general partners upon liquidation,
less the $4 million it would have already paid to GP Credit as a precondition of
the tender offer. (Id., Ex. 5 (cover letter)) Nelson's proposed settlement
provides, "GP Credit further agrees that . . . it will not attempt to collect
more from Metric than an amount which would leave Metric with Two Million
Dollars . . . immediately prior to liquidation." (Id., Ex. 4 at 63) GP Credit
could argue that this language no longer applies once Metric enters liquidation.
This would enable GP Credit to seize the entire $4.4 million in remaining Metric
assets to satisfy its judgment, leaving $0 in distributions for the 29,919 units
that Nelson does not intend to buy. Even assuming that GP Credit would leave
Metric with a $2 million reserve that Nelson generally described in his
materials, upon liquidation, over $ 1 million of that sum would go to Nelson as
a 50 percent plus unit holder, leaving at most $33 per unit for the remaining
29,919 units. (Id., Ex. 5 at 14)

No. C03-2523-CRB                      - 9 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  Conversely, if Metric's unit holders were to reject Nelson's
offer, and if the Tennessee court affirmed the zero damages judgment in Nelson's
lawsuit against Metric, the $8.4 million in total Metric assets could be
distributed upon liquidation at the rate of approximately $139 a unit for all
59,919 Metric units. (Id. (cover letter))

                  Nelson's offering materials also emphasize that he has been in
litigation against Metric for years and that such litigation could continue for
years--and prevent distributions to the unit holders--if his offer is not
accepted. (Id., Ex. 4 at 24-25, 37-38, 59-60) He adds that if he succeeds, those
who did not tender likely will have to endure multiple additional bouts of
litigation that he will initiate if he obtains control of Metric. (Id. at 10,
23, 25-27) He also emphasizes that the unit holders are defendants in a lawsuit
that seeks to force them to return past distributions and that if his offer does
not succeed or for those who do not tender, those limited partners will be
pursued personally. (Id. at 8, 12, 15, 17, 37) Worse still, Nelson's offer was
riddled with misstatements and material omissions, which we recite in detail,
post.

C.       METRIC OBJECTS TO NELSON'S ATTEMPTED END-RUN ON THE PARTNERSHIP
         AGREEMENT AND GIVES HIM NOTICE THAT IT WILL SEEK AN INJUNCTION IF HE
         DOES NOT CURE THE VIOLATIONS; NELSON REFUSES, SO METRIC GIVES NOTICE OF
         THIS APPLICATION

                  On May 28, 2003, Metric's Managing General Partner advised
Nelson in writing that his tender offer and proxy solicitation were invalid
because he had failed to comply with the Partnership Agreement's procedure for
calling a vote of the Limited Partners. (Philpot Decl, Ex. 5 at Ex. (a)(2))
Metric requested that he withdraw his invalid offer and solicitations and
proceed anew in compliance with the Agreement and stated that it would seek an
injunction if Nelson did not agree to do so within two days. (Id.) The next day,
Nelson's counsel requested an additional 3 days, or until June 2, 2003, to
respond. (Id., 4) On the afternoon of June 2, 2003, Nelson refused to withdraw
his invalid offer and solicitations. (Id.) Metric immediately gave notice that

No. C03-2523-CRB                       - 10 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

it would be filing this TRO application the next day in this Court. (Id.) Nelson
advised that he would be filing an opposition. (Id.)

                               III LEGAL ANALYSIS

                  The Federal Rules of Civil Procedure and the Williams Act
grant courts the power and authority to issue both an ex parte TRO and
preliminary injunction in cases just such as this.(2) To prevail on a motion for
a TRO or a preliminary injunction, the moving party must show either (1) a
combination of probable success on the merits and the possibility of irreparable
injury if relief is not granted, or (2) the existence of serious questions on
the merits and that the balance of hardships tips in its favor. GoTo.com, Inc.
v. Walt Disney Co., 202 F.3d 1199, 1204-05 (9th Cir. 2000); Rodeo Collection,
Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987); Wininger v. SI
Management L.P., 32 F. Supp. 2d 1144, 1146-47 (N. D. Cal. 1997). These are not
separate tests, but rather "opposite ends of a single `continuum in which the
required showing of harm varies inversely with the required showing of
meritoriousness.'" Rodeo Collection, 812 F.2d at 1217 (citations omitted).

                  To balance the moving party's rights against the defendant's
right to be heard, Rule 65 authorizes a court to issue an immediate TRO ex parte
and to fix a hearing on a motion for a preliminary injunction within 10 days
thereafter. Fed. R. Civ. Proc. 65(b). Metric demonstrates below that it is
likely to succeed on the merits and is suffering immediate and continuing
irreparable harm. It respectfully submits that its TRO application should be
granted forthwith and the Court should issue an order to show cause why a
preliminary injunction should not issue that sets the matter for hearing within
10 days of entry of the TRO.

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

(2)      Rule 65(b) provides for an ex parte TRO to prevent "immediate and
irreparable injury, loss or damage [which] will result to the applicant before
the adverse party or the party's attorney can be heard in opposition." Moreover,
upon a showing of violation of the federal securities laws, the Court has broad
powers to fashion an appropriate remedy. Mills v. Electric Auto-Lite Co., 396
U.S. 375, 391 (1970). Courts therefore may and do issue immediate TROs followed
by preliminary injunctions to restrain defective tender offers. See, e.g.
Marathon Oil v. Mobil Corp., 35o F. Supp. 315 (N. D. Ohio) aff'd 669 F.2d 378
(6th Cir. 1981) and cases cited, post.

No. C03-2523-CRB                      - 11 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

A.       METRIC'S CLAIM THAT NELSON'S OFFER VIOLATES METRIC'S PARTNERSHIP
         AGREEMENT ESTABLISHES A LIKELIHOOD OF SUCCESS AND IRREPARABLE HARM

         1.       NELSON'S FAILURE TO FOLLOW THE AGREEMENT'S VOTING PROCEDURE IS
                  A CRYSTAL CLEAR VIOLATION THAT PROVIDES A SETTLED BASIS FOR A
                  TRO

                  Metric's Partnership and Assignment Agreements are unambiguous
that Nelson could only submit his consent proposals to a vote of the limited
partners by first obtaining the written request of 10% of the unit holders or
the approval of the Managing General Partner to call such a vote. And it is
undisputed that he failed to do so. Because his tender offer is preconditioned
on acceptance of his invalid consents, there is no point in allowing his invalid
offer and solicitations to proceed. Doing so would only create confusion among
Metric's limited partners, would cause the loss of the costs expended on the
invalid offer and solicitation efforts and inevitable legal challenges, and
could also produce the unseemly result of having votes cast that could not be
counted due to Nelson's violation of the Partnership Agreement. Therefore,
Nelson's invalid solicitations should be restrained immediately. See Pennwalt
Corp. v. Centaur Partners, 710 F. Supp. 111, 117 (E. D. Pa. 1989) (issuing TRO
followed by preliminary injunction to restrain consent solicitation where
solicitor had no authority to call special shareholder meeting; "It is beyond
cavil that to permit the shareholder's meeting to go forward when there is no
proper authority to call the meeting would cause irreparable harm."); C.A.
Cavendes , S. Sociedad Finaciera v. Florida Nat. Banks Of Fla., 556 F. Supp.
254, 259 (M. D. Fla. 1982) (failure to follow voting procedure in company's
bylaws causes irreparable injury; voiding election held in violation of bylaws
and issuing preliminary injunction).

                  Indeed, "once a tender offer has been consummated, it becomes
difficult and sometimes virtually impossible for a court to `unscramble the
eggs.'" Sonesta International Hotels Corp. v. Wellington Associates, 483 F.2d
247, 250 (2d Cir. 1970); Consolidated Gold Fields PLC v. Minorco, S.A., 871 F.2d
252, 261 (2d Cir. 1989) (injunction is "remedy of choice" where it is difficult
to unscramble transaction after it has been consummated). Moreover, an

No. C03-2523-CRB                    - 12 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

after-the-fact invalidation causes irreparable harm and confusion for those
shareholders who have cast votes, only to see those votes go unrecognized. Thus,
"in the normal situation, when it appears likely that the offer may contain
materially misleading statements or omissions as made, the interests of the
shareholders and of the public in full disclosure of relevant circumstances
renders preliminary injunctive relief an appropriate method of remedying the
deficiencies in disclosure before the offer is consummated." Ronson Corp. v.
Liquifin Atkiegesellschaft, 483 F.2d 846, 851 (3rd Cir. 1973); accord Koppers
Co. v. American Express Co., 689 F. Supp. 1371, 1382 (W. D. Pa. 1988) (immediate
injunction is a "particularly useful remedy to prevent violations of the
disclosure requirements of the securities laws."). That logic also warrants an
immediate injunction here to restrain Nelson's continuing violation of the
Partnership Agreement before Nelson scrambles the eggs of his invalid offer and
solicitation any further.

                  Because Nelson's violation of the Partnership Agreement is
crystal clear and beyond dispute, it is difficult to imagine what he might say
in response. The only defense he has asserted to Metric is that his
solicitations should be deemed an attempt to merely canvass the limited partners
to gauge the level of support for his proposals. But allowing such "canvassing"
would in and of itself confuse Metric's unit holders and violate the securities
laws because Nelson did not inform the unit holders that he was merely
"canvassing" but that he has not followed the required Partnership Agreement
procedure for calling a vote of the unit holders.

                  Indeed, Nelson's failure to obtain preliminary 10% unit holder
approval and failure to disclose that he lacks such approval unfairly enables
him to boost his chances of success. Each unit holder has no idea how her fellow
limited partners will vote but may be tempted to approve by the erroneous belief
that at least 10% must have given preliminary approval, since the matter has
been submitted for a vote. Worse still, Nelson makes misleading statements in
his offering materials that imply that over 10% of the voting units support his
proposal. (Philpot Decl, Ex. 4 at 13) Because acceptance of Nelson's offer will
likely destroy the value of any units not purchased, a unit holder's erroneous
belief that Nelson has cleared the

No. C03-2523-CRB                       - 13 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

initial hurdle to success gives Nelson a large boost in getting votes from unit
holders who fear being left out in the cold. Thus, as discussed further, post,
Nelson's failure to disclose that he has not obtained the required approval of
10% of the units to call a vote on his proxy proposals is itself a material
omission that invalidates his tender offer. Allowing him to proceed in violation
of the Partnership Agreement only compounds the problems with his offer. The
better approach is to enjoin the offer now and require him to comply with the
Agreement.

         2.       NELSON'S PROPOSED CONSENTS ALSO VIOLATE THE PARTNERSHIP
                  AGREEMENT PROVISIONS THAT PROHIBIT A LIMITED PARTNER VOTE TO
                  "APPROVE" A SELF-DEALING TRANSACTION

                  Nelson openly admits that he would have a disabling conflict
of interest if he had acquired control of Metric then caused it to settle its
litigation against him. He states in his offering materials that it is his
"objective" to sanitize that conflict by obtaining the "approval" of a majority
of the limited partners for his self-dealing proposals. (Philpot Decl, Ex. 4 at
34) But Metric's Partnership Agreement does not allow such limited partner
"approval" of self-dealing.

                  Paragraph 15.1.7 of the Partnership Agreement prohibits the
Managing General Partner from using or permitting another to use any Partnership
assets "in any manner except for the exclusive benefit of the Partnership."
(Philpot Decl., Ex. 6) Under paragraph 15.3.39, the General Partner may not
"cause the Partnership to permit a Unit Holder to contract away the fiduciary
duty owed by the General Partners to the Unit Holder under common law." (Id.)
And paragraph 16.2 provides that limited partners shall have the right by
majority vote "to vote only upon the following matters": removal of the General
Partners and election of a successor, dissolution and termination of the
Partnership, amendment of the Partnership Agreement, extension of the
Partnership term, and any proposal to sell all or substantially all of the
Partnership's assets." (Id. (emph. added)) The list of permissible voting
matters does not include

No. C03-2523-CRB                       - 14 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

a vote to "approve" a self-dealing transaction that an incoming General Partner
anticipates. (Id.) Rather, as noted, section 15.3.39 prohibits any such vote.

                  Again, because the Partnership Agreement unambiguously
prohibits the preapproval on which Nelson's offer is conditioned, the time to
enjoin the offer is now.

B.       METRIC'S CLAIMS THAT NELSON HAS VIOLATED THE DISCLOSURE REQUIREMENTS OF
         THE SECURITIES LAWS ALSO ESTABLISHES A LIKELIHOOD OF SUCCESS AND
         IRREPARABLE HARM

         1.       VIOLATION OF THE SECURITIES LAWS CAUSES IRREPARABLE HARM TO A
                  COMPANY AND ITS UNIT HOLDERS

                  Sections 14(a), (d) and (e) of the Securities and Exchange Act
of 1934 (the anti-fraud provision of the Williams Act, 15 U.S.C. Section 78n(a),
(d)-(e)), and SEC Rule 14a-9, prohibit in any form of proxy solicitation or
tender offer (1) the omission of any material fact that is necessary to make
statements made in the solicitation or offer not misleading, or (2) any other
statement or act that is "fraudulent, deceptive or manipulative." An omitted
fact is "material" if there is "a substantial likelihood that a reasonable
shareholder would consider it important in deciding how to vote." TSC
Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449 (1976).

                  The purpose of these rules is to provide the shareholder
confronted with a tender offer "with complete and truthful information about the
offeror [and] the terms and probable consequences of the offer." Applied Digital
Data Systems v. Milgo Electronic, 425 F. Supp. 1145, 1152 (S.D.N.Y. 1977). "It
was felt that in a tender offer situation, the stockholders of the target
corporation should have complete information concerning the persons seeking to
assume control." Berman v. Gerber Products Co., 454 F. Supp. 1310, 1322-23 (W.
D. Mich. 1978). Similarly, the proxy rules promote "the free exercise of the
voting rights of shareholders" by ensuring that proxies would be solicited with
"explanation to the stockholder of the real nature of

No. C03-2523-CRB                      - 15 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

the questions for which authority to cast his vote is sought." Mills, 396 U.S.
at 381 (1970) (quoting H. R. Rep. No. 1383, 73d Cong., 2d Sess., 14; S Rep. No.
792, 73d Cong., 2d Sess., 12)

                  Because there is no guarantee that shareholders will read
responsive opposition statements, the securities laws place an affirmative duty
on any offeror or proxy solicitor to provide a complete and candid disclosure.
See Santa Fe Industries, Inc. v. Green, 430 U.S. 462, 477-78 (1977) ("the Court
repeatedly has described the `fundamental purpose' of the [1934] act as
implementing a `philosophy of full disclosure.'"). Accordingly, disclosures made
in statements opposing the offer or proxy solicitation therefore do not cure
misleading disclosures in an offering statement or proxy solicitation. Cf.
Koppers, 689 F. Supp. at 1407 (upon finding that defendants' tender offer
materials violated securities laws, court found it unnecessary to review claims
concerning management's responsive Schedule 14D-9).

                  Violation of these rules causes irreparable injury because
security holders are denied the ability to make investment decisions on the
basis of adequate information. See General Aircraft Corp. v. Lampert, 556 F.2d
90, 96 (1st Cir. 1977) (affirming finding that shareholders would suffer
irreparable harm if injunction requiring defendant to comply with securities
laws was not issued); Kaufman v. Cooper Companies, Inc., 719 F. Supp. 174, 178
(S.D.N.Y. 1989) (irreparable injury results from violation of federal proxy
rules, as "the purposes of the securities laws is to provide information to
investors so that they have the opportunity to make informed choices"); Riggs
Nat'l Bank v. Allbritton, 561 F. Supp. 164, 181 (D.D.C. 1981) (rejecting defense
argument that shareholders had adequate remedy in damages); see also Mills, 396
U.S. at 383 (stating that use of solicitation that is materially misleading
violates securities laws and injunctive relief is appropriate to remedy such a
defect). These cases recognize that the injury inflicted upon a shareholder's
voting rights is a distinct injury from the economic harm inflicted by the
passage of a proposed tender offer or proxy solicitation. Id; see also Diceon
Electronics, Inc. v. Calvary Partners, L.P., 772 F. Supp. 859, 869 (D. Del.
1991) (damages inadequate remedy for harm to voting rights caused by misleading
tender offer).

No. C03-2523-CRB                     - 16 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                  Eisenberg v. Chicago Miwaukee Corp., 537 A. 2d 1051, 1062
(Del. Ch. 1987) explains why an injunction is required, and money damages
inadequate in such cases:

         [A]t issue is the shareholders' right to make an informed, uncoerced
         decision. That right is specific, and its enforcement requires a
         specific, not a substitutional remedy. As this Court has recognized, to
         permit a deficient offer to go forward might forever deprive the
         tendering and non-tendering shareholders of their right to be treated
         fairly. In that event, the harm could not easily be undone, and given
         the nature of the shareholder interests at stake, damages would not be
         a meaningful or adequate remedy. Therefore, the threatened harm is
         irreparable. An injunction is the remedy most likely to achieve
         disclosure of the information necessary to achieve an informed decision
         and to eliminate the offer's coercive aspects.

                  Moreover, because it is impossible to assess the extent of the
taint from a misleading disclosure, a court must void any acceptances or
consents returned. See Kaufman, 719 F. Supp. at 185-86 (invalidating proxies
tainted by misleading statements). Thus, as noted above, an immediate injunction
is preferable to an attempt to "unscramble the eggs."

         2.       NELSON'S DISCLOSURES VIOLATE THE SECURITIES LAWS AND ARE
                  CAUSING CONTINUING IRREPARABLE HARM

                  Nelson's tender offer statement and consent solicitations made
numerous statements that are misleading in light of the material facts that he
omitted to mention. These misleading statements and material omissions are
recited fully in Metric's complaint and include:

                  (1)      He fails to disclose that he has proceeded even
though neither the Managing General Partner nor 10% of the voting units have
called for a vote on his offer. Given that the Partnership Agreement requires
such preapproval and that Nelson misleadingly suggests he has obtained the
support of more than 10% of the unit holders, the unit holders are likely to be
deceived into failing to realize that his offer has been compromised by a fatal
procedural error. It is hard to imagine a more material omission than a failure
to inform a shareholder that his or her vote will be invalid. Moreover, as
noted, Nelson's misleading of the unit holders as to his failure

No. C03-2523-CRB                    - 17 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

to obtain 10% approval also is material because his prospects of success will be
critical to any unit holders assessment of whether to take the risk of not
tendering.

                  (2)      Nelson states he does not believe his financial
condition is relevant to his offer because he will be funding the purchase with
a loan from GP Credit, but that in any event, he has a negative net worth in
excess of $10 million. Philpot Decl., Ex. 4 at 9. He does not however, disclose
GP Credit's financial condition; nor does he disclose that there is nothing in
his offer that protects the unit holders should GP Credit decide not to proceed
with its loan to him. Because Nelson is not obligated to pay for the tendered
units until 10 business days after Metric approves the settlement and pays GP
Credit $4 million, the lack of protection for Metric's unit holders if GP Credit
reneges on its loan commitment, and GP Credit's ability to satisfy any judgment
in an action to recover the $4 million payment are critical to an assessment of
the offer. This is particularly true because Nelson's $10 million negative net
worth makes it unlikely that Metric would be able to recover from him if GP
Credit reneges. Accordingly, Nelson's failure to disclose GP Credit's financial
condition and the lack of protection if it reneges constitute material
omissions. Cf. Pabst Brewing Co. v. Kalmanovitz, 551 F. Supp. 882, 891-92 (D.
De. 1982) (financial information about two businessmen who were providing
necessary funding for tender offer was required to be disclosed); Koppers, 689
F. Supp. at 1390-91 (failure to disclose financial condition of investment bank,
"one of the principal planners and players in this transaction," was material
omission and warranted preliminary injunction against tender offer).

                  (3)      Similarly, Nelson discloses that his wife is a
"manager" of GP Credit. (Philpot Decl., Ex. 4 at 9) But he apparently told a
Tennessee court that she owned GP Credit, and that court recited her ownership
as a fact. (Id., Ex. 3 at 2-3) He also discloses no information concerning how
or why GP Credit acquired the litigation rights and obligations of the
Nelson-related entities, whether it can legally deliver effective releases or
what precisely is the nature of his relationship with GP Credit. Given GP
Credit's essential role, these omitted facts are material. Cf. Schedule 14D-Item
7 (requiring disclosure in tender offer of any contracts,

No. C03-2523-CRB                  - 18 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

arrangements or understandings between the bidder and any other person with
respect to the target's securities); Koppers, 689 F. Supp. at 1395 (because of
creditor's key role in offer, further disclosure concerning offeror's
obligations to creditor was required); Riggs, 516 F. Supp. at 173-75 (offeror
required to disclose information concerning his ability to repay financing for
offer).

                  (4)      He also fails to disclose that a Tennessee state
court has cited his purported transfer to GP Credit of his litigation rights and
obligations as evidence of the "elements of fraud" in his schemes to evade
Hardage's and Orlando Residence's Tennessee judgment against him. (Philpot
Decl., Ex. 3 at 2-3) A disclosure of this fact is necessary to evaluate the risk
that Metric's approval of Nelson's offer might be viewed as evidence of a Metric
conspiracy with Nelson to defraud Hardage and Orlando Residence and the
Tennessee court. In deciding how to vote, a reasonable shareholder would
certainly consider it important to know that he or she might be considered a
party to a fraud if he or she voted for the proposal. Moreover, it is settled
that information reflecting a takeover bidder's competence and integrity is
material--particularly where the offer will leave a substantial number of
minority shares untouched. See Life Investors, Inc. v. AGO Holding, N.V., Fed.
Sec. L. Rep. (CCH) 98,356 (8th Cir. 1981) ("Where, as here, the partial offer
means that a substantial minority will necessarily remain, the shareholder must
weigh staying with the company and the bidder as part of the minority bloc";
ordering injunction pending appeal where tender offer did not fully disclose
financial condition of bidder ); Berman, 454 F. Supp. at 1322-23 ("Congress in
enacting the Williams Act clearly intended that information with respect to the
integrity of the tender offeror's management be disclosed"), quoting H. R. No.
171, 90th Cong., 2d Sess. ("The competence and integrity of . . . the persons
who seek management positions are of vital importance to the stockholder").

                  (5)      Nelson states that he is offering to pay $86 for each
unit. (Philpot Decl, Ex. 4 at 8) But he fails to disclose that when all factors
are taken into account, the unit holders' recovery is likely to be substantially
lower. If more than 30,000 of the units are tendered, Nelson proposes to
purchase only a pro-rata share from the tendering unit holders. For example, if

No. C03-2523-CRB                    - 19 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

50,000 units are tendered, because Nelson will purchase only 30,000 units, a
unit holder who tenders 100 units will end up selling 60 units and retaining 40.
Accordingly, to evaluate Nelson's offer, each unit holder must determine not
only the likely sum to be obtained on the portion of units Nelson purchases, but
also the potential value of his or her remaining units if Nelson's offer
succeeds. Under Nelson's proposal, all remaining Metric assets will likely end
up being paid to Nelson or his related entities, or in the best-case, a $2
million liquidation reserve will be left. (And, even then, one-half of that $2
million will go to Nelson because he will then own half the units.) Thus, as
noted, the remaining 29,919 units --held either by those who did not tender or
those who retained units as the result of a tender of more than 50 percent of
all units--are likely to receive somewhere between nothing, or at most $33 a
unit. Nelson does not, however, disclose the devastating effect on the value of
the units that he declines to buy if his offer succeeds.

                  (6)      He states "I believe the Partnership will ultimately
be found liable for damages in excess of $12 million from its breach of the 1993
settlement agreement" and that "the Proposed Settlement Agreement permits the
Partnership to pay only a fraction of the amount for which it may be held
liable." (Philpot Decl, Ex. 4 at 60) But he offers no factual or legal analysis
in support. He also states that a Tennessee judge "decided that the
Partnership's breach caused no damages. I believe he made a mistake. How the
appellate courts will view the matters cannot be known with certainty." (Id.)
But he nowhere states that appellate reversals are the exception, not the rule.
It is impossible based on Nelson's selective disclosure for the unit holders to
assess whether his proposal bears a reasonable relationship to Metric's
litigation exposure.

                  (7)      Similarly, he states his "feeling" that breach of
fiduciary claims against the present General Partner and others based on their
purported mishandling of the settlement agreement "may be worth millions of
dollars." (Id. at 25) But he offers no supporting facts or legal analysis to
enable unit holders to evaluate this claim. He also fails to disclose that he
has already lost analogous tortious interference claims, that a court would
likely find the proposed claims barred by the statute of limitations, and that
his proposed claims for management's

No. C03-2523-CRB                   - 20 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

purported mishandling of the settlement would have little or no value if the
Tennessee appellate court were to affirm the judgment awarding Nelson zero
dollars for his aborted settlement claim.

                  (8)      Nelson states that his "objective" in seeking to
settle his lawsuits against Metric as a precondition to his offer is to
eliminate the conflict of interest between himself and Metric. (Id. at 34) But
he fails to disclose that he will continue to have an irreconcilable
post-acceptance conflict of interest with regard to prosecution of the lawsuits
that he proposes to bring on Metric's behalf. GP Credit is not obligated to
reimburse the expenses of the proposed lawsuits unless those expenses are less
than the amount paid to GP Credit in addition to its initial $4 million
recovery. (Id. at 63) Because Nelson owes GP Credit millions, he would have an
interest in satisfying it by pursuing lawsuits that would be unjustified under a
cost-benefits analysis for Metric, but that might be in GP Credit's interests
(since it only pays if the lawsuits succeed). His failure to disclose these
"delicate ethical issues" is a material omission. Cf. Koppers, 689 F. Supp. at
1391 (disclosure of ramifications of potential conflict of interest issues posed
by broker-dealer's involvement in tender offer would be material to
stockholders)

                  (9)      Nelson fails to disclose the existence of Securities
and Exchange Commission Rule 14d-7 which provides that any person who has
deposited securities pursuant to a tender offer has the right to "withdraw any
such securities during the period such offer request or invitation remains
open." As a result of this material omission, any unit holders who have tendered
have done so without realizing they can change their mind once they receive
Metric's position on the tender offer. Similarly, Nelson's materials state that
by executing and delivering an Agreement of Sale, a tendering unit holder (who
does not properly withdraw acceptance of Nelson's Offer prior to the Expiration
Date), irrevocably appoints Nelson as that unit holder's proxy. But the
Agreement of Sale states that the power of attorney granted is irrevocable and
does not state that it terminates (as to voting the units) upon withdrawal of
the tender. As a result, Nelson, contrary to his offer characterization but
under the terms of his Agreement of Sale, can vote the units of a person who at
one time tendered and has subsequently withdrawn and now

No. C03-2523-CRB                    - 21 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

does not want the Nelson proposal to go forward. In addition, the tender offer
materials state that by executing and delivering the Agreement of Sale, the
tendering unit holder also irrevocably appoints Nelson as the unit holder's
attorney-in-fact, to be effective only upon Nelson's payment for the units. But
the Agreement of Sale has no such carve out, and in fact, has language that
would permit Nelson to transfer the units to his name without paying for them.
To the extent Nelson intended to have these powers, the tender offer materials
must disclose this and also disclose the risks inherent in these provisions. Cf.
Calumet Industries v. MacClure, 464 F. Supp. 19, 27-28 (N.D. Ill. 1978)
(enjoining defendants from exercising shareholders' consents where defendants
had misrepresented that consents were irrevocable).

C.       ENJOINING NELSON NOW IS PREFERABLE TO PERMITTING HIS TAINTED OFFER TO
         PROCEED

                  Nelson's fraud will eventually require the invalidation of any
acceptances or solicitations that Metric's limited partners return. Kaufman, 719
F. Supp. at 185-86. The difficulty of "unscrambling the eggs," however, could
prove insurmountable because Nelson's offer calls for an immediate payout of $4
million to a third party--GP Credit--without any security for the transferred
assets. After-the-fact invalidation raises the unseemly spectre of shareholders
who have cast votes, only to see those votes go unrecognized. And, of course,
voiding the election at the end of the day results in a loss of the considerable
expenses associated with the vote tally and legal challenge--a loss which Metric
is unlikely to recover from Nelson, given his $10 million negative net worth.
Thus, the wiser course is to enjoin the offer and solicitation immediately and
order Nelson to comply with the securities laws going forward.

D.       THE HARM TO NELSON IN MERELY REQUIRING HIM TO FOLLOW THE LAW AND
         METRIC'S PARTNERSHIP AGREEMENT IS MINIMAL WHEN COMPARED TO METRIC'S
         INJURY

                  Although Nelson has a right to freely compete in tender offer
situations [see, e.g., Jewel Companies, Inc. v. Pay Less Drug Stores Northwest,
Inc., 510 F. Supp. 1006 (N.D. Cal.

No. C03-2523-CRB                        - 22 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

1981)], he has no right to disregard the Partnership Agreement provisions that
govern votes of the limited partners, to violate the securities laws, to
wrongfully interfere with Metric's contractual relationship with its limited
partners or to enlist those partners to join him in committing a breach of
fiduciary duty to minority interests. Nelson thus will suffer little or no
cognizable "harm" from merely being ordered to comply with the Agreement and the
law. See Studebaker Corp. v. Gittlin, 360 F. 2d 692, 696 (2d Cir. 1966). Indeed,
forcing Nelson to comply now will benefit him and all other interested persons
by eliminating the flaws in his invalid offer, while permitting Metric's unit
holders to make a free and informed choice should Nelson submit a proper offer
to them in accordance with Metric's Partnership Agreement and the law.

E.       NELSON'S VIOLATIONS OF CALIFORNIA LAW ALSO WARRANT A TRO

                  Although the Court need not go further, there is little doubt
that Nelson's offer and solicitation are also tortious violations of California
law and are causing irreparable harm. Nelson's conduct is a breach of his
fiduciary duty and aiding and abetting the breach of fiduciary duty by Metric
unit holders. Had Nelson attempted to implement his proposed settlement once he
obtained control, his self-dealing would easily be struck down as a breach of
his management fiduciary duties. As noted, Nelson essentially admits as much and
asks for a bare majority of Metric's unit holders to approve his proposals as a
condition to cash out their shares. But unit holders who choose to cash out have
little incentive to protect the Partnership and remaining minority interests and
thus may not give "preapproval" to a self-dealing incoming director's breach of
fiduciary duty.

                  Setting forth a broad fiduciary duty protection, California
law provides that in any transaction where control of the corporation is
material, the conduct of directors and shareholders is governed by a
comprehensive requirement of "good faith and inherent fairness" to the minority.
Jones v. H.F. Ahmanson & Co., 1 Cal. 3d 93, 1001 (1969); see also Fisher v.
Pennsylvania Life Co., 69 Cal. App. 3d 506 (1977). As the California Supreme
Court explained: "[T]he burden is

No. C03-2523-CRB                         - 23 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

on the director or stockholder not only to prove the good faith of the
transaction but also to show its inherent fairness from the viewpoint of the
corporation . . . . The essence of the test is whether or not under all the
circumstances the transaction carries the earmarks of an arm's length bargain.
If it does not, equity will set it aside." Jones, 1 Cal. 3d at 108.

                  Here, however, Nelson's offer has none of the "earmarks of an
arm's length bargain." If he does not obtain an appellate reversal of his zero
damages judgment against Metric, there would be no basis for Metric to pay
anything to settle the lawsuit, much less pay $10 million. As a general rule,
appellate reversals are the rare exception, and not the rule--particularly after
a trial, as Nelson obtained in Tennessee. The number of $0 damages judgments
following a trial that turn into $10 million awards thanks to an appeal are even
rarer. Apart from Nelson's deception as to what he is offering, the only reason
any rational unit holder would vote for this deal would be to avoid Nelson's
intent to destroy the value of the non-tendering units and his threat to delay
any cash distribution on those units for years. Given the broad scope of
California's fiduciary duty law, such coerced tenders cannot suffice to validate
a self-dealing transaction that would never fly if Nelson had attempted it after
obtaining control.

                                  IV CONCLUSION

                  The Court should issue an immediate TRO restraining Nelson
from any further action in support of his invalid tender offer and consent
solicitations and should set the matter for

No. C03-2523-CRB                      - 24 -

 Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO And
               OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

a preliminary injunction hearing within 10 days of the TRO (per Rule 65(b).

                  DATED: June 2, 2003.

                                         REED SMITH CROSBY HEAFEY LLP

                                         By   /s/ Kenneth J. Philpot
                                            ----------------------------------
                                            Kenneth J. Philpot
                                            Attorneys for Plaintiff
                                            Metric Growth Suite Investors, L.P.

No. C03-2523-CRB                        - 25 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                                                         PAGE
                                                                                                                      
I INTRODUCTION.........................................................................................................    2

II FACTUAL BACKGROUND..................................................................................................    5

           A.        Nelson Wages A 10-Year Losing Litigation Battle Against Metric....................................    5

           B.        To Fund His Litigation Vendettas And To Reverse His In-Court
                     Results, Nelson Violates The Provisions In Metric's
                     Partnership Agreement That Govern Votes Of The Limited
                     Partners And Presents Its Limited Partners With An Invalid,
                     Misleading And Coercive Tender Offer..............................................................    8

                     1.        Nelson's Violations Of The Partnership Agreement........................................    8

                     2.        Nelson Submits Misleading And Coercive Offer And
                               Solicitations To Use Metric's Own Assets To
                               "Purchase" For Nelson Control Of Metric So That
                               He Can Cause Metric To Award Himself A Generous
                               Litigation Settlement...................................................................    9

           C.        Metric Objects To Nelson's Attempted End-Run On The Partnership
                     Agreement And Gives Him Notice That It Will Seek An Injunction
                     If He Does Not Cure The Violations; Nelson Refuses, So Metric
                     Gives Notice Of This Application..................................................................   11

III LEGAL ANALYSIs.....................................................................................................   12

           A.        Metric's Claim That Nelson's Offer Violates Metric's Partnership
                     Agreement Establishes A Likelihood Of Success And Irreparable
                     Harm..............................................................................................   13

                     1.        Nelson's Failure To Follow The Agreement's Voting Procedure
                               Is A Crystal Clear Violation That Provides A Settled Basis
                               For A TRO...............................................................................   13

                     2.        Nelson's Proposed Consents Also Violate The Partnership
                               Agreement Provisions That Prohibit A Limited Partner
                               Vote To "Approve" A Self-Dealing Transaction............................................   15

           B.        Metric's Claims That Nelson Has Violated The Disclosure Requirements
                     Of The Securities Laws Also Establishes A Likelihood Of Success And
                     Irreparable Harm..................................................................................   16

                     1.        Violation Of The Securities Laws Causes Irreparable Harm To
                               A Company And Its Unit Holders..........................................................   16

                     2.        Nelson's Disclosures Violate The Securities Laws And Are
                               Causing Continuing Irreparable Harm....................................................    18

           C.        Enjoining Nelson Now Is Preferable To Permitting His Tainted Offer To
                     Proceed..........................................................................................    23


                                      - i -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For Tro
              And Osc Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                                                         PAGE
                                                                                                                      
           D.        The Harm To Nelson In Merely Requiring Him To Follow The Law And
                     Metric's Partnership Agreement Is Minimal When Compared To Metric's
                     Injury............................................................................................   23

           E.        Nelson's Violations Of California Law Also Warrant A TRO..........................................   24

IV CONCLUSION..........................................................................................................   25


                                     - ii -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For Tro
              And Osc Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                              TABLE OF AUTHORITIES
                                   (CONTINUED)



                                                                                                            PAGE(S)
                                                                                                         
                                        CASES
Applied Digital Data Systems v. Milgo Electronic,
       425 F. Supp. 1145 (S.D.N.Y. 1977) ...........................................................                  15

Berman v. Gerber Products Co.,
       454 F. Supp. 1310 (W. D. Mich. 1978) ........................................................              15, 19

C.A. Cavendes, S. Sociedad Finaciera v. Florida Nat. Banks of Fla.,
       556 F. Supp. 254 (M. D. Fla. 1982) ..........................................................                  12

Calumet Industries v. MacClure,
       464 F. Supp. 19 (N.D. Ill. 1978) ............................................................                  22

Consolidated Gold Fields PLC v. Minorco, S.A.,
       871 F.2d 252 (2d Cir. 1989) .................................................................                  12

Eisenberg v. Chicago Miwaukee Corp.,
       537 A.2d 1051 (Del. Ch. 1987) ...............................................................                  17

Fisher v. Pennsylvania Life Co.,
       69 Cal. App. 3d 506 (1977) ..................................................................                  23

GP Credit Co., LLC v. Metric Partners Growth Suite Investors, L.P. et al.,
       Superior Court of California, San Francisco Co.,
       No. CGC-02-403301 ...........................................................................                   6

General Aircraft Corp. v. Lampert,
       556 F.2d 90 (1st Cir. 1977) .................................................................                  16

GoTo.com, Inc. v. Walt Disney Co.,
       202 F.3d 1199 (9th Cir. 2000) ...............................................................                  11

I ; see also Diceon Electronics, Inc. v. Calvary Partners, L.P.,
       772 F. Supp. 859 (D. Del. 1991) .............................................................                  16

Jewel Companies, Inc. v. Pay Less Drug Stores Northwest, Inc.,
       510 F. Supp. 1006 (N.D. Cal.  1981)] ........................................................                  22

Jones v. H.F. Ahmanson & Co.,
       1 Cal. 3d 93 (1969) .........................................................................              23, 24

Kaufman v. Cooper Companies, Inc.,
       719 F. Supp. 174 (S.D.N.Y. 1989) ............................................................          16, 17, 22

Koppers Co. v. American Express Co.,
       689 F. Supp. 1371 (W. D. Pa. 1988) ..........................................................  13, 16, 18, 19, 21

Life Investors, Inc. v. AGO Holding, N.V.,
       Fed. Sec. L. Rep. (CCH) 98 (8th Cir. 1981) ..................................................                  19


                                       - iii -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For Tro
              And Osc Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                                        PAGE(S)
                                                                                                     
Marathon Oil v. Mobil Corp.,
       35o F. Supp. 315 (N. D. Ohio) aff'd 669 F.2d 378 (6th Cir. 1981) ............................         11

Metric Partners Growth Suite Investors, L.P. v. Nashville Lodging Co. et al.,
       Chancery Court for Davidson Co., Tennessee,
       No. 96-1405-III .............................................................................          6

Metric Partners Growth Suite Investors, L.P. v. Nelson,
       Superior Court of California, San Francisco Co.,
       No. 928065 ..................................................................................          6

Mills v. Electric Auto-Lite Co.,
       396 U.S. 375 (1970) .........................................................................     11, 16

Nashville Lodging Co. v. Metric Partners Growth Suite Investors, L.P.,
       Chancery Court for Davidson Co., Tennessee,
       No. 94-1911-I ...............................................................................          6

Nashville Lodging Co. v. Metric Partners Growth Suite Investors, L.P. et al.,
       Circuit Court, State of Wisconsin,
       No. 94CV001212 (inactive) ...................................................................          6

Nelson and Nashville Lodging Co. v. Metric Realty et al.,
       Chancery Court for Davidson Co., Tennessee,
       No. 97-2189-III .............................................................................          6

Nelson v. Metric Realty,
       2002 Tenn. App. LEXIS 698 ...................................................................          4

Orlando Residence, Ltd. v. Nashville Lodging Co.,
       Tennessee Chancery Ct, Davidson Co.,
       No. 92-3086-III..............................................................................          7

Pabst Brewing Co. v. Kalmanovitz,
       551 F. Supp. 882 (D. De. 1982) ..............................................................         18

Pennwalt Corp. v. Centaur Partners,
       710 F. Supp. 111 (E. D. Pa. 1989) ...........................................................         12

Riggs Nat'l Bank v. Allbritton,
       561 F. Supp. 164 (D.D.C. 1981) ..............................................................     16, 19

Rodeo Collection, Ltd. v. West Seventh,
       812 F.2d 1215 (9th Cir. 1987) ...............................................................         11

Ronson Corp. v. Liquifin Atkiegesellschaft,
       483 F.2d 846 (3rd Cir. 1973) ................................................................         13

Santa Fe Industries, Inc. v. Green,
       430 U.S. 462 (1977) .........................................................................         16


                                       - iv -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For Tro
              And Osc Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

                                  TABLE OF CONTENTS
                                     (CONTINUED)



                                                                                                          PAGE(S)
                                                                                                       
Sonesta International Hotels Corp. v. Wellington Associates,
       483 F.2d 247 (2d Cir. 1970) .................................................................         12

Studebaker Corp. v. Gittlin,
       360 F.2d 692 (2d Cir. 1966) .................................................................         23

TSC Industries, Inc. v. Northway, Inc.,
       426 U.S. 438 (1976) .........................................................................         15

Wininger v. SI Management L.P.,
       32 F. Supp. 2d 1144 (N. D. Cal. 1997) .......................................................         11

                                    STATUTES

California Code of Civil Procedure section 527(c) ..................................................         11

Fed. R. Civ. Proc. 65(b) ...........................................................................         11

SEC Rule 14a-9 .....................................................................................         15

Williams Act, 15 U.S.C.Section 78n(a), (d)-(e) .....................................................         15


                                      - v -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For Tro
              And Osc Why A Preliminary Injunction Should Not Issue



                          REED SMITH CROSBY HEAFEY LLP
A limited liability partnership formed in the State of Delaware. "Reed Smith"
and "Reed Smith Crosby Heafey LLP" refer to Reed Smith LLP and related entities.

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No C03-2523-CRB                           - 1 -

    Mem. Of Points And Authorities In Support Of Ex Parte Application For TRO
              And OSC Why A Preliminary Injunction Should Not Issue

EX-99.(A)(8)

                                                                 Exhibit (a)(8)


                      IN THE UNITED STATES DISTRICT COURT

                    FOR THE NORTHERN DISTRICT OF CALIFORNIA

METRIC PARTNERS GROWTH,                              NO. C 03-02523 CRB

         Plaintiff,                                  TEMPORARY RESTRAINING ORDER

 V.

KENNETH E. NELSON,
        Defendant.
                                  /
- ----------------------------------

      For the reasons stated at oral argument on plaintiffs motion for a
temporary restraining order on June 20, 2003, defendant Kenneth E. Nelson, is
hereby enjoined from taking any further action in support of his tender offer
and consent solicitations, except that defendant may attempt to convene a vote
of the limited partners in accordance with the partnership agreement. Plaintiff
shall file a bond in the amount of $25,000.00 within three business days of the
date of this order.

      IT IS SO ORDERED.

Dated: June 27, 2003

                                                    /s/ Charles R. Breyer
                                                    ----------------------------
                                                    CHARLES R. BREYER
                                                    UNITED STATES DISTRICT JUDGE