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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
NTS-PROPERTIES III
(Name of Issuer)
NTS-PROPERTIES III
and
ORIG, LLC
(Name of Persons Filing Statement)
LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
62942E100
(CUSIP Number of Class of Securities)
J.D. Nichols, Managing General Partner
NTS Properties Associates
10172 Linn Station Road
Louisville, Kentucky 40223
(502) 426-4800
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person Filing Statement)
Copy to:
Michael J. Choate, Esq.
Shefsky & Froelich Ltd.
444 North Michigan Avenue, Suite 2500
Chicago, Illinois 60611
(312) 836-4066
September 30, 1998
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
- -----------------------------------------------------|--------------------------
Transaction Valuation: $250,000 (a) | Amount of Filing Fee
Limited Partnership Interest at $250 per Interest | $50.00 (b)
- -----------------------------------------------------|--------------------------
(a) Calculated as the aggregate maximum purchase price for limited
partnership interests.
(b) Calculated as 1/50th of 1% of the Transaction Value.
Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number,
or the form of Schedule and the date of its filing.
Amount Previously Paid: ____________________________ Not Applicable
Form of Registration No.: __________________________ Not Applicable
Filing Party: ______________________________________ Not Applicable
Date Filed: ________________________________________ Not Applicable
- --------------------------------------------------------------------------------
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Item 1. Security and Issuer.
- -----------------------------
(a) The name of the issuer is NTS-Properties III, a Georgia limited
partnership (the "Partnership"). The Partnership's principal executive offices
are located at 10172 Linn Station Road, Louisville, Kentucky 40223.
(b) The title of the securities that are subject to the Offer to
Purchase dated September 30, 1998 (the "Offer") is limited partnership
interests or portions thereof in the Partnership. (As used herein, the term
"Interest" or "Interests", as the context requires, shall refer to the limited
partnership interests in the Partnership and portions thereof that constitute
the class of equity security that is the subject of this tender offer or the
limited partnership interests or portions thereof that are tendered by the
limited partners of the Partnership ("Limited Partners") to the Offerors
pursuant to the Offer to Purchase.) This Offer is being made to all Limited
Partners. As of June 30, 1998, the Partnership had 13,770 outstanding Interests
held by 990 holders of record. Subject to the conditions set forth in the Offer,
the Partnership and ORIG, LLC, a Kentucky limited liability company, and an
affiliate of the Partnership (the "Affiliate" and, collectively with the
Partnership, the "Offerors") will purchase in the aggregate up to 1,000
Interests. The purchase price of the Interests tendered to the Offerors will be
equal to $250 per Interest, net to the tendering Limited Partners in cash (the
"Purchase Price"). Although the Offer is being made to all Limited Partners, the
Partnership has been advised that neither the general partner, NTS Properties
Associates ("General Partner"), the Affiliate, nor any of their partners,
members, affiliates or associates intend to tender any Interests pursuant to the
Offer.
Reference is hereby made to the Introduction of the Offer, which is
incorporated herein by reference.
(c) There is currently no established trading market for the Interests,
and any transfer of Interests is limited by the terms of the Partnership's
Amended and Restated Agreement of Limited Partnership dated as of September 23,
1982 ("Partnership Agreement").
Reference is hereby made to Section 7, "Cash Distribution Policy," of
the Offer which is incorporated herein by reference.
(d) In addition to the Partnership, ORIG, LLC, an affiliate of the
Partnership, is jointly filing this statement as a co-offeror. ORIG, LLC is
located at 10172 Linn Station Road, Louisville, Kentucky. The members of ORIG,
LLC are substantially the same as the partners of the General Partner.
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Item 2. Source and Amount of Funds or Other Consideration.
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(a) The total amount of funds required to complete the Offer is
approximately $285,000 (including approximately $250,000 to purchase 1,000
Interests plus approximately $35,000 for expenses associated with administering
the Offer such as legal, accounting, printing and mailing expenses and transfer
fees). The Partnership will purchase the first 500 Interests tendered pursuant
to the Offer and will fund its purchases and its portion of the expenses of the
Offer from its cash reserves. If the Offer is oversubscribed and the
Partnership, in its sole discretion, decides to purchase Interests in excess of
500 Interests, the Partnership will fund these additional purchases and
expenses, if any, from its cash reserves.
The Affiliate will purchase the next 500 Interests tendered and will
fund its purchases and its portion of the expenses of the Offer from cash
contributions to be made to the Affiliate by its members. If the Offer is
oversubscribed and the Affiliate, in its sole discretion, decides to purchase
Interests in excess of 500 Interests, the Affiliate will fund these additional
purchases and expenses, if any, from its cash contributions.
Reference is hereby made to Section 9, "Source and Amount of Funds," of
the Offer which is incorporated herein by reference.
(b) Neither the Partnership nor the Affiliate intends to borrow funds
to purchase any Interests tendered pursuant to this Offer.
Reference is hereby made to Section 9, "Source and Amount of Funds,"
which is incorporated herein by reference.
Item 3. Purpose of the Tender Offer and Plans or Proposals of Issuer or the
- ---------------------------------------------------------------------------
Affiliate.
- ----------
The purpose of the Offer is to provide Limited Partners who desire to
liquidate their investment in the Partnership with a method for doing so. With
the exception of isolated transactions, no established secondary trading market
for the Interests exists and transfers of Interests are subject to certain
restrictions as set forth in the Partnership Agreement, including prior approval
of the General Partner. Interests that are tendered to the Partnership will be
retired, although the Partnership may issue interests from time to time in
compliance with the registration requirements of federal and state securities
laws or any exemptions therefrom. Interests that are tendered to the Affiliate
will be held by the Affiliate. Neither the Partnership nor the General Partner
has plans to offer for sale any other additional interests, but they each
reserve the right to do so in the future.
The Offer is generally not conditioned upon any minimum number of
Interests being tendered. The Offer is conditioned upon, among other things, the
absence of certain adverse
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conditions described in Section 6, "Certain Conditions of the Offer." In
particular, the Offer will not be consummated, if in the opinion of the General
Partner, there is a reasonable likelihood that purchases under the Offer would
result in termination of the Partnership (as a partnership) under Section 708 of
the Internal Revenue Code of 1986, as amended (the "Code"); or termination of
the Partnership's status as a partnership for federal income tax purposes under
Section 7704 of the Code. Further, the Offerors will not purchase Interests, if
the purchase of Interests would result in the Interests being owned by fewer
than three hundred (300) holders of record.
(a) The Offerors have agreed that the Partnership will purchase the
first 500 Interests tendered during the Offer, and that, if more than 500
Interests are tendered, the Affiliate will purchase up to an additional 500
Interests tendered on the same terms and conditions as those Interests purchased
by the Partnership. If, on the Expiration Date (defined below), the Offerors
determine that more than 1,000 Interests have been tendered during the Offer,
each Offeror may either: (i) accept the additional Interests permitted to be
accepted pursuant to Rule 13e-4(f)(1) promulgated under the Securities Exchange
Act of 1934, as amended; or (ii) extend the Offer, if necessary, and increase
the amount of Interests that the Offeror is offering to purchase to an amount
that the Offeror believes to be sufficient to accommodate the excess Interests
tendered as well as any Interests tendered during the extended Offer.
If the Offer is oversubscribed and the Offerors do not act in
accordance with (i) or (ii), above, or if the Offerors act in accordance with
(i) and (ii), above, but the Offer remains oversubscribed, then the Offerors
will accept Interests tendered prior to or on the Expiration Date (defined
below) for payment on a pro rata basis. In the event of proration, the number of
Interests purchased from a Limited Partner will be equal to a fraction of the
Interests tendered, the numerator of which will be the total number of Interests
the Offerors are willing to purchase and the denominator of which will be the
total number of Interests properly tendered. Notwithstanding the foregoing, the
Offerors will not purchase Interests tendered by a Limited Partner if, as a
result of the purchase, the Limited Partner would continue to be a Limited
Partner and would hold fewer than five (5) Interests.
The term "Expiration Date" shall mean 12:00 Midnight, Eastern Standard
Time, on December 29, 1998, unless and until the Offerors extend the period of
time for which the Offer is open, in which event "Expiration Date" will mean the
latest time and date at which the Offer, as extended by the Offerors or the
Affiliate, expires. The Partnership may extend the Offer in its sole discretion
by providing the Limited Partners with written notice of the extension;
provided, however, that if the Offer is oversubscribed, the Partnership or the
Affiliate may, each in its sole discretion, extend the Offer by providing the
Limited Partners with written notice of the extension.
(b) Neither the Offerors nor the General Partner has any plans or
proposals that relate to or would result in an extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Partnership.
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(c) Neither the Offerors nor the General Partner has any plans or
proposals that relate to or would result in a sale or transfer of a material
amount of assets of the Partnership.
(d) Neither the Offerors nor the General Partner has any plans or
proposals that relate to or would result in any change in the identity of the
General Partner or in the management of the Partnership, including, but not
limited to, any plans or proposals to change the number or term of the General
Partner(s), to fill any existing vacancy for the General Partner, or to change
any material term of the management agreement between the General Partner and
the Partnership.
(e) The partnership expects to incur approximately $2.0 - $2.5 million of
expenses to refurbish its Plainview Triad North property for a new tenant once
this property is vacated by the current tenant, Aetna Life Insurance
Partnership. The partnership may borrow all or some of the funds necessary to
complete this refurbishment. Other than these anticipated borrowings, neither
the Offerors nor the General Partner has any plans or proposals that relate to
or would result in any material change in the present distribution policy or
indebtedness or capitalization of the Partnership.
(f) Neither the Offerors nor the General Partner has any plans or
proposals that relate to or would result in any other material change in the
Partnership's structure or business.
(g) Neither the Offerors nor the General Partner has any plans or
proposals that relate to or would result in any change in the Partnership
Agreement or other actions that may impede the acquisition of control of the
Partnership by any person.
(h)-(j) Items (h) through (j) of this Item 3 are not applicable to the
Partnership because the Offer is conditioned on the Partnership having no fewer
than three hundred (300) holders of record after completion of the Offer.
Reference is hereby made to the Introduction, Section 1, "Background
and Purposes of the Offer," Section 5, "Purchase of Interests; Payment of
Purchase Price," Section 6, "Certain Conditions of the Offer," and Section 10,
"Certain Information About the Partnership" of the Offer which are incorporated
herein by reference.
Item 4. Interest in Securities of the Issuer.
- ----------------------------------------------
There have not been any transactions involving Interests that were
effected during the past forty (40) business days by the Partnership, the
General Partner, the Affiliate or any person controlling the Partnership, the
General Partner or the Affiliate, except as set forth below:
On September 4, 1998, an affiliate of the Partnership, Ocean Ridge
Investments, Ltd. ("Ocean Ridge"), a Florida limited liability partnership,
purchased five (5) Interests at a price equal to $250 per interest from a third
party.
Reference is hereby made to Section 12, "Transactions and Arrangements
Concerning Interests," of the Offer which is incorporated herein by reference.
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Item 5. Contracts, Arrangements, Understandings or Relationships with Respect to
- --------------------------------------------------------------------------------
the Issuer's Securities.
- ------------------------
The Partnership Agreement, contained in the Partnership's prospectus
dated October 13, 1982, grants the General Partner discretion to decide whether
the Partnership or any of its affiliates will purchase Interests from time to
time from Limited Partners on certain terms and conditions described in the
Partnership Agreement. The Partnership, however, will not purchase Interests, if
as a result, the Limited Partner would continue to be a Limited Partner and
would hold fewer than five (5) Interests.
The Offerors are not aware of any other contract, arrangement,
understanding or relationship relating, directly or indirectly, to this Offer
(whether or not legally enforceable) between or among (i) the Partnership, the
General Partner or the Affiliate or (ii) any person controlling the Partnership,
the General Partner or the Affiliate or any other person.
Reference is hereby made to the Introduction, Section 1, "Background
and Purposes of the Offer," and Section 12, "Transactions and Arrangements
Concerning Interests," of the Offer each of which are incorporated herein by
reference.
Item 6. Persons Retained, Employed or to be Compensated.
- ---------------------------------------------------------
No persons have been employed, retained or are to be compensated by the
Offerors to make solicitations or recommendations in connection with the Offer.
Item 7. Financial Information.
- -------------------------------
(a) Reference is hereby made to the audited financial statements of the
Partnership for the years ended December 31, 1996 and December 31, 1997 filed
with the Securities and Exchange Commission ("Commission") on Form 10-K on March
27, 1997 and March 30, 1998, respectively, which are incorporated herein by
reference. Also, reference is hereby made to the unaudited financial statements
of the Partnership for the three and six-month periods ended June 30, 1998 as
previously filed with the Commission on Form 10-Q on August 14, 1998, which are
incorporated herein by reference.
(b) Reference is hereby made to the financial statements giving pro
forma effect of the Offer attached as Appendix A of Exhibit (a)(1) hereto, which
are incorporated herein by reference.
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Item 8. Additional Information.
- --------------------------------
(a) Reference is hereby made to Section 10, "Certain Information About the
Partnership" and Section 12, "Transactions and Arrangements Concerning
Interests," of the Offer which are incorporated herein by reference.
(b) None.
(c) Not applicable.
(d) None.
(e) Reference is hereby made to the Offer, the Letter of Transmittal and
related documents which are attached hereto as Exhibits (a)(1)-(a)(5) and are
incorporated herein by reference.
Item 9. Material to be Filed as Exhibits.
- ------------------------------------------
(a)(1) Form of Offer to Purchase dated September 30, 1998 (including
financial statements giving pro forma effect of the Offer).
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership.
(a)(4) Form of Letter to Limited Partners.
(a)(5) Substitute Form W-9 with Guidelines.
(b) Not applicable.
(c) Reference is hereby made to the Amended and Restated Agreement of
Limited Partnership of NTS-Properties III, dated as of September 23,
1982, previously filed with the Securities and Exchange Commission
as part of the Partnership's Registration Statement on Form S-11,
No.2-78152, filed with the Commission on June 25, 1982 and declared
effective on October 13, 1982.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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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.
Date: September 30, 1998 NTS-PROPERTIES III, a Georgia limited
partnership.
By:NTS - PROPERTIES ASSOCIATES,
General Partner
By:/s/ J.D. Nichols
-----------------------------------
J.D. Nichols,
Managing General Partner
ORIG, LLC,
a Kentucky limited liability company.
By:/s/ Richard L. Good
-----------------------------------
Richard L. Good,
Managing Member
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EXHIBITS
Exhibit
Number Description
------- -----------
(a)(1) Form of Offer to Purchase, dated September 30, 1998
(including financial statements giving pro forma effect of
the Offer).*
(a)(2) Form of Letter of Transmittal.*
(a)(3) Form of Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership.*
(a)(4) Form of Letter to Limited Partners.*
(a)(5) Substitute Form W-9 with Guidelines.*
(b) Not applicable.
(c) Reference is hereby made to the Amended and Restated
Agreement of Limited Partnership of NTS-Properties III,
dated September 23, 1982, as previously filed with the
Securities and Exchange Commission with the Partnership's
Registration Statement on Form S-11 No. 2-78152, declared
effective on October 13, 1982.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
*Filed herein.
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Exhibit (a)(1)
Form of Offer to Purchase, dated September 30, 1998
<PAGE>
Offer to Purchase for Cash
by
NTS-Properties III
and
ORIG, LLC
of Up to
1,000 Limited Partnership Interests
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, EASTERN STANDARD TIME, ON DECEMBER 29, 1998, UNLESS EXTENDED.
NTS-Properties III is a Georgia limited partnership (the "Partnership")
that owns certain commercial real estate properties. See Section 10, "Certain
Information About the Partnership." The Partnership's general partner,
NTS-Properties Associates (the "General Partner") owns a thirty-five percent
(35%) interest in the Partnership and the limited partners own, in the
aggregate, a sixty-five percent (65%) interest in the Partnership. The
Partnership and ORIG, LLC, a Kentucky limited liability company and an affiliate
of the Partnership (the "Affiliate" and the Partnership are each an "Offeror"
and collectively, the "Offerors"), are offering to purchase for cash upon the
terms and conditions set forth in this Offer to Purchase ("Offer to Purchase")
and the related Letter of Transmittal ("Letter of Transmittal," which together
with the Offer to Purchase constitutes the "Offer") in the aggregate up to 1,000
of the Partnership's limited partnership interests (the "Interests") at a price
equal to $250 per Interest (the "Purchase Price"). This Offer is being made to
all limited partners of the Partnership (the "Limited Partners") and is
generally not conditioned upon any minimum amount of Interests being tendered,
but is subject to certain conditions described herein.
Limited Partners tendering all or any portion of their Interests are
subject to certain risks including:
o The Purchase Price of $250 per Interest may not equate to the fair
market value or the liquidation value of the Interest and is less
than the book value per Interest.
o Neither the General Partner, on behalf of the Partnership, nor the
Affiliate has retained an independent third party to evaluate the
fairness of the Offer.
o Conflicts in establishing the Purchase Price exist between tendering
Limited Partners and the Partnership, the General Partner and
non-tendering Limited Partners.
o Negative tax consequences may exist for any Limited Partner tendering
its Interests.
o The General Partner makes no recommendation regarding whether Limited
Partners should tender or retain their Interests.
Limited Partners continuing to hold all or any portion of their Interests are
subject to certain risks including:
o The Partnership may not make future cash distributions to Limited
Partners.
o The percentage ownership of Interests held by persons controlling,
controlled by or under common control with the General Partner or its
affiliates will increase as a result of the Offer.
o The Partnership has no current plans to liquidate its assets and to
distribute the proceeds to its Limited Partners.
o General economic risks are associated with investments in real estate.
o The Partnership's financial condition may be adversely affected by a
downturn in the business of any tenant occupying a significant portion
of a Partnership property or a tenant's decision not to renew its
lease.
See "RISK FACTORS."
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THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF INTERESTS BEING
TENDERED; PROVIDED, HOWEVER, NO TENDER WILL BE ACCEPTED FROM A LIMITED PARTNER
IF, AS A RESULT OF THE TENDER, THE LIMITED PARTNER WOULD CONTINUE TO BE A
LIMITED PARTNER AND WOULD HOLD FEWER THAN FIVE (5) INTERESTS. THE OFFER IS
CONDITIONED UPON, AMONG OTHER THINGS, THE ABSENCE OF CERTAIN CONDITIONS
DESCRIBED IN SECTION 6, "CERTAIN CONDITIONS OF THE OFFER."
__________________________________
IMPORTANT
Any Limited Partner wishing to tender all or any portion of his, her or
its Interests should complete and sign the enclosed Letter of Transmittal in
accordance with the instructions in the Offer to Purchase and Letter of
Transmittal and deliver it together with the Certificate(s) of Ownership for the
Interests being tendered (or if the Certificate(s) of Ownership for the
Interests is (are) lost, stolen, misplaced or destroyed, the Affidavit and
Indemnification Agreement for Missing Certificate(s) of Ownership executed by
the Limited Partner attesting to such fact), the Substitute Form W-9 and any
other required documents to the Partnership. A Limited Partner having Interests
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact that broker, dealer, commercial bank, trust company
or other nominee if he, she or it desires to tender such Interests.
__________________________________
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or any other documents relating to
this Offer may be directed to NTS Investor Services c/o Gemisys at (800)
387-7454.
The date of this Offer to Purchase is September 30, 1998
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NEITHER THE OFFERORS NOR THE PARTNERSHIP'S GENERAL PARTNER MAKE ANY RE-
COMMENDATION TO ANY LIMITED PARTNER REGARDING WHETHER TO TENDER OR REFRAIN FROM
TENDERING INTERESTS. EACH LIMITED PARTNER MUST MAKE HIS, HER OR ITS OWN DECISION
REGARDING WHETHER TO TENDER INTERESTS, AND, IF SO, THE PORTION OF SUCH LIMITED
PARTNER'S INTERESTS TO TENDER.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE OFFERORS REGARDING WHETHER LIMITED PARTNERS SHOULD TENDER OR REFRAIN FROM
TENDERING INTERESTS PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. ANY RECOMMENDATION
OR INFORMATION, IF GIVEN OR MADE, MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE OFFERORS OR THE GENERAL PARTNER.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH
TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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TABLE OF CONTENTS
INTRODUCTION ..................................................................5
SUMMARY OF CERTAIN INFORMATION ................................................8
RISK FACTORS ..................................................................9
THE OFFER ....................................................................12
Section 1. Background and Purposes of the Offer ..........................12
Section 2. Offer to Purchase and Purchase Price; Proration; Expiration Date;
Determination of Purchase Price ...............................13
Section 3. Procedure for Tendering Interests .............................14
Section 4. Withdrawal Rights .............................................15
Section 5. Purchase of Interests; Payment of Purchase Price ..............16
Section 6. Certain Conditions of the Offer ...............................16
Section 7. Cash Distribution Policy ......................................19
Section 8. Effects of the Offer ..........................................19
Section 9. Source and Amount of Funds ....................................19
Section 10. Certain Information About the Partnership .....................20
Section 11. Certain Federal Income Tax Consequences .......................21
Section 12. Transactions and Arrangements Concerning Interests ............24
Section 13. Extensions of Tender Period; Terminations; Amendments .........24
Section 14. Fees and Expenses .............................................25
Section 15. Address; Miscellaneous ........................................25
Appendix A
The Partnership's Financial Statements Giving
Pro Forma Effect of the Offer ...........................................27
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To Holders of Limited Partnership
Interests of NTS-Properties III
INTRODUCTION
NTS-Properties III is a Georgia limited partnership (the "Partnership")
that owns certain commercial real estate properties. See Section 10, "Certain
Information About the Partnership." The Partnership's general partner,
NTS-Properties Associates (the "General Partner") owns a thirty-five percent
(35%) interest in the Partnership and the limited partners own, in the
aggregate, a sixty-five percent (65%) interest in the Partnership. The
Partnership and ORIG, LLC, a Kentucky limited liability company and an affiliate
of the Partnership (the "Affiliate") (the Partnership and the Affiliate are each
an "Offeror" and, collectively, the "Offerors"), hereby offer to purchase up to
1,000 of the Partnership's limited partnership interests (the "Interests") at a
purchase price of $250 per Interest (the "Purchase Price") in cash to the seller
upon the terms and subject to the conditions set forth in this "Offer to
Purchase" and in the related "Letter of Transmittal" (together the "Offer to
Purchase" and "Letters of Transmittal" constitute the "Offer"). (As used herein,
the term "Interest" or "Interests," as the context requires, refers to the
limited partnership interests in the Partnership and portions thereof that
constitute the class of equity security that is the subject of this Offer or the
limited partnership interests or portions thereof that are tendered by the
limited partner to the Offerors pursuant to the Offer.) This Offer is being made
to all limited partners in the Partnership (the "Limited Partners") and is
generally not conditioned upon any minimum amount of Interests being tendered,
except as described herein. The Interests are not traded on any established
trading market and are subject to certain restrictions on transferability set
forth in the Amended and Restated Agreement of Limited Partnership of
NTS-Properties III, dated September 23, 1982 (the "Partnership Agreement"). The
Partnership or the Affiliate, each in its sole discretion, may purchase more
than 500 Interests but neither has any current intention to do so.
The Purchase Price should not be viewed as equivalent to the fair
market value or the liquidation value of an Interest and is less than the book
value per Interest. As of June 30, 1998 and December 31, 1997, the book value of
each Interest was approximately $299.70 and $284.73, respectively. The Purchase
Price offered by the Offerors has been determined by the Partnership, in its
sole discretion, based on: (i) recent sales of Interests by Limited Partners to
third parties in secondary market transactions; (ii) recent repurchases of
interests by the Partnership; and (iii) recent purchases of Interests by the
Partnership's affiliate, Ocean Ridge Investments Ltd., a Florida limited
liability partnership. Neither the Offerors nor the General Partner has obtained
an opinion from an independent third party regarding the fairness of the
Purchase Price.
Subject to the conditions set forth in the Offer, the Partnership will
purchase the first 500 Interests which are tendered and received by the
Partnership by, and not withdrawn prior to, 12:00 Midnight, Eastern Standard
Time, on December 29, 1998, subject to any extension by the Offerors (the
"Expiration Date"). If more than 500 Interests are tendered, the Affiliate will
purchase up to an additional 500 Interests which are tendered and received by
the Partnership by, and not withdrawn prior to the Expiration Date. If, on the
Expiration Date the Offerors determine that more than 1,000 Interests have been
tendered during the Offer, each Offeror may either: (i) accept the additional
Interests permitted to be accepted pursuant to Rule 13e-4(f)(1) promulgated
under the Securities
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Exchange Act of 1934 ("Exchange Act"), as amended; or (ii) extend the Offer, if
necessary, and increase the amount of Interests that the Offeror is offering to
purchase to an amount that the Offeror believes to be sufficient to accommodate
the excess Interests tendered as well as any Interests tendered during the
extended Offer.
If the Offer is oversubscribed and the Offerors do not act in
accordance with (i) or (ii), above, or if the Offerors act in accordance with
(i) and (ii), above, but the Offer remains oversubscribed, then the Offerors
will accept Interests tendered prior to or on the Expiration Date for payment on
a pro rata basis. In the event of proration, the number of Interests purchased
from a Limited Partner will be equal to a fraction of the Interests tendered,
the numerator of which will be the total number of Interests the Offerors are
willing to purchase and the denominator of which will be the total number of
Interests properly tendered. Any fractional interests resulting from this
calculation will be rounded down to the nearest whole number. Fractions of
Interests will not be purchased. The Partnership will notify, in writing, all
Limited Partners from whom the Offerors will purchase fewer than the number of
Interests tendered by the Limited Partner. For any Interest tendered but not
purchased by the Offerors, a book entry will be made on the Partnership's books
to reflect the Limited Partner's ownership of the Interests not purchased. The
Partnership will not issue a new Certificate of Ownership for the Interests not
purchased by the Offerors, except upon written request of the Limited Partner.
The Offer is generally not conditioned upon any minimum number of
Interests being tendered. The Offer, however, is conditioned upon, among other
things, the absence of certain adverse conditions described in Section 6,
"Certain Conditions of the Offer." In particular, the Offer will not be
consummated, if in the opinion of the General Partner, there is a reasonable
likelihood that purchases under the Offer would result in termination of the
Partnership (as a partnership) under Section 708 of the Internal Revenue Code of
1986, as amended (the "Code"); or termination of the Partnership's status as a
partnership for federal income tax purposes under Section 7704 of the Code.
Further, the Offerors will not purchase Interests if the purchase of Interests
would result in Interests being owned by fewer than three hundred (300) holders
of record. See Section 6, "Certain Conditions of the Offer."
All purchases of Interests pursuant to the Offer will be effective as
of the Expiration Date. Each Limited Partner who tenders Interests pursuant to
the Offer will receive the Purchase Price and cash distributions declared prior
to the Expiration Date, if any. Limited Partners will not be entitled to receive
cash distributions declared and payable after the Expiration Date, if any, on
any Interests tendered and accepted by the Offerors.
The tender of an Interest will be treated as a sale of the Interest for
federal and most state income tax purposes which will result in the Limited
Partner recognizing gain or loss for income tax purposes. Limited Partners are
urged to review carefully all the information contained in or referred to in
this Offer including, without limitation, the information presented herein in
Section 11, "Certain Federal Income Tax Consequences."
As of September 10, 1998, the General Partner owned five (5) of the
Partnership's outstanding Interests. All partners, members, affiliates and
associates of the General Partner or the Affiliate beneficially owned, or were
in the process of acquiring, in the aggregate, 583 Interests,
6
<PAGE>
representing approximately 4.2% of the Partnership's 13,770 outstanding
Interests. Although the Offer is being made to all Limited Partners, the
Partnership has been advised that none of the partners, members, affiliates or
associates of the General Partner or the Affiliate intend to tender any
Interests pursuant to the Offer. Assuming the Offer is fully subscribed, the
General Partner, the Affiliate and partners, members, affiliates and associates
of the General Partner or the Affiliate, will own, after the Offer, in the
aggregate, 1,083 Interests representing approximately 8.2% of the Partnership's
outstanding Interests.
7
<PAGE>
SUMMARY OF CERTAIN INFORMATION
------------------------------
The following is a summary of certain information contained elsewhere
in this Offer. The summary does not purport to be complete and is qualified in
its entirety by reference to the more detailed information contained elsewhere
in this Offer and related documents. Capitalized terms used but not defined in
this summary are defined elsewhere in this Offer. Limited Partners are urged to
read all documents constituting this Offer in their entirety.
Offerors The Partnership, a Georgia limited partnership,
and its Affiliate, a Kentucky limited liability
company, invite all of the Partnership's Limited
Partners to tender their Interests upon the
terms and subject to the conditions set forth in
this Offer.
Purchase Price $250 per Interest in cash.
Expiration Date The Offer expires on December 29, 1998 at 12:00
Midnight, Eastern Standard Time unless the Offer
is otherwise extended by the Offerors in accor-
dance with the provisions set forth herein. ALL
INTERESTS BEING TENDERED MUST BE RECEIVED BY THE
PARTNERSHIP AT THE ADDRESS SET FORTH IN SECTION
15, "ADDRESS; MISCELLANEOUS," ON OR BEFORE THE
EXPIRATION DATE.
Offer Conditions The Offerors will purchase in the aggregate up
to 1,000 Interests. The first 500 Interests
tendered will be purchased by the Partnership;
up to an additional 500 Interests tendered will
be purchased by the Affiliate. If the Offer is
oversubscribed, first the Partnership may pur-
chase additional Interests and then the
Affiliate may purchase additional Interests,
each in its sole discretion. If the Offer
remains oversubscribed, Interests will be
purchased on a pro rata basis. This Offer is
being made to all Limited Partners and is not
conditioned upon a minimum amount of Interests
being tendered; provided, however, no tender
will be accepted from a Limited Partner if, as a
result of the tender, the Limited Partner would
continue to be a Limited Partner and would hold
fewer than five (5) Interests. The Offer is sub-
ject to certain terms and conditions set forth
in the Offer.
8
<PAGE>
RISK FACTORS
------------
Limited Partners Tendering All or Any Portion of Their Interests Are Subject
----------------------------------------------------------------------------
to Certain Risks:
- -----------------
Purchase Price May Be Less Than Fair Market Value and Liquidation
----------------------------------------------------------------------
Value and is Less Than the Book Value. The Interests are not traded on a
- -----------------------------------------
recognized stock exchange or trading market and a readily identifiable, liquid
market for the Interests does not exist. The Offerors are aware of certain
secondary market transactions by which Interests were transferred at prices
ranging from $222.50 to $260 per Interest (these prices reflect those paid by
third party buyers and include commissions and other mark-ups) by Limited
Partners to third parties during the period from January 1, 1997 to April 30,
1998. Additionally, the Partnership and its affiliate, Ocean Ridge Investments
Ltd., a Florida limited liability partnership, have purchased 2,346 Interests
during the period from March 1, 1995 to September 10, 1998 at prices ranging
from $105 to $250 per Interest. As of June 30, 1998 and December 31, 1997, the
book value of each Interest was approximately $299.70 and $284.73, respectively.
Neither these secondary market transactions nor the Purchase Price necessarily
reflects the value that Limited Partners would realize from holding the
Interests until termination or liquidation of the Partnership which could result
in greater or lesser value. The Offerors have not obtained an opinion from an
independent third party regarding the fairness of the Purchase Price.
Furthermore, the Offerors did not obtain an appraisal of the Partnership's
assets in establishing the Purchase Price.
Negative Tax Consequences May Exist for Any Limited Partner Tendering
-----------------------------------------------------------------------
Interests. Limited Partners tendering and selling Interests pursuant to this
- ----------
Offer generally will recognize a gain or loss on the tender of his, her or its
Interests for federal and most state income tax purposes. The amount of gain or
loss realized will be, in general, the excess of the Purchase Price minus the
Limited Partner's adjusted tax basis in the Interests sold. Generally, the sale
of Interests held by a Limited Partner for more than twelve (12) months will
result in long-term capital gain or loss. Due to the complexity of tax issues,
Limited Partners are advised to consult their tax advisors with respect to their
individual tax situations before tendering their Interests pursuant to the
Offer. See Section 11, "Certain Federal Income Tax Consequences."
Conflict of Interest. A conflict of interest exists between Limited
---------------------
Partners who are tendering their Interests and the Partnership, the General
Partner and non-tendering Limited Partners. Tendering Limited Partners would
prefer a higher Purchase Price; the Partnership, the General Partner and
non-tendering Limited Partners would prefer a lower Purchase Price.
General Partner Makes No Recommendation to Limited Partners. The
------------------------------------------------------------------
General Partner makes no recommendation regarding whether Limited Partners
should tender or retain their Interests. Limited Partners should make their own
decisions regarding whether to tender their Interests based upon their own
individual situation.
9
<PAGE>
Limited Partners Who Do Not Tender All or Any Portion of their
-----------------------------------------------------------------------
Interests are Subject to Certain Risks:
- ---------------------------------------
The Partnership May Not Make Future Cash Distributions. The amount of
--------------------------------------------------------
funds required by the Partnership to fund the Offer is estimated to be
approximately $142,500 ($125,000 to purchase 500 Interests plus approximately
$17,500 for its proportionate share of the expenses associated with
administering the Offer; the expenses of the Offer will be apportioned between
the Offerors based on the number of Interests purchased by each Offeror). The
Partnership intends to fund these monies from its cash reserves. The use of the
Partnership's cash reserves to fund the Offer will have the effect of: (i)
reducing the existing cash available for future needs or contingencies and (ii)
reducing or eliminating the interest income that the Partnership earns on its
cash reserves. There can be no assurance that the Partnership will be able to
fund its future needs or contingencies, which may have a material adverse effect
on the Partnership's business or financial condition.
Increased Voting Control by Affiliates of the Partnership. If the Offer
----------------------------------------------------------
is fully subscribed, the percentage ownership of Interests held by persons
controlling, controlled by or under common control with the Partnership will
increase. As of September 17, 1998, the General Partner owned five (5) of the
Partnership's outstanding Interests. All partners, members, affiliates and
associates of the General Partner or the Affiliate beneficially owned, or were
in the process of acquiring, in the aggregate, 583 Interests, representing
approximately 4.2% of the outstanding Interests. Although this Offer is being
made to all Limited Partners, the Partnership has been advised that none of the
partners, members, affiliates or associates of the General Partner or the
Affiliate intend to tender any Interests pursuant to the Offer. Assuming the
Offer is fully subscribed, the General Partner, the Affiliate, partners,
members, affiliates and associates of the General Partner or the Affiliate, will
own, after the Offer, in the aggregate, 1,083 Interests representing
approximately 8.2% of the outstanding Interests, an increase of 4.0%. In
addition, other persons controlling, controlled by or under common control with
the Partnership, by virtue of the decreased number of outstanding Interests,
will have a greater percentage of the outstanding Interests. The increase in
ownership of Interests will enable these entities or individuals to have a
greater influence on certain matters voted on by Limited Partners including
removal of the General Partner and termination of the Partnership.
Partnership Has No Currents Plans to Liquidate. The Partnership has no
-------------------------------------------------
current plan to liquidate its assets and to distribute the proceeds to its
Limited Partners nor does the Partnership contemplate resuming distributions to
the Limited Partners. Therefore, Limited Partners who do not tender their
Interests may not be able to realize any return on or of their investment in the
foreseeable future.
Reliance on Certain Tenants. The Partnership's financial condition and
----------------------------
ability to fund future cash needs including its ability to make future cash
distributions, if any, may be adversely affected by the bankruptcy, insolvency
or a downturn in business of any tenant occupying a significant portion of any
Partnership property or by a tenant's decision not to renew its lease. The
Partnership has received notice from Aetna Life Insurance Partnership ("Aetna"),
the largest tenant of Plainview Triad North ("Plainview"), that it will
gradually vacate the property. Aetna occupies sixty-five percent (65%) of
Plainview and accounts for approximately twenty-two percent (22%) of the
Partnership's total revenue. Aetna will vacate approximately 52,000 square feet
of its original 63,000 square foot space by September 30, 1998. Aetna will
occupy the remaining 11,000 square
10
<PAGE>
feet through March 31, 1999. There can be no assurance that the space will be
retenanted in a timely manner on terms and conditions acceptable to the
Partnership, if at all. It is estimated that the Partnership will incur expenses
estimated at $2.0-2.5 million to refurbish the premises for another tenant. The
Partnership may borrow all or a portion of the Funds necessary to complete this
refurbishment. Failure to re-lease the space vacated by Aetna on a timely-basis
and on terms and conditions acceptable to the Partnership could have a material
adverse effect on the Partnership's results of operation and financial
condition.
General Economic Risks Associated with Investments in Real Estate. All
------------------------------------------------------------------
real property investments are subject to some degree of risk. Generally, equity
investments in real estate are illiquid and, therefore, the Partnership's
ability to promptly vary its portfolio in response to changing economic,
financial and investment conditions is limited. Real estate investments are also
subject to changes in economic conditions as well as other factors affecting
real estate values, including: (i) possible federal, state or local regulations
and controls affecting rents, prices of goods, fuel and energy consumption and
prices, water and environmental restrictions; (ii) increased labor and material
costs; and (iii) the attractiveness of the property to tenants in the
neighborhood. For a detailed discussion of the risks associated with investment
in real estate, refer to the "Risk Factors" set forth in the Partnership's
prospectus dated October 13, 1982.
11
<PAGE>
THE OFFER
Section 1. Background and Purposes of the Offer. The purpose of the
Offer is to provide Limited Partners who desire to liquidate their investment in
the Partnership with a method for doing so. With the exception of isolated
transactions, no established secondary trading market for the Interests exists
and pursuant to the Partnership Agreement, transfers of Interests are subject to
certain restrictions including the prior approval of the General Partner. The
General Partner believes that there are certain Limited Partners who desire
immediate liquidity while other Limited Partners may not need or desire
liquidity and would prefer the opportunity to retain their Interests. The
General Partner believes that the Limited Partners should be entitled to make a
choice between immediate liquidity and continued ownership and, thus, believes
that the Offer being made hereby accommodates the differing goals of both groups
of Limited Partners. Those Limited Partners who tender their Interests pursuant
to the Offer are, in effect, exchanging certainty and liquidity for the
potentially higher return of continued ownership of their Interests. The
continued ownership of Interests, however, entails the risk of loss of all or a
portion of the Limited Partner's investment. See "Risk Factors."
Neither the Offerors nor the General Partner has any current plans or
proposals that relate to or would result in: (i) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Partnership; (ii) a sale or transfer of a material amount of assets of the
Partnership; (iii) any change in the identity of the General Partner or in the
management of the Partnership, including, but not limited to, any plans or
proposals to change the number or term of the General Partner(s), to fill any
existing vacancy for the General Partner, or to change any material term of the
management agreement between the General Partner and the Partnership; (iv) any
material change in the present distribution policy, indebtedness or
capitalization of the Partnership (other than borrowings that the Partnership
may undertake to fund the expected $2.0 - $2.5 million refurbishment of the
Partnership's Plainview property for a new tenant once this property is vacated
by the current tenant, Aetna. See Section 10, "Certain Information About the
Partnership"); (v) any other material change in the structure or business of the
Partnership; or (vi) any change in the Partnership Agreement or other actions
that may impede the acquisition of control of the Partnership by any person. The
General Partner, however, may explore and pursue any of these options in the
future.
The purchase of Interests pursuant to the Offer will have the effect
of increasing the proportionate interest in the Partnership of Limited Partners
(including the affiliates of the General Partner that own interests) who do not
tender their Interests or tender only a portion of their Interests. Limited
Partners retaining their Interests may be subject to increased risks including
but not limited to: (1) reduction in the Partnership's cash reserves, which may
impact the Partnership's ability to fund its future cash requirements, thus
having a material adverse effect on the Partnership's financial condition; and
(2) increased voting control by the affiliates of the General Partner (including
the Affiliate) and members of the affiliates. See "Risk Factors." Interests that
are tendered to the Partnership in connection with this Offer will be retired,
although the Partnership may issue new interests from time to time in compliance
with the federal and state securities laws or any exemptions therefrom.
Interests purchased by the Affiliate will be held by the Affiliate. Neither the
Partnership nor the General Partner has plans to offer for sale any other
additional interests, but each reserves the right to do so in the future.
The General Partner intends to consider the desirability of the
Partnership making future tender offers to purchase interests following
completion of the Offer, but is not required to make any
12
<PAGE>
future offers. Although the Partnership and its affiliates have from time to
time purchased interests, this is the first tender offer made by the Partnership
or the Affiliate for interests. See Section 2, "Offer to Purchase and Purchase
Price; Expiration Date; Determination of Purchase Price."
Section 2. Offer to Purchase and Purchase Price; Proration; Expiration
Date; Determination of Purchase Price.
Offer to Purchase and Purchase Price. The Offerors will, upon the terms
------------------------------------- and subject to the conditions of the
Offer, described below, purchase in the aggregate up to 1,000 Interests that are
properly tendered by, and not withdrawn prior to, the Expiration Date at a price
equal to $250 per Interest; provided however, that no tender will be accepted
from a Limited Partner if, as a result of the tender, the Limited Partner would
continue to be a Limited Partner and would hold fewer than five (5) Interests.
The Partnership will purchase the first 500 Interests which are tendered and
received by the Partnership by, and not withdrawn prior to, the Expiration Date.
If more than 500 Interests are tendered and received by the Partnership as a
result of this Offer, the Affiliate will purchase up to an additional 500
Interests which are tendered by and not withdrawn prior to the Expiration Date.
If, on the Expiration Date the Offerors determine that more than 1,000
Interests have been tendered during the Offer, each Offeror may either: (i)
accept the additional Interests permitted to be accepted pursuant to Rule
13e-4(f)(1) promulgated under the Exchange Act, as amended; or (ii) extend the
Offer, if necessary, and increase the amount of Interests that the Offeror is
offering to purchase to an amount that the Offeror believes to be sufficient to
accommodate the excess Interests tendered as well as any Interests tendered
during the extended Offer.
Proration. If the Offer is oversubscribed and the Offerors do not act
----------
in accordance with (i) or (ii), above, or if the Offerors act in accordance with
(i) and (ii), above, but the Offer remains oversubscribed, then the Offerors
will accept Interests tendered prior to or on the Expiration Date for payment on
a pro rata basis ("Proration"). In the event of Proration, the number of
Interests purchased from a Limited Partner will be equal to a fraction of the
Interests tendered, the numerator of which will be the total number of Interests
the Offerors are willing to purchase and the denominator of which will be the
total number of Interests properly tendered. Any fractional interests resulting
from this calculation will be rounded down to the nearest whole number.
Fractions of Interests will not be purchased. The Partnership will notify, in
writing, all Limited Partners from whom the Offerors will purchase fewer than
the number of Interests tendered by the Limited Partner. For any Interest
tendered but not purchased by the Offerors, a book entry will be made on the
Partnership's books to reflect the Limited Partner's ownership of the Interests
not purchased. The Partnership will not issue a new Certificate of Ownership for
Interests not purchased by the Offerors, except upon written request of the
Limited Partner.
THIS OFFER IS NOT CONDITIONED UPON ANY MINIMUM AMOUNT OF INTERESTS
BEING TENDERED; PROVIDED, HOWEVER, NO TENDER WILL BE ACCEPTED FROM A LIMITED
PARTNER IF, AS A RESULT OF THE TENDER, THE LIMITED PARTNER WOULD CONTINUE TO BE
A LIMITED PARTNER AND WOULD HOLD FEWER THAN FIVE (5) INTERESTS.
13
<PAGE>
Expiration Date. The term "Expiration Date" means 12:00 Midnight,
-----------------
Eastern Standard Time, on December 29, 1998, unless and until the Offerors
extend the period of time for which the Offer is open, in which event
"Expiration Date" will mean the latest time and date at which the Offer, as
extended by the Offerors, expires. The Partnership may extend the Offer, in its
sole discretion, by providing the Limited Partners with written notice of the
extension; provided, however, that if the Offer is oversubscribed, the
Partnership or the Affiliate may, each in its sole discretion, extend the Offer
by providing the Limited Partners with written notice of the extension. For a
description of how the Offer may be extended or terminated, see Section 13,
"Extensions of Tender Period; Terminations; Amendments."
Determination of Purchase Price. The Purchase Price represents the
-----------------------------------
price at which the Offerors are willing to purchase Interests. No Limited
Partner approval is required or was sought regarding the determination of the
Purchase Price. No special committee of the Partnership, the Affiliate or the
Limited Partners has approved this Offer and no special committee or independent
person has been retained to act on behalf of the Partnership or the Affiliate.
Neither the Offerors nor the General Partner has obtained an opinion from an
independent third party regarding the fairness of the Purchase Price.
The Purchase Price offered by the Offerors was determined by the
Partnership in its sole discretion based on: (i) the value of recent sales of
Interests from Limited Partners to third parties in secondary market
transactions; (ii) the value of recent repurchases of interests by the
Partnership; and (iii) the value of recent purchases of Interests by the
Partnership's affiliate. The General Partner is aware of certain sales of
Interests made at prices ranging from $222.50 to $260 per Interest (these prices
reflect those paid by third party buyers and include commissions and other
mark-ups) by certain Limited Partners to third parties during the period from
January 1, 1997 to April 30, 1998. The Partnership and its affiliate, Ocean
Ridge Investments Ltd., a Florida limited liability partnership, have also
purchased Interests in secondary market transactions at prices ranging from $105
to $250 per Interest during the period from March 1, 1995 to September 17, 1998.
The information regarding transactions between Limited Partners and third
parties is based on the General Partner's knowledge and may not reflect all
transactions that have taken place during the time periods set forth above. As
of June 30, 1998 and December 31, 1997, the book value of each Interest was
approximately $299.70 and $284.73, respectively.
In determining the Purchase Price, the Partnership did not consider the
liquidation value or book value per Interest and did not appraise the value of
its assets.
Section 3. Procedure for Tendering Interests. Limited Partners that
wish to tender Interests pursuant to this Offer must submit a properly completed
and duly executed Letter of Transmittal and Substitute Form W-9, together with
the Certificate(s) of Ownership for the Interests being tendered or if the
Certificate(s) of Ownership for the Interests is (are) lost, stolen, misplaced
or destroyed, the Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership executed by the Limited Partner attesting to such
fact (the "Affidavit"), and any other required documents to NTS Investor
Services c/o Gemisys at the address listed in Section 15, "Address;
Miscellaneous." THE LETTER OF TRANSMITTAL, SUBSTITUTE FORM W-9, AND
CERTIFICATE(S) OF OWNERSHIP FOR THE INTERESTS BEING TENDERED (OR AFFIDAVIT, IF
APPLICABLE) AND ANY OTHER REQUIRED DOCUMENTS MUST BE
14
<PAGE>
RECEIVED BY THE PARTNERSHIP ON OR BEFORE THE EXPIRATION DATE. NEITHER THE
PARTNERSHIP NOR THE AFFILIATE WILL ACCEPT INTERESTS RECEIVED BY THE PARTNERSHIP
AFTER THE EXPIRATION DATE.
Method of Delivery. LIMITED PARTNERS ASSUME ANY RISK ASSOCIATED WITH
-------------------
THE METHOD FOR DELIVERING THE LETTER OF TRANSMITTAL, SUBSTITUTE FORM W-9 AND
CERTIFICATE(S) OF OWNERSHIP FOR THE INTERESTS (OR THE AFFIDAVIT). THE
PARTNERSHIP RECOMMENDS THAT LIMITED PARTNERS SUBMIT ALL DOCUMENTS VIA REGISTERED
MAIL RETURN RECEIPT REQUESTED AND PROPERLY INSURED OR BY AN OVERNIGHT COURIER
SERVICE. LIMITED PARTNERS MAY CONFIRM RECEIPT OF A LETTER OF TRANSMITTAL BY
CONTACTING NTS INVESTOR SERVICES C/O GEMISYS AT THE ADDRESS AND TELEPHONE NUMBER
LISTED IN SECTION 15, "ADDRESS; MISCELLANEOUS."
Determination of Validity. All questions regarding the validity, form,
--------------------------
eligibility (including time of receipt) and acceptance for payment of any
Interests will be determined by the Partnership, in its sole discretion.
Notwithstanding the foregoing, if the Offer is oversubscribed, the Partnership
and the Affiliate may each decide to purchase Interests in excess of the initial
1,000 Interests. In that case, all questions regarding the validity, form or
eligibility (including time of receipt) and acceptance for payment of any
additional Interests purchased by either the Partnership or the Affiliate will
be determined by each respective party in its sole discretion. Each
determination, whether made by the Partnership or the Affiliate, will be final
and binding. The Partnership or the Affiliate, if applicable, has the absolute
right to waive any of the conditions of the Offer or any defect or irregularity
in any tender, or in the related transmittal documents. Unless waived, any
defects or irregularities must be cured within the time period established by
the Partnership or the Affiliate. In any event, tenders will not be deemed to
have been made until all defects or irregularities have been cured or waived.
The Offerors are neither under any duty nor will they incur any liability for
failure to notify any tendering Limited Partner of any defects, irregularities
or rejections contained in the tenders.
Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Rule 14e-4 promulgated thereunder require that a person tendering
Interests on his, her or its behalf, must own the Interests tendered. Section
10(b) and Rule 14e-4 provide a similar restriction applicable to the tender or
guarantee of a tender on behalf of another person. The tender of Interests
pursuant to any of the procedures described herein constitutes acceptance by the
tendering Limited Partner of the terms and conditions of the Offer including a
representation and warranty that (i) the tendering Limited Partner owns the
Interests being tendered within the meaning of Rule 14e-4; and (ii) the tender
complies with Rule 14e-4.
Section 4. Withdrawal Rights. Any Limited Partner tendering Interests
pursuant to this Offer may withdraw the tender at any time prior to the
Expiration Date. For a withdrawal to be effective, it must be in writing and
received by NTS Investor Services c/o Gemisys via mail or facsimile at the
address or facsimile number set forth in the Section 15, "Address;
Miscellaneous" on or before the Expiration Date. Any notice of withdrawal must
specify the name of the person withdrawing the tender and the amount of
Interests previously tendered that are being withdrawn.
15
<PAGE>
All questions as to form and validity of the notice of withdrawal will
be determined by the Partnership, in its sole discretion. If the Offer is
oversubscribed, all questions as to form and validity of the notice of
withdrawal will be determined by the Partnership or the Affiliate, each in its
sole discretion, for any Interests purchased by the Partnership or the Affiliate
in excess of the initial 1,000 Interests. All determinations made by the
Partnership or the Affiliate will be final and binding. Interests properly
withdrawn will not thereafter be deemed to be tendered for purposes of the
Offer. However, withdrawn Interests may be retendered by following the
procedures set forth in Section 3, "Procedure for Tendering of Interests" prior
to the Expiration Date. Tenders made pursuant to the Offer which are not
otherwise withdrawn in accordance with this Section 4, "Withdrawal Rights," will
be irrevocable.
Section 5. Purchase of Interests; Payment of Purchase Price. Upon the
terms and subject to the conditions of the Offer, the Offerors will pay $250 per
Interest to each Limited Partner properly tendering its Interests. The Purchase
Price will be paid in the form of a check from the purchasing Offeror to each
Limited Partner. All monies due to each Limited Partner will be delivered to the
Limited Partner by first class U.S. Mail deposited in the mailbox within five
(5) business days after the Expiration Date. Under no circumstances will
interest be paid on the Purchase Price to be paid by the Offerors for Interests
tendered, regardless of any extension of the Offer or any delay in making
payment. In the event of Proration as set forth in Section 2, "Offer to Purchase
and Purchase Price; Proration; Expiration Date; Determination of Purchase
Price," the Offerors may not be able to determine the proration factor and pay
for those Interests which have been accepted for payment, and for which payment
is otherwise due, until approximately five (5) business days after the
Expiration Date.
Interests will be deemed purchased at the time of acceptance by the
Offerors but in no event earlier than the Expiration Date. Interests purchased
by the Partnership will be retired, although the Partnership may issue new
interests from time to time in compliance with the registration requirements of
federal and state securities laws or exemptions therefrom.
Interests purchased by the Affiliate will be held by the Affiliate.
Neither the Partnership nor the General Partner has plans to offer for sale any
other additional interests, but each reserves the right to do so in the future.
Section 6. Certain Conditions of the Offer.
Notwithstanding any other provision of this Offer, the Offerors will
not be required to purchase or pay for any Interests tendered and may terminate
the Offer as provided in Section 13, "Extensions of Tender Period; Terminations;
Amendments" or may postpone the purchase of, or payment for, Interests tendered
if any of the following events occur prior to the Expiration Date:
(a) there is a reasonable likelihood that consummation of the
Offer would result in the termination of the Partnership (as a
partnership) under Section 708 of the Code;
(b) there is a reasonable likelihood that consummation of the
Offer would result in termination of the Partnership's status as a
partnership for federal income tax purposes under Section 7704 of the
Code;
16
<PAGE>
(c) as a result of the Offer, there would be fewer than three
hundred (300) holders of record, pursuant to Rule 13e-3 promulgated under the
Exchange Act;
(d) there shall have been instituted or threatened or shall be
pending any action or proceeding before or by any court or
governmental, regulatory or administrative agency or instrumentality,
or by any other person, which: (i) challenges the making of the Offer
or the acquisition by the Partnership or the Affiliate of Interests
pursuant to the Offer or otherwise directly or indirectly relates to
the Offer; or (ii) in the Partnership's sole judgment (determined
within five (5) business days prior to the Expiration Date), could
materially affect the business, condition (financial or other), income,
operations or prospects of the Partnership, taken as a whole, or
otherwise materially impair in any way the contemplated future conduct
of the business of the Partnership or materially impair the Offer's
contemplated benefits to the Partnership;
(e) there shall have been any action threatened or taken, or
approval withheld, or any statute, rule or regulation proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Partnership or the Affiliate, by any
government or governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, which, in the Offerors' sole
judgment, would or might directly or indirectly:
(i) delay or restrict the ability of the Partnership
or the Affiliate, or render the Partnership or the Affiliate
unable, to accept for payment or pay for some or all of the
Interests;
(ii) materially affect the business, condition (financial
or other), income, operations, or prospects of the Partnership
or the Affiliate, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the
business of the Partnership or the Affiliate;
(f) there shall have occurred:
(i) the declaration of any banking moratorium or
suspension of payment in respect of banks in the United
States;
(ii) any general suspension of trading in, or
limitation on prices for, securities on any United States
national securities exchange or in the over-the-counter
market;
(iii) the commencement of war, armed hostilities or
any other national or international crises directly or
indirectly involving the United States;
(iv) any limitation (whether or not mandatory)
by any governmental, regulatory or administrative agency or
authority on, or any event which, in the Offerors' sole
judgment, might affect, the extension of credit by banks or
other lending institutions in the United States;
17
<PAGE>
(v) (A) any significant change, in the Offerors' sole
judgment, in the general level of market prices of equity
securities or securities convertible into or exchangeable for
equity securities in the United States or abroad or (B) any
change in the general political, market, economic, or
financial conditions in the United States or abroad that (1)
could have a material adverse effect on the business condition
(financial or other), income, operations or prospects of the
Partnership, or (2) in the sole judgment of the Offerors,
makes it inadvisable to proceed with the Offer; or
(vi) in the case of the foregoing existing at the
time of the commencement of the Offer, in the Offerors' sole
judgment, a material acceleration or worsening thereof;
(g) any change shall occur or be threatened in the business,
condition (financial or otherwise), or operations of the Partnership,
that, in the Partnership's sole judgment, is or may be material to the
Partnership;
(h) a tender or exchange offer for any or all of the Interests
of the Partnership, or any merger, business combination or other
similar transaction with or involving the Partnership, shall have been
proposed, announced or made by any person;
(i) (i) any entity, "group" (as that term is used in Section
13(d)(3) of the Exchange Act) or person (other than entities, groups or
persons, if any, who have filed with the Commission on or before
September 30, 1998 a Schedule 13G or a Schedule 13D with respect to
any of the Interests) shall have acquired or proposed to acquire
beneficial ownership of more than 5% of the outstanding Interests; or
(ii) such entity, group, or person that has publicly disclosed any such
beneficial ownership of more than 5% of the Interests prior to such
date shall have acquired, or proposed to acquire, beneficial ownership
of additional Interests constituting more than 2% of the outstanding
Interests or shall have been granted any option or right to acquire
beneficial ownership of more than 2% of the outstanding Interests; or
(iii) any person or group shall have filed a Notification and Report
Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or
made a public announcement reflecting an intent to acquire the
Partnership or its assets; or
(j) the General Partner determines that it is not in best
interest of the Partnership to purchase Interests pursuant to the
Offer;
which, in the sole judgment of the Offerors, in any such case and regardless of
the circumstances (including any action of the Partnership or the Affiliate)
giving rise to such event, makes it inadvisable to proceed with the Offer or
with such purchase or payment. The foregoing conditions are for the sole benefit
of the Partnership and the Affiliate and may be asserted by the Partnership or
the Affiliate on their respective behalf regardless of the circumstances giving
rise to any such condition (including any action or inaction by the Partnership
or the Affiliate) or may be waived by the Partnership or the Affiliate in whole
or in part. The Offerors' failure at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by the Partnership or the Affiliate concerning the
events described in this Section 6,
18
<PAGE>
"Certain Conditions of the Offer" shall befinal and binding on all parties. As
of the date hereof, the Offerors believe that neither paragraph (a) nor
paragraph (b) of this Section 6, "Certain Conditions of the Offer" will prohibit
the consummation of the Offer.
Section 7. Cash Distribution Policy.
The Partnership commenced operations in October, 1982 and anticipated
providing Limited Partners with 10% non-cumulative distributions. Distributions
were suspended effective December 31, 1996. Although the Partnership is not
obligated to make future cash distributions, it may do so in the future. Limited
Partners that tender the Interests pursuant to the Offer will not be entitled to
receive any cash distributions made, if any, after the Expiration Date, on any
Interests which are tendered and accepted by the Offerors. There can be no
assurance that the Partnership will make any distributions in the future to
Limited Partners who continue to own Interests following completion of the
Offer.
Section 8. Effects of the Offer.
In addition to the effects of the Offer on tendering and non-tendering
Limited Partners and upon the General Partner as set forth in the "Risk Factors"
of this Offer to Purchase, the Offer will affect the Partnership in several
other respects:
The Partnership will use some or all of its existing cash reserves to
purchase Interests. The use of the Partnership's cash reserve will have the
effect of: (i) reducing the cash available to fund future needs and
contingencies and (ii) reducing or eliminating the Partnership's present
interest income earned on such cash reserves. Financial statements giving pro
forma effect of the Offer, assuming the purchase by the Partnership of 500
Interests at $250 per Interest, are attached hereto as Appendix A.
Upon completion of the Offer, the Offerors may consider purchasing any
interests not purchased in the Offer. Any such purchases may be on the same
terms or on terms which are more or less favorable to Limited Partners than the
terms of this Offer. Rule 13e-4 promulgated under the Exchange Act prohibits the
Offerors from purchasing any Interests, other than pursuant to the Offer, until
at least ten (10) business days after the Expiration Date. Any possible future
purchases by the Partnership will depend on many factors, including but not
limited to, the market price of Interests, the results of the Offer, the
Partnership's business and financial position and general economic market
conditions.
Section 9. Source and Amount of Funds. The total amount of funds
required to complete this Offer is approximately $285,000 (including $250,000 to
purchase 1,000 Interests plus approximately $35,000 for expenses related to
administering the Offer). The Partnership expects to fund monies required to
complete its purchases and to pay its portion of expenses (approximately
$125,000 to purchase 500 Interests and approximately $17,500 for its
proportionate share of expenses related to administering the Offer; the expenses
of the Offer will be apportioned between the Offerors based on the number of
Interests purchased by each Offeror) from its cash reserves. As of December 31,
1997 and June 30, 1998 the Partnership had unrestricted cash and cash
equivalents equal to $266,940 and $266,352, respectively. If the Offer is
oversubscribed and the Partnership, in
19
<PAGE>
its sole discretion, decides to purchase Interests in excess of 500 Interests,
the Partnership will fund these additional purchases and expenses, if any, from
its cash reserves.
The Affiliate expects to fund monies required to complete its purchases
and to pay its portion of expenses (approximately $125,000 to purchase 500
Interests and approximately $17,500 for its proportionate share of expenses
related to administering the Offer; the expenses of the Offer will be
apportioned between the Offerors based on the number of Interests purchased by
each Offeror) from cash contributions to be made to the Affiliate by its
members. If the Offer is oversubscribed and the Affiliate, in its sole
discretion, decides to purchase Interests in excess of 500 Interests, the
Affiliate will fund these additional purchases and expenses, if any, from these
cash contributions.
Section 10. Certain Information About the Partnership
Certain Information About the Partnership.
- ------------------------------------------
The Partnership was formed in September, 1982 under the laws of the
State of Georgia. The general partner is NTS-Properties Associates, a Georgia
limited partnership. NTS-Properties Associates owns a thirty-five percent (35%)
interest in the Partnership and the limited partners own, in the aggregate, a
sixty-five percent (65%) interest in the Partnership. The Partnership owns the
following properties:
- Peachtree Corporate Center, a business park with approximately
191,357 rentable square feet located in Norcross, Georgia, a
suburb of Atlanta. The acquisition was completed on January
26, 1983. As of June 30, 1998, the Peachtree Center was 86%
occupied.
- Plainview Plaza II, an office complex with approximately
115,014 rentable square feet located in Jeffersontown,
Kentucky, a suburb of Louisville. The acquisition was
completed on January 26, 1983. As of June 30, 1998, Plainview
Plaza II was 100% occupied.
- Plainview Triad North, an office complex with approximately
89,632 rentable square feet located in Jeffersontown, Kentucky
The acquisition was completed on February 15, 1983. As of June
30, 1998, Plainview Triad North was 91% occupied.
The Partnership has received notice from Aetna Life Insurance
Partnership ("Aetna"), the largest tenant of Plainview Triad North
("Plainview"), that it will gradually vacate the property. Aetna will vacate
approximately 53,000 square feet of its original 63,000 square foot space by
September 30, 1998. Aetna will occupy the remaining 11,000 square feet until
March 31, 1999. Aetna occupies sixty-five percent (65%) of Plainview and
accounts for approximately 22% of the Partnership's total revenue. There can be
no assurance that the space will be retenanted in a timely manner on terms and
conditions acceptable to the Partnership, if at all. It is estimated that the
Partnership will incur expenses estimated at $2.0-2.5 million to refurbish the
premises for another tenant. The Partnership may borrow all or a portion of the
funds necessary to complete this refurbishment.
20
<PAGE>
On April 1, 1998, the Partnership obtained financing from an insurance
company in the amount of approximately $6,800,000. The loan bears interest at a
fixed rate of 6.89% and is secured by a first mortgage on Plainview Plaza II.
Principal will be paid over 17 years, with monthly payments of principal and
interest totaling approximately $56,650. The proceeds of the mortgage were used
to pay off the $2,214,251 and $4,500,000 mortgages payable outstanding at March
31, 1998 and to pay loan closing costs. As of June 30, 1998, the outstanding
balance of the loan was approximately $6,764,652. The loan is the only
indebtedness secured by any Partnership property. A certain portion of the
proceeds of the loan were applied to the cost of replacing the roof on one of
the three buildings located at Plainview Plaza II.
Currently, the Partnership's plans for renovations and other major
capital expenditures include the possibility of common area and exterior
building renovation of Plainview. As of June 30, 1998, the Partnership has made
a commitment for approximately $42,000 for architectural services for the
renovations at Plainview. The Plainview renovations are estimated to cost
approximately $1,000,000 and will make the property more competitive and enhance
its value. The Partnership may seek financing to fund these improvements. There
can be no assurance, however, that the Partnership will be able to obtain the
financing or that the financing will be on favorable terms.
Section 11. Certain Federal Income Tax Consequences.
Certain Federal Income Tax Consequences of the Offer. The following is
------------------------------------------------------
a general summary under currently applicable law of certain federal income tax
considerations generally applicable to the sale of Interests pursuant to the
Offer. The following summary is for general information only, and the tax
treatment described herein may vary depending upon each Limited Partner's
particular situation. Certain Limited Partners (including, but not limited to,
insurance companies, tax-exempt organizations, financial institutions or
broker/dealers, foreign corporations, and persons who are not citizens or
residents of the United States) may be subject to special rules not discussed
below. In addition, the summary does not address the federal income tax
consequences to all categories of Interest holders, nor does it address the
federal income tax consequences to persons who do not hold the Interests as
"capital assets," as defined by the Internal Revenue Code of 1986, as amended
(the "Code"). No ruling from the Internal Revenue Service ("IRS") will be sought
with respect to the federal income tax consequences discussed herein; thus,
there can be no assurance that the IRS will agree with the conclusions stated
herein. Limited Partners are urged to consult their own tax advisors as to the
particular tax consequences of a tender of their Interests pursuant to the
Offer, including the applicability and effect of any state, local, foreign or
other tax laws, any recent changes in applicable tax laws and any proposed
legislation. The following information is intended as a general statement of
certain tax considerations, and Limited Partners should not construe this as
legal or tax advice.
Sale of Interests Pursuant to the Offer. The receipt of cash for
--------------------------------------------
Interests pursuant to the Offer will be a taxable transaction for federal income
tax purposes and may also be a taxable transaction under applicable state, local
and other tax laws. The purchase of Interests pursuant to the Offer will be
deemed a sale of the Interests by the tendering Limited Partner. The payment for
a Limited Partner's Interests may be in complete liquidation of that portion of
the Limited Partner's ownership in the Partnership represented by the purchased
Interests. The recipient of such payments is taxable
21
<PAGE>
to the extent of any gainor loss recognized in connection with such sale. In
general, and subject to the recapture rules of the Code Section 751 discussed
below, a holder will recognize capital gain or loss at the time his or her
Interests are purchased by the Partnership to the extent that the money
distributed to him or her exceeds his or her adjusted basis in the purchased
Interests. Upon a sale of an Interest pursuant to the Offer, a Limited Partner
will be deemed to have received money in the form of any cash payments to him or
her and to the extent he or she is relieved from his or her proportionate share
of liabilities, if any, to which the Partnership's assets are subject. A Limited
Partner will thus be required to recognize gain upon the sale of his or her
Interests if the amount of cash he or she received, plus the amount he or she is
deemed to have received as a result of being relieved of his or her
proportionate share of Partnership nonrecourse liabilities (if any), exceeds the
adjusted basis of the Limited Partner in the purchased Interests. The income
taxes payable upon the sale must be determined by each Limited Partner on the
basis of his or her own financial interests.
The adjusted basis of a Limited Partner's Interests is calculated by
taking his or her initial basis and making certain additions and subtractions
thereto. The initial basis of a Limited Partner is the amount paid for an
Interest ($1,000 per Interest for those who purchased in the initial offering),
increased by a Limited Partner's proportionate share of nonrecourse liabilities,
if any, to which the Partnership's assets are subject and by the share of
Partnership taxable income, capital gains and other income items allocated to
the Limited Partner. There was nonrecourse debt attributed to the Interests in
the approximate amount of $6,764,652 as of June 30, 1998. A Limited Partner's
basis is reduced by cash distributions and by the share of Partnership losses
allocated to the Limited Partner.
A selling Limited Partner will be allocated a pro rata share of the
Partnership's taxable income or loss for 1998 with respect to the Interests sold
in accordance with the provisions of the Partnership Agreement concerning
transfers of Interests. Such allocation will affect the Limited Partner's
adjusted tax basis in his or her Interests and, therefore, the amount of the
Limited Partner's taxable gain or loss upon a sale of Interests pursuant to this
Offer. For individuals, trusts and estates the income allocated will be treated
as ordinary income which could be taxed at a rate as high as 39.6% for federal
income tax purposes, while the corresponding reduction in taxable gain upon the
sale of the Interests will result in tax savings of no more than 28% of the
reduction in taxable gain. The Partnership's net income for the six-month period
ended June 30, 1998 was $200,765.
In determining the tax consequences of accepting the Offer, the
Partnership's payments for Interests will be deemed to be equal to the $250 cash
payment per Interest plus a pro rata share of the Partnership's nonrecourse debt
(together, the "Selling Price"). The taxable gain (or loss) to be incurred as a
consequence of accepting the Offer is determined by subtracting the Selling
Price from the adjusted basis of the purchased Interest.
Each Limited Partner must determine his or her own adjusted tax basis
because it will vary depending upon when the Limited Partner purchased the
Interests and the amount of distributions received for each Interest, which
varies depending upon the date on which the Limited Partner was admitted to the
Partnership.
A taxable gain, if any, on the disposition of Interests must be
allocated between ordinary income and long term capital gain. Long term capital
gain or loss will be realized on such sale by
22
<PAGE>
a Limited Partner if: (1) he or she is not a "dealer" in securities; (2) he or
she has held the Interests for longer than twelve (12) months; and (3) the
Partnership has no Section 751 assets. To the extent that a portion of the gain
realized on the sale of an Interest is attributable to Section 751 assets (i.e.,
"unrealized receivables" and "inventory items of the Partnership which have
appreciated substantially in value") a Limited Partner will recognize ordinary
income, and not a capital gain, upon the sale of the Interest. For purposes of
Code Section 751, certain depreciation deductions claimed by the Partnership
(recapturable cost recovery allowance) are treated as if they were an
"unrealized receivable." Thus, gain, if any, recognized by a Limited Partner who
sells an Interest will be ordinary income in an amount not to exceed his or her
share of the Partnership's recapturable cost recovery allowance. Furthermore, if
the Partnership were deemed to be a "dealer" in real estate for federal income
tax purposes, the property held by the Partnership might be treated as
"inventory items of the Partnership which have appreciated substantially in
value" for purposes of Code Section 751 and a Limited Partner tendering his or
her Interest would recognize ordinary income, in an amount equal to his or her
share of the appreciation in value of the Partnership's real estate inventory.
The General Partner does not believe it has operated the Partnership's business
in a manner as to make the Partnership a "dealer" for tax purposes.
For taxable Limited Partners the amount of recapturable cost recovery
allowance per Interest purchased by a Limited Partner in the original offering
is estimated to be $207.96 as of June 30, 1998. Therefore, a maximum of $207.96
of the taxable gain per Interest will be considered to be ordinary income with
the balance of the taxable gain considered to be capital gain for federal income
tax purposes for the Limited Partners who hold their Interests as capital
assets. Ordinary income recognized in 1998 is taxed at a stated maximum rate of
39.6% for federal income tax purposes. Net capital gains are taxed for federal
income tax purposes at a stated maximum rate of 20% for Interests held at least
twelve (12) months. The tax rates may actually be somewhat higher, depending on
the taxpayer's personal exemptions and amount of adjusted gross income. A
taxable loss, if any, on the disposition of Interests will be recognized as a
capital loss for federal income tax purposes for Limited Partners who hold their
Interests as capital assets.
Tax exempt Limited Partners subject to unrelated business taxable
income (UBTI) should consult their tax advisor to determine what amount, if any,
of the above recapturable cost recovery allowance should be reported as UBTI.
Foreign Limited Partners. Gain realized by a foreign Limited Partner on
-------------------------
a sale of Interests pursuant to this Offer will be subject to federal income
tax. Under Code Section 1445 and related regulations, the transferee of a
partnership interest held by a foreign person is generally required to deduct
and withhold a tax equal to 10% of the amount realized on the disposition. The
Partnership or the Affiliate, as the case may be, will withhold 10% of the
amount realized by a tendering foreign Limited Partner. Amounts withheld would
be creditable against a foreign Limited Partner's federal income tax liability,
and if in excess thereof, a refund could be obtained from the IRS by filing a
U.S. income tax return.
To prevent back-up federal income tax withholding equal to 31% of the
payments made pursuant to the Offer, each Limited Partner (except a foreign
Limited Partner) who does not otherwise establish an exemption from such
withholding must notify the Partnership of the Limited Partner's correct
taxpayer identification number (or certify that such taxpayer is awaiting a
taxpayer
23
<PAGE>
identification number) and provide certain other information by completing a
Substitute Form W-9 to the Partnership. (For each Limited Partner's convenience,
a Substitute Form W-9 is enclosed herein). Certain Limited Partners, including
corporations, are not subject to the withholding and reporting requirements.
Foreign Limited Partners are subject to other requirements.
Retirement Plan Investors. Qualified pension, profit sharing and stock
--------------------------
bonus plans and IRA's (collectively "Qualified Plans") are generally exempt from
taxation except to the extent that their UBTI, determined in accordance with
Code Sections 511-514, exceeds $1,000 in any taxable year. Code Section
512(b)(5) provides generally that UBTI does not include gains or losses from the
disposition of property other than inventory or property held primarily for sale
to customers in the ordinary course of business. However, Code Section 512(b)(4)
provides that notwithstanding Code Section 512(b)(5), a portion of the gain from
the sale of "debt-financed property" (as defined in the Code) may be treated as
UBTI. Because a portion of the Partnership's assets are "debt financed," a
portion of the gain, if any, recognized by a Qualified Plan on the sale of an
interest may be UBTI. If a Qualified Plan is not a "dealer" in securities, the
remaining portion of any gain from the sale of Interests will not be UBTI unless
the Partnership is deemed to be a "dealer" in real estate. The General Partner
does not believe the Partnership's business has been operated in such a manner
as to make it a dealer, but there is no assurance that the IRS may not contend
that the Partnership is a dealer. If the Partnership obtains financing to
purchase Interests, the IRS may contend that each nonredeeming Limited Partner
has acquired an interest in debt-financed property, in addition to the current
debt-financed property of the Partnership. See Section 9, "Source and Amount of
Funds."
Section 12. Transactions and Arrangements Concerning Interests. Based
upon the Partnership's and Affiliate's records and information provided to the
Partnership by the General Partner and affiliates of the General Partner,
neither the Partnership, General Partner, the Affiliate nor, to the best of the
Partnership's knowledge, any controlling person of the Partnership, the General
Partner, nor the Affiliate, has effected any transactions in the Interests
during the forty (40) business days prior to the date hereof, except as set
forth below:
On September 4, 1998, an affiliate of the Partnership, Ocean Ridge
Investments, Ltd. ("Ocean Ridge"), a Florida limited liability partnership,
purchased five (5) Interests at a price equal to $250 per interest from a third
party.
Section 13. Extensions of Tender Period; Terminations; Amendments. The
Partnership has, or, if the Offer is oversubscribed, each Offeror has, the right
at any time and from time to time to extend the period of time during which the
Offer is open by giving written notice of the extension to each Limited Partner.
If there is any extension, all Interests previously tendered and not purchased
or withdrawn will remain subject to the Offer and may be purchased by the
Offerors, except to the extent that such Interests may be withdrawn as set forth
in Section 4, "Withdrawal Rights."
If the Offer is oversubscribed, each Offeror has the right to purchase
additional Interests. If either Offeror decides, in its sole discretion, to
increase the amount of Interests being sought and, at the time that the notice
of such increase is first published, sent or given to holders of Interests, the
Offer is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth
24
<PAGE>
business day from, and including, the date that such notice is first so
published, sent or given, then the Offer will be extended until the expiration
of such period of ten (10) business days.
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 Midnight, Eastern Standard Time. The Offerors have the right:
(i) to terminate the Offer and not to purchase or pay for any Interests not
previously purchased or paid for upon the occurrence of any of the conditions
specified in Section 6, "Certain Conditions of the Offer," by giving written
notice of such termination to the Limited Partners and making a public
announcement thereof; or (ii) at any time and from time to time, to amend the
Offer in any respect. All extensions, delays in payment or amendments will be
followed by public announcement thereof, such announcement in the case of an
extension to be issued no later than 9:00 a.m. Eastern Standard Time, on the
next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Offerors may choose to make any public
announcement, except as provided by applicable law (including Rule 13e-4(e)(2)
under the Exchange Act), the Offerors have no obligation to publish, advertise
or otherwise communicate any such public announcement, other than by issuing a
release to the Dow Jones News Service.
Section 14. Fees and Expenses. The Offerors will not pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
Interests pursuant to the Offer. The Offerors will reimburse brokers, dealers,
commercial banks and trust companies for customary handling and mailing expenses
incurred in forwarding the Offer to their customers.
Section 15. Address; Miscellaneous.
Address. All executed copies of the Letter of Transmittal and
--------
Substitute Form W-9 and the Certificate(s) of Ownership for the Interests being
tendered (or the Affidavit) must be sent via mail or overnight courier service
to the address set forth below. Manually signed facsimile copies of the Letter
of Transmittal will not be accepted. The Letter of Transmittal, Substitute Form
W-9 and Certificate(s) of Ownership for the Interests being tendered (or the
Affidavit) should be sent or delivered by each Limited Partner or such Limited
Partner's broker, dealer, commercial bank, trust company or other nominee as
follows:
By Mail, Hand Delivery or Overnight Mail/Express:
NTS Investor Services
c/o Gemisys
7103 S. Revere Parkway
Englewood, CO 80112
Any questions, requests for assistance, or requests for additional
copies of this Offer to Purchase, the Letter of Transmittal or any other
documents relating to this Offer also may be directed to NTS Investor Services
c/o Gemisys at the above-listed address or at: (800) 387-7454 or by facsimile
at: (303) 705-6151.
Miscellaneous. The Offer is not being made to, nor will tenders be
--------------
accepted from, Limited Partners in any jurisdiction in which the Offer or its
acceptance would not comply with the securities
25
<PAGE>
or Blue Sky laws of such jurisdiction. Neither Offeror is aware of any
jurisdiction in which the Offer or tenders pursuant thereto would not be in
compliance with the laws of such jurisdiction. The Offerors reserve the right to
exclude Limited Partners in any jurisdiction in which it is asserted that the
Offer cannot lawfully be made. The Offerors believe such exclusion is
permissible under applicable laws and regulations, provided the Offerors make a
good faith effort to comply with any state law deemed applicable to the Offer.
The Offerors have filed an Issuer Tender Offer Statement on Schedule
13E-4 with the Securities and Exchange Commission ("Commission") which includes
certain information relating to the Offer summarized herein. A copy of this
statement may be obtained from the Partnership by contacting NTS Investor
Services c/o Gemisys at the address and phone number set forth in this Section
15, "Address; Miscellaneous" or from the public reference office of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549.
The Commission also maintains a site on the World Wide Web at http://www.sec.gov
that contains reports electronically filed by the Partnership with the
Commission.
NTS-Properties III
September 30, 1998
352653-13
26
<PAGE>
Appendix A
The Partnership's Financial Statements Giving
Pro Forma Effect of the Offer
The following unaudited pro forma balance sheet and income statement of
the Partnership are presented to give effect of the Offer as if it was fully
subscribed and completed before June 30, 1998 and December 31, 1997. Each pro
forma statement contains four columns. The two columns on the left contain
certain financial information extracted or derived from the Partnership's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 and its Annual
Report on Form 10-K for the fiscal year ended December 31, 1997, respectively.
The Quarterly and Annual Reports contain more comprehensive financial
information than the information contained herein and were filed with the
Securities and Exchange Commission ("Commission") pursuant to the Securities
Exchange Act of 1934. The information extracted from the Quarterly and Annual
Reports is qualified in its entirety by reference to the reports and the
financial statements (including the notes) contained in the reports. The two
columns on the right present the quarterly and annual reports of the Partnership
giving effect of the Offer as if the Offer was fully subscribed and completed
before June 30, 1998 and December 31, 1997. The information presented in these
columns is based on certain assumptions made by the Partnership in its good
faith judgment, such as, the amount of expenses it will incur in administering
the Offer. These unaudited pro forma statements are not necessarily indicative
of what the Partnership's actual financial condition would have been for the
quarter ended June 30, 1998 and the year ended December 31, 1997, nor do they
purport to represent the future financial position of the Partnership.
27
<PAGE>
<TABLE>
NTS-PROPERTIES III
------------------
BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY
------------------------------------------------
<CAPTION>
After After
Actual Actual Tender Tender
As of As of As of As of
June 30, Dec. 31, June 30, Dec. 31,
1998 1997 1998 1997
---- ---- ---- ----
ASSETS
<S> <C> <C> <C> <C>
Cash and equivalents $ 266,352 $ 266,940 $ 141,352 $ 141,940
Cash and equivalents-
restricted 124,983 284,599 124,983 284,599
Investment securities -- 101,591 -- 101,591
Accounts receivable, net
of allowance for
doubtful accounts
$4,200 (1998) and
$42,035 (1997) 217,637 269,922 217,637 269,922
Land, buildings and
amenities, net 10,238,185 9,828,962 10,238,185 9,828,962
Other assets 404,665 370,302 404,665 370,302
----------- ----------- ----------- -----------
Total assets $11,251,822 $11,122,316 $11,126,822 $10,997,316
=========== =========== =========== ===========
LIABILITIES AND
PARTNERS' EQUITY
Mortgages payable $ 6,764,652 $ 6,734,603 $ 6,764,652 $ 6,734,603
Accounts payable-
operations 90,629 36,773 90,629 36,773
Accounts payable-
construction 33,076 102,655 33,076 102,655
Security deposits 101,463 103,816 101,463 103,816
Other liabilities 146,946 155,179 146,946 155,179
----------- ----------- ----------- -----------
7,136,766 7,133,026 7,136,766 7,133,026
Commitments and
Contingencies
Partners' equity 4,115,056 3,989,290 3,990,056 3,864,290
----------- ----------- ----------- -----------
$11,251,822 $11,122,316 $11,126,822 $10,997,316
=========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
NTS-PROPERTIES III
------------------
BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY (CONTINUED)
------------------------------------------------------------
<CAPTION>
Limited General
Partners Partner Total
-------- ------- -----
PARTNERS' EQUITY
<S> <C> <C> <C>
Initial equity $15,600,000 $ 8,039,710 $23,639,710
Adjustment to historical basis -- (5,455,030) (5,455,030)
----------- ------------ ------------
15,600,000 2,584,680 18,184,680
Net income (loss) -
prior years 74,801 (2,395,121) (2,320,320)
Net income (loss) -
current year 246,348 (45,583) 200,765
Cash distributions
declared to date (11,349,844) (206,985) (11,556,829)
Repurchase of limited
partnership units (393,240) -- (393,240)
------------ ------------ ------------
Balances at June 30, 1998 $ 4,178,065 $ (63,009) $ 4,115,056
============ ============ ===========
*Reference is made to the audited financial statements in the Form 10-K as filed
with the Commission on March 30, 1998.
</TABLE>
<PAGE>
<TABLE>
NTS-PROPERTIES III
------------------
STATEMENTS OF OPERATIONS
------------------------
<CAPTION>
After After
Tender Tender
June 30, Dec. 31, June 30, Dec. 31,
1998 1997 1998 1997
---- ---- ---- ----
REVENUES:
<S> <C> <C> <C> <C>
Rental income, net of
provision for doubtful
accounts of $0 (1998)
and $14,552 (1997) $1,800,542 $3,090,978 $1,800,542 $3,090,978
Rental income -
affiliated 149,590 295,031 149,590 295,031
Interest and other income 7,042 40,281 7,042 40,281
---------- ---------- ---------- ---------
1,957,174 3,426,290 1,957,174 3,426,290
EXPENSES:
Operating expenses 443,059 794,637 443,059 794,637
Operating expenses -
affiliated 211,820 440,458 211,820 440,458
Write-off of unamortized
tenant improvements 8,438 86,406 8,438 86,406
Amortization of capitalized
leasing costs 12,740 24,423 12,740 24,423
Interest expense 237,254 524,901 237,254 524,901
Management fees 99,364 168,006 99,364 168,006
Real estate taxes 103,770 206,603 103,770 206,603
Professional and
administrative expenses 31,715 60,604 31,715 60,604
Professional and
administrative expenses -
affiliated 70,525 133,969 70,525 133,969
Depreciation and
amortization 472,466 851,713 472,466 851,713
---------- ---------- ---------- ----------
1,691,151 3,291,720 1,691,151 3,291,720
---------- ---------- ---------- ----------
Net income before
extraordinary item 266,023 134,570 266,023 134,570
Extraordinary item -
write-off of
unamortized loan cost (65,258) -- (65,258) --
---------- ---------- ---------- ---------
Income before tender
offer cost 200,765 134,570 200,765 134,570
Tender offer costs -- -- (17,500) (17,500)
---------- ---------- --------- ---------
Net income $ 200,765 $ 134,570 $ 183,265 $ 117,070
========== ========== ========= =========
Net income allocated to
the limited partners:
Income before extraordinary
item $ 310,953 $ 239,206 $ 310,953 $ 239,206
Extraordinary item (64,605) -- (64,605) --
--------- ---------- --------- ---------
Income before tender
offer cost 246,348 239,206 246,348 239,206
Tender offer costs -- -- (17,325) (17,325)
--------- ---------- --------- ---------
Net income $ 246,348 $ 239,206 $ 229,023 $ 221,881
========= ========== ========= =========
Net income per limited
partnership unit:
Income before extraordinary
item $ 22.30 $ 17.00 $ 23.13 $ 17.62
Extraordinary item (4.63) -- (4.80) --
---------- ---------- ---------- ----------
Income before tender
offer cost 17.67 17.00 18.33 17.62
Tender offer cost -- -- (1.29) (1.28)
---------- ---------- ---------- ----------
Net income $ 17.67 $ 17.00 $ 17.04 $ 16.34
========== ========== ========== ==========
Weighted average number
of units 13,941 14,072 13,441 13,572
========== ========= ========== ==========
</TABLE>
<PAGE>
Exhibit (a)(2)
Form of Letter of Transmittal
<PAGE>
LETTER OF TRANSMITTAL
Regarding the Interests in
NTS - PROPERTIES III
Tendered Pursuant to the Offer to Purchase Dated September 30, 1998
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT, AND THIS LETTER OF
TRANSMITTAL MUST BE RECEIVED BY THE PARTNERSHIP BY, 12:00 MIDNIGHT
EASTERN STANDARD TIME, ON TUESDAY, DECEMBER 29, 1998
(THE "EXPIRATION DATE"), UNLESS THE OFFER IS
EXTENDED BY THE OFFERORS.
[Investor Name] If applicable:
[Address] [Custodian]
[City, State, Zip] [Address]
[Tax I.D. #] [City, State, Zip]
[# of Interests] [Account #]
I am a Limited Partner of NTS-Properties III. I hereby tender my
limited partnership interests or portion thereof, as described and specified
below, to the Offerors, NTS-Properties III (the "Partnership"), and the
Partnership's affiliate, ORIG, LLC, (the "Affiliate" and the Partnership are
each an "Offeror" and collectively the "Offerors") upon the terms and conditions
set forth in the Offer to Purchase, dated September 30, 1998 (collectively, the
"Offer to Purchase" and "Letter of Transmittal" constitute the "Offer").
THIS LETTER OF TRANSMITTAL IS SUBJECT TO ALL THE TERMS AND CONDITIONS
SET FORTH IN THE OFFER TO PURCHASE, INCLUDING, BUT NOT LIMITED TO, THE ABSOLUTE
RIGHT OF THE OFFERORS TO REJECT ANY AND ALL TENDERS DETERMINED BY THEM, IN THEIR
SOLE DISCRETION, NOT TO BE IN THE APPROPRIATE FORM.
I hereby represent and warrant that I have full authority to sell my
interests, or portion thereof, to the Offerors, and that the Offerors will
acquire good title, free and clear of any adverse claim. Upon request, I will
execute and deliver any additional documents necessary to complete the sale of
my interests in accordance with the terms of the Offer. In the event of my death
or incapacity, all authority and obligation shall be placed with my heirs,
personal representatives and successors.
I hereby appoint NTS-Properties Associates (without posting of a bond)
as the attorney-in-fact of me with respect to my interests, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to: (1) transfer ownership of my interests on the
Partnership's books to the respective Offeror, (2) change the address of record
of my interests prior to or after completion of the transfer, (3) execute and
deliver lost certificate indemnities and all other transfer documents, (4)
direct any custodian or trustee holding record title to the interests to do what
is necessary, including the execution and delivery of a copy of this Letter of
Transmittal, and (5) upon payment by the respective Offeror of the purchase
price, to receive all benefits and cash distributions and otherwise exercise all
rights of beneficial ownership of my interests hereby tendered.
(Over)
<PAGE>
INSTRUCTIONS TO TENDER INTERESTS
Please complete the following steps to tender your interests:
o Complete Part 1. by inserting the number of interests you wish to tender.
o Complete Part 2. by providing your telephone number(s).
o Complete Part 3. by providing the appropriate signature(s). (Note: if
your account is held by a Trustee or Custodian, sign below and forward
this form to the Trustee or Custodian at the address noted on the
first page of this Letter of Transmittal to complete the remaining
steps). All signatures must be notarized by a Notary Public.
o Return your original Certificate(s) of Ownership for the interests with
this form. If you are unable to locate your Certificate(s) of Ownership,
complete the Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership.
PART 1. NUMBER OF INTERESTS IN THE PARTNERSHIP TO BE TENDERED:
[ ] I tender my entire interest in the Partnership, being ____ interests for
a price of $250.00 per interest.
[ ] I tender only a portion of my interest in the Partnership, being _____
interests for a price of $250.00 per interest.
PART 2. TELEPHONE NUMBER(S).
My telephone numbers are: (___)_________ [Daytime] and (___)_________ [Evening]
PART 3. SIGNATURE(S).
FOR INDIVIDUALS/JOINT OWNERS:
_____________________________ _____________________________
Print Name of Limited Partner Print Name of Joint Owner
_____________________________ _____________________________
Signature of Limited Partner Signature of Joint Owner
Sworn to me this ___ day of Sworn to me this ___ day of
____________, 1998. ____________, 1998.
_____________________________ _____________________________
Notary Public Notary Public
FOR CUSTODIAL/TRUSTEE/IRA ACCOUNTS:
_____________________________ _____________________________
Print Name of Signatory Signature
Sworn to me this_____day of
_____________________________ ____________, 1998.
Title of Signatory
_____________________________
Notary Public
Return or Deliver: (1) this Letter of Transmittal; (2) your original
Certificate(s) of Ownership for the interests, or if you are unable to locate
your Certificate(s) of Ownership, the Affidavit and Indemnification Agreement
for Missing Certificate(s) of Ownership; and (3) the Substitute Form W-9 on or
before the Expiration Date to:
NTS INVESTOR SERVICES
C/O GEMISYS
7103 S. REVERE PARKWAY
ENGLEWOOD, CO 80112
For additional information, call: (800) 387-7454.
<PAGE>
Exhibit (a)(3)
Form of Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership
<PAGE>
AFFIDAVIT AND INDEMNIFICATION AGREEMENT FOR MISSING
CERTIFICATE(S) OF OWNERSHIP
State of ______________
County of _____________
_____________________________________
_____________________________________
_____________________________________
_____________________________________ (The "Limited Partner")
being duly sworn, deposes and says:
1. The Limited Partner is of legal age and is the true and lawful, present and
sole, record and beneficial owner of _________ (insert number of interests)
limited partnership interests (the "Interests") of NTS-Properties III (the
"Partnership"). The Interests were represented by the following Certificate(s)
of Ownership (the "Certificate(s)") issued to the :
Certificate(s) No. Number of Interests Date Issued
- ----------------- ------------------- -----------
The Certificate(s) was (were) lost, stolen, misplaced or destroyed under the
following circumstances:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________ and after diligent search, the
Certificate(s) could not be found.
2. Neither the Certificate(s) nor any interest therein has at any time been
sold, assigned, endorsed, transferred, pledged, deposited under any agreement or
otherwise disposed of, whether or not for value, by or on behalf of the Limited
Partner. Neither the Limited Partner nor anyone acting on the Limited Partner's
behalf has at any time signed any power of attorney, any stock power or other
authorization with respect to the Certificate(s) and no person or entity of any
type other than the Limited Partner has or has asserted any right, title, claim
or interest in or to the Certificate(s) or to the Interests represented thereby.
3. The Limited Partner hereby requests, and this Affidavit and Indemnification
Agreement is made and given in order to induce the Partnership, (i) to refuse to
recognize any person other than the Limited Partner as the owner of the
Certificate(s); (ii) to refuse to make any payment, transfer, registration,
delivery or exchange called for by the Certificate(s) to any person other than
the Limited Partner; and (iii) to refuse the Certificates or to make the
payment, transfer, registration, delivery or exchange called for by the
Certificate(s) without the surrender thereof or cancellation.
4. If the Limited Partner or the representative or the assigns of the Limited
Partner should find or recover the Certificate(s), the Limited Partner will
immediately surrender and deliver the same to the Partnership for cancellation
without requiring any consideration thereof.
(Over)
<PAGE>
5. The Limited Partner agrees in consideration of the issuance to the Limited
Partner of a new certificate in substitution for the Certificate(s), to
indemnify and hold harmless the Partnership, each general partner of the
Partnership, each affiliate of the Partnership and any person, firm or entity
now or hereafter acting as the transfer agent, registrar, trustee, depositary,
redemption, fiscal or paying agent of the Partnership, or in any other capacity
and their respective successors and assigns, from and against any and all
liabilities, losses, damages, costs and expenses of every nature (including
reasonable attorney's fees) in connection with, or arising out of, said lost,
stolen, misplaced or destroyed Certificate(s) without the surrender thereof and,
whether or not: (a) based upon or arising out of the honoring of, or refusing to
honor, the Certificate(s) when presented to anyone, (b) based upon or arising
from inadvertence, accident, oversight or neglect or failure to inquire into
contest or litigate the right of any applicant to receive payment, credit,
transfer, registration, exchange or delivery in respect of the Certificate(s)
and/or the new instrument or instruments issued in lieu thereof on the part of
the Partnership, its affiliates, agents and employees or any general Partner of
the Partnership and its agents and employees, (c) based upon or arising out of
any determination which the Partnership, its affiliates or any general partner
thereof may in fact makes as to the merits of any such claim, right, or title,
(d) based upon or arising out of any fraud or negligence on the part of the
Limited Partner in connection with reporting the loss of the Certificate(s) and
the issuance of new instrument or instruments in lieu thereof, or (e) based upon
or arising out of any other matter or thing whatsoever it may be.
6. The Limited Partner agrees that all notices, requests, demands and other
communications under this Affidavit and Indemnification Agreement shall be in
writing and shall be mailed to the party to whom notice is to be given by
certified or registered mail, postage prepaid; if intended for the Partnership
shall be addressed to Gemisys, 7103 S. Revere Pkwy., Englewood, CO 80112 Attn.:
NTS Investor Services, or such other address as the Partnership shall have given
notice to the Limited Partner at the address set forth at the end of this
Affidavit and Indemnification Agreement or at such other address as the Limited
Partner shall have given prior notice to the Partnership in a manner herein
provided.
7. No waiver shall be deemed to be made by the Partnership or its affiliates of
any of its rights hereunder unless in writing, and each waiver, if any, shall be
a waiver only with respect to the specific instance involved and shall in no way
impair the rights of the Partnership or its affiliates or the obligations of the
Limited Partner in any other respect at any other time.
8. The provisions of this Affidavit and Indemnification Agreement shall be
binding upon and inure to the benefit of the successors and assigns of the
Partnership and its affiliates and the Limited Partner.
9. This Affidavit and Indemnification Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
_________________________________________________
Signature of Limited Partner (Please sign exactly
as name appears on certificate)
_________________________________________________
Limited Partner Signature (if held jointly)
Sworn to me this _____
day of _________, 1998. _________________________________________________
Name of Limited Partner
______________________
Notary Public
_________________________________________________
Address of Limited Partner
352649-10
<PAGE>
Exhibit (a)(4)
Form of Letter to Limited Partners
<PAGE>
[NTS letterhead]
To our Limited Partners:
Enclosed for your consideration is an Offer to Purchase your limited
partnership interests. Please read all of the enclosed material carefully before
deciding to tender your interest. Your attention is invited to the following:
o The purchase price per interest is $250.00.
o The offer is being made to all Limited Partners.
o Up to 500 interests may be purchased by the Partnership and an
additional 500 interests may be purchased by the Partnership's
affiliate, ORIG, LLC. If more that 1000 interests are tendered, the
Partnership and its affiliate may decide to purchase more than 1000
interest or to purchase less than all of the interests tendered on a
pro rata basis.
o The offer and withdrawl right will expire at 12:00 Midnight, Eastern
Standard Time, on Tuesday, December 29, 1998, unless the Offer is
extended.
After reading the Offer to Purchase (white), if you with to tender any or
all of your interests, complete and return to NTS Investors Services c/o Gemisys
the following:
(1) the Letter of Transmittal (blue);
(2) the Substitute Form W-9 (green); and
(3) the Certificate(s) of Ownership for the interests or, if you are
unable to locate the Certificate(s) of Ownership, complete
the Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership (yellow).
On or before the expiration of the Offer return or deliver all of the above
documents to:
NTS INVESTOR SERVICES
C/O GEMISYS
7103 S. REVERE PARKWAY
ENGLEWOOD, CO 80112
For additional information, call: (800) 387-7454
<PAGE>
Exhibit (a)(5)
Substitute Form W-9 with Guidelines
<PAGE>
Substitute Form W-9
o Purpose of the Substitute Form W-9
Each tendering Limited Partner is required to provide to the
Partnership its correct Taxpayer Identification Number ("TIN") on Substitute
Form W-9 which is provided below, and to certify whether the Limited Partner is
subject to backup withholding of federal income tax. If the Partnership is not
provided with the correct TIN, the Limited Partner may be subject to a $500
penalty imposed by the Internal Revenue Service (the "IRS"). In addition,
failure to provide the information on Substitute Form W-9 may subject the
tendering Limited Partner to 31% federal income tax withholding on the payment
of the purchase price of all Interests purchased by the Offerors from the
Limited Partner pursuant to this Offer.
o Instructions for filling out the Substitute Form W-9
Each tendering Limited Partner must fill out the Substitute Form W-9
below by: (1) inserting their TIN; (2) certifying whether the Limited Partner is
subject to backup withholding of federal income tax; and (3) signing the form.
If the tendering Limited Partner is an individual, the TIN is the
Limited Partner's social security number.
If the tendering Limited Partner has been notified by the IRS that the
Limited Partner is subject to backup withholding, the Limited Partner must cross
out item (2) of the "Certification" box of Substitute Form W-9, unless the
Limited Partner has since been notified by the IRS that the Limited Partner is
no longer subject to backup withholding. If backup withholding applies, the
Partnership is required to withhold 31% of any payments made to the Limited
Partner. Backup withholding is not an additional tax. Rather, the tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.
If the tendering Limited Partner has not been issued a TIN and has
applied for one or intends to apply for one in the near future, the Limited
Partner should write "Applied For" in the space provided for the TIN in Part I
of the Substitute Form W-9, and sign and date the Substitute Form W-9. If
"Applied For" is written in Part I and the Partnership is not provided with a
TIN within 60 days, the Partnership will withhold 31% on all payments of the
purchase price to the Limited Partner until a TIN is provided to the
Partnership.
Certain Limited Partners (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, the individual must submit an Internal Revenue Form W-8,
signed under penalties of perjury, attesting to such individual's exempt status.
A Form W-8 may be obtained from NTS Investor Services c/o Gemisys at the address
and telephone number provided in Section 15, "Address; Miscellaneous" of the
Offer to Purchase.
For complete instructions on how to fill out Substitute Form W-9, refer
to the Guidelines enclosed.
(OVER)
<PAGE>
________________________________________________________________________________
SUBSTITUTE | Part I -- Taxpayer Identification |
FORM W-9 | Number -- For all accounts, enter | ___________________
| your TIN in the box at right. | Social Security No.
| (For most individuals, this is |
Department of the | your social security number.) |
Treasury | Certify by signing and dating | OR
Internal Revenue | below. |
Service | | ___________________
| | Employer
Payer's Request | | Identification No.
for Taxpayer | |
Identification | |
Number (TIN) | |
| | (If awaiting a TIN
| | write "Applied For"
| | in the space above).
____________________|___________________________________|_______________________
Part II -- For payees exempt from backup withholding, see the enclosed
Guidelines and complete as instructed therein.
________________________________________________________________________________
Certification -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me). and
(2) I am not subject to backup withholding either because (a) I am exempt from
backup withholding, (b) I have not been notified by the Internal Revenue Service
(the "IRS") that I am subject to backup withholding as a result of failure to
report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
Certificate Instructions -- You must cross out item (2) above, if you have been
notified by the IRS that you are subject to backup withholding because of under
reporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see instructions in the enclosed
Guidelines.)
________________________________________________________________________________
SIGNATURE __________________________________ DATE _________________ , 199 ____
________________________________________________________________________________
361656-1
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer. -
Social Security numbers have nine digits separated by two hyphens, e.g.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, e.g., 00-0000000. The table below will help determine the number to
give the payer.
Give the SOCIAL
For this type of account: SECURITY
number of -
- ------------------------------------ --------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on the
account(1)
3. Husband and wife (joint The actual owner of
account) the account or, if joint
funds, either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to Minors
Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a. A revocable savings trust The grantor-trustee(1)
account (in which grantor
is also trustee)
b. Any "trust" account that The actual owner(1)
is not a legal or valid trust
under State law
Give the EMPLOYER
For this type of account: IDENTIFICATION
number of -
- ------------------------------------ --------------------------
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or The legal entity (do
pension trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is not
designated in the
account title)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
12. Partnership account held in The partnership
13. Association, club, or other The organization
14. A broker or registered The broker or nominee
15. Account with the Department The public entity
of Agriculture in the name of
a public entity (such as a
State or local government,
school district, or prison) that
receives agricultural program
payments
- ------------------------------------ --------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. If the owner does not have an employer
identification number, furnish the owner's social security number.
(5) List first and circle the name of the legal trust, estate or pension trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at an office of the Social Security
Administration or the Internal Revenue Service.
To complete Substitute Form W-9, if you do not have a tax payer identification
number, write "Applied For" in the space for the taxpayer identification number
in Part 1, sign and date the Form, and give it to the requester. Generally, you
will then have 60 days to obtain a taxpayer identification number and furnish it
to the requester. If the requester does not receive your taxpayer identification
number within 60 days, backup withholding, if applicable, will begin and will
continue until you furnish your taxpayer identification number to the requester.
Payees Exempt from Backup Withholding Penalties
Payees specifically exempted from backup withholding on ALL payments include the
following:*
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States,
or any political subdivision or instrumentality thereof.
o A foreign government or a political subdivision, agency or
instrumentality thereof.
o An international organization or any agency or instrumentality
thereof.
o A registered dealer in securities or commodities registered in the
United States or a possession of the United States.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An entity registered at all times during the tax year under the
Investment Company Act of 1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
o Payments to nonresident aliens subject to withholding under section
1441.
o Payments to partnerships not engaged in a trade or business in the
United States and which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid
in money.
- ----------
* Unless otherwise noted herein, all references below to section numbers or to
regulations are references to the Internal Revenue Code and the regulations
promulgated thereunder.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
o Payments of interest on obligations issued by individuals. Note: You
may be subject to backup withholding if (i) this interest is $600 or
more, (ii) the interest is paid in the course of the payer's trade or
business and (iii) you have not provided your correct taxpayer
identification number to the payer.
o Payments of tax-exempt interest (including exempt interest dividends
under section 852).
o Payments described in section 6049(b)(5) to nonresident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file a Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice.- Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax return.
Payers must be given the numbers whether or not recipients are required to file
tax returns. Payers must generally withhold 31% of taxable interest, dividends,
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.-If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) Civil Penalty for False Statements With Respect to Withholding.-If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500. (3) Criminal
Penalty for Falsifying Information.-If you falsify certifications or
affirmations, you are subject to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION
CONTACT YOUR TAX CONSULTANT OR THE
INTERNAL REVENUE SERVICE
<PAGE>
