SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13E-4
AMENDMENT NO. 1 TO THE
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
(Name of Person 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
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| Transaction Valuation: $250,000 (a) | Amount of Filing Fee |
| Limited Partnership Interest at $250 per Interest | $50.00 (b) |
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(a) Calculated based upon the purchase of 1,000 limited partnership
interests at $250 per Interest.
(b) Calculated as 1/50th of 1% of the Transaction Value.
|X| 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: ___________ $50.00
Form of Registration No.: ____________ Schedule 13E-4, No. 98-000014
Filing Party: _______________________ NTS Properties III and ORIG, LLC
Date Filed: _________________________ September 30, 1998
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<PAGE>
AMENDMENT NO. 1 TO
ISSUER TENDER OFFER STATEMENT ON SCHEDULE 13E-4
INTRODUCTION
This Amendment No. 1 dated February 3, 1999 supplements and amends the
Issuer Tender Offer Statement on Schedule 13E-4 (the "Original Statement") filed
with the Securities and Exchange Commission on September 30, 1998 by NTS
Properties III (the "Partnership") and ORIG, LLC, a Kentucky limited liability
company, (the "Affiliate" and, collectively with the Partnership, the
"Offerors") regarding the Offerors' offer to purchase in the aggregate up to
1,000 limited partnership interests in the Partnership. A copy of the Offer to
Purchase dated September 30, 1998 and the related Letter of Transmittal (which
together constitute the "Offer") were incorporated by reference in the Original
Statement. Under the terms of the Offer, the Offer was to expire at 12:00
midnight, Eastern Standard Time, on December 29, 1998. As of December 29, 1998,
a total of 729 Interests were properly tendered pursuant to the Offer. These 729
Interests were accepted by the Offerors on December 29, 1998 and were purchased,
without proration, on December 31, 1998. The Partnership repurchased 500 of
these Interests on December 31, 1998. The Affiliate purchased the remaining 229
of these Interest on December 31, 1998. By Press Release dated December 29,
1998, the Offerors announced their intention to: (i) extend the Expiration Date
of the Offer to March 31, 1999; and (ii) accept any and all Interests properly
tendered pursuant to the Offer on or prior to March 31, 1999.
This Amendment constitutes the first amendment to the Original
Statement in accordance with Rule 13e-4(c)(3) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and General Instruction D to Schedule
13E-4. This Amendment hereby removes the Affiliate as a co-filer of this
Schedule. (This Affiliate, however, remains an Offeror pursuant to the Offer and
is filing a Tender Offer Statement on Schedule 14D-1 simultaneously herewith.)
This Amendment supplements and amends the terms of the Offer to grant recision
and withdrawal rights through the Expiration Date to limited partners whose
Interests were accepted on December 29, 1998. This Amendment also supplements
and amends the original Statement: (i) to include the information required under
General Instruction C to Schedule 13E-4; and (ii) amends Section 6, "Certain
Conditions of the Offer," of the Offer to Purchase by deleting the phrase "sole
judgment" and replacing it with the phrase "reasonable judgment". This Amendment
also includes as an Exhibit the Offerors' December 29, 1998 Press Release,
attached hereto as Exhibit (a)(6), which was inadvertently not filed pursuant to
an amendment to this Schedule upon its release to the public. Finally, this
Amendment extends the Expiration Date of the Offer from March 29, 1999 to March
31, 1999. A copy of the Offerors' Press Release dated February 3, 1999 extending
the Offer is attached hereto as Exhibit (a)(8).
Item 1. Security and Issuer.
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(b) The title of the securities that are subject to Amendment No. 1 to
the Offer to Purchase dated February 3, 1999 (the "Offer") is limited
partnership interests or portions thereof in the Partnership. This Offer is
being made to all Limited Partners. As of December 31, 1998, the Partnership had
13,270 outstanding Interests held by 921 holders of record. Subject to the
conditions
2
<PAGE>
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 any and all of
the outstanding Interests.
Reference is hereby made to the Introduction of the Offer, which is
incorporated herein by reference.
(d) In addition to the Partnership, ORIG, LLC, an affiliate of the
Partnership (the "Affiliate"), is jointly offering to purchase the Interests.
ORIG, LLC is located at 10172 Linn Station Road, Louisville, Kentucky. The
Affiliate is not a co-filer of this Schedule. Rather, the Affiliate is filing a
Tender Offer Statement on Schedule 14D-1 simultaneously with the filing of this
Amendment No. 1 to the Issuer Tender Offer Statement. The members of the
Affiliate are J.D. Nichols and Brian F. Lavin. Mr. Nichols is the general
partner of NTS Properties Associates, the General Partner of the Partnership
(the "General Partner"). Mr. Nichols is also the managing member of the
Affiliate. Mr. Lavin is the Executive Vice President of the General Partner. The
business address of Mr. Nichols and Mr. Lavin is: 10172 Linn Station Road,
Louisville, Kentucky, 40223.
Item 2. Source and Amount of Funds or Other Consideration.
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(a) As of December 29, 1998 the Offerors had received 729 tendered
Interests. The Offerors do not expect to receive more than 1,000 total tendered
Interests pursuant to the Offer. Therefore, the total amount of funds
anticipated 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 purchased the
first 500 Interests tendered on December 31, 1998 pursuant to the Offer and
funded its purchases and its portion of the expenses of the Offer from its cash
reserves. If 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 purchased 229 tendered Interests on December 31, 1998 and
funded its purchases and its portion of the expenses of the Offer from cash
contributions made by its members pursuant to a verbal agreement which was
subsequently memorialized by a binding Capital Contribution Agreement, attached
as Exhibit (c)(2) hereof, which is hereby incorporated herein by reference. The
Affiliate will purchase the first 271 Interests properly tendered after December
29, 1998 pursuant to the Amended Offer. These purchases and expenses, if any,
will be funded according to the terms of the Capital Contribution Agreement. If
the Affiliate, in its sole discretion, decides to purchase Interests in excess
of an aggregate of 500 Interests (including the 229 Interests purchased on
December 31, 1998), the Affiliate will fund these additional purchases and
expenses, if any, will be funded according to the terms of the Capital
Contribution Agreement.
The General Partner is not offering to purchase Interests pursuant to
the Offer. Therefore, this Item 2 is inapplicable to the General Partner.
3
<PAGE>
Reference is hereby made to Section 9, "Source and Amount of Funds," of
the Offer which is incorporated herein by reference.
Item 3. Purpose of the Tender Offer and Plans or Proposals of Issuer or the
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Affiliate.
- ---------
(a) The Partnership purchased the first 500 Interests tendered pursuant
to the Offer. The Affiliate purchased the next 229 Interests tendered pursuant
to the Offer. The Affiliate will purchase the first 271 Interests tendered and
accepted after December 29, 1998 on the same terms and conditions as those
Interests accepted on December 29, 1998. If, on the Expiration Date (defined
below), the Offerors determine that more than an aggregate of 1,000 Interests
have been tendered during the Offer (including the 729 Interests purchased on
December 31, 1998), the Offerors will accept the additional Interests and
determine which Interests will be purchased by the Partnership and which
Interests will be purchased by the Affiliate. In addition, the Offerors hereby
grant to all limited partners whose tendered Interests were accepted on December
29, 1998, the right to rescind the sale of their Interests and to withdraw their
tendered Interests pursuant to the terms of the Offer. Limited partners who
desire to rescind and withdraw their Interests must request rescission and
withdraw of the sale of their Interests in writing and include with such written
request either the uncashed check of the Partnership or the Affiliate (as the
case may be) in payment of Interests or a personal check payable to the
Partnership or the Affiliate (as the case may be) in an amount equal to the
purchase price for such Interests.
The term "Expiration Date" shall mean 12:00 Midnight, Eastern Standard
Time, on March 31, 1999, 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.
Reference is hereby made to Amendment No. 1 to the Offer and 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, Mr. Nichols or Mr. Lavin or any person
controlling the Partnership, the General Partner or the Affiliate, other than as
follows:
On December 31, 1999, the Partnership purchased 500, and the Affiliate
purchased 229, Interests at a price equal to $250 per Interest,
pursuant to the Offer.
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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<PAGE>
Item 5. Contracts, Arrangements, Understandings or Relationships with Respect to
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the Issuer's Securities.
- -----------------------
Mr. Nichols and Mr. Lavin, the members of the Affiliate, funded the
purchase of 229 Interests by the Affiliate and the Affiliate's proportionate
share of the expenses of the Offer from capital contributions made immediately
upon termination of the Offer pursuant to a verbal agreement between the members
of the Affiliate. This verbal agreement was subsequently memorialized by a
binding Capital Contribution Agreement executed by the members of the Affiliate,
which is attached hereto as Exhibit (c)(2) and is incorporated herein by
reference. All of the Affiliate's additional purchases and expenses, if any,
will be funded according to the terms of the Capital Contribution Agreement.
Other than the Capital Contribution Agreement, 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, the
Affiliate, Mr. Nichols or Mr. Lavin, or (ii) any person controlling the
Partnership, the General Partner or the Affiliate or any other person.
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 nine-month periods ended September 30, 1998
as previously filed with the Commission on Form 10-Q on November 16, 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 Supplement No. 1 to the Offer to Purchase
included as part of Exhibit (a)(6) hereto, which are incorporated herein by
reference.
Item 8. Additional Information.
- -------------------------------
(e) Reference is hereby made to Amendment No. 1 to the Offer and to the
Press Releases by the Offerors which are attached hereto as Exhibits
(a)(6)-(a)(8) and are incorporated herein by reference.
5
<PAGE>
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).1
(a)(2) Form of Letter of Transmittal.1
(a)(3) Form of Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership.1
(a)(4) Form of Letter to Limited Partners.1
(a)(5) Substitute Form W-9 with Guidelines.1
(a)(6) Form of Amendment No.1 to the Offer to Purchase dated February 3,
1999.2
(a)(7) Press Release by the Offerors dated December 29, 1998.2
(a)(8) Press Release by the Offerors dated February 3, 1999.2
(b) None.
(c)(1) 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.
(c)(2) Capital Contribution Agreement dated January 20, 1999 executed by the
members of ORIG, LLC.2
(d) None.
(e) None.
(f) None.
- --------
1Previously filed as an Exhibit to the Issuer Tender Offer Statement on Form
13E-4, No. 98-00014, on September 30, 1998.
2Filed herein.
6
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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: February 3, 1999 NTS-PROPERTIES III, a Georgia limited
partnership.
By: NTS - PROPERTIES ASSOCIATES,
General Partner
By: /s/ J. D. Nichols
-----------------
J.D. Nichols,
Managing General Partner
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<PAGE>
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).1
(a)(2) Form of Letter of Transmittal.1
(a)(3) Form of Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership.1
(a)(4) Form of Letter to Limited Partners.1
(a)(5) Substitute Form W-9 with Guidelines.1
(a)(6) Form of Amendment No. 1 to the Offer to Purchase dated
February 3, 1999.2
(a)(7) Press Release by the Offerors dated December 29, 1998.2
(a)(8) Press Release by the Offerors dated February 3, 1999.2
(b) None.
(c)(1) 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.
(c)(2) Capital Contribution Agreement dated January 20,1999 executed
by the members of ORIG, LLC.2
(d) None.
(e) None.
(f) None.
1Previously filed as an Exhibit to the Issuer Tender Offer Statement on
Form 13E-4, No. 98-00014, on September 30, 1998.
2Filed herein.
8
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Exhibit (a)(6)
Form of Amendment No. 1 to the Offer to Purchase, dated February 3, 1999
<PAGE>
[NTS letterhead]
To our Limited Partners:
Enclosed is Amendment No. 1 to the Offer to Purchase your limited
partnership interests (the "Amended Offer"). The Offerors have: (i) increased
the number of Interests that the Offerors are willing to purchase pursuant to
the Offer; (ii) extended the Expiration Date of the Offer; and (iii) provided
updated financial statements for the Partnership. Pursuant to the Amended Offer,
the Offerors will now accept any and all Interests tendered on or before March
31, 1999. The purchase price per interest remains $250.00. The offer remains
open to all Limited Partners. The offer and withdrawal rights will expire at
12:00 Midnight, Eastern Standard Time, on March 31, 1999, unless the Offer is
extended.
On December 31, 1998, pursuant to the Offer, the Offerors purchased an
aggregate of 729 Interests that were properly tendered as of December 29, 1998.
Limited Partners whose tendered Interests were purchased on December 31, 1998
are hereby granted the right to rescind these sales and to withdraw their
tendered Interests, pursuant to the terms of the Offer. If you have already
tendered and received payment for your Interests, and wish to withdraw your
Interests, you may do so by requesting recision of the sale of your Interests
and withdrawal of your tendered Interests in writing and including with such
written request either the uncashed check of the Partnership or the Affiliate
(as the case may be) in payment of Interests or a personal check payable to the
Partnership or the Affiliate (as the case may be) in an amount equal to the
purchase price paid for your Interests. If you have already tendered and
received payment for your Interests, and do not wish to withdraw, your Interests
will be deemed purchased as of December 31, 1998, and no action is required. If
you have already tendered your Interests, and do not wish to withdraw your
Interests, your Interests will be purchased upon expiration of the Amended
Offer. If you have not tendered your Interests, and wish to tender any or all of
your Interests, complete and return to NTS Investors Services c/o Gemisys the
following documents:
(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>
Amendment No. 1 to the
Offer to Purchase for Cash
by
NTS-Properties III
and
ORIG, LLC
of Any and All
Limited Partnership Interests
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, EASTERN STANDARD TIME, ON MARCH 31, 1999, 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 Amendment No. 1 to the 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 any and all 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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<PAGE>
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."
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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.
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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 Amendment No. 1 to the Offer to Purchase is February 3, 1999
2
<PAGE>
NEITHER THE OFFERORS NOR THE PARTNERSHIP'S GENERAL PARTNER MAKE ANY
RECOMMENDATION 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.
3
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TABLE OF CONTENTS
INTRODUCTION...................................................................5
SUMMARY OF CERTAIN INFORMATION.................................................7
RISK FACTORS...................................................................8
THE OFFER.....................................................................11
Section 1. Background and Purposes of the Offer........................11
Section 2. Offer to Purchase and Purchase Price; Proration; Expiration
Date; Determination of Purchase Price.......................12
Section 3. Procedure for Tendering Interests...........................13
Section 4. Withdrawal Rights...........................................14
Section 5. Purchase of Interests; Payment of Purchase Price............14
Section 6. Certain Conditions of the Offer.............................15
Section 7. Cash Distribution Policy....................................17
Section 8. Effects of the Offer........................................17
Section 9. Source and Amount of Funds..................................18
Section 10. Certain Information About the Partnership...................18
Section 11. Certain Federal Income Tax Consequences.....................19
Section 12. Transactions and Arrangements Concerning Interests..........22
Section 13. Extensions of Tender Period; Terminations; Amendments.......23
Section 14. Fees and Expenses...........................................23
Section 15. Address; Miscellaneous......................................23
Appendix A The Partnership's Financial Statements Giving
Pro Forma Effect of the Offer ..............................25
4
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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 any
and all 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 Amendment
No. 1 to the Offer to Purchase (the "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 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 September 30, 1998 and December 31, 1997, the book
value of each Interest was approximately $309.15 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.
On December 31, 1998, the Offerors purchased an aggregate of 729
Interests that were properly tendered as of December 29, 1998, pursuant to the
Offer. The Partnership purchased 500 of these Interests and the Affiliate
purchased 229 of these Interests. Subject to the conditions set forth in the
Offer, the Offerors will purchase any and all Interests which are tendered and
received by the Partnership by, and not withdrawn prior to, 12:00 Midnight,
Eastern Standard Time, on March 31, 1999, subject to any extension by the
Offerors (the "Expiration Date"). If, on the Expiration Date the Offerors
determine that more than an aggregate of 1,000 Interests (including the 729
Interests purchased pursuant to the Offer on December 31, 1998) have been
tendered during the Offer, the Offerors will accept the additional Interests and
determine which Interests will be purchased by the Partnership and which
Interests will be purchased by the Affiliate.
5
<PAGE>
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 tendered after December 29, 1998 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, if any, declared prior to the date on which the Offerors accept
the Limited Partner's tendered Interests. Limited Partners will not be entitled
to receive cash distributions, if any, declared and payable after the date on
which the Offerors accept the Limited Partner's tendered Interests.
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 December 31, 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, 812 Interests, representing
approximately 6.1% of the Partnership's 13,270 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 1,000 Interests are tendered, 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.
6
<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 March 31, 1999
at 12:00 Midnight, Eastern Standard
Time unless the Offer is otherwise
extended by the Offerors in
accordance 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 any and all Interests.
The first 500 Interests tendered
were purchased by the Partnership
on December 31, 1998. The Affiliate
purchased 229 Interests on December
31, 1998. If more than an aggregate
of 1,000 Interests are tendered, the
Offerors will accept the additional
Interests and determine which
Interests will be purchased by the
Partnership and which Interests will
be purchased by the Affiliate. 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 subject to
certain terms and conditions set
forth in the Offer.
7
<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 September 30, 1998 and December 31, 1997,
the book value of each Interest was approximately $309.15 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.
8
<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 Offerors do
------------------------------------------------------
not anticipate that more than 1,000 Interests will be tendered. If 1,000
Interests are tendered, 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 December 31, 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, 812 Interests, representing
approximately 6.1% 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. If 1,000
Interests are tendered, 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 2.1%. 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 Current 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 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.
9
<PAGE>
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.
10
<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; (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 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."
11
<PAGE>
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 any and all 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 Affiliate will purchase the first
271 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 an
aggregate of 1,000 Interests (including the 729 Interests purchased on December
31, 1998) have been tendered during the Offer, the Offerors will accept the
additional Interests and determine which Interests will be purchased by the
Partnership and which Interests will be purchased by the Affiliate.
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.
Expiration Date. The term "Expiration Date" means 12:00 Midnight,
----------------
Eastern Standard Time, on March 31, 1999, 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 more than an aggregate of 1,000 Interests are
tendered, 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.
12
<PAGE>
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 September 30, 1998 and December 31, 1997, the book value of each Interest was
approximately $309.15 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 (and who have not previously
tendered their Interests) 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
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, the Partnership and the Affiliate may each decide
to purchase Interests in excess of 500 Interests. In that case, all questions
regarding the validity, form or eligibility
13
<PAGE>
(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 (including those Limited Partners whose Interests were
purchased by the Offerors on December 31, 1998), 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. Additionally,
Limited Partners whose Interests were purchased on December 31, 1998 and who
desire to withdraw their tendered Interests must also request recision of the
sale of their tendered Interests and withdrawal of their tendered Interests and
include either the uncashed check of the Partnership or the Affiliate (as the
case may be) in payment of such tendered Interests or a check payable to the
Partnership or the Affiliate (as the case may be) in an amount equal to the
aggregate purchase price of the Limited Partner's tendered Interests.
All questions as to form and validity of the notice of withdrawal will
be determined by the Partnership, in its sole discretion. 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 500 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.
14
<PAGE>
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.
Interests will be deemed purchased at the time of acceptance by the
Offerors; provided, however, that Interests that were accepted by the Offerors
on December 29, 1998 will be deemed purchased as of December 31, 1999. 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;
(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 reasonable 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'
reasonable judgment, would or might directly or indirectly:
15
<PAGE>
(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' reasonable judgment,
might affect, the extension of credit by banks or other
lending institutions in the United States;
(v) (A) any significant change, in the Offerors'
reasonable 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 reasonable
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'
reasonable 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 reasonable 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;
16
<PAGE>
(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 reasonable 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, "Certain
Conditions of the Offer" shall be final 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 date of acceptance by the
Offerors, 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:
17
<PAGE>
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. As of December 29, 1998 the
Offerors had received and accepted 729 tendered Interests. The Offerors do not
expect to receive more than 1,000 total tendered Interests pursuant to the
Offer.Therefore, the total amount of funds anticipated 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 September 30, 1998 the
Partnership had unrestricted cash and cash equivalents equal to $266,940 and
$255,398, respectively. If 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 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 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:
18
<PAGE>
- 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.
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
19
<PAGE>
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 to the extent of any gain
or 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 $6,710,864 as of September 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 the year in which the Limited Partner's
Interests are accepted 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
20
<PAGE>
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 nine-month period ended September 30, 1998 was $256,428.
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 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 September 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.
21
<PAGE>
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 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 follows:
On December 31, 1998, the Partnership purchased 500 Interests, and the
Affiliate purchased 229 Interests, at a price equal to $250 per
Interest from tendering Limited Partners pursuant to the Offer.
22
<PAGE>
Section 13. Extensions of Tender Period; Terminations; Amendments. The
Partnership has, or, if more than an aggregate of 1,000 Interests are tendered,
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 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."
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) 705-6171.
23
<PAGE>
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 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 and a Tender Offer Statement on Schedule 14D-1 with the Securities and
Exchange Commission ("Commission") which include certain information relating to
the Offer summarized herein. A copy of these statements 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
February 3, 1999
24
<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 September 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 September 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 1,000 Interests had been tendered before
September 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 September 30, 1998 and the year ended December 31, 1997, nor do
they purport to represent the future financial position of the Partnership.
25
<PAGE>
<TABLE>
NTS-PROPERTIES III
------------------
BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY
------------------------------------------------
<CAPTION>
Actual Actual After Tender After Tender
As of As of As of As of
September 30, December 31, September 30, December 31,
1998 1997 1998 1997
ASSETS
<S> <C> <C> <C> <C>
Cash and equivalents $ 255,398 $ 266,940 $ 130,398 $ 141,940
Cash and equivalents - restricted 279,550 284,599 279,550 284,599
Investment securities -- 101,591 -- 101,591
Accounts receivable, net of allowance
for doubtful accounts of $7,934 (1998)
and $42,035 (1997) 156,459 269,922 156,459 269,922
Land, buildings and amenities, net 10,124,054 9,828,962 10,124,054 9,828,962
Other assets 388,743 370,302 388,743 370,302
----------- ----------- ----------- -----------
Total assets $11,204,204 $11,122,316 $11,079,204 $10,997,316
=========== =========== =========== ===========
LIABILITIES AND PARTNERS' EQUITY
Mortgages payable $ 6,710,864 $ 6,734,603 $ 6,710,864 $ 6,734,603
Accounts payable - operations 78,238 36,773 78,238 36,773
Accounts payable - construction 4,790 102,655 4,790 102,655
Security deposits 93,792 103,816 93,792 103,816
Other liabilities 145,801 155,179 145,801 155,179
----------- ----------- ----------- -----------
7,033,485 7,133,026 7,033,485 7,133,026
Commitments and Contingencies
Partners' equity 4,170,719 3,989,290 4,045,719 3,864,290
----------- ----------- ----------- -----------
$11,204,204 $11,122,316 $11,079,204 $10,997,316
=========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<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
============ ============ ============
</TABLE>
*Reference is made to the audited financial statements in the Form 10-K as
filed with the Commission on March 30, 1998.
<PAGE>
<TABLE>
NTS-PROPERTIES III
STATEMENTS OF OPERATIONS
<CAPTION>
After Tender After Tender
September 30, December 31, September 30, December 31,
1998 1997 1998 1997
REVENUES:
Rental income,net of
provision for doubtful
accounts of $0 (1998) and
<S> <C> <C> <C> <C>
$14,552 (1997) $ 2,664,929 $ 3,090,978 $ 2,664,929 $ 3,090,978
Rental income - affiliated 223,430 295,031 223,430 295,031
Interest and other income 11,068 40,281 11,068 40,281
----------- ----------- ----------- -----------
2,899,427 3,426,290 2,899,427 3,426,290
EXPENSES:
Operating expenses 689,402 794,637 689,402 794,637
Operating expenses-affiliated 303,182 440,458 303,182 440,458
Write-off of unamortized
tenant improvements 48,108 86,406 48,108 86,406
Interest expense 353,468 524,901 353,468 524,901
Management fees 149,504 168,006 149,504 168,006
Real estate taxes 155,496 206,603 155,496 206,603
Professional and
administrative expenses 45,965 60,604 45,965 60,604
Professional and admin
expenses - affiliated 103,127 133,969 103,127 133,969
Depreciation and amortization 729,489 851,713 729,489 851,713
----------- ----------- ----------- -----------
2,577,741 3,291,720 2,577,741 3,291,720
----------- ----------- ----------- -----------
Net income before
extraordinary item 321,686 134,570 321,686 134,570
Extraordinary item - write-off
of unamortized loan cost (65,258) -- (65,258) --
----------- ----------- ----------- -----------
Income before tender offer
cost 256,428 134,570 256,428 134,570
Tender offer costs -- -- (17,500) (17,500)
----------- ----------- ----------- -----------
Net income $ 256,428 $ 134,570 $ 238,928 $ 117,070
=========== =========== =========== ===========
Net income allocated to the limited partners:
Income before extraordinary
item $ 389,923 $ 239,206 $ 389,923 $ 239,206
Extraordinary item (64,605) -- (64,605) --
----------- ----------- ----------- -----------
Income before tender offer
cost 325,318 239,206 325,318 239,206
Tender offer costs -- -- (17,325) (17,325)
----------- ----------- ----------- -----------
Net income $ 325,318 $ 239,206 $ 307,993 $ 221,881
=========== =========== ----------- ===========
Net income per limited partnership unit:
Income before extraordinary
item $ 28.08 $ 17.00 $ 29.13 $ 17.62
Extraordinary item (4.65) -- (4.83) --
----------- ----------- ----------- -----------
Income before tender offer 23.43 17.00 24.30 17.62
cost
Tender offer cost -- -- (1.29) (1.28)
----------- ----------- ----------- -----------
Net income $ 23.43 $ 17.00 $ 23.01 $ 16.34
=========== =========== =========== ===========
Weighted average number of 13,883 14,072 13,383 13,572
units ========== ========== ========== ======
</TABLE>
<PAGE>
Exhibit (a)(7)
Press Release by the Offerors dated December 29, 1998
<PAGE>
PRESS RELEASE
NTS-PROPERTIES III AND ORIG, LLC ANNOUNCE EXTENSION OF TENDER OFFER
Louisville, Kentucky December 29, 1998. NTS-Properties III and ORIG,
LLC announced today that current outstanding issuer tender offer for
NTS-Properties III Limited Partnership Interests has been extended until March
29, 1999. The original tender offer for up to 1,000 Limited Partnership
Interests commenced on September 30, 1998 and was scheduled to expire on
December 29, 1998.
As of today, December 29, 1998, 709 Limited Partnership Interests have
been tendered. All interests tendered will be accepted today. NTS-Properties III
and ORIG, LLC will accept any and all Interests tendered pursuant to the terms
and conditions of the tender offer at the same price of $250 per Interest until
March 29, 1999.
For additional information, please contact NTS Investor Services c/o
Gemisys, at (800) 387- 7454.
<PAGE>
Exhibit (a)(8)
Press Release by the Offerors dated February 3, 1999
<PAGE>
PRESS RELEASE
NTS-PROPERTIES III AND ORIG, LLC ANNOUNCE EXTENSION OF TENDER OFFER
Louisville, Kentucky. February 3, 1999. NTS-Properties III and ORIG,
LLC announced today that the current outstanding tender offer for NTS-Properties
III Limited Partnership Interests has been extended to March 31, 1999.The tender
offer had been scheduled to expire on March 29, 1999. In addition, although the
December 29, 1998 press release by the Partnership and ORIG, LLC indicated that
the Offerors had acepted a total of 709 interests as of December 29, 1998, the
total number of Interests accepted by the Partnership and ORIG, LLc was 729
Interests.
<PAGE>
Exhibit (c)(2)
Capital Contribution Agreement dated January 20, 1999
executed by the members of ORIG, LLC
<PAGE>
CAPITAL CONTRIBUTION AGREEMENT
This Capital Contribution Agreement (the "Agreement") is made as
of the 20th day of January, 1999 by and between J.D. Nichols ("Nichols") and
Brian F. Lavin ("Lavin"), being all of the members of ORIG, LLC, a Kentucky
limited liability company ("ORIG"). Nichols and Lavin are individually referred
to as a "Member" and collectively referred to as the "Members".
RECITALS:
WHEREAS, ORIG has filed with the Securities and Exchange
Commission offers to purchase (the "Tender Offers") limited partnership
interests ("Interests") jointly with each of the following limited partnerships:
(i) NTS-Properties III, a Georgia limited partnership; (ii) NTS-Properties IV.,
Ltd., a Kentucky limited partnership; (iii) NTS-Properties V, a Maryland limited
partnership; (iv) NTS Properties VI, a Maryland limited partnership; and (v)
NTS-Properties VII, a Florida limited partnership (collectively, the
"Partnerships");
WHEREAS, pursuant to the terms and conditions of the Tender
Offers, ORIG anticipates accepting and purchasing Interests in each of the
Partnerships;
WHEREAS, pursuant to the terms and conditions of the Tender
Offers, ORIG will be required to pay any and all of ORIG's expenses incurred in
connection with the Tender Offers (including, but not limited to, ORIG's
proportionate share of the legal, accounting, printing and mailing expenses
relating to the Tender Offers) (the "Expenses");
WHEREAS, the Members desire to make cash capital contributions to
ORIG (the "Capital Contributions") sufficient for ORIG to purchase the Interests
and to pay the Expenses; and
WHEREAS, each Member desires to receive membership interests in
ORIG proportionate to the Member's Capital Contributions.
NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Aggregate Capital Contributions: On or prior to the expiration of
--------------------------------
each of the Tender Offers, the Members shall make Capital Contributions, which,
in the aggregate, are sufficient for ORIG to purchase all Interests accepted
by ORIG pursuant to the Tender Offers and to pay any and all of the Expenses.
2. Individual Capital Contributions: On or prior to the expiration
----------------------------------
of each of the Tender Offers, each Member shall make a Capital Contribution to
ORIG in an amount to be unanimously agreed upon by the Members.The Members agree
that upon expiration of all of the Tender Offers, the approximate percentages
of the aggregate Capital Contributions shall be: (i) Nichols -- 90%; and
(ii) Lavin -- 10%, unless otherwise agreed to in writing by the Members.
3. Disagreement: If the Members cannot agree upon the amounts of the
------------
Capital Contributions to be made by each Member upon the expiration of each
Tender Offer, Nichols hereby agrees to make all Capital Contributions
necessary to enable ORIG to fulfill its obligations pursuant to the Tender
Offers.
1
<PAGE>
4. Membership Interest: At all times, each Member shall have a
--------------------
membership interest in ORIG calculated by dividing the Capital Contributions
made by the individual Member by the total of all Capital Contributions made by
the Members.
5. Miscellaneous:
-------------
a) Assignability. This Agreement shall not be assignable by any of
-------------
the parties hereto without the prior written consent of all of the other
parties.
b) Governing Law. The laws of the State of Kentucky will govern
--------------
all questions concerning the construction, validity and interpretation of this
Agreement and the performance of the obligations imposed by this Agreement.
c) Entire Agreement. This Agreement and other documents delivered
----------------
or to be delivered pursuant to this Agreement contain or will contain the entire
agreement among the parties hereto with respect to the transactions contemplated
herein and supersede all previous oral and written agreements.
d) Amendment. This Agreement may be amended, modified, or
---------
supplemented only by written agreement of all of the Members.
e) Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
f) Further Assurances. The parties will, from time to time, upon
-------------------
the reasonable request of any other party, execute, acknowledge and deliver in
proper form such further instruments and perform such further acts as may be
reasonably necessary or desirable to give effect to the transactions
contemplated by this Agreement.
g) Recitals: The recitals set forth above are incorporated by
--------
reference herein and made a part hereof as if fully set forth herein.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their signature
to be set forth below as of the day and year first written above.
/s/ J.D. Nichols
----------------
J.D. Nichols, a Member
/s/ Brian F. Lavin
------------------
Brian F. Lavin, a Member
Being all of the Members of ORIG, LLC
3
<PAGE>
