SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
NTS-PROPERTIES IV., LTD.
(Name of Issuer)
NTS-PROPERTIES IV., LTD.
(Name of Person Filing Statement)
LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
62942E209
(CUSIP Number of Class of Securities)
J.D. Nichols, Managing General Partner
NTS-Properties Associates IV
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
July 28, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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| Transaction Valuation: $205,000 (a) | Amount of Filing Fee|
| Limited Partnership Interest at $205 per Interest | $41.00(b) |
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(a) Calculated as the aggregate maximum purchase price for limited
partnership interests.
(b) Calculated as 1/50th of 1% of the Transaction Value.
o Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or
the form of Schedule and the date of its filing.
Amount Previously Paid: __________________________ Not Applicable
Form of Registration No.: __________________________ Not Applicable
Filing Party: _____________________________________ Not Applicable
Date Filed: ______________________________________ Not Applicable
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Item 1. Security and Issuer.
- -----------------------------
(a) The name of the issuer is NTS-Properties IV., Ltd., a Kentucky
limited partnership (the "Partnership"). The Partnership's principal executive
offices are located at 10172 Linn Station Road, Louisville, Kentucky 40223.
(b) The title of the securities that are subject to the Offer to
Purchase dated July 28, 1999 (the "Offer") is limited partnership interests or
portions thereof in the Partnership. (As used herein, the term "Interest" or
"Interests", as the context requires, shall refer to the limited partnership
interests in the Partnership and portions thereof that constitute the class of
equity security that is the subject of this tender offer of limited partnership
interests or portions thereof that are tendered by the limited partners of the
Partnership ("Limited Partners") to the Offerors pursuant to the Offer to
Purchase.) This Offer is being made to all Limited Partners. As of July 1, 1999,
the Partnership had 24,709 outstanding Interests held by 2,107 holders of
record. Subject to the conditions set forth in the Offer, the Partnership and
ORIG, LLC, a Kentucky limited liability company and an affiliate of the
Partnership (the "Affiliate" and, collectively with the Partnership, the
"Offerors"), will purchase in the aggregate up to 1,000 Interests. The purchase
price of the Interests tendered to the Offerors will be equal to $205 per
Interest, net to the tendering Limited Partners in cash (the "Purchase Price").
Although the Offer is being made to all Limited Partners, the Partnership has
been advised that neither the general partner, NTS-Properties Associates IV
("General Partner"), the Affiliate, nor any of their partners, members,
affiliates or associates intends to tender any Interests pursuant to the Offer.
Reference is hereby made to the Introduction of the Offer, which is
incorporated herein by reference.
(c) There is currently no established trading market for the Interests,
and any transfer of Interests is limited by the terms of the Partnership's
Amended and Restated Agreement of Limited Partnership as amended on July 20,
1988 ("Partnership Agreement").
Reference is hereby made to Section 7, "Cash Distribution Policy," of
the Offer which is incorporated herein by reference.
(d) In addition to the Partnership, the Affiliate is jointly offering
to purchase the Interests. The address of the Affiliate is 10172 Linn Station
Road, Louisville, Kentucky 40223. The members of the Affiliate are J.D. Nichols
and Brian F. Lavin. Mr. Nichols serves as the Managing General Partner of the
General Partner and Chairman of the Board of NTS Development Company and NTS
Capital Corporation, the corporate general partner of the General Partner. Mr.
Nichols is also the managing member of the Affiliate. Mr. Lavin serves as the
President and Chief Operating Officer of NTS Development Company and NTS Capital
Corporation. The business address of Mr. Nichols and Mr. Lavin is 10172 Linn
Station Road, Louisville, Kentucky 40223.
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Item 2. Source and Amount of Funds or Other Consideration.
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(a) The total amount of funds required to complete the Offer is
approximately $225,000 (including $205,000 to purchase 1,000 Interests plus
approximately $20,000 for expenses associated with administering the Offer, such
as legal, accounting, printing and mailing expenses and transfer fees). The
Partnership will purchase the first 500 Interests tendered pursuant to the Offer
and will fund its purchases and its portion of the expenses of the Offer from
its cash reserves. If the Offer is oversubscribed and the Partnership, in its
sole discretion, decides to purchase Interests in excess of 500 Interests, the
Partnership will fund these additional purchases and expenses, if any, from its
cash reserves.
The Affiliate will purchase the next 500 Interests tendered and will
fund its purchases and its portion of the expenses of the Offer from cash
contributions to be made to the Affiliate by its members. If the Offer is
oversubscribed and the Affiliate, in its sole discretion, decides to purchase
Interests in excess of 500 Interests, the Affiliate will fund these additional
purchases and expenses, if any, from these cash contributions.
Mr. Nichols and Mr. Lavin, the members of the Affiliate, will fund the
purchase of Interests by the Affiliate and the Affiliate's proportionate share
of the expenses of the Offer from capital contributions to be made immediately
upon termination of the Offer pursuant to the terms of a Capital Contribution
Agreement dated as of January 20, 1999 by and between Mr. Nichols and Mr. Lavin,
which is attached hereto as Exhibit (c)(2) and is herein incorporated by
reference.
Reference is hereby made to Section 9, "Source and Amount of Funds," of
the Offer, which is incorporated herein by reference.
(b) None of the Partnership, the Affiliate nor the members of the
Affiliate intend to borrow funds to purchase any Interests tendered pursuant to
this Offer.
Mr. J.D. Nichols is the Chairman of the Board of NTS Capital
Corporation, the corporate general partner of the General Partner, and is the
Managing General Partner of the General Partner. Mr. Richard L. Good is the Vice
Chairman of NTS Capital Corporation. Mr. Brian F. Lavin is the President and
Chief Operating Officer of NTS Capital Corporation. None of the General Partner,
Mr. Nichols, Mr. Good or Mr. Lavin is offering to purchase Interests pursuant to
the Offer. Therefore, this Item 2 is inapplicable to the General Partner, Mr.
Nichols, Mr. Good and Mr. Lavin.
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.
- ----------
The purpose of the Offer is to provide Limited Partners who desire to
liquidate some or all of their investment in the Partnership with a method for
doing so. With the exception of isolated
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transactions, no established secondary trading market for the Interests exists
and it is unlikely that one will develop in the future. Transfers of Interests
are subject to certain restrictions as set forth in the Partnership Agreement,
including prior approval of the General Partner. Interests that are tendered to
the Partnership will be retired, although the Partnership may issue interests
from time to time in compliance with the registration requirements of federal
and state securities laws or any exemptions therefrom. Interests that are
tendered to the Affiliate will be held by the Affiliate. Neither the Partnership
nor the General Partner has plans to offer for sale any other additional
interests, but each reserves the right to do so in the future.
The Offer is generally not conditioned upon any minimum number of
Interests being tendered but is conditioned on, among other things, the absence
of certain adverse conditions described in Section 6, "Certain Conditions of the
Offer." The Offer will not be consummated if, in the opinion of the General
Partner, there is a reasonable likelihood that purchases under the Offer would
result in termination of the Partnership (as a partnership) under Section 708 of
the Internal Revenue Code of 1986, as amended (the "Code"), or termination of
the Partnership's status as a partnership for federal income tax purposes under
Section 7704 of the Code. Further, the Offerors will not purchase Interests, if
the purchase of Interests would result in the Interests being owned by fewer
than three hundred (300) holders of record.
(a) The Offerors have agreed that the Partnership will purchase the
first 500 Interests tendered during the Offer, and that, if more than 500
Interests are tendered, the Affiliate will purchase up to an additional 500
Interests tendered on the same terms and conditions as those Interests purchased
by the Partnership. If, on the Expiration Date (defined below), the Offerors
determine that more than 1,000 Interests have been tendered during the Offer,
each Offeror may: (i) accept the additional Interests permitted to be accepted
pursuant to Rule 13e-4(f)(1) promulgated under the Securities Exchange Act of
1934, as amended; or (ii) extend the Offer, if necessary, and increase the
amount of Interests that the Offeror is offering to purchase to an amount that
the Offeror believes to be sufficient to accommodate the excess Interests
tendered as well as any Interests tendered during the extended Offer. If the
Offer is oversubscribed, and the Offerors do not act in accordance with (i) or
(ii) above, or the Offerors act in accordance with (i) and (ii), above, but the
Offer remains oversubscribed, then the Offerors will accept Interests tendered
prior to or on the Expiration Date (defined below) for payment on a pro rata
basis. In this case, the number of Interests purchased from a Limited Partner
will be equal to a fraction of the Interests tendered, the numerator of which
will be the total number of Interests the Offerors are willing to purchase and
the denominator of which will be the total number of Interests properly
tendered. Notwithstanding the foregoing, the Offerors will not purchase
Interests tendered by a Limited Partner if, as a result of the purchase, the
Limited Partner would continue to be a Limited Partner and would hold fewer than
five (5) Interests.
The term "Expiration Date" shall mean 12:00 Midnight, Eastern Standard
Time, on October 29, 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. The Partnership may extend the Offer in its sole discretion
by
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providing the Limited Partners with written notice of the extension; provided,
however, that if the Offer is oversubscribed, the Partnership or the Affiliate
may, each in its sole discretion, extend the Offer by providing the Limited
Partners with written notice of the extension.
(b) Neither the Offerors nor the General Partner has any plans or
proposals that relate to or would result in an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Partnership.
(c) None of the Offerors, the General Partner, Mr. Nichols, Mr. Good
or Mr. Lavin has any plans or proposals that relate to or would result in a sale
or transfer of a material amount of assets of the Partnership or any of its
subsidiaries.
(d) In anticipation of retirement, Mr. Good, the Vice Chairman and
former President of NTS Capital Corporation and NTS Development Company, has
begun to decrease his responsibilities with the Partnership and its affiliates.
In conjunction with Mr. Good's decreased responsibilities, Mr. Lavin was
appointed President and Chief Operating Officer of NTS Development Company and
NTS Capital Corporation in February, 1999. In addition, NTS Capital Corporation
hired a new Chief Financial Officer, Gregory Wells, effective July 1, 1999.
Other than these management changes, none of the Offerors, the General Partner,
Mr. Nichols, Mr. Good or Mr. Lavin has any plans or proposals that relate to or
would result in any change in the identity of the General Partner or in the
management of the Partnership, including, but not limited to, any plans or
proposals to change the number or term of the General Partner, to fill any
existing vacancy for the General Partner, or to change any material term of the
management agreement between the General Partner and the Partnership.
(e) None of the Offerors, the General Partner, Mr. Nichols, Mr.
Good or Mr. Lavin has any plans or proposals that relate to or would result in
any material change in the present distribution policy or indebtedness or
capitalization of the Partnership.
(f) None of the Offerors, the General Partner, Mr. Nichols, Mr. Good or
Mr. Lavin has any plans or proposals that relate to or would result in any other
material change in the Partnership's structure or business.
(g) None of the Offerors, the General Partner, Mr. Nichols, Mr. Good or
Mr. Lavin has any plans or proposals that relate to or would result in any
change in the Partnership Agreement or other actions that may impede the
acquisition of control of the Partnership by any person.
Items (h) through (j) of this Item 3 are not applicable to the
Partnership because the Offer is conditioned on the Partnership having no fewer
than three hundred (300) holders of record after completion of the Offer.
Reference is hereby made to the Introduction, Section 1, "Background
and Purposes of the Offer," Section 5, "Purchase of Interests; Payment of
Purchase Price," Section 6, "Certain Conditions
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of the Offer," Section 10, "Certain Information About the Partnership" and
Section 13, "Extensions of Tender Period; Terminations; Amendments" of the
Offer, which are incorporated herein by reference.
Item 4. Interest in Securities of the Issuer.
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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, Mr. Good, Mr. Lavin or any
associate or subsidiary of such person except as follows:
On May 5, 1999, Ocean Ridge purchased five Interests from a
Limited Partner for a purchase price of $205 per Interest. On June 21,
1999, Ocean Ridge purchased ten Interests from a Limited Partner for a
purchase price of $205 per Interest. On June 29, 1999, Ocean Ridge
purchased five Interests from a Limited Partner for a purchase price of
$205 per Interest.
Reference is hereby made to Section 12, "Transactions and Arrangements
Concerning Interests" of the Offer, which is incorporated herein by reference.
Item 5. Contracts, Arrangements, Understandings or Relationships with Respect
- --------------------------------------------------------------------------------
to the Issuer's Securities.
- ---------------------------
The Partnership Agreement, contained in the Partnership's prospectus
dated August 1, 1983, grants the General Partner discretion to decide whether
the Partnership or any of its affiliates will purchase Interests from time to
time from Limited Partners on certain terms and conditions described in the
Partnership Agreement. The Partnership, however, will not purchase Interests
from a Limited Partner where, after the purchase, the Limited Partner would
continue to be a Limited Partner and would hold fewer than five (5) Interests.
Mr. Nichols and Mr. Lavin, the members of the Affiliate, will fund the
purchase of Interests by the Affiliate and the Affiliate's proportionate share
of the expenses of the Offer from capital contributions to be made immediately
upon termination of the Offer pursuant to the terms of a Capital Contribution
Agreement dated as of January 20, 1999 by and between Mr. Nichols and Mr. Lavin,
which is attached hereto as Exhibit (c)(2) and is incorporated herein by
reference.
Other than this agreement, none of the Offerors, Mr. Nichols, Mr. Good
or Mr. Lavin is aware of any other contract, arrangement, understanding or
relationship relating, directly or indirectly, to this Offer (whether or not
legally enforceable) between or among (i) the Partnership, the General Partner
or the Affiliate or any person controlling the Partnership, the General Partner,
the Affiliate and (ii) any other person.
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Reference is hereby made to the Introduction, Section 1, "Background
and Purposes of the Offer," and Section 12, "Transactions and Arrangements
Concerning Interests" of the Offer, which are incorporated herein by reference.
Item 6. Persons Retained, Employed or to be Compensated.
- ---------------------------------------------------------
No persons have been employed, retained or are to be compensated by the
Offerors to make solicitations or recommendations in connection with the Offer.
Item 7. Financial Information.
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(a)(1)(2) Reference is hereby made to the audited financial statements
of the Partnership for the years ended December 31, 1997 and December 31, 1998,
respectively, filed with the Securities and Exchange Commission ("Commission")
on the Partnership's Annual Reports on Form 10-K on March 30, 1998 and Form
10-K405 on April 15, 1999, respectively, which are incorporated herein by
reference. Also, reference is hereby made to the unaudited financial statements
of the Partnership for the quarter ended March 31, 1999, filed with the
Commission on the Partnership's Quarterly Report on Form 10-Q on May 18, 1999,
which are incorporated herein by reference.
(3) The Partnership had an earnings to fixed charges coverage
deficiency of $15,659 for the three months ended March 31, 1999. The
Partnership's ratio of earnings to fixed charges was 1.3:1 for the year ended
December 31, 1998. The Partnership's ratio of earnings to fixed charges was
1.0:1 for the year ended December 31, 1997.
(4) Reference is hereby made to the Introduction to the Offer, which is
incorporated herein by reference.
(b) Reference is hereby made to the financial statements giving the
effect of the Offer on a pro forma basis attached as Appendix A of Exhibit
(a)(1) hereto, which are incorporated herein by reference.
Item 8. Additional Information.
- --------------------------------
(a) Reference is hereby made to Section 10, "Certain Information About
the Partnership" and Section 12, "Transactions and Arrangements Concerning
Interests" of the Offer, which are incorporated herein by reference.
(b) None.
(c) Not Applicable.
(d) None.
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(e) Reference is hereby made to the Offer, the Letter of Transmittal
and related documents, forms of which are attached hereto as Exhibits (a)(1) -
(a)(5), and are incorporated herein by reference.
Item 9. Material to be Filed as Exhibits.
- ------------------------------------------
(a)(1) Form of Offer to Purchase dated July 28, 1999 (including
financial statements giving pro forma effect of the Offer).
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership.
(a)(4) Form of Letter to Limited Partners.
(a)(5) Substitute Form W-9 with Guidelines.
(b) None.
(c)(1) Reference is hereby made to: (1) the Amended and Restated
Agreement of Limited Partnership of NTS-Properties IV., Ltd.,
previously filed with the Securities and Exchange Commission
as part of the Partnership's Registration Statement on Form
S-11, No. 2-83771, filed with the Commission on May 16, 1983,
and declared effective on August 1, 1983.
(c)(2) Capital Contribution Agreement dated as of January 20, 1999
between J.D. Nichols and Brian F. Lavin, the members of ORIG,
LLC.
(d) None.
(e) None.
(f) None.
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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: July 28, 1999 NTS-PROPERTIES IV., LTD., a Kentucky limited
partnership
By: NTS - PROPERTIES ASSOCIATES
IV, General Partner
By:___________________________
J.D. Nichols,
Managing General Partner
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EXHIBITS
Exhibit
Number Description
- ------ -----------
(a)(1) Form of Offer to Purchase, dated July 28, 1999 (including
financial statements giving pro forma effect of the Offer).
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Affidavit and Indemnification Agreement for
Missing Certificate(s) of Ownership.
(a)(4) Form of Letter to Limited Partners.
(a)(5) Substitute Form W-9 with Guidelines.
(b) None.
(c)(1) Reference is hereby made to: (1) the Amended and
Restated Agreement of Limited Partnership of NTS- Properties
IV., Ltd., previously filed with the Securities and Exchange
Commission as part of the Partnership's Registration
Statement on Form S-11, No. 2-83771, filed with the
Commission on May 16, 1983, and declared
effective on August 1, 1983.
(c)(2) Capital Contribution Agreement dated as of January 20,
1999 between J.D. Nichols and Brian F. Lavin, the
members of ORIG, LLC.
(d) None.
(e) None.
(f) None.
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EXHIBIT (a)(1)
Form of Offer to Purchase, dated July 28, 1999
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Offer to Purchase for Cash
by
NTS-Properties IV., Ltd.
and
ORIG, LLC
of Up to
1,000 Limited Partnership Interests
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, EASTERN STANDARD TIME, ON FRIDAY, OCTOBER 29, 1999, UNLESS EXTENDED.
NTS-Properties IV., Ltd. is a Kentucky limited partnership (the
"Partnership") that owns, or owns joint venture interests in, certain
residential rental and commercial real estate properties. See Section 10,
"Certain Information About the Partnership." NTS-Properties Associates IV, a
Kentucky limited partnership, is the general partner of the Partnership (the
"General Partner"). NTS Capital Corporation, a Kentucky corporation, is the
corporate general partner of the General Partner. NTS Capital Corporation is
controlled by Mr. J.D. Nichols, its Chairman of the Board, Richard L. Good, its
Vice Chairman, and Brian F. Lavin, its President and Chief Operating Officer.
Except as otherwise provided in the Partnership Agreement (defined below), and
as more fully described in Section 10, "Certain Information About the
Partnership", the General Partner owns a one percent (1%) interest in the
Partnership and the limited partners, in the aggregate, own a ninety-nine
percent (99%) interest in the Partnership. The Partnership and ORIG, LLC, a
Kentucky limited liability company (the "Affiliate"), an affiliate of the
Partnership (the Affiliate and the Partnership are each an "Offeror" and
collectively, the "Offerors"), are offering to purchase for cash upon the terms
and conditions set forth in this Offer to Purchase ("Offer to Purchase") and the
related Letter of Transmittal ("Letter of Transmittal," which together with the
Offer to Purchase constitutes the "Offer") in the aggregate up to 1,000 of the
Partnership's limited partnership interests (the "Interests") at a price equal
to $205 per Interest (the "Purchase Price"). This Offer is being made to all
limited partners of the Partnership ("Limited Partners") and is generally not
conditioned on the tender of any minimum number 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 $205 per Interest may not equate to the
fair market value or the liquidation value of the Interests
o Neither the General Partner, on behalf of the Partnership, nor
the Affiliate has retained an independent third party to
evaluate the fairness of the Offer.
o Conflicts in establishing the Purchase Price exist between
tendering Limited Partners and the Partnership, the General
Partner and non-tendering Limited Partners.
o Negative tax consequences may exist for any Limited Partner
tendering its Interests.
o The General Partner makes no recommendation regarding whether
Limited Partners should tender or retain their Interests.
Limited Partners continuing to hold all or any portion of their
Interests are subject to certain risks including:
o The Partnership may not make future cash distributions to
Limited Partners.
o The percentage ownership of Interests held by persons
controlling, controlled by or under common control with the
General Partner or its affiliates will increase as a result of
the Offer.
o The Partnership has no current plans to liquidate its assets
and to distribute the proceeds to its Limited Partners.
o General economic risks are associated with investments in real
estate.
o The Partnership's financial condition may be adversely
affected by a downturn in the business of any tenant occupying
a significant portion of a Partnership property or a tenant's
decision not to renew its lease.
See "RISK FACTORS."
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THE OFFER IS NOT CONDITIONED ON THE TENDER OF ANY MINIMUM NUMBER OF
INTERESTS; 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 Offer to Purchase is July 28, 1999
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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, HOW MANY OF SUCH
LIMITED PARTNER'S INTERESTS TO TENDER.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE OFFERORS REGARDING WHETHER LIMITED PARTNERS SHOULD TENDER OR REFRAIN FROM
TENDERING INTERESTS PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. ANY RECOMMENDATION
OR INFORMATION, IF GIVEN OR MADE, MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE OFFERORS OR THE GENERAL PARTNER.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH
TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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TABLE OF CONTENTS
INTRODUCTION...................................................................1
SUMMARY OF CERTAIN INFORMATION.................................................4
RISK FACTORS...................................................................5
THE OFFER......................................................................8
Section 1. Background and Purposes of the Offer.........................8
Section 2. Offer to Purchase and Purchase Price; Proration; Expiration
Date; Determination of Purchase Price........................9
Section 3. Procedure for Tendering Interests...........................11
Section 4. Withdrawal Rights...........................................12
Section 5. Purchase of Interests; Payment of Purchase Price............12
Section 6. Certain Conditions of the Offer.............................13
Section 7. Cash Distribution Policy....................................15
Section 8. Effects of the Offer........................................16
Section 9. Source and Amount of Funds..................................16
Section 10. Certain Information About the Partnership...................17
Section 11. Certain Federal Income Tax Consequences.....................21
Section 12. Transactions and Arrangements Concerning Interests..........25
Section 13. Extensions of Tender Period; Terminations;
Amendments..................................................25
Section 14. Fees and Expenses...........................................25
Section 15. Address; Miscellaneous......................................26
Appendix A
The Partnership's Financial Statements Giving
Pro Forma Effect of the Offer........................................28
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To Holders of Limited Partnership Interests of
NTS-Properties IV., Ltd.
INTRODUCTION
NTS-Properties IV., Ltd. is a Kentucky limited partnership (the
"Partnership") that owns, or owns joint venture interests in, certain
residential rental and commercial real estate properties. Except as otherwise
provided in the Partnership Agreement (defined below) and as more fully
described in Section 10, "Certain Information About the Partnership", the
Partnership's general partner, NTS- Properties Associates IV (the "General
Partner") owns a one percent (1%) interest in the Partnership and the limited
partners own, in the aggregate, a ninety-nine percent (99%) interest in the
Partnership. The Partnership and ORIG, LLC, a Kentucky limited liability company
(the "Affiliate"), an affiliate of the Partnership (the Partnership and the
Affiliate are each an "Offeror" and, collectively, the "Offerors"), hereby offer
to purchase up to 1,000 of the Partnership's limited partnership interests (the
"Interests") at a purchase price of $205 per Interest (the "Purchase Price") in
cash to the seller upon the terms and subject to the conditions set forth in
this "Offer to Purchase" and in the related "Letter of Transmittal" (together
the "Offer to Purchase" and "Letters of Transmittal" constitute the "Offer").
(As used herein, the term "Interest" or "Interests," as the context requires,
refers to the limited partnership interests in the Partnership and portions
thereof that constitute the class of equity security that is the subject of this
Offer or the limited partnership interests or portions thereof that are tendered
by the limited partner to the Offerors pursuant to the Offer.) The Partnership,
in its sole discretion, may purchase more than 500 Interests, and the Affiliate,
in its sole discretion, may purchase more than 500 Interests, but neither has
any current intention to do so. This Offer is being made to all limited partners
in the Partnership ("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 IV, as amended on July 20,
1988 (the "Partnership Agreement").
The Purchase Price should not be viewed as equivalent to the fair
market value or the liquidation value of an Interest. As of December 31, 1998
and March 31, 1999, the book value of each Interest was approximately $158.01
and $152.41, respectively. The Purchase Price offered by the Offerors has been
determined by the General Partner, in its sole discretion, based on: (i) the
response to the Offerors' tender offer of $205 per Interest which commenced on
November 20, 1998 and terminated on February 19, 1999 (the "Prior Offer"); (ii)
sales of Interests by Limited Partners to third parties in secondary market
transactions in 1997 and 1998; (iii) repurchases of interests by the Partnership
in 1997, 1998 and 1999; and (iv) purchases of Interests by the Partnership's
affiliate, Ocean Ridge Investments Ltd., a Florida limited liability partnership
("Ocean Ridge") in 1996, 1998 and 1999. The Partnership is aware of an offer to
purchase Interests by a third-party offeror for $153.37 per Interest. The
Partnership, however, is not aware of the other material terms of this
third-party offer. Neither the Offerors nor the General Partner has obtained an
opinion from an independent third party regarding the fairness of the Purchase
Price.
<PAGE>
Subject to the conditions set forth in the Offer, the Partnership will
purchase the first 500 Interests which are tendered and received by the
Partnership by, and not withdrawn prior to, 12:00 Midnight, Eastern Standard
Time, on Friday, October 29, 1999, subject to any extension of the Offer by the
Offerors (the "Expiration Date"). If more than 500 Interests are tendered, the
Affiliate will purchase up to an additional 500 Interests which are tendered and
received by the Partnership by, and not withdrawn prior to the Expiration Date.
If, on the Expiration Date, the Offerors determine that more than 1,000
Interests have been tendered during the Offer, each Offeror may: (i) accept the
additional Interests in accordance with Rule 13e-4(f)(1) promulgated under the
Securities Exchange Act of 1934 ("Exchange Act"), as amended; or (ii) extend the
Offer, if necessary, and increase the amount of Interests that the Offeror is
offering to purchase to an amount that the Offeror believes to be sufficient to
accommodate the excess Interests tendered as well as any Interests tendered
during the extended Offer.
If the Offer is oversubscribed and the Offerors do not act in
accordance with (i) or (ii), above, or if the Offerors act in accordance with
(i) and (ii), above, but the Offer remains oversubscribed, then the Offerors
will accept Interests tendered prior to or on the Expiration Date for payment on
a pro rata basis ("Proration"). If the Partnership pro rates, the number of
Interests purchased from a Limited Partner will be equal to a fraction of the
Interests tendered, the numerator of which will be the total number of Interests
the Offerors are willing to purchase and the denominator of which will be the
total number of Interests properly tendered. Any fractional interests resulting
from this calculation will be rounded down to the nearest whole number.
Fractions of Interests will not be purchased. The Partnership will notify, in
writing, all Limited Partners from whom the Offerors will purchase fewer than
the number of Interests tendered by the Limited Partner. For any Interest
tendered but not purchased by the Offerors, a book entry will be made on the
Partnership's books to reflect the Limited Partner's ownership of the Interests
not purchased. The Partnership will not issue a new Certificate of Ownership for
the Interests not purchased by the Offerors, except upon written request of the
Limited Partner.
The Offer is generally not conditioned on the tender of any minimum
number of Interests. The Offer, however, is conditioned upon, among other
things, the absence of certain adverse conditions described in Section 6,
"Certain Conditions of the Offer." In particular, the Offer will not be
consummated, if in the opinion of the General Partner, there is a reasonable
likelihood that purchases under the Offer would result in termination of the
Partnership (as a partnership) under Section 708 of the Internal Revenue Code of
1986, as amended (the "Code"), or termination of the Partnership's status as a
partnership for federal income tax purposes under Section 7704 of the Code.
Further, the Offerors will not purchase Interests if the purchase of Interests
would result in Interests being owned by fewer than three hundred (300) holders
of record. See Section 6, "Certain Conditions of the Offer."
All purchases of Interests pursuant to the Offer will be effective as
of the Expiration Date. Each Limited Partner who tenders Interests pursuant to
the Offer will receive the Purchase Price and cash distributions declared and
payable prior to the Expiration Date, if any. Limited Partners will
2
<PAGE>
not be entitled to receive cash distributions declared and payable after the
Expiration Date, if any, on any Interests tendered and accepted by the Offerors.
The tender and acceptance 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 July 1, 1999, the General Partner owned five (5) of the
Partnership's outstanding Interests and the Affiliate owned 659 of the
Partnership's outstanding Interests. All partners, members, affiliates and
associates of the General Partner or the Affiliate beneficially owned an
aggregate of 990 Interests, representing approximately 4.0% of the Partnership's
24,709 outstanding Interests. Although the Offer is being made to all Limited
Partners, the Partnership has been advised that neither the General Partner, the
Affiliate, nor any of the partners, members, affiliates or associates of the
General Partner or the Affiliate intends to tender any Interests pursuant to the
Offer. Assuming the Offer is fully subscribed, the General Partner, the
Affiliate, and partners, members, affiliates and associates of the General
Partner or the Affiliate, will own, after the Offer, an aggregate of 1,490
Interests, representing approximately 6.1% of the Partnership's 24,209
outstanding Interests.
3
<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 Kentucky limited partnership, and
the 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 $205 per Interest in cash.
Expiration Date The Offer expires on Friday, October 29, 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 up to
1,000 Interests. The first 500 Interests tendered
will be purchased by the Partnership; up to an
additional 500 Interests tendered will be purchased
by the Affiliate. If the Offer is oversubscribed,
first the Partnership may purchase additional
Interests, and then the Affiliate may purchase
additional Interests, each in its sole discretion.
If the Offer remains oversubscribed, Interests will
be purchased on a pro rata basis. This Offer is
being made to all Limited Partners and is not
conditioned on the tender of any minimum number of
Interests; 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.
4
<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 Book Value. The Interests are not traded on a recognized
stock exchange or trading market. A readily identifiable, liquid market for the
Interests does not exist and is not likely to exist in the near future. The
Partnership and the Affiliate purchased an aggregate of 1,259 Interests on
February 19, 1999 for $205 per Interest, pursuant to the Prior Offer. The
Partnership purchased 600 of these Interests. The Affiliate purchased 659 of
these Interests. The Offerors are also aware of certain secondary market
transactions by which Interests were transferred at prices equal to $100.00 to
$200.00 per Interest (including commissions and other mark-ups) by Limited
Partners to third parties during the period from January 1, 1997 to September
30, 1998. Additionally, the Partnership has repurchased 5,036 interests, and its
affiliate, Ocean Ridge, has purchased 331 Interests during the period from
January 1, 1996 through June 30, 1999 at prices ranging from $150 to $205 per
Interest. As of December 31, 1998 and March 31, 1999, the book value of each
Interest was approximately $158.01 and $152.41, respectively. The Purchase Price
for Interest in this Offer was determined by the General Partner, in part, based
on the purchase price per Interest in the Prior Offer. None of the purchase
price per Interest in the Prior Offer, the secondary market transactions
described above or the Purchase Price in this Offer 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 selling Interests pursuant to this Offer generally
- ----------
will recognize a gain or loss on the sale of their Interests for federal and
most state income tax purposes. The amount of gain or loss realized will be, in
general, the excess of the amount realized by the seller (generally, the sum of
the Purchase Price plus the selling Limited Partner's share of Partnership
liabilities) 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 selling 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.
5
<PAGE>
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.
Limited Partners Who Do Not Tender All or Any Portion of Their
-----------------------------------------------------------------------
Interests Are Subject to Certain Risks:
- ---------------------------------------
The Partnership May Not Make Future Cash Distributions. The amount of
funds required by the Partnership to fund the Offer is estimated to be
approximately $112,500 ($102,500 to purchase 500 Interests plus approximately
$10,000 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 of Interests held by persons controlling,
controlled by or under common control with the Partnership will increase. As of
July 1, 1999, the General Partner owned five (5) of the Partnership's
outstanding Interests and the Affiliate owned 659 of the Partnership's
outstanding Interests. The General Partner, the Affiliate, and all partners,
members, affiliates and associates of the General Partner or the Affiliate
beneficially own, in the aggregate, 990 Interests, representing approximately
4.0% of the Partnership's 24,709 outstanding Interests. Although this Offer is
made to all Limited Partners, the Partnership has been advised that none of the
General Partner, the Affiliate, nor any of the partners, members, affiliates or
associates of the General Partner or the Affiliate intends to tender any
Interests pursuant to the Offer. Assuming the Offer is fully subscribed, the
General Partner, the Affiliate, and partners, members, affiliates and associates
of the General Partner or the Affiliate, will own, after the Offer, an aggregate
of 1,490 Interests, representing approximately 6.1% of the Partnership's 24,209
outstanding Interests, an increase of 2.1% of the outstanding Interests. In
addition, other persons controlling, controlled by or under common control with
the Partnership, by virtue of the decreased number of outstanding Interests,
will own a greater percentage of the outstanding Interests. Thus, these entities
or individuals will 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 Plan to Liquidate. The Partnership has no
----------------------------------------------
current plan to sell 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 any distribution relating to their
investment in the Partnership in the foreseeable future.
6
<PAGE>
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.
Commercial leases representing approximately 24% and 13% of the Partnership's
1998 operating revenues are scheduled to expire (unless extended) in 1999 and
2000, respectively. Failure to re-lease the space vacated by significant tenants
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. See Section 10, "Certain Information About the
Partnership".
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 August 1, 1983.
7
<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 some or all of
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 current value of a Limited Partner's investment.
See Risk Factors - "General Economic Risks Associated with Investments in Real
Estate."
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) with the exception of the recent appointment of Brian F.
Lavin as President and Chief Operating Officer of NTS Capital Corporation in
conjunction with the planned retirement of Richard L. Good, the Vice Chairman
and former President of NTS Capital Corporation, the corporate general partner
of the General Partner, and the hiring of Gregory Wells as the Chief Financial
Officer of NTS Capital Corporation, 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 Affiliate and other 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 persons controlling the
affiliates, which will increase
8
<PAGE>
the influence that affiliates of the General Partner and persons controlling the
affiliates have on certain matters voted on by Limited Partners, including
removal of the General Partner and termination of the Partnership. See Risk
Factors -- "The Partnership May Not Make Future Cash Distributions" and
"Increased Voting Control by Affiliates of the Partnership". 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 Offer is the second tender offer made by the Partnership and the
Affiliate for Interests. The Partnership and the Affiliate purchased an
aggregate of 1,259 Interests on February 19, 1999 for $205 per Interest,
pursuant to the Prior Offer. The Partnership purchased 600 of these Interests.
The Affiliate purchased 659 of these Interests. 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.
Section 2. Offer to Purchase and Purchase Price; Proration; Expiration
Date; Determination of Purchase Price.
Offer to Purchase and Purchase Price. The Offerors will, upon the terms
-------------------------------------
and subject to the conditions of the Offer, described below, purchase in the
aggregate up to 1,000 Interests that are properly tendered by, and not withdrawn
prior to, the Expiration Date at a price equal to $205 per Interest; provided
however, that no tender will be accepted from a Limited Partner if, as a result
of the tender, the Limited Partner would continue to be a Limited Partner and
would hold fewer than five (5) Interests. The Partnership will purchase the
first 500 Interests which are tendered and received by the Partnership by, and
not withdrawn prior to, the Expiration Date. If more than 500 Interests are
tendered and received by the Partnership as a result of this Offer, the
Affiliate will purchase up to an additional 500 Interests which are tendered by,
and not withdrawn prior to, the Expiration Date.
If, on the Expiration Date, the Offerors determine that more than 1,000
Interests have been tendered during the Offer, each Offeror may: (i) accept the
additional Interests permitted to be accepted pursuant to Rule 13e-4(f)(1)
promulgated under the Exchange Act, as amended; or (ii) extend the Offer, if
necessary, and increase the amount of Interests that the Offeror is offering to
purchase to an amount that the Offeror believes to be sufficient to accommodate
the excess Interests tendered as well as any Interests tendered during the
extended Offer.
Proration. If the Offer is oversubscribed and the Offerors do not act
----------
in accordance with (i) or (ii), above, or if the Offerors act in accordance with
(i) and (ii), above, but the Offer remains oversubscribed, then the Offerors
will accept Interests tendered prior to or on the Expiration Date for payment on
a pro rata basis. In the event of Proration, the number of Interests purchased
from a Limited Partner will be equal to a fraction of the Interests tendered,
the numerator of which will
9
<PAGE>
be the total number of Interests the Offerors are willing to purchase and the
denominator of which will be the total number of Interests properly tendered.
Any fractional Interests resulting from this calculation will be
rounded down to the nearest whole number. Fractions of Interests will not be
purchased. The Partnership will notify, in writing, all Limited Partners from
whom the Offerors will purchase fewer than the number of Interests tendered by
the Limited Partner. For any Interest tendered but not purchased by the
Offerors, a book entry will be made on the Partnership's books to reflect the
Limited Partner's ownership of the Interests not purchased. The Partnership will
not issue a new Certificate of Ownership for Interests not purchased by the
Offerors, except upon written request of the Limited Partner.
THIS OFFER IS NOT CONDITIONED ON 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.
Expiration Date. The term "Expiration Date" means 12:00 Midnight,
-----------------
Eastern Standard Time, on Friday, October 29, 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 the Offer is oversubscribed, the
Partnership or the Affiliate may, each in its sole discretion, extend the Offer
by providing the Limited Partners with written notice of the extension. For a
description of how the Offer may be extended or terminated, see Section 13,
"Extensions of Tender Period; Terminations; Amendments."
Determination of Purchase Price. The Purchase Price represents the
----------------------------------
price at which the Offerors are willing to purchase Interests. No Limited
Partner approval is required or was sought regarding the determination of the
Purchase Price. No special committee of the Partnership, the Affiliate or the
Limited Partners has approved this Offer and no special committee or independent
person has been retained to act on behalf of the Partnership or the Affiliate.
Neither the Offerors nor the General Partner has obtained an opinion from an
independent third party regarding the fairness of the Purchase Price.
The Purchase Price offered by the Offerors was determined by the
General Partner in its sole discretion based on: (i) the response to the
purchase price of $205 in the Prior Offer; (ii) sales of Interests by Limited
Partners to third parties in secondary market transactions in 1997 and 1998;
(iii) repurchases of interests by the Partnership in 1997, 1998 and 1999; and
(iv) purchases of Interests by the Partnership's affiliate, Ocean Ridge in 1996,
1998 and 1999. The Partnership is aware of an offer to purchase Interests by a
third-party offeror for $153.37 per Interest. The Partnership, however, is not
aware of the other material terms of this third-party offer. The General Partner
is also aware of certain sales of Interests made at prices equal to $100.00 to
$200.00 per
10
<PAGE>
Interest (including commissions and other mark-ups) by certain Limited Partners
to third parties during the period from January 1, 1997 to September 30, 1998.
The Partnership has repurchased interests, and its affiliate, Ocean Ridge, has
purchased Interests, in secondary market transactions at prices ranging from
$150 to $205 per Interest during the period from January 1, 1996 through June
30, 1999. 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 December 31, 1998 and March 31, 1999, the book value of each Interest was
approximately $158.01 and $152.41, respectively.
In determining the Purchase Price, the Partnership did not estimate or
project the liquidation value per Interest or consider the book value per
Interest and did not appraise the value of its assets.
Section 3. Procedure for Tendering Interests. Limited Partners that
wish to tender Interests pursuant to this Offer must submit a properly completed
and duly executed Letter of Transmittal and Substitute Form W-9, together with
the Certificate(s) of Ownership for the Interests being tendered or if the
Certificate(s) of Ownership for the Interests is (are) lost, stolen, misplaced
or destroyed, the Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership executed by the Limited Partner attesting to such
fact (the "Affidavit"), and any other required documents to NTS Investor
Services c/o Gemisys, at the address listed in Section 15, "Address;
Miscellaneous."
THE LETTER OF TRANSMITTAL, SUBSTITUTE FORM W-9, AND CERTIFICATE(S) OF OWNERSHIP
FOR THE INTERESTS BEING TENDERED (OR AFFIDAVIT, IF APPLICABLE) AND ANY OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE PARTNERSHIP ON OR BEFORE THE
EXPIRATION DATE. NEITHER THE PARTNERSHIP NOR THE AFFILIATE WILL ACCEPT INTERESTS
RECEIVED BY THE PARTNERSHIP AFTER THE EXPIRATION DATE.
Method of Delivery. LIMITED PARTNERS ASSUME ANY RISK ASSOCIATED WITH
-------------------
THE METHOD FOR DELIVERING THE LETTER OF TRANSMITTAL, SUBSTITUTE FORM W-9 AND
CERTIFICATE(S) OF OWNERSHIP FOR THE INTERESTS (OR THE AFFIDAVIT). THE
PARTNERSHIP RECOMMENDS THAT LIMITED PARTNERS SUBMIT ALL DOCUMENTS VIA REGISTERED
MAIL RETURN RECEIPT REQUESTED AND PROPERLY INSURED OR BY AN OVERNIGHT COURIER
SERVICE. LIMITED PARTNERS MAY CONFIRM RECEIPT OF A LETTER OF TRANSMITTAL BY
CONTACTING NTS INVESTOR SERVICES C/O GEMISYS AT THE ADDRESS AND TELEPHONE NUMBER
LISTED IN SECTION 15, "ADDRESS; MISCELLANEOUS."
Determination of Validity. All questions regarding the validity, form,
--------------------------
eligibility (including time of receipt) and acceptance for payment of any
Interests will be determined by the Partnership, in its sole discretion.
Notwithstanding the foregoing, if the Offer is oversubscribed, the Partnership
and the Affiliate may each decide to purchase Interests in excess of the initial
1,000 Interests. In that case, all questions regarding the validity, form or
eligibility (including time of receipt) and
11
<PAGE>
acceptance for payment of any additional Interests purchased by either the
Partnership or the Affiliate will be determined by each respective party, in its
sole discretion. Each determination, whether made by the Partnership or the
Affiliate, will be final and binding. The Partnership or the Affiliate, if
applicable, has the absolute right to waive any of the conditions of the Offer
or any defect or irregularity in any tender, or in the related transmittal
documents. Unless waived, any defects or irregularities must be cured within the
time period established by the Partnership or the Affiliate. In any event,
tenders will not be deemed to have been made until all defects or irregularities
have been cured or waived. The Offerors are neither under any duty nor will they
incur any liability for failure to notify any tendering Limited Partner of any
defects, irregularities or rejections contained in the tenders.
Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Rule 14e-4 promulgated thereunder require that a person tendering
Interests on his, her or its behalf, must own the Interests tendered. Section
10(b) and Rule 14e-4 provide a similar restriction applicable to the tender or
guarantee of a tender on behalf of another person. The tender of Interests
pursuant to any of the procedures described herein constitutes acceptance by the
tendering Limited Partner of the terms and conditions of the Offer, including a
representation and warranty that (i) the tendering Limited Partner owns the
Interests being tendered within the meaning of Rule 14e-4; and (ii) the tender
complies with Rule 14e-4.
Section 4. Withdrawal Rights. Any Limited Partner tendering Interests
pursuant to this Offer may withdraw the tender at any time prior to the
Expiration Date. For a withdrawal to be effective, it must be in writing and
received by NTS Investor Services c/o Gemisys via mail or facsimile at the
address or facsimile number set forth in the Section 15, "Address;
Miscellaneous" on or before the Expiration Date. Any notice of withdrawal must
specify the name of the person withdrawing the tender and the amount of
Interests previously tendered that are being withdrawn.
All questions as to form and validity of the notice of withdrawal will
be determined by the Partnership, in its sole discretion. If the Offer is
oversubscribed, all questions as to form and validity of the notice of
withdrawal will be determined by the Partnership or the Affiliate, each in its
sole discretion, for any Interests purchased by the Partnership or the
Affiliate, as the case may be, in excess of the initial 1,000 Interests. All
determinations made by the Partnership or the Affiliate will be final and
binding. Interests properly withdrawn will not thereafter be deemed to be
tendered for purposes of the Offer. However, withdrawn Interests may be
retendered by following the procedures set forth in Section 3, "Procedure for
Tendering of Interests" prior to the Expiration Date. Tenders made pursuant to
the Offer which are not otherwise withdrawn in accordance with this Section 4,
"Withdrawal Rights," will be irrevocable.
Section 5. Purchase of Interests; Payment of Purchase Price. Upon the
terms and subject to the conditions of the Offer, the Offerors will pay $205 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)
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business days after the Expiration Date. Under no circumstances will interest be
paid on the Purchase Price to bepaid by the Offerors for Interests tendered,
regardless of any extension of the Offer or any delay in making payment. In the
event of Proration as set forth in Section 2, "Offer to Purchase and Purchase
Price; Proration; Expiration Date; Determination of Purchase Price," the
Offerors may not be able to determine the proration factor and pay for those
Interests that have been accepted for payment, and for which payment is
otherwise due, until approximately five (5) business days after the Expiration
Date.
Interests will be deemed purchased at the time of acceptance by the
Offerors but in no event earlier than the Expiration Date. Interests purchased
by the Partnership will be retired, although the Partnership may issue new
interests from time to time in compliance with the registration requirements of
federal and state securities laws or exemptions therefrom. Interests purchased
by the Affiliate will be held by the Affiliate. Neither the Partnership nor the
General Partner has plans to offer for sale any other additional interests, but
each reserves the right to do so in the future.
Section 6. Certain Conditions of the Offer. Notwithstanding any other
provision of this Offer, the Offerors will not be required to purchase or pay
for any Interests tendered and may terminate the Offer as provided in Section
13, "Extensions of Tender Period; Terminations; Amendments" or may postpone the
purchase of, or payment for, Interests tendered if any of the following events
occur prior to the Expiration Date:
(a) there is a reasonable likelihood that consummation of the
Offer would result in the termination of the Partnership (as a
partnership) under Section 708 of the Code;
(b) there is a reasonable likelihood that consummation of the
Offer would result in termination of the Partnership's status as a
partnership for federal income tax purposes under Section 7704 of the
Code;
(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;
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(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:
(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
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(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;
(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 July
28, 1999 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.
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Section 7. Cash Distribution Policy. The Partnership commenced
operations in August, 1984 and anticipated providing Limited Partners with 8%
non-cumulative distributions. Distributions were suspended effective January 1,
1997. 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 declared and payable, if any, after the Expiration Date, on any
Interests which are tendered and accepted by the Offerors. There can be no
assurance that the Partnership will make any distributions in the future to
Limited Partners who continue to own Interests following completion of the
Offer. See Section 10, "Certain Information About the Partnership."
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:
If the Offer is fully subscribed, the Partnership will use
approximately $112,500 to purchase 500 Interests and pay costs associated with
the Offer. This will have the effect of: (i) reducing the cash available to fund
future needs and contingencies or to make future distributions; and (ii)
reducing or eliminating the interest income that the Partnership would have been
able to earn had it invested this cash in interest bearing investments.
Financial statements giving pro forma effect of the Offer, assuming the purchase
by the Partnership of Interests at $205 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 as the terms of this Offer or on terms which are more favorable or less
favorable to Limited Partners than the terms of this Offer. Rule 13e-4
promulgated under the Exchange Act prohibits the Offerors from purchasing any
Interests, other than pursuant to the Offer, until at least ten (10) business
days after the Expiration Date. Any possible future purchases by the Partnership
will depend on many factors, including but not limited to, the market price of
Interests, the results of the Offer, the Partnership's business and financial
position and general economic market conditions.
Section 9. Source and Amount of Funds. The total amount of funds
required to complete this Offer is approximately $225,000 (including $205,000 to
purchase 1,000 Interests plus approximately $20,000 for expenses related to
administering the Offer). The Partnership expects to fund monies required to
complete its purchases and to pay its expenses from its cash reserves
(approximately $102,500 to purchase 500 Interests and approximately $10,000 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. As of March 31, 1999 and December
31, 1998 the Partnership had unrestricted cash and cash equivalents of $708,839
and $640,969, or $28.69 and $25.94 per Interest, respectively. If the Offer is
oversubscribed and the Partnership, in its sole discretion, decides to purchase
Interests in excess of 500 Interests, the Partnership will fund these additional
purchases and expenses, if any, from its cash reserves.
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The Affiliate expects to fund monies required to complete its purchases
and to pay its portion of expenses (approximately $102,500 to purchase 500
Interests and approximately $10,000 for its proportionate share of expenses
related to administering the Offer), from cash contributions to be made to the
Affiliate by its members. If the Offer is oversubscribed and the Affiliate, in
its sole discretion, decides to purchase Interests in excess of 500 Interests,
the Affiliate will fund these additional purchases and expenses, if any, from
these cash contributions.
Section 10. Certain Information About the Partnership
Certain Information About the Partnership.
- ------------------------------------------
The Partnership was formed in May, 1983 under the laws of the State of
Kentucky. NTS- Properties Associates IV, a Kentucky limited partnership, is the
Partnership's General Partner. NTS Capital Corporation is the corporate general
partner of the General Partner. NTS Capital Corporation is controlled by Mr.
J.D. Nichols, its Chairman of the Board, Mr. Richard L. Good, its Vice Chairman,
and Mr. Brian F. Lavin, its President and Chief Operating Officer. The
Partnership's net income or loss and cash distributions are allocated according
to the terms of the Partnership Agreement. Under the Partnership Agreement, Net
Cash Receipts (as defined in the Partnership Agreement) that are made available
for distribution are distributed 99% to the Limited Partners and 1% to the
General Partner until Limited Partners have received the 8% Preferred
Distribution (as defined in the Partnership Agreement), then to the General
Partner until it has received the General Partner Subordinated Distribution (as
defined in the Partnership Agreement), then 90% to the Limited Partners and 9%
to the General Partner as its Partnership management fee and 1% to the General
Partner as its distributive Partnership share. Net Cash Proceeds (as defined in
the Partnership Agreement) are distributed 99% to the Limited Partners and 1% to
the General Partner until the Limited Partners have received cash distributions
from all sources equal to their Original Capital (as defined in the Partnership
Agreement), plus the amount of any deficiency in the 8% Cumulative Distribution
as of the end of the calendar quarter next preceding the date of such
distribution. Thereafter, any remaining Net Cash Proceeds are distributed 75% to
Limited Partners and 25% to the General Partner.
The Partnership owns the following properties and joint venture
interests:
o Commonwealth Business Center Phase I, a business center with
approximately 57,000 net rentable ground floor square feet and
approximately 24,000 net rentable mezzanine square feet in
Louisville, Kentucky, constructed by the Partnership. The
occupancy level at Commonwealth Business Center Phase I was
92% at March 31, 1999.
o Plainview Point Office Center Phase I and II, an office center
with approximately 56,000 net rentable square feet in
Louisville, Kentucky, acquired complete by the Partnership.
The occupancy level at Plainview Point Office Center Phase I
and II was 53% at March 31, 1999.
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o The Willows of Plainview Phase I, a 118-unit luxury apartment
complex in Louisville, Kentucky, constructed by the
Partnership. The occupancy level at The Willows of Plainview
Phase I was 96% at March 31, 1999.
o A joint venture interest in The Willows of Plainview Phase II,
a 144-unit luxury apartment complex in Louisville, Kentucky,
constructed by the joint venture between the Partnership and
NTS-Properties V, a Maryland limited partnership, an affiliate
of the General Partner of the Partnership ("NTS-Properties
V"). The Partnership's percentage interest in the joint
venture was 10% at March 31, 1999. The occupancy level at The
Willows of Plainview Phase II was 99% at March 31, 1999.
o A joint venture interest in Golf Brook Apartments, a 195-unit
luxury apartment complex in Orlando, Florida, constructed by
the joint venture between the Partnership and NTS-Properties
VI, a Maryland limited partnership, an affiliate of the
General Partner of the Partnership, ("NTS-Properties VI"). The
Partnership's percentage interest in the joint venture was 4%
at March 31, 1999. The occupancy level at Golf Brook
Apartments was 96% at March 31, 1999.
o A joint venture interest in Plainview Point III Office Center,
an office center with approximately 62,000 net rentable square
feet in Louisville, Kentucky, constructed by the joint venture
between the Partnership and NTS-Properties VI. The
Partnership's percentage interest in the joint venture was 5%
at March 31, 1999. The occupancy level at Plainview Point III
Office Center was 93% at March 31, 1999.
o A joint venture interest in Blankenbaker Business Center 1A, a
business center with approximately 50,000 net rentable ground
floor square feet and approximately 50,000 net rentable
mezzanine square feet located in Louisville, Kentucky,
acquired complete by a joint venture (the "Blankenbaker Joint
Venture") between NTS-Properties Plus Ltd. and NTS-Properties
VII,Ltd.,affiliates of the General Partner of the Partnership.
The Partnership's percentage interest in the joint venture was
30% at March 31, 1999. The occupancy level at Blankenbaker
Business Center 1A was 100% at March 31, 1999.
o A joint venture interest in the Lakeshore/University II Joint
Venture ("L/U II Joint Venture"). The L/U II Joint Venture was
formed on January 23, 1995 among the Partnership and
NTS-Properties V, NTS-Properties Plus Ltd. and NTS/Fort
Lauderdale, Ltd., affiliates of the General Partner of the
Partnership. The Partnership's percentage interest in the L/U
II Joint Venture was 18% at March 31, 1999.
A description of the properties owned by the L/U II Joint Venture
appears below:
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-- Lakeshore Business Center Phase I - a business center
with approximately 103,000 net rentable square feet
located in Fort Lauderdale, Florida, acquired
complete by the joint venture. The occupancy level of
Lakeshore Business Center Phase I was 72% at March
31, 1999.
-- Lakeshore Business Center Phase II - a business
center with approximately 97,000 net rentable square
feet located in Fort Lauderdale, Florida, acquired
complete by the joint venture. The occupancy level of
Lakeshore Business Center Phase II was 85% at March
31, 1999.
-- Lakeshore Business Center Phase III- approximately
3.77 acres of undeveloped land adjacent to the
Lakeshore Business Center development, which is zoned
for commercial development. The L/U II Joint Venture
intends to build and develop a 40,000 square foot
office service building on this property.
The L/U II Joint Venture recently sold the following property:
__ University Business Center Phase II, a business
center with approximately 78,000 net rentable first
floor (office and service) and second floor (office)
square feet and approximately 10,000 net rentable
mezzanine square feet located in Orlando, Florida,
acquired complete by the joint venture. The
Partnership received net cash proceeds from the sale
of this property (after repaying debt and costs of
the sale) of approximately $442,000.
As of June 30, 1999, the L/U II Joint Venture intends to use the
remaining 3.8 acres of the land it owns at the Lakeshore Business Center
Development to construct Lakeshore Business Center Phase III. Construction is
expected to begin during 1999. The construction cost is currently estimated to
be $4,000,000 and will be funded by a capital contribution from NTS-Properties V
and debt financing. Construction will not begin until, in the opinion of the
general partner of the L/U II Joint Venture, financing on favorable terms has
been obtained. The Partnership and NTS-Properties Plus, which currently have 18%
and 12% interests, respectively, in the L/U II Joint Venture are not in a
position to contribute additional capital required for the construction of
Lakeshore Business Center Phase III. The Partnership and NTS-Properties Plus
have agreed that NTS-Properties V will make a capital contribution to the L/U II
Joint Venture and that, as a result, NTS-Properties V's interest in the L/U II
Joint Venture will increase proportionally and the Partnership's interest in the
L/U II Joint Venture will decrease proportionally.
During the first quarter of 1999, SHPS, Inc., a division of which is
the sole tenant of the Blankenbaker Business Center 1A, announced its intentions
to consolidate its operations and to build
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its corporate headquarters in Jefferson County, Kentucky. It is the
Partnership's understanding that SHPS, Inc. does not intend to continue to
occupy the space at Blankenbaker Business Center 1A through the duration of its
lease term, which expires in July 2005. The Partnership's proportionate share of
the rental income from this property accounted for approximately 7% of the
Partnership's rental revenues during 1998. The Blankenbaker Joint Venture has
not yet determined the effect, if any, that vacation of this property by the
tenant would have on its operations. Neither the Blankenbaker Joint Venture nor
the Partnership has received notice of termination. The Blankenbaker Joint
Venture plans to review all of its options in the event that it receives notice
of termination.
Commercial leases representing approximately 24% and 13% of the
Partnership's 1998 operating revenues are scheduled to expire (unless extended
in 1999 and 2000, respectively). In the next 12 months, the Partnership
anticipates a demand on its future liquidity as the Partnership continues its
efforts to lease the Partnership's commercial properties. Currently, the
Partnership's plans for renovations and other major capital expenditures include
tenant improvements at the Partnership's properties as required by lease
negotiations. Changes to current tenant finish improvements are a typical part
of any lease negotiation. Improvements generally include a revision to the
current floor plan to accommodate a tenant's needs, new carpeting and paint
and/or wallcovering. The extent and cost of the improvements are determined by
the size of the space being leased and whether the improvements are for a new
tenant or incurred because of a lease renewal. The tenant finish improvements
will be funded by cash flow from operations and cash reserves. As of March 31,
1999, the Partnership had a commitment for approximately $25,000 of interior
renovations of the common area at Plainview Point Office Center Phases I and II.
The source of funds for this project is expected to be cash flow from operations
and/or cash reserves. At this time, the future leasing and additional tenant
finish costs which will be required to renew current leases that expire during
1999 or obtain new tenants are unknown. However, the demand on the Partnership's
future liquidity may increase if the sole tenant of the Blankenbaker Business
Center vacates that property and the Partnership contributes to any tenant
refinishes made by the Blankenbaker Joint Venture. The Partnership had no other
material commitments for renovations or capital improvements as of March 31,
1999.
The Partnership's properties are encumbered by the following mortgages:
Loan Balance
at 03/31/99: Encumbered Property: Due:
- ------------ -------------------- ----
$1,922,588 Commonwealth Business Center Phase I 10/01/04
$1,907,440 Willows of Plainview Phase I 01/05/13
$1,815,791 Willows of Plainview Phase I 01/05/13
Properties owned by joint ventures in which the Partnership is a
partner are encumbered by the following mortgages:
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Loan Balance
at 03/31/99: Encumbered Property: Due:
- ------------ -------------------- ----
$ 312,510* Willows of Plainview Phase II 01/05/13
$ 186,664* Willows of Plainview Phase II 01/05/13
$ 1,028,449* Blankenbaker Business Center 1A 11/15/05
$ 923,626* Lakeshore Business Center Phase I 08/01/08
$ 858,474* Lakeshore Business Center Phase II 08/01/08
*This amount represents the Partnership's proportionate interest in the
mortgages payable as of March 31, 1999.
The Partnership had an earnings to fixed charges coverage deficiency of
$15,659 for the three months ended March 31, 1999. The Partnership's ratio of
earnings to fixed charges was 1.3:1 for the year ended December 31, 1998. The
Partnership's ratio of earnings to fixed charges was 1.0:1 for the year ended
December 31, 1997.
For more detailed financial information about the Partnership, see
"Appendix A: The Partnership's Financial Statements Giving Pro Forma Effect of
the Offer".
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. The actual tax
treatment of a tender of Interests may vary depending upon each Limited
Partner's particular situation. Certain Limited Partners (including, but not
limited to, insurance companies, tax-exempt entities, 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 discussion 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 treat 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 laws. The purchase of Interests pursuant to the Offer will be
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<PAGE>
deemed a sale of the Interests by the tendering Limited Partner. The payment for
a Limited Partner's Interests will 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
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 sum of money distributed to him or her plus
the selling Limited Partner's share of Partnership liabilities 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 Partnership 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
liabilities (if any), exceeds the Limited Partner's adjusted basis 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 tax circumstances.
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. A Limited Partner's initial basis 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 share of 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 $8,955,530, or
$362.44 per Interest, as of March 31, 1999. Basis is generally reduced by cash
distributions, decreases in a Limited Partner's share of liabilities and by the
share of Partnership losses allocated to the Interest.
A selling Limited Partner will be allocated a pro rata share of the
Partnership's taxable income or loss for 1999 with respect to the Interests sold
in accordance with the provisions of the Partnership Agreement concerning
transfers of Interests. This allocation will affect the Limited Partner's
adjusted tax basis in his or her Interests and, therefore, the amount of the
Limited Partner's taxable gain or loss upon a sale of Interests pursuant to this
Offer. For individuals, trusts and estates the income allocated will be treated
as ordinary income which could be taxed at a rate as high as 39.6% for federal
income tax purposes, while the corresponding reduction in taxable gain upon the
sale of the Interests will result in tax savings of no more than 28% of the
reduction in taxable gain.
In determining the tax consequences of accepting the Offer, the
Partnership's payments for Interests will be deemed to be equal to the $205 cash
payment per Interest plus a pro rata share of the Partnership's debt (together,
the "Selling Price"). There was nonrecourse debt attributed to the Interests in
the approximate amount of $8,955,530, or $362.44 per Interest, as of March 31,
1999. The taxable gain (or loss) to be incurred as a consequence of accepting
the Offer is determined by subtracting the adjusted basis of the purchased
Interest from the Selling Price.
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<PAGE>
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, unrecaptured Section 1250 gain 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
(generally, depreciation deductions in excess of straight-line depreciation in
the case of real property and all allowable depreciation to date in the case of
other property) constitute "unrealized receivables." 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 depreciation
deductions that are "unrealized receivables." In general, for Interests held for
twelve (12) months or longer, with respect to real property, the amount of gain
attributable to depreciation not taxed as ordinary income is taxed at a maximum
rate of 25%. 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 depreciation subject to
ordinary income tax per Interest purchased by a Limited Partner in the original
offering is estimated to be $133.77 as of March 31, 1999, subject to further
adjustment for tax exempt use property rules. Therefore, a maximum of
approximately $133.77 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 1999 is taxed at a
stated maximum rate of 39.6% for federal income tax purposes. In the case of
real property, the amount of gain not taxed as ordinary income attributable to
depreciation is taxed at a maximum rate of 25%. Net capital gains are taxed for
federal income tax purposes at a stated maximum rate of 20% for Interests held
at least twelve (12) months. The tax rates may actually be somewhat higher,
depending on the taxpayer's personal exemptions and amount of adjusted gross
income. A taxable loss, if any, on the disposition of Interests will be
recognized as a capital loss for federal income tax purposes for Limited
Partners who hold their Interests as capital assets. Tax exempt Limited Partners
may be subject to a recapturable cost recovery allowance. The amount of
recapturable cost recovery allowance per Interest for tax exempt Limited
Partners, if any,
23
<PAGE>
may be less than that for taxable Limited Partners. Tax exempt Limited Partners
may be subject to tax on unrelated business taxable income (UBTI) and,
therefore, should consult their tax advisors to determine what amount, if any,
of the 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 may be
credited against a foreign Limited Partner's federal income tax liability, and
if in excess thereof, a refund can be obtained from the IRS by filing a U.S.
income tax return.
Back-up Withholding. 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. See "Foreign Limited Partners," above.
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, Treasury Regulation
1.1245-6(b) provides that Code Section 1245 overrides the nonrecognition
provisions of subtitle A of the Code, including Code Section 512(b)(5), if
applicable; furthermore 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 Section 514) 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 will 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 will 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."
24
<PAGE>
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, or the Affiliate, has effected any transactions in the Interests during
the forty (40) business days prior to the date hereof.
On May 5, 1999, Ocean Ridge purchased five Interests from a
Limited Partner for a purchase price of $205 per Interest. On June 21,
1999, Ocean Ridge purchased ten Interests from a Limited Partner for a
purchase price of $205 per Interest. On June 29, 1999, Ocean Ridge
purchased ten Interests from a Limited Partner for a purchase price of
$205 per Interest.
Section 13. Extensions of Tender Period; Terminations; Amendments. The
Partnership has, or, if the Offer is oversubscribed, each Offeror has, the right
at any time and from time to time, to extend the period of time during which the
Offer is open by giving written notice of the extension to each Limited Partner.
If there is any extension, all Interests previously tendered and not purchased
or withdrawn will remain subject to the Offer and may be purchased by the
Offerors, except to the extent that such Interests may be withdrawn as set forth
in Section 4, "Withdrawal Rights."
If the Offer is oversubscribed, each Offeror has the right to purchase
additional Interests. If either Offeror decides, in its sole discretion, to
increase the amount of Interests being sought and, at the time that the notice
of such increase is first published, sent or given to holders of Interests, the
Offer is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from, and including, the date that such notice
is first so published, sent or given, then the Offer will be extended until the
expiration of such period of ten (10) business days.
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 Midnight, Eastern Standard Time. The Offerors have the right:
(i) to terminate the Offer and not to purchase or pay for any Interests not
previously purchased or paid for upon the occurrence of any of the conditions
specified in Section 6, "Certain Conditions of the Offer," by giving written
notice of such termination to the Limited Partners and making a public
announcement thereof; or (ii) at any time and from time to time, to amend the
Offer in any respect. All extensions, delays in payment or amendments will be
followed by public announcements thereof, such announcements 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.
25
<PAGE>
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, 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.
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 Partnership has filed an Issuer Tender Offer Statement on Schedule
13E-4 and the Affiliate has filed a Tender Offer Statement on Schedule 14D-1
with the Securities and Exchange Commission ("Commission") which includes
certain information relating to the Offer summarized herein. Copies 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;
26
<PAGE>
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 IV., Ltd.
July 28, 1999
27
<PAGE>
Appendix A
The Partnership's Financial Statements Giving
Pro Forma Effect of the Offer
The following unaudited pro forma balance sheets and statements of
operations of the Partnership are presented to give effect of the Offer as if it
was fully subscribed and completed as of January 1, 1998 and January 1, 1999.
The pro forma financial statements contain certain financial information for the
fiscal year ended December 31, 1998 extracted or derived from the Partnership's
Annual Report on Form 10-K and certain financial information for the quarter
ended March 31, 1999 extracted or derived from the Partnership's Quarterly
Report on Form 10-Q. The Annual and Quarterly 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 Annual and Quarterly
Reports is qualified in its entirety by reference to the reports and the
financial statements (including the notes) contained in the reports. The pro
forma financial statements present the quarterly and annual reports of the
Partnership giving effect of the Offer as if the Offer was fully subscribed and
completed as of January 1, 1999 and January 1, 1998, respectively. The
information presented in these pro forma financial statements 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 year ended December 31, 1998
or the quarter ended March 31, 1999, nor do they purport to represent the future
financial position of the Partnership.
28
<PAGE>
<TABLE>
NTS-PROPERTIES IV
A Kentucky Limited Partnership
Unaudited Proforma
BALANCE SHEETS
<CAPTION>
Tender
Actual Proforma
As of As Of
March 31, 1999 March 31, 1999
-------------- --------------
<S> <C> <C>
ASSETS
Cash and equivalents* $ 708,839 $ 596,339
Cash and equivalents - restricted 114,699 114,699
Investment securities -- --
Accounts receivable, net of allowance for
doubtful accounts of $2,043 (1999) and $1,972
(1998) 200,009 200,009
Land, buildings and amenities, net 11,162,109 11,162,109
Asset held for sale and development 297,251 297,251
Other assets 408,444 408,444
----------- -----------
$12,891,351 $12,778,851
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Mortgages payable $ 8,955,522 $ 8,955,522
Accounts payable 154,765 154,765
Security deposits 79,362 79,362
Other liabilities 150,358 150,358
----------- -----------
9,340,007 9,340,007
Commitments and Contingencies
Partners' equity* 3,551,344 3,438,844
----------- -----------
$12,891,351 $12,778,851
=========== ===========
*This offer will reduce Cash and Partners' equity and increase Expenses.
</TABLE>
<PAGE>
<TABLE>
NTS-PROPERTIES IV
A Kentucky Limited Partnership
UNAUDITED PROFORMA
STATEMENT OF OPERATIONS
<CAPTION>
Tender Tender
Actual Actual Proforma Proforma
for three for the for three for the
months ended year ended months ended year ended
March 31, December 31, March 31, December 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
--------------------------------------------------------
REVENUES:
Rental Income $ 846,090 $ 3,561,342 $ 846,090 $ 3,561,342
Gain on sale of assets -- 208,607 -- 208,607
Interest and other income 8,428 57,752 8,428 57,752
----------- ----------- ----------- -----------
854,518 3,827,701 854,518 3,827,701
EXPENSES*:
Operating expenses 190,449 785,718 190,449 785,718
Operating expenses - 141,636 466,497 141,636 466,497
affiliated
Write-off of unamortized
building costs, improvements 10,720 13,081 10,720 13,081
Amortization of
capitalized leasing costs 892 14,998 892 14,998
Interest expense 172,245 803,140 172,245 803,140
Management fees 46,877 204,498 46,877 204,498
Real estate taxes 50,856 212,763 50,856 212,763
Professional and
administrative expenses 36,635 114,956 36,635 114,956
Tender offer costs -- -- 10,000 10,000
Professional and
administrative 41,648 154,605 41,648 154,605
expenses - affiliated
Depreciation and 178,219 805,087 178,219 805,087
amortization ----------- ----------- ----------- -----------
870,177 3,575,343 880,177 3,585,343
----------- ----------- ----------- -----------
Income (loss) $ (15,659) $ 252,358 $ (25,659) $ 242,358
=========== =========== =========== ===========
Net income (loss)
allocated to $ (15,502) $ 249,834 $ (25,402) $ 239,934
=========== =========== =========== ===========
the limited partners
Net income per limited
partnership unit $ (0.62) $ 9.64 $ (1.03) $ 9.44
=========== =========== =========== ===========
Weighted average number of
limited partnership Units 25,082 25,918 24,582 25,418
=========== =========== =========== ===========
*This offer will reduce Cash and Partners' equity and increase Expenses.
</TABLE>
<PAGE>
Exhibit (a)(2)
Form of Letter of Transmittal
<PAGE>
LETTER OF TRANSMITTAL
Regarding the Interests in
NTS - PROPERTIES IV., LTD.
Tendered Pursuant to the Offer to Purchase Dated July 28, 1999
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT, AND THIS LETTER OF TRANSMITTAL
MUST BE RECEIVED BY THE PARTNERSHIP BY,
12:00 MIDNIGHT EASTERN STANDARD TIME, ON FRIDAY,
OCTOBER 29, 1999 (THE "EXPIRATION DATE"), UNLESS
THE OFFER IS EXTENDED BY OFFERORS.
[Investor Name] If applicable:
[Address] [Custodian]
[City, State, Zip] [Address]
[Tax I.D. #] [City, State, Zip]
[# of Interests] [Account #]
I am a Limited Partner of NTS-Properties IV., Ltd. I hereby tender my limited
partnership interests or portion thereof, as described and specified below, to
the Offerors, NTS-Properties IV., Ltd. (the "Partnership"), and the
Partnership's affiliate, ORIG, LLC, (the "Affiliate" and the Partnership are
each an "Offeror" and collectively the "Offerors") upon the terms and conditions
set forth in the Offer to Purchase, dated July 28, 1999 (collectively, the
"Offer to Purchase" and "Letter of Transmittal" constitute the "Offer").
THIS LETTER OF TRANSMITTAL IS SUBJECT TO ALL THE TERMS AND CONDITIONS SET FORTH
IN THE OFFER TO PURCHASE, INCLUDING, BUT NOT LIMITED TO, THE ABSOLUTE RIGHT OF
THE OFFERORS TO REJECT ANY AND ALL TENDERS DETERMINED BY THEM, IN THEIR SOLE
DISCRETION, NOT TO BE IN THE APPROPRIATE FORM.
I hereby represent and warrant that I have full authority to sell my interests,
or portion thereof, to the Offerors, and that the Offerors will acquire good
title, free and clear of any adverse claim. Upon request, I will execute and
deliver any additional documents necessary to complete the sale of my interests
in accordance with the terms of the Offer. In the event of my death or
incapacity, all authority and obligation shall be placed with my heirs, personal
representatives and successors.
I hereby appoint NTS-Properties Associates IV (without posting of a bond) as my
attorney-in-fact with respect to my interests, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to: (1) transfer ownership of my interests on the Partnership's books
to the respective Offeror, (2) change the address of record of my interests
prior to or after completing the transfer, (3) execute and deliver lost
certificate indemnities and all other transfer documents, (4) direct any
custodian or trustee holding record title to the interests to do what is
necessary, including executing and delivering a copy of this Letter of
Transmittal, and (5) upon payment by the respective Offeror of the purchase
price, to receive all benefits and cash distributions and otherwise exercise all
rights of beneficial ownership of my interests hereby tendered.
(Over)
<PAGE>
INSTRUCTIONS TO TENDER INTERESTS
Please complete the following steps to tender your interests:
o Complete Part 1. by inserting the number of interests you wish to
tender.
o Complete Part 2. by providing your telephone number(s).
o Complete Part 3. by providing the appropriate signature(s). (Note: if
your account is held by a Trustee or Custodian, sign below and forward
this form to the Trustee or Custodian at the address noted on the first
page of this Letter of Transmittal to complete the remaining steps).
All signatures must be notarized by a Notary Public.
o Return your original Certificate(s) of Ownership for the interests with
this form. If you are unable to locate your Certificate(s) of
Ownership, complete the Affidavit and Indemnification Agreement for
Missing Certificate(s) of Ownership.
PART 1. NUMBER OF INTERESTS IN THE PARTNERSHIP TO BE TENDERED:
[ ] I tender my entire interest in the Partnership of ______ interests for a
price of $205.00 per interest.
[ ] I tender ___ interests, representing only a portion of my interest in
the Partnership, for a price of $205.00 per interest.
PART 2. TELEPHONE NUMBER(S).
My telephone numbers are: (____)__________[Daytime] and (____)_________[Evening]
PART 3. SIGNATURE(S).
FOR INDIVIDUALS/JOINT OWNERS:
- ---------------------------------- -------------------------------
Print Name of Limited Partner Print Name of Joint Owner
- ---------------------------------- -------------------------------
Signature of Limited Partner Signature of Joint Owner
Sworn to me this ___ day of ___, 1999. Sworn to me this ___ day of ____, 1999.
- ---------------------------------- -------------------------------
Notary Public Notary Public
FOR CUSTODIAL/TRUSTEE/IRA ACCOUNTS:
- --------------------------------- -------------------------------
Print Name of Signatory Signature Sworn to me
this __day of ______, 1999.
- ---------------------------------
Title of Signatory _______________________________
Notary Public
Return or Deliver: (1) this Letter of Transmittal; (2) your original
Certificate(s) of Ownership for the interests, or if you are unable to locate
your Certificate(s) of Ownership, the Affidavit and Indemnification Agreement
for Missing Certificate(s) of Ownership; and (3) the Substitute Form W-9 on or
before the Expiration Date to:
NTS INVESTOR SERVICES
C/O GEMISYS
7103 S. REVERE PARKWAY
ENGLEWOOD, CO 80112
For additional information, call: (800) 387-7454.
<PAGE>
Exhibit (a)(3)
Form of Affidavit and Indemnification Agreement for
Missing Certificate(s) of Ownership
<PAGE>
AFFIDAVIT AND INDEMNIFICATION AGREEMENT
FOR MISSING CERTIFICATE(S) OF OWNERSHIP
State of ______________
County of _____________
=====================================
_____________________________________ (The "Investor")
being duly sworn, deposes and says:
1. The Investor is of legal age and is the true and lawful, present and
sole, record and beneficial owner of _________ (insert number of interests)
limited partnership interests (the "Interests") of NTS-Properties IV., Ltd.,
(the "Partnership"). The Interests were represented by the following
Certificate(s) of Ownership (the "Certificate(s)") issued to the Investor:
Certificate(s) No. Number of Interests Date Issued
- ------------------ ------------------- -----------
The Certificate(s) was (were) lost, stolen, destroyed or misplaced under the
following circumstances:
================================================================================
__________________________________________________and after diligent search, the
Certificate(s) could not be found.
2. Neither the Certificate(s) nor any interest therein has at any time
been sold, assigned, endorsed, transferred, pledged, deposited under any
agreement or other disposed of, whether or not for value, by or on behalf of the
investor. Neither the Investor nor anyone acting on the Investor's behalf has at
any time signed any power of attorney, any stock power or other authorization
with respect to the Certificate(s) and no person or entity of any type other
than the Investor has or has asserted any right, title, claim or interest in or
to the Certificate(s) or to the Interests represented thereby.
3. The Investor hereby requests, and this Affidavit and Indemnification
Agreement is made and given in order to induce the Partnership, (i) to refuse to
recognize any person other than the Investor as the owner of the Certificate(s)
and (ii) to refuse to make any payment, transfer, registration, delivery or
exchange called for by the Certificate(s) to any person other than the Investor
and to refuse the Certificates or to make the payment, transfer, registration,
delivery or exchange called for by the Certificate(s) without the surrender
thereof or cancellation.
4. If the Investor or the representative or the assigns of the Investor
should find or recover the Certificate(s), the Investor will immediately
surrender and deliver the same to the Partnership for cancellation without
requiring any consideration thereof.
5. The Investor agrees in consideration of the issuance to the Investor
of a new certificate in substitution for the Certificate(s), to indemnify and
hold harmless the Partnership, each general partner of the Partnership, each
affiliate of the Partnership and any person, firm or corporation now or
hereafter acting as the transfer agent, registrar, trustee, depositary,
redemption, fiscal or paying agent of the Partnership, or in any other capacity
and their respective
(Over)
<PAGE>
successors and assigns, from and against any and all liabilities, losses,
damages, costs and expenses of every nature (including reasonable attorney's
fees) in connection with, or arising out of, the lost, stolen, destroyed or
mislaid Certificate(s) without the surrender thereof and, whether or not: (a)
based upon or arising out of the honoring of, or refusing to honor, the
Certificate(s) when presented to anyone, (b) or based upon or arising from
inadvertence, accident, oversight or neglect on the part of the Partnership, its
affiliates or any general Partner of the Partnership, agents, clerk, or employee
of the Partnership or any general partner of the Partnership and/or the omission
or failure to inquire into contest or litigate the right of any applicant to
receive payment, credit, transfer, registration, exchange or delivery in respect
of the Certificate(s) and/or the new instrument or instruments issued in lieu
thereof, (c) and/or based upon or arising out of any determination which the
Partnership, its affiliates or any general partner thereof may in fact makes as
to the merits of any such claim, right, or title, (d) and/or based upon or
arising out of any fraud negligence on the part of the Investor in connection
with reporting the loss of the Certificate(s) and the issuance of new instrument
or instruments in lieu thereof, (e) and/or based upon or arising out of any
other matter or thing whatsoever it may be.
6. The Investor agrees that all notices, requests, demands and other
communications under this Affidavit and Indemnification Agreement shall be in
writing and shall be mailed to the party to whom notice is to be given by
certified or registered mail, postage prepaid; if intended for the Partnership
shall be addressed to Gemisys, 7103 S. Revere Pkwy., Englewood, CO 80112 Attn.:
NTS Investor Services, or such other address as the Partnership shall have given
notice to the Investor at the address set forth at the end of this Affidavit and
Indemnification Agreement or at such other address as the Investor shall have
given prior notice to the Partnership in a manner herein provided.
7. No waiver shall be deemed to be made by the Partnership or its
affiliates of any of its rights hereunder unless the same shall be in writing,
and each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of the Partnership or
its affiliates or the obligations of the Investor in any other respect at any
other time.
8. The provisions of this Affidavit and Indemnification Agreement shall
be binding upon and inure to the benefit of the successors and assigns of the
Partnership and its affiliates and the Investor.
9. This Affidavit and Indemnification Agreement shall be governed by
and construed in accordance with the laws of the State of Kentucky.
----------------------------------------------------
Investor Signature
(Please sign exactly as name appears on certificate)
----------------------------------------------------
Investor Signature
(if held jointly)
----------------------------------------------------
Name
----------------------------------------------------
Address
Sworn to me this ____ day of ________________, 1999.
- -------------------------------
Notary Public
My commission expires: / /
---------------
<PAGE>
Exhibit (a)(4)
Form of Letter to Limited Partners
<PAGE>
[NTS letterhead]
July 28, 1999
Account Name 1
Account Name 2
Address
City, State Zip
To our Limited Partners:
Enclosed for your review is an Offer to Purchase your limited
partnership interests. Please read all of the enclosed material carefully before
deciding to tender your interests.
================================================================================
|| You currently own ____ interests. The Partnership is offering to purchase ||
|| your interests for $205.00 per interest, or a total of $_______, ||
|| subject to the terms of the Offer. ||
|| ||
|| Payment will be made within five business days of the expiration of the ||
|| Offer. ||
================================================================================
We invite your attention to the following:
o This Offer is being made to all Limited Partners.
o Up to 500 interests may be purchased by the Partnership and an
additional 500 interests may be purchased by the Partnership's
affiliate, ORIG, LLC. If more than 1,000 interests are tendered, the
Partnership may decide to purchase more than 500 interests and the
affiliate may decide to purchase more than 500 interests or the
Partnership and the affiliate may decide to purchase less than all of
the interests tendered on a pro rata basis.
o The Offer will expire at 12:00 midnight, Eastern Standard Time, on
Friday, October 29, 1999, unless the Offer is extended.
After reading the Offer to Purchase (white), if you wish to tender any
or all of your interests, complete and return to NTS Investor Services c/o
Gemisys, before October 29, 1999, the following:
(1) the Letter of Transmittal (blue);
(2) the Substitute Form W-9 (green); and
(3) the Certificate(s) of Ownership for the interests or,
if you are unable to locate the Certificate(s) of
Ownership, complete the Affidavit and Indemnification
Agreement for Missing Certificate(s) of Ownership
(yellow).
NTS INVESTOR SERVICES
C/O GEMISYS
7103 S. REVERE PARKWAY
ENGLEWOOD, CO 80112
For additional information, call: (800) 387-7454
<PAGE>
Exhibit (a)(5)
Substitute Form W-9 with Guidelines
<PAGE>
Substitute Form W-9
o Purpose of the Substitute Form W-9
Each tendering Limited Partner is required to provide to the
Partnership its correct Taxpayer Identification Number ("TIN") on Substitute
Form W-9 which is provided below, and to certify whether the Limited Partner is
subject to backup withholding of federal income tax. If the Partnership is not
provided with the correct TIN, the Limited Partner may be subject to a $500
penalty imposed by the Internal Revenue Service (the "IRS"). In addition,
failure to provide the information on Substitute Form W-9 may subject the
tendering Limited Partner to 31% federal income tax withholding on the payment
of the purchase price of all Interests purchased by the Offerors from the
Limited Partner pursuant to this Offer.
o Instructions for filling out the Substitute Form W-9
Each tendering Limited Partner must fill out the Substitute Form W-9
below by: (1) inserting their TIN; (2) certifying whether the Limited Partner is
subject to backup withholding of federal income tax; and (3) signing the form.
If the tendering Limited Partner is an individual, the TIN is the
Limited Partner's social security number.
If the tendering Limited Partner has been notified by the IRS that the
Limited Partner is subject to backup withholding, the Limited Partner must cross
out item (2) of the "Certification" box of Substitute Form W-9, unless the
Limited Partner has since been notified by the IRS that the Limited Partner is
no longer subject to backup withholding. If backup withholding applies, the
Partnership is required to withhold 31% of any payments made to the Limited
Partner. Backup withholding is not an additional tax. Rather, the tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.
If the tendering Limited Partner has not been issued a TIN and has
applied for one or intends to apply for one in the near future, the Limited
Partner should write "Applied For" in the space provided for the TIN in Part I
of the Substitute Form W-9, and sign and date the Substitute Form W-9. If
"Applied For" is written in Part I and the Partnership is not provided with a
TIN within 60 days, the Partnership will withhold 31% on all payments of the
purchase price to the Limited Partner until a TIN is provided to the
Partnership.
Certain Limited Partners (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, the individual must submit an Internal Revenue Form W-8,
signed under penalties of perjury, attesting to such individual's exempt status.
A Form W-8 may be obtained from NTS Investor Services c/o Gemisys at the address
and telephone number provided in Section 15, "Address; Miscellaneous" of the
Offer to Purchase.
For complete instructions on how to fill out Substitute Form W-9, refer
to the Guidelines enclosed.
(OVER)
<PAGE>
- --------------------------------------------------------------------------------
SUBSTITUTE | Part I -- Taxpayer Identification |
FORM W-9 | Number -- For all accounts, enter | ___________________
| your TIN in the box at right. | Social Security No.
| (For most individuals, this is |
Department of the | your social security number.) |
Treasury | Certify by signing and dating | OR
Internal Revenue | below. |
Service | | ___________________
| | Employer
Payer's Request | | Identification No.
for Taxpayer | |
Identification | |
Number (TIN) | |
| | (If awaiting a TIN
| | write "Applied For"
| | in the space above).
- --------------------|-----------------------------------|-----------------------
Part II -- For payees exempt from backup withholding, see the enclosed
Guidelines and complete as instructed therein.
- --------------------------------------------------------------------------------
Certification -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me). and
(2) I am not subject to backup withholding either because (a) I am exempt from
backup withholding, (b) I have not been notified by the Internal Revenue Service
(the "IRS") that I am subject to backup withholding as a result of failure to
report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
Certificate Instructions -- You must cross out item (2) above, if you have been
notified by the IRS that you are subject to backup withholding because of under
reporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see instructions in the enclosed
Guidelines.)
- --------------------------------------------------------------------------------
SIGNATURE __________________________________ DATE _________________ , 199 ____
- --------------------------------------------------------------------------------
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer.
Social Security numbers have nine digits separated by two hyphens, e.g.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, e.g., 00-0000000. The table below will help determine the number to
give the payer.
Give the SOCIAL
For this type of account: SECURITY
number of -
- ------------------------------------ --------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on the
account(1)
3. Husband and wife (joint The actual owner of
account) the account or, if joint
funds, either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to Minors
Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a. A revocable savings trust The grantor-trustee(1)
account (in which grantor
is also trustee)
b. Any "trust" account that The actual owner(1)
is not a legal or valid trust
under State law
Give the EMPLOYER
For this type of account: IDENTIFICATION
number of -
- ------------------------------------ --------------------------
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or The legal entity (do
pension trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is not
designated in the
account title)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
12. Partnership account held in The partnership
13. Association, club, or other The organization
14. A broker or registered The broker or nominee
15. Account with the Department The public entity
of Agriculture in the name of a public entity (such as a State or local
government, school district, or prison) that receives agricultural program
payments
- ------------------------------------ --------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. If the owner does not have an employer
identification number, furnish the owner's social security number.
(5) List first and circle the name of the legal trust, estate or pension trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at an office of the Social Security
Administration or the Internal Revenue Service.
To complete Substitute Form W-9, if you do not have a tax payer identification
number, write "Applied For" in the space for the taxpayer identification number
in Part 1, sign and date the Form, and give it to the requester. Generally, you
will then have 60 days to obtain a taxpayer identification number and furnish it
to the requester. If the requester does not receive your taxpayer identification
number within 60 days, backup withholding, if applicable, will begin and will
continue until you furnish your taxpayer identification number to the requester.
Payees Exempt from Backup Withholding Penalties
Payees specifically exempted from backup withholding on ALL payments include the
following:*
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States,
or any political subdivision or instrumentality thereof.
o A foreign government or a political subdivision, agency or
instrumentality thereof.
o An international organization or any agency or instrumentality
thereof.
o A registered dealer in securities or commodities registered in the
United States or a possession of the United States.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a). o An entity
registered at all times during the tax year under the
Investment Company Act of 1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
o Payments to nonresident aliens subject to withholding under section
1441.
o Payments to partnerships not engaged in a trade or business in the
United States and which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid
in money.
- ----------
* Unless otherwise noted herein, all references below to section numbers or to
regulations are references to the Internal Revenue Code and the regulations
promulgated thereunder.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
o Payments of interest on obligations issued by individuals. Note: You
may be subject to backup withholding if (i) this interest is $600 or
more, (ii) the interest is paid in the course of the payer's trade or
business and (iii) you have not provided your correct taxpayer
identification number to the payer.
o Payments of tax-exempt interest (including exempt interest dividends
under section 852).
o Payments described in section 6049(b)(5) to nonresident aliens. o
Payments on tax-free covenant bonds under section 1451. o Payments made by
certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file a Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice.- Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax return.
Payers must be given the numbers whether or not recipients are required to file
tax returns. Payers must generally withhold 31% of taxable interest, dividends,
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.-If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect. (2) Civil Penalty for False Statements With
Respect to Withholding.-If you make a false statement with no reasonable basis
which results in no imposition of backup withholding, you are subject to a
penalty of $500. (3) Criminal Penalty for Falsifying Information.-If you falsify
certifications or affirmations, you are subject to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION
CONTACT YOUR TAX CONSULTANT OR THE
INTERNAL REVENUE SERVICE
<PAGE>
