SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------------------------
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
(Amendment No. 1)
NTS-Properties IV
(Name of Subject Company (issuer))
NTS-Properties IV (Offeror and Issuer)
ORIG, LLC (Offeror and Affiliate of Issuer)
J.D. Nichols (Bidder and Affiliate of Issuer)
Brian F. Lavin (Bidder and Affiliate of Issuer)
(Names of Filing Persons(identifying status as offeror, issuer or other person))
LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
62942E209
(CUSIP Number of Class of Securities)
J.D. Nichols, Managing General Partner of
NTS-Properties Associates IV and Managing Member
of ORIG, LLC
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
filing persons)
Copy to:
Michael J. Choate, Esq.
Shefsky & Froelich Ltd.
444 North Michigan Avenue, Suite 2500
Chicago, Illinois 60611
(312) 836-4066
Calculation of Filing Fee:
Previously Paid
[ ] 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 or Schedule and the date of its filing.
Amount Previously Paid: _______________________ Not Applicable
Form or Registration No.: ______________________ Not Applicable
Filing Party: ______________________________ Not Applicable
Date Filed: ______________________________ Not Applicable
[ ] Check box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to
which the statement relates:
[X] third-party tender offer subject to rule 14d-1.
[X] issuer tender offer subject to rule 13e-4.
[ ] going private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
<PAGE>
This Schedule TO relates to an Offer to Purchase dated September 22,
2000 (the "Offer") by NTS-Properties IV, a Kentucky limited partnership (the
"Partnership") and ORIG, LLC ("ORIG"), a Kentucky limited liability company and
affiliate of the Partnership (each an "Offeror" and collectively, the
"Offerors"), to purchase up to 200 limited partnership interests in the
Partnership. Information in the Offer to Purchase is incorporated herein by
reference in response to all of the items set forth in this Schedule TO, unless
otherwise indicated.
Item 5. Past contracts, transactions, negotiations and agreements.
(a) NTS Development Company, an affiliate of the General Partner,
directs the management of the Partnership's properties pursuant to a written
agreement (the "Management Agreement") between NTS Development Company and the
Partnership. Under the Management Agreement, NTS Development Company establishes
rental policies and rates and directs the marketing activity of leasing
personnel. It also coordinates the purchase of equipment and supplies,
maintenance activity and the selection of all vendors, suppliers and independent
contractors.
Under the Management Agreement, the Partnership agreed to pay NTS
Development Company a management fee is equal to 5% of gross revenues from
residential properties and 6% of gross revenues from commercial properties. Also
under the Management Agreement, the Partnership agreed to pay NTS Development
Company a repair and maintenance fee equal to 5.9% of costs incurred which
relate to capital improvements. The Partnership paid NTS Development Company the
following fees for the six months ended June 30, 2000 and for the year ended
December 31, 1999. These charges include items which have been expensed as
operating expenses - affiliated or professional and administrative expenses and
items which have been capitalized as other assets or as land, buildings and
amenities.
Six Months Year
Ended Ended
06/30/00 12/31/99
-------- --------
Property
Management
Fee $93,564 $186,264
Repair and
Maintenance Fee 22,819 21,620
------ ------
$116,383 $207,884
======== ========
The Management Agreement also requires the Partnership to purchase all
insurance relating to the managed properties, to pay the direct out-of-pocket
expenses of NTS Development Company in connection with the operation of the
properties, including the cost of goods and materials used for
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and on behalf of the Partnership, and to reimburse NTS Development Company for
the salaries, commissions, fringe benefits, and related employment expenses of
on-site personnel. The Partnership also paid NTS Development Company the
following amounts for expenses, in addition to the fees described in the
preceding table, for the six months ended June 30, 2000 and for the year ended
December 31, 1999. These charges included items which have been expensed as
operating expenses - affiliated or professional and administrative expenses and
items which have been capitalized as other assets or as land, building and
amenities.
Six Months Year
Ended Ended
06/30/00 1999
-------- ----
Leasing $ 48,824 $ 148,888
Administrative 96,129 208,739
Property
Management
Costs 142,064 340,261
Other 4,000 13,804
----- ------
$291,017 $711,692
======== ========
The initial term of the Management Agreement was five years, and
thereafter for succeeding one-year periods, unless canceled by either party upon
sixty days written notice. As of September 22, 2000, the Management Agreement is
still in effect.
In connection with the retirement of Richard L. Good, the former Vice
Chairman of NTS Capital Corporation, and under an agreement dated as of January
1, 1999 (the "Retirement Agreement"), JDN Financial Holdings, LLC, a Delaware
limited liability company owned by J.D. Nichols ("JDN Financial"), acquired the
equity interests of Richard L. Good in various entities affiliated with the
Partnership, including NTS Corporation, NTS-Properties Associates VI, NTS-
Properties Associates VII, NTS-Properties Plus Associates, and interests in
private limited partnerships with ownership interests in real estate. JDN
Financial did not purchase Interests in connection with the Retirement
Agreement. In consideration for his equity interests in the foregoing entities,
Richard L. Good received (i) monetary consideration equal to his salary and
bonus in the amount of approximately $529,000, (ii) various promissory notes in
the net amount of approximately $1,600,000, payable monthly through February 29,
2012 at the current interest rate of 5.09% per annum, and (iii) equity interests
in real and personal property, including 50% of the equity interest in National
Aquatics, Inc. and 70% of the equity interest in NTS/Sabal Office Limited
Partnership.
On February 25, 2000, Mr. Nichols made a capital contribution of
$100,000 to NTS Financial Partnership, a Kentucky general partnership ("NTS
Financial") and an affiliate of the Partnership.
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On September 17, 1999, Mr. Nichols received a return of capital from
NTS Financial in the amount of $50,000, and used such funds to make a capital
contribution to ORIG. On February 25, 2000, Mr. Nichols received a return of
capital from NTS Financial in the amount of $100,000, and used such funds to
make a capital contribution to ORIG.
In the past two years, Mr. Nichols has received the following returns
of capital from NTS Financial on the dates set forth in the table below. Mr.
Nichols used these funds to pay third party obligations.
Return of
Date Capital
---- -------
June 30, 2000 $119,155
March 29, 2000 $165,000
January 5, 2000 $164,122
October 18, 1999 $100,000
October 15, 1999 $225,739
June 30, 1999 $119,155
In the past two years, Mr. Nichols has received the following returns
of capital from NTS Financial on the dates set forth in the table below. Mr.
Nichols used such funds to make a capital contribution to ORIG to purchase
limited partnership interests in the entities listed below.
Return of
Date Capital Limited Partnership
---- ------- -------------------
January 4, 2000 $220,000 NTS-Properties V
December 28, 1999 $320,000 NTS-Properties VI
December 21, 1999 $191,750 NTS-Properties VII, Ltd.
December 15, 1999 $404,897 The Partnership and NTS-
Properties III
October 7, 1999 $852,000 NTS-Properties VII, Ltd.
April 5, 1999 $109,000 NTS-Properties III
March 11, 1999 $ 96,000 The Partnership
February 24, 1999 $137,000 The Partnership
March 11, 1999 $ 96,000 NTS-Properties VII, Ltd.
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In the past two years, Mr. Nichols has also received the following funds
from NTS Financial, which were not a return of capital, but were undistributed
profits from private affiliates of NTS Financial. These funds were used to pay
taxes.
Date Distribution
---- ------------
January 18, 2000 $251,000
April 19, 1999 $715,000
January 1, 1999 $297,500
January 1, 1999 $ 56,000
Since January 1, 1998, Mr. Nichols has personally guaranteed various loans
made to various publicly and privately-held affiliates of the Partnership. As of
August 31, 2000, Mr. Nichols had outstanding personal guaranties totaling
approximately $27,198,000. Mr. Nichols has guaranteed the payment of
approximately $215,000 of notes payable of NTS Corporation. Mr. Nichols has
guaranteed the payment of approximately $17,700,000 of loans of various
affiliates. In October, 1998, Mr. Nichols and Mr. Lavin each personally
guaranteed $3,250,000 of a loan made to a privately-held affiliate of the
Partnership secured by a property, the book value of which is $10,000,000. Mr.
Nichols also guaranteed, as an indemnitor, that the conditions of certain surety
bonds will be met. The outstanding commitments of the surety bonds aggregated
$3,283,000 at December 31, 1999. In December, 1999, Mr. Nichols and Mr. Lavin
each personally guaranteed a $2,000,000 loan to ORIG from Community Trust Bank,
N.A. in the following amounts: (1) Mr. Nichols guaranteed 75% of all
indebtedness of ORIG or $1,500,000, whichever is less; and (2) Mr. Lavin
guaranteed 25% of all indebtedness of ORIG or $500,000, whichever is less. This
loan was repaid using the proceeds of a $6,000,000 loan to ORIG from the Bank of
Louisville. Mr. Nichols and Mr. Lavin each personally guaranteed up to
$6,000,000 of the obligations under the loan from the Bank of Louisville for
which each of them is jointly and severally liable.
In addition to the guaranties described above, on March 31, 1989 NTS
Guaranty Corporation, owned 100% by Mr. Nichols and an affiliate of the
Partnership, guaranteed certain obligations of NTS Mortgage Income Fund, which
is also an affiliate of the Partnership. On September 20, 1988, Mr. Nichols has
issued a $10,000,000 demand note to NTS Guaranty Corporation, which may be used
to satisfy the guaranty. The obligations of NTS Guaranty Corporation under the
guaranty are expressly limited to the assets of NTS Guaranty Corporation, its
ability to draw upon the $10,000,000 demand note and Mr. Nichols' ability to
answer the demand.
(b) During the past two years, ORIG has participated in joint tender offers
with (i) the Partnership to purchase Interests and (ii) limited partnerships
that are affiliates of the Partnership to purchase the limited partnership
interests of those partnerships. The following table sets forth the results of
these tender offers:
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<TABLE>
Limited
Partnership Limited
Interests Partnership
Total Purchased by Interests
Purchase Subject Price per Interests the Subject Purchased
Date Partnership Interest Purchased Partnership by ORIG
---- ----------- --------- --------- ----------- -------
<S> <C> <C> <C> <C> <C>
December NTS- $250 729 500 229
31, 1998 Properties III
December NTS- $250 938 500 438
8, 1999 Properties III
February NTS- $205 1,259 600 659
19, 1999 Properties IV
December NTS- $205 2,245 500 1,745
8, 1999 Properties IV
February The $205 2,458 600 1,858
5, 1999 Partnership
December The $230(*) 1,196 250 946
31, 1999 Partnership
January NTS- $350 2,103 750 1,353
18, 1999 Properties VI
September NTS- $370 2,801 500 2,301
30, 1999 Properties VI
December NTS- $380 1,085 250 835
23, 1999 Properties VI
August NTS- $380 3,685 100 3,585
15, 2000 Properties VI
March NTS- $6 25,794 10,000 15,794
12, 1999 Properties VII,
Ltd.
November 30, NTS- $6 41,652 10,000 31,652
1999 Properties VII,
Ltd.
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Limited
Partnership Limited
Interests Partnership
Total Purchased by Interests
Purchase Subject Price per Interests the Subject Purchased
Date Partnership Interest Purchased Partnership by ORIG
---- ----------- --------- --------- ----------- -------
<S> <C> <C> <C> <C> <C>
August 15, NTS- $6 39,220 2,500 36,720
2000 Properties VII,
Ltd.
</TABLE>
Mr. Nichols disclaims beneficial ownership of 10% of all of the Interests in the
Partnership that are owned by ORIG, and disclaims 10% of all of the limited
partnership interests in limited partnerships affiliated with the Partnership
that are owned by ORIG.
Mr. Lavin disclaims beneficial ownership of 90% of all of the Interests in the
Partnership that are owned by ORIG, and disclaims 90% of all of the limited
partnership interests in limited partnerships affiliated with the Partnership
that are owned by ORIG.
* The original offering price was $215 per interest which was increased to $230
per interest on December 20, 1999.
In addition to the above tender offers involving ORIG, o September 30,
1999, NTS- Properties V purchased 2,523 limited partnership interests of
NTS-Properties V from limited partners for $205 per interest pursuant to an
offer to purchase interests.
The Partnership's affiliates, BKK Financial, Inc., an Indiana corporation
("BKK"), and Ocean Ridge Investments, Ltd., a Florida limited partnership
("Ocean Ridge"), have purchased Interests from time to time. Mr Nichols' wife,
Barbara Nichols, is the sole limited partner of Ocean Ridge. BKK is the general
partner of Ocean Ridge. Since March, 1995 Ocean Ridge and BKK purchased 326
Interests at prices ranging from $130 to $205 per Interest. All of these
Interests are currently owned by Ocean Ridge. Mr. Nichols and Mr. Lavin disclaim
beneficial ownership of each of these Interests. The General Partner owns five
Interests. Mr. Nichols and Mr. Lavin disclaim beneficial ownership of each of
these Interests.
ORIG purchased Interests in the Partnership and also purchased limited
partnership interests in limited partnerships affiliated with the Partnership
pursuant to an Agreement, Bill of Sale and Assignment dated February 10, 2000,
by and among ORIG and four investors in the Partnership and partnerships
affiliated with the Partnership (the "Purchase Agreement") for an aggregate
purchase price of $900,000. ORIG paid these investors a premium above the
purchase price previously offered for limited partnership interests pursuant to
prior tender offers because this purchase allowed ORIG to purchase a substantial
number of limited partnership interests without incurring the significant
expenses involved with a tender offer. Pursuant to the Purchase Agreement, ORIG
purchased the following Interests in the Partnership and limited partnership
interests in limited partnerships affiliated with the Partnership:
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o An aggregate of 565 limited partnership interests in the Partnership
from three of the investors for total consideration of $136,629, or an
average price of $241.82 per interest.
o An aggregate of 135 limited partnership interests in NTS-Properties III
from two of the investors for total consideration of $38,676, or an
average price of $286.49 per interest.
o An aggregate of 1,604 limited partnership interests in NTS-Properties V
from three of the investors for total consideration of $425,949, or an
average price of $265.55 per interest.
o An aggregate of 675 limited partnership interests in NTS-Properties VI
from two of the investors for total consideration of $281,128, or
$416.49 per interest.
o An aggregate of 2,251 Interests in NTS-Properties VII, Ltd. from one of
the investors for total consideration of $15,082, or an average price
of $6.70 per Interest.
o An aggregate of 2,536 limited partnership interests in NTS-Properties
Plus, Ltd., from three of the investors for total consideration of
$2,536, or an average purchase price of $1.00 per interest.
Item 10. Financial Statements.
In light of the fact that ORIG is not subject to the reporting
requirements of the Act and given the limited scope of ORIG's operations and its
relatively small size, the costs of preparing audited financial statements would
impose an unreasonable burden on ORIG. ORIG, therefore, did not include audited
financial statements in the Offer.
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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: November 8, 2000 NTS-PROPERTIES IV, a Kentucky limited
partnership
By: NTS-PROPERTIES ASSOCIATES IV
General Partner
By: /s / J.D. Nichols
--------------------------------------
J.D. Nichols, Managing General Partner
ORIG, LLC, a Kentucky limited liability
company.
By: /s / J.D. Nichols
--------------------------------------
J.D. Nichols, Managing Member
/s / J.D. Nichols
--------------------------------------
J. D. Nichols, individually
/s / Brian F. Lavin
--------------------------------------
Brian F. Lavin, individually
