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 V
(Name of Issuer)
NTS-PROPERTIES V
(Name of Person Filing Statement)
LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
62942E308
(CUSIP Number of Class of Securities)
J.D. Nichols, Managing General Partner
NTS-Properties Associates V
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
June 25, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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| Transaction Valuation: $167,500 (a) | Amount of Filing Fee |
| Limited Partnership Interest at $167.50 per Interest | $33.50(b) |
- --------------------------------------------------------------------------------
(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.
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(a) The name of the issuer is NTS-Properties V, a Maryland 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 June 25, 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 or the limited
partnership interests or portions thereof that are tendered by the limited
partners of the Partnership ("Limited Partners") to the Partnership pursuant to
the Offer to Purchase.) This Offer is being made to all Limited Partners. As of
April 30, 1999, the Partnership had 33,394 outstanding Interests held by 2,303
holders of record. Subject to the conditions set forth in the Offer, the
Partnership will purchase up to 1,000 Interests. The purchase price of the
Interests tendered to the Partnership will be equal to $167.50 per Interest,
payable 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 V
("General Partner"), nor any of the partners, members, affiliates or associates
of the Partnership intend to tender any Interests pursuant to the Offer.
Reference is hereby made to the Introduction of the Offer, which is
incorporated herein by reference.
(c) There is currently no established trading market for the Interests,
and any transfer of Interests is limited by the terms of the Partnership's
Amended and Restated Agreement of Limited Partnership dated as of April 30, 1984
("Partnership Agreement").
Reference is hereby made to the Introduction of the Offer and Section
7, "Cash Distribution Policy," of the Offer which are incorporated herein by
reference.
(d) No person other than the Partnership is filing this statement.
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 $192,500 (including approximately $167,500 to purchase 1,000
Interests plus approximately $25,000 for expenses associated with administering
the Offer, such as legal, accounting, printing and mailing expenses and transfer
fees). The Partnership will fund its purchases and 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 1,000 Interests,
the Partnership will fund these additional purchases and expenses, if any, from
its cash reserves.
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Reference is hereby made to Section 9, "Source and Amount of Funds," of
the Offer, which is incorporated herein by reference.
(b) The Partnership does not 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.
- ------- -------------------------------------------------------------
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 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. 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 Partnership 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) If, on the Expiration Date (defined below), the Partnership
determines that more than 1,000 Interests have been tendered during the Offer,
the Partnership 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 Partnership is offering to purchase to an
amount that the Partnership believes to
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be sufficient to accomodate the excess Interests tendered as well as any
Interests tendered during the extended Offer.
If the Offer is oversubscribed, and the Partnership does not act in
accordance with (i) or (ii) above, or if the Partnership acts in accordance with
(i) and (ii), above, but the Offer remains oversubscribed, then the Partnership
will accept Interests tendered on or before 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 Partnership is
willing to purchase and the denominator of which will be the total number of
Interests properly tendered. Notwithstanding the foregoing, the Partnership 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 August 31, 1999, unless and until the Partnership extends 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 Partnership,
expires. The Partnership may extend the Offer in its sole discretion by
providing the Limited Partners with written notice of the extension. Except as
described above, none of the Partnership, the General Partner, Mr. Nichols, Mr.
Good or Mr. Lavin has any plans or proposals that relate to or would result in
the acquisition by any person of additional securities of the Partnership or the
disposition of securities of the Partnership.
(b) None of the Partnership, the General Partner, Mr. Nichols, Mr. Good
or Mr. Lavin 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) On September 8, 1998, the Partnership executed a definitive
agreement with Silver Cities Properties, Ltd. ("Silver Cities"), an affiliate of
Full Sail Recorders, Inc., a tenant of the Partnership ("Full Sail"), pursuant
to which the Partnership agreed to sell to Silver Cities the Phase III vacant
land adjacent to the University Business Center development ("Phase III") for a
purchase price of $801,000. Subsequent to execution of this agreement, a portion
of Phase III was acquired by Orange County, Florida pursuant to its power of
eminent domain for approximately $217,000 for the purpose of expanding a road
adjacent to Phase III. The Partnership will credit approximately $146,000 to
Silver Cities on the closing of the sale of Phase III, representing the portion
of Phase III acquired by Orange County, plus a portion of Silver Cities' legal
expenses related to this acquisition by Orange County. The Partnership expects
to receive net proceeds of approximately $655,000 from Silver Cities on closing
of the sale of Phase III. The sale of Phase III is expected to close in the
first quarter of 2000, although this closing may occur earlier at Silver Cities'
option. As of March 31, 1999, the carrying value of Phase III was approximately
$801,000. As of March 31, 1999, the carrying value of Phase III represented
approximately 5% of the carrying value of the real estate assets of the
Partnership.
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There can be no assurance as to when or if the sale of Phase III will
be consummated. The Partnership estimates that the sale of Phase III will create
a recognizable capital loss for the Partnership. The recognizable capital loss
for Limited Partners at the time that Phase III is sold, if it is sold, is
estimated to be $34.87 per Interest. Limited Partners who tender and sell
Interests pursuant to this Offer will not recognize this anticipated loss if the
sale of Phase III is consummated after the Expiration Date.
Other than as described above, none of the Partnership, the General
Partner, Mr. Nichols 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
has reached an agreement with a new Chief Financial Officer to begin on July 1,
1999, to replace its former Chief Financial Officer, who recently resigned to
accept another position. Other than these management changes, none of the
Partnership, 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 Partnership, 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) Except for the anticipated sale of Phase III, none of the
Partnership, 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 Partnership, 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, Mr. Nichols, Mr. Good, Mr. Lavin or any associate or
subsidiary of such person.
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, 1984, 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 Limited Partner where, after the purchase, the Limited Partner would
continue to be a Limited Partner and would hold fewer than five (5) Interests.
None of the Partnership, the General Partner, 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, Mr.
Nichols, Mr. Good, Mr. Lavin or any person controlling the Partnership, the
General Partner, Mr. Nichols, Mr. Good, Mr. Lavin and (ii) any other person.
Reference is hereby made to the Introduction, Section 1, "Background
and Purposes of the Offer," and Section 12, "Transactions and Arrangements
Concerning Interests" of the Offer, 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
Partnership 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 Form 10-K on March 26, 1998 and
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March 31, 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 20, 1999,
which are incorporated herein by reference.
(3) The Partnership had an earnings to fixed charges coverage
deficiency of $29,609 for the three months ended March 31, 1999. The
Partnership's ratio of earnings to fixed charges was 4.3:1 for the year ended
December 31, 1998. The Partnership had an earnings to fixed charges coverage
deficiency of $558,678 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.
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(a) Reference is hereby made to Section 10, "Certain Information About
the Partnership" and Section 12, "Transactions and Arrangements Concerning
Interests" of the Offer, which are incorporated herein by reference.
(b) None.
(c) Not applicable.
(d) None.
(e) Reference is hereby made to the Offer, the Letter of Transmittal
and related documents, 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 June 25, 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.
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(c) Reference is hereby made to the Amended and Restated Agreement
of Limited Partnership of NTS-Properties V, dated as of April
30, 1984, previously filed with the Securities and Exchange
Commission as part of the Partnership's Registration Statement
on Form S-11, No. 2-90818, filed with the Commission on May 1,
1984 and declared effective on August 1, 1984.
(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: June 25, 1999
NTS-PROPERTIES V, a Maryland limited
partnership
By: NTS-PROPERTIES ASSOCIATES V,
General Partner
By: ____________________________
J.D. Nichols
Its: Managing General Partner
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EXHIBITS
Exhibit
Number Description
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(a)(1) Form of Offer to Purchase, dated June 25, 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) Reference is hereby made to the Amended and Restated
Agreement of Limited Partnership of NTS-Properties V,
dated as of April 30, 1984, previously filed with the
Securities and Exchange Commission as part of the
Partnership's Registration Statement on Form S-11, No.
2-90818, filed with the Commission on May 1, 1984 and
declared effective on August 1, 1984.
(d) None.
(e) None.
(f) None.
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Exhibit (a)(1)
Form of Offer to Purchase, dated June 25, 1999
<PAGE>
Offer to Purchase for Cash
by
NTS-Properties V
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 TUESDAY, AUGUST 31, 1999, UNLESS EXTENDED.
NTS-Properties V is a Maryland limited partnership (the "Partnership"
or the "Partnership") that owns directly, or indirectly through joint ventures,
interests in, certain commercial and residential rental real estate properties.
See Section 10, "Certain Information About the Partnership." NTS-Properties
Associates V, 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 is
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 $167.50 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 $167.50 per Interest may not equate
to the fair market value or the liquidation value of
the Interests and is less than the book value per Interest.
o The General Partner, on behalf of the Partnership
has not 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 sale by the Partnership of certain properties may
decrease its future operating revenues.
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 June 25, 1999.
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NEITHER THE OFFEROR NOR THE PARTNERSHIP'S GENERAL PARTNER MAKES 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 INTERESTS
TO TENDER.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE PARTNERSHIP 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 PARTNERSHIP OR THE GENERAL PARTNER.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH
TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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TABLE OF CONTENTS
INTRODUCTION...................................................................5
SUMMARY OF CERTAIN INFORMATION.................................................8
RISK FACTORS...................................................................9
THE OFFER.....................................................................12
Section 1. Background and Purposes of the Offer........................12
Section 2. Offer to Purchase and Purchase Price; Proration; Expiration
Date; Determination of Purchase Price.......................13
Section 3. Procedure for Tendering Interests...........................15
Section 4. Withdrawal Rights...........................................16
Section 5. Purchase of Interests; Payment of Purchase Price............16
Section 6. Certain Conditions of the Offer.............................17
Section 7. Cash Distribution Policy....................................19
Section 8. Effects of the Offer........................................19
Section 9. Source and Amount of Funds..................................20
Section 10. Certain Information About the Partnership...................20
Section 11. Certain Federal Income Tax Consequences.....................24
Section 12. Transactions and Arrangements Concerning Interests..........28
Section 13. Extensions of Tender Period; Terminations; Amendments.......28
Section 14. Fees and Expenses...........................................28
Section 15. Address; Miscellaneous......................................29
Appendix A
The Partnership's Financial Statements Giving
Pro Forma Effect of the Offer........................................31
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To Holders of Limited Partnership
Interests of NTS-Properties V
INTRODUCTION
NTS-Properties V is a Maryland limited partnership (the "Partnership"
or the "Partnership") that owns, or owns joint venture interests in, certain
commercial and residential rental real estate properties. See Section 10,
"Certain Information About the Partnership." 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 V (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 hereby
offers to purchase up to 1,000 of the Partnership's limited partnership
interests (the "Interests") at a purchase price of $167.50 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 Partnership
pursuant to the Offer.) This Offer is being made to all limited partners in the
Partnership ("Limited Partners") and is generally not conditioned upon any
minimum number 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 V dated April 30, 1984 (the
"Partnership Agreement"). The Partnership may purchase more than 1,000
Interests, but does not have any current intention to do so.
The Purchase Price should not be viewed as equivalent to the fair
market value or the liquidation value of an Interest and is less than the book
value per Interest. As of December 31, 1998 and March 31, 1999, the book value
of each Interest was approximately $302.40 and $262.75, respectively. As of
December 31, 1998 and March 31, 1999, the Partnership had $136.06 and $102.39
per Interest of cash and cash equivalents, respectively, representing 45% and
39% of the Partnership's book value, respectively. The Purchase Price offered by
the Partnership has been determined by the General Partner, in its sole
discretion, based on: (i) the response to the Partnership's tender offer of $205
per Interest (less a distribution of $37.50 per Interest paid to Limited
Partners on March 15,1999) which commenced on October 14, 1998 and terminated on
February 5, 1999 (the "Prior Offer"); (ii) sales of Interests by Limited
Partners to third parties in secondary market transactions from January 1, 1997
through April 30, 1998; (iii) repurchases of interests by the Partnership in
1997 and 1998; (iv) purchases of Interests by the Partnership's affiliate, Ocean
Ridge Investments Ltd., a Florida limited liability partnership ("Ocean Ridge")
in 1998; and (v) the price offered in a 1998 tender offer for Interests by a
third-party offeror that is not affiliated with the Partnership, General
Partner, or any of the Partners, members, affiliates or
5
<PAGE>
associates of the Partnership or the General Partner. Neither the Partnership
nor the General Partner has obtained an opinion from an independent third party
regarding the fairness of the Purchase Price.
Subject to the conditions set forth in the Offer, the Partnership will
purchase the first 1,000 Interests which are tendered and received by the
Partnership by, and not withdrawn prior to, 12:00 Midnight, Eastern Standard
Time, on Tuesday, August 31, 1999, subject to any extension of the Offer by the
Partnership (the "Expiration Date"). If, on the Expiration Date, more than 1,000
Interests have been tendered during the Offer, the Partnership 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
Partnership is offering to purchase to an amount that it 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 Partnership does not act in
accordance with (i) or (ii), above, or if the Partnership acts in accordance
with (i) and (ii), above, but the Offer remains oversubscribed, then the
Partnership 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 Partnership is 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 it will purchase fewer than
the number of Interests tendered by the Limited Partner. For any Interest
tendered but not purchased by the Partnership, 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 Partnership, 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 Partnership will not purchase Interests if the purchase of
Interests would result in Interests being owned by fewer than three hundred
(300) holders of record. See Section 6, "Certain Conditions of the Offer."
All purchases of Interests pursuant to the Offer will be effective as
of the Expiration Date. Each Limited Partner who tenders Interests pursuant to
the Offer will receive the Purchase Price and cash distributions declared prior
to the Expiration Date, if any. Limited Partners will not be entitled
6
<PAGE>
to receive cash distributions declared and payable after the Expiration Date,
if any, on any Interests tendered and accepted by the Partnership.
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 April 30, 1999, the General Partner owned five (5) of the
Partnership's outstanding Interests. The General Partner and all partners,
members, affiliates and associates of the General Partner beneficially owned an
aggregate of 4,495 Interests, representing approximately 13.5% of the
Partnership's 33,394 outstanding Interests. Although the Offer is being made to
all Limited Partners, the Partnership has been advised that neither the General
Partner nor any of the partners, members, affiliates or associates of the
General Partner intends to tender any Interests pursuant to the Offer. Assuming
the Offer is fully subscribed, the General Partner and partners, members,
affiliates and associates of the General Partner will own, after the Offer, an
aggregate of 4,495 Interests, representing approximately 13.9% of the
Partnership's 32,394 outstanding Interests.
7
<PAGE>
SUMMARY OF CERTAIN INFORMATION
------------------------------
The following is a summary of certain information contained elsewhere
in this Offer. The summary does not purport to be complete and is qualified in
its entirety by reference to the more detailed information contained elsewhere
in this Offer and related documents. Capitalized terms used but not defined in
this summary are defined elsewhere in this Offer. Limited Partners are urged to
read all documents constituting this Offer in their entirety.
Partnership The Partnership, a Maryland limited partnership
invites all of the Partnership's Limited Partners
to tend their Interests upon the terms and subject
to the conditions set forth in this Offer.
Purchase Price $167.50 per Interest in cash.
Expiration Date The Offer expires on Tuesday, August 31, 1999 at
12:00 Midnight, Eastern Standard Time unless the
Offer is otherwise extended by the Partnership 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 Partnership will purchase upto 1,000 Interests.
If the Offer is oversubscribed, the Partnership may
purchase additional Interests 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.
8
<PAGE>
RISK FACTORS
------------
Limited Partners Tendering All or Any Portion of Their Interests Are
------------------------------------- ------- -------- -------------
Subject to Certain Risks:
- -------------------------
Purchase Price May Be Less Than Fair Market Value and Liquidation
-------- ----- --------------------- ------ --------- -----------
Value and is Less Than Book Value. The Interests are not traded on a recognized
- ----------------------------------
stock exchange or trading market and a readily identifiable, liquid market for
the Interests does not exist. The Partnership and ORIG, LLC, an affiliate of the
Partnership, purchased Interests on February 5, 1999 for $205 per Interest
pursuant to the Prior Offer. The Partnership is also aware of certain secondary
market transactions by which Interests were transferred at prices ranging from
$165.59 to $183.99 per Interest (these prices include commissions and other
mark-ups) by Limited Partners to third parties during the period from January 1,
1997 to April 30, 1998. The Partnership has repurchased 1,882 interests, and its
affiliate, Ocean Ridge, has purchased 2,637 Interests during the period from
March 1, 1995 to September 30, 1998 at prices ranging from $112 to $160 per
Interest. The Purchase Price for Interests in the Offer was determined by the
General Partner, in part, based on the purchase price per Interest in the Prior
Offer, less a $37.50 per Interest distribution paid to all Limited Partners as
of March 15, 1999 (this distribution was not paid to holders of interests
tendered in the Prior Offer). The purchase price does not necessarily reflect
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 Purchase Price is less than the book value of the Interests.
As of December 31, 1998 and March 31, 1999, the book value of each Interest was
approximately $302.40 and $262.75, respectively. As of December 31, 1998 and
March 31, 1999, the Partnership had $136.06 and $102.39 per Interest of cash and
cash equivalents, respectively, representing 45% and 39% of the Partnership's
book value, respectively. The Partnership has not obtained an opinion from an
independent third party regarding the fairness of the Purchase Price.
Furthermore, the Partnership 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. In addition,
the Partnership has executed a definitive agreement to sell a parcel of vacant
land to a third party. The Partnership anticipates that if this sale is
consummated, it will be consummated in the first quarter of 2000, although it
may occur earlier at the buyer's option. The Partnership anticipates that, if
consummated, this sale will create a significant capital loss per Interest for
Limited Partners, recognizable in the tax year of the sale. Limited Partners
selling Interests pursuant to this Offer will not receive this anticipated tax
loss if this vacant land sale is consummated after the Expiration Date. 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
9
<PAGE>
Offer. See Section 10, "Certain Information About the Partnership" and
Section 11, "Certain Federal Income Tax Consequences."
Conflict of Interest. A conflict of interest exists between Limited
---------------------
Partners who are tendering their Interests and the Partnership, the General
Partner and non-tendering Limited Partners. Tendering Limited Partners would
prefer a higher Purchase Price; the Partnership, the General Partner and
non-tendering Limited Partners would prefer a lower Purchase Price.
General Partner Makes No Recommendation to Limited Partners. The
------- ------- -------- -------------- -- ------- ---------
General Partner makes no recommendation regarding whether Limited Partners
should tender or retain their Interests. Limited Partners should make their own
decisions regarding whether to tender their Interests based upon their own
individual situation.
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 $192,500 ($167,500 to purchase 1,000 Interests plus approximately
$25,000 for the expenses associated with administering the Offer). 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
April 30, 1999, the General Partner owned five (5) of the Partnership's
outstanding Interests. The General Partner and all partners, members, affiliates
and associates of the General Partner beneficially own, in the aggregate 4,495
Interests, representing approximately 13.5% of the Partnership's 33,394
outstanding Interests. Although this Offer is made to all Limited Partners, the
Partnership has been advised that neither the General Partner nor any of the
partners, members, affiliates or associates of the General Partner intends to
tender any Interests pursuant to the Offer. Assuming the Offer is fully
subscribed, the General Partner and partners, members, affiliates and associates
of the General Partner will own, after the Offer, an aggregate of 3,237
Interests, representing approximately 13.9% of the Partnership's 32,394
outstanding Interests, an increase of 0.4% 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.
10
<PAGE>
Sale of Certain Properties May Decrease Future Revenues. The
---- -- ------- ---------- --- -------- ------ ---------
Partnership has executed a definitive agreement to sell a parcel of vacant land
owned by the Partnership ("Phase III") to Silver Cities Properties, Ltd.
("Silver Cities"), an affiliate of one of the Partnership's tenants, for
approximately $655,000. There can be no assurances that the sale of Phase III
will be consummated, that the Partnership will receive the anticipated sale
price of Phase III or that the net proceeds of the sale (after repayment of
outstanding indebtedness on Phase III and closing costs) will be reinvested by
the Partnership. See Section 10, "Certain Information About 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.
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 that accounted for 4.8% and 5.4% 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, 1984.
11
<PAGE>
THE OFFER
Section 1. Background and Purposes of the Offer. The purpose of the
Offer is to provide Limited Partners who desire to liquidate 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 Partnership 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) 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 (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); (iii) any material change in the present distribution
policy, indebtedness or capitalization of the Partnership; (iv) any other
material change in the structure or business of the Partnership (with the
exception of the anticipated sale of Phase III); or (v) except as described
below, any change in the Partnership Agreement or other actions that may impede
the acquisition of control of the Partnership by any person. See Section 10
"Certain Information About the Partnership." 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 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 and
persons controlling the affiliates, which will increase the influence that
affiliates of the General Partner and persons controlling the affiliates have on
certain matters voted on by Limited Partners, including
12
<PAGE>
removal of the General Partner and termination of the Partnership.
See "Risk Factors - 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. 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 for
Interests. On February 5, 1999, the Partnership and ORIG, LLC, which is owned by
Mr. Nichols and Mr. Lavin, purchased an aggregate of 2,458 interests for $205
per interest pursuant to the Prior Offer. 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 Partnership 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 $167.50 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.
If, on the Expiration Date, the Partnership determines that more than
1,000 Interests have been tendered during the Offer, the Partnership 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 Partnership
is offering to purchase to an amount that the Partnership 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 Partnership does not
----------
act in accordance with (i) or (ii), above, or if the Partnership acts in
accordance with (i) and (ii), above, but the Offer remains oversubscribed, then
the Partnership will accept Interests tendered prior to or on the Expiration
Date for payment on a pro rata basis. In the event of Proration, the number of
Interests purchased from a Limited Partner will be equal to a fraction of the
Interests tendered, the numerator of which will be the total number of Interests
the Partnership is 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 it will purchase fewer than the number
of Interests tendered by the Limited Partner. For any Interest tendered but not
purchased by the Partnership, a book entry will be made on the Partnership's
books to reflect the Limited Partner's ownership of the Interests not purchased.
13
<PAGE>
The Partnership will not issue a new Certificate of Ownership for Interests not
purchased by the Partnership, 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 Tuesday, August 31, 1999, unless and until the
Partnership extends 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 Partnership, expires. The Partnership may extend the Offer,
in its sole discretion, 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 Partnership is 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 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. Neither the Partnership 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 Partnership was determined in the
Partnership's sole discretion, based on: (i) the response to the Prior Offer of
$205 per Interest (less a distribution of $37.50 per Interest paid to Limited
Partners on of March 15, 1999); (ii) sales of Interests by Limited Partners to
third parties in secondary market transactions from January 1, 1997 through
April 30, 1998; (iii) repurchases of interests by the Partnership in 1997 and
1998; (iv) purchases of Interests by Ocean Ridge in 1998; and (v) the price
offered in a 1998 tender offer for Interests by a third-party offeror that is
not affiliated with the Partnership or the General Partner or any of the
Partners, members, affiliates or associates of the Partnership or the General
Partner. The General Partner is aware of certain sales of Interests made at
prices ranging from $165.59 to $183.99 per Interest (these prices include
commissions and other mark-ups) by certain Limited Partners to third parties
during the period from January 1, 1997 to April 30, 1998. The Partnership has
repurchased interests, and Ocean Ridge has purchased Interests, in secondary
market transactions at prices ranging from $112 to $160 per Interest during the
period from March 1, 1995 to September 30, 1998. The information regarding
transactions between Limited Partners and third parties is based on the General
Partner's knowledge and may not reflect all transactions that have taken place
during the time periods set forth above. As of December 31, 1998 and March 31,
1999, the book value of each Interest was approximately $302.40 and $262.75,
respectively. As of December 31, 1998 and March 31, 1999, the Partnership had
$136.06 and $102.39 per Interest of cash and cash equivalents, respectively,
representing 45% and 39% of the Partnership's book value, respectively.
14
<PAGE>
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. THE PARTNERSHIP WILL NOT 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
may decide to purchase Interests in excess of the initial 1,000 Interests. Each
determination by the Partnership will be final and binding. The Partnership 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. In any event, tenders will not be deemed to have
been made until all defects or irregularities have been cured or waived. The
Partnership is neither under any duty nor will it incur any liability for
failure to notify any tendering Limited Partner of any defects, irregularities
or rejections contained in the tenders.
15
<PAGE>
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. All determinations
made by the Partnership 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 Partnership will pay
$167.50 per Interest to each Limited Partner properly tendering its Interests.
The Purchase Price will be paid in the form of a check from the Partnership. All
monies due to each Limited Partner will be delivered by first class U.S. Mail
deposited in the mailbox within five (5) business days after the Expiration
Date. Under no circumstances will interest be paid on the Purchase Price to be
paid by the Partnership 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 Partnership 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
Partnership 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.
16
<PAGE>
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 Partnership 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 thePartnership'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 of Interests pursuant to the Offer
or otherwise directly or indirectly relates to the Offer; or (ii)in the
Partnership's reasonable judgment (determined within five (5) business
days prior to the Expiration Date), could materially affect the
business, condition (financial or other), income, operations or
prospects of the Partnership, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the business of
the Partnership or materially impair the Offer's contemplated benefits
to the Partnership;
(e) there shall have been any action threatened or taken, or approval
withheld, or any statute, rule or regulation proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Partnership, by any government or
governmental, regulatory or administrative authority or agency or
tribunal, domestic or foreign, which, in the Partnership's reasonable
judgment, would or might directly or indirectly:
(i) delay or restrict the ability of the Partnership, or
render the Partnership 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,
taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the
Partnership;
17
<PAGE>
(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 Partnership's 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 Partnership's
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 Partnership's
reasonable judgment, makes it inadvisable to proceed with the
Offer; or
(vi) in the case of the foregoing existing at the time of
the commencement of the Offer, in the Partnership's
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
June 25, 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
18
<PAGE>
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 Partnership's reasonable judgment, in any such case and regardless
of the circumstances (including any action of the Partnership) 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 may be asserted by the Partnership on its behalf regardless of the
circumstances giving rise to any such condition (including any action or
inaction by the Partnership) or may be waived by the Partnership in whole or in
part. The Partnership's 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 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 Partnership believes that neither
paragraph (a) nor paragraph (b) of this Section 6, "Certain Conditions of the
Offer" will prohibit the consummation of the Offer.
Section 7. Cash Distribution Policy. The Partnership commenced
operations in August, 1984 and anticipated providing Limited Partners with 8%
non-cumulative quarterly distributions. Quarterly distributions were suspended
effective March 31, 1994. The Partnership paid a special cash distribution of
$1,252,275, or $37.50 per Interest, to Limited Partners on March 15, 1999. This
distribution was not paid to holders of interests tendered in the Prior Offer.
Although the Partnership is not obligated to make future cash distributions, it
may do so in the future. There can be no assurance, however, that the
Partnership will make any other distributions in the future to Limited Partners
who continue to own Interests following completion of this Offer. Limited
Partners that tender the Interests pursuant to the Offer will not be entitled to
receive any cash distributions declared, if any, after the Expiration Date, on
any Interests which are tendered and accepted by 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 $192,500 of
cash to purchase 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 and (ii) reducing or eliminating the interest income
19
<PAGE>
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 1,000 Interests at
$167.50 per Interest, are attached hereto as Appendix A.
Upon completion of the Offer, the Partnership 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 Partnership 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 $192,500 (including $167,500 to
purchase 1,000 Interests plus approximately $25,000 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. As of
March 31, 1999 and December 31, 1998 the Partnership had unrestricted cash and
cash equivalents equal to $3,419,294 and $4,543,666, or $102.39 and $136.06 per
Interest, respectively. If the Offer is oversubscribed and the Partnership, in
its sole discretion, decides to purchase Interests in excess of 1,000 Interests,
the Partnership will fund these additional purchases and expenses, if any, from
its cash reserves.
Section 10. Certain Information About the Partnership
Certain Information About the Partnership. The Partnership was formed
------------------------------------------
in April, 1984 under the laws of the State of Maryland. NTS-Properties
Associates V, 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, Operating Net Cash Receipts (as defined in the
Partnership Agreement) that are made available for distribution are distributed:
(i) 99% to the Limited Partners and 1% to the General Partner until the Limited
Partners have received an 8% Preferred Return (as defined in the Partnership
Agreement); (ii) to the General Partner, in an amount equal to approximately 10%
of the Limited Partner's 8% Preferred Return; (iii) the remainder, 90% to the
Limited Partners and 10% to the General Partner. Net Operating Income (Loss) (as
defined in the Partnership Agreement), exclusive of depreciation, is allocated
to the Limited Partners and the General Partner in proportion to their
respective cash distributions. Net Operating Income, exclusive of depreciation,
in excess of cash distributions is allocated as follows: (i) pro rata to all
partners with a negative capital account in an amount to restore their
respective
20
<PAGE>
negative capital account to zero; (ii) 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); and (iii) the balance is allocated 75% to the Limited Partners and
25% to the General Partner. Depreciation Expense (as defined in the Partnership
Agreement) is allocated 99% to the Limited Partners and 1% to the General
Partner.
The Partnership owns the following properties:
o Commonwealth Business Center Phase II, a business center with
approximately 61,000 net rentable ground floor square feet and
approximately 9,000 net rentable mezzanine square feet located
in Louisville, Kentucky, constructed by the Partnership. The
occupancy level at Commonwealth Business Center II at March
31, 1999 was 79%.
o Approximately 6.21 acres of land, adjacent to the University
Place development ("Phase III"), in Orlando, Florida, which is
zoned for commercial development. Phase III is currently under
contract to be sold for approximately $655,000.
The Partnership recently sold the following property:
o University Business Center Phase I ("University I"), a
business center with approximately 82,000 net rentable first
floor (office and service) and second floor (office) square
feet and approximately 16,000 net rentable mezzanine square
feet located in Orlando, Florida, constructed by the
Partnership. The Partnership received net cash proceeds from
the sale of this property (after repaying debt and costs of
the sale) of approximately $1,717,000.
The Partnership owns interests in the following joint ventures:
o The Willows of Plainview Phase II, a 144-unit luxury apartment
complex located in Louisville, Kentucky, constructed by the
joint venture between the Partnership and NTS-Properties IV,
an affiliate of the General Partner. The Partnership's
percentage interest in the joint venture was 90% at March 31,
1999. The occupancy level at the apartment complex at March
31, 1999 was 99%.
o Lakeshore/University II Joint Venture ("L/U II Joint
Venture"), which was formed on January 23, 1995 among the
Partnership and NTS-Properties IV, NTS-Properties Plus Ltd.
and NTS/Fort Lauderdale, Ltd., affiliates of the General
Partner. The Partnership's percentage ownership interest in
the joint venture was 69% at March 31, 1999. A description of
the properties owned by the L/U II Joint Venture appears
below:
21
<PAGE>
-- Lakeshore Business Center Phase I - a business center
---------------------------------
with approximately 103,000 net rentable square feet
located in Fort Lauderdale, Florida. The occupancy
level at Lakeshore Business Center Phase I at March
31, 1999 was 72%.
-- Lakeshore Business Center Phase II - a business
--------- -------- ------ ----- --
center with approximately 97,000 net rentable square
feet located in Fort Lauderdale, Florida. The
occupancy level at Lakeshore Business Center Phase II
at March 31, 1999 was 85%.
-- Outparcel Building Sites - approximately 6.2 acres of
-------------------------
undeveloped land adjacent to the Lakeshore Business
Center development which is zoned for commercial
development. The L/U II Joint Venture plans to begin
constructing Phase III of the Lakeshore Business
Center in 1999 on the remaining 3.8 acres of this
property.
The L/U II Joint Venture recently sold the following property:
o University Business Center Phase II ("University 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 $2,494,000.
The properties owned by The Willows of Plainview Phase II joint venture
are encumbered by mortgages payable to an insurance company as follows:
Loan Balance
at 03/31/99: Due:
------------ ----
$ 2,736,357 January 5, 2013
$ 1,634,273 January 5, 2013
The properties owned by the L/U II Joint Venture are encumbered by
mortgages payable to an insurance company as follows:
Loan Balance
at 03/31/99: Encumbered Property: Due:
- ------------ -------------------- ----
$ 3,327,669 Lakeshore Business Center Phase II August 1, 2008
$ 3,580,216 Lakeshore Business Center Phase I August 1, 2008
22
<PAGE>
The Partnership has a fee title interest in each of the properties that
it owns. The joint ventures in which the Partnership is a partner have a fee
title interest in each of the properties that they own. In the opinion of the
Partnership's management, the properties are adequately covered by insurance.
On September 8, 1998, the Partnership executed a definitive agreement
with Silver Cities Properties, Ltd. ("Silver Cities"), pursuant to which the
Partnership agreed to sell to Silver Cities the Phase III vacant land adjacent
to the University Business Center development ("Phase III") for a purchase price
of $801,000. Subsequent to executing this agreement, a portion of Phase III was
acquired by Orange County, Florida pursuant to its power of eminent domain for
approximately $217,000 for the purpose of expanding a road adjacent to Phase
III. The Partnership will credit approximately $146,000 to Silver Cities on the
closing of the sale of Phase III, representing the portion of Phase III acquired
by Orange County, plus a portion of Silver Cities' legal expenses related to
this acquisition by Orange County. The Partnership expects to receive net
proceeds of approximately $655,000 from Silver Cities on closing of the sale of
Phase III. The sale of Phase III is expected to close in the first quarter of
2000, although this closing may occur earlier at Silver Cities' option. As of
March 31, 1999, the Partnership's carrying value of Phase III was approximately
$801,000, representing approximately 5% of the aggregate carrying value of the
real estate assets of the Partnership.
There can be no assurance as to when or if the sale of Phase III will
be consummated. The Partnership estimates that the sale of Phase III will create
a recognizable capital loss for the Partnership. The recognizable capital loss
for Limited Partners at the time that Phase III is sold, if it is sold, is
estimated to be $34.87 per Interest. Limited Partners who tender and sell
Interests pursuant to this Offer will not recognize this anticipated loss if the
sale of Phase III is consummated after the Expiration Date.
Other than as described above, neither the Partnership nor the General
Partner has any plans or proposals that would relate to or result in the sale or
transfer of a material amount of the assets of the Partnership or any of its
subsidiaries.
The L/U II Joint Venture intends to begin constructing Phase III of the
Lakeshore Business Center on 3.8 acres of vacant land owned by the L/U II Joint
Venture at the Lakeshore Business Center Development during 1999. The
construction cost is currently estimated to be $4,000,000 and will be funded by
a capital contribution of approximately $2,000,000 by the Partnership to the L/U
II Joint Venture, with the balance funded from the proceeds of a mortgage to be
placed on the property. Construction will not begin until, in the opinion of the
General Partner, financing on favorable terms has been obtained. NTS-Properties
Plus and NTS-Properties IV., Ltd., which currently own 12% and 18% interests,
respectively, in the L/U II Joint Venture, have informed the Partnership that
they do not have the financial resources to make additional capital
contributions to the L/U II Joint Venture for the construction of Lakeshore
Business Center Phase III. As a result of the Partnership's capital contribution
to the L/U II Joint Venture, the Partnership's interest in the L/U II Joint
Venture will increase. The amount of this increase will depend, in part, on the
actual
23
<PAGE>
cost of construction of the Lakeshore Business Center Phase III and cannot be
determined at this time.
Commercial Leases that accounted for 4.8% and 5.4% of the Partnership's
1998 operating revenues are scheduled to expire (unless extended) in 1999 and
2000, respectively. The Partnership has no material commitments for renovations
or other capital improvements as of March 31, 1999. However, the Partnership may
incur costs associated with improvements at the Partnership's commercial
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 and
are currently unknown. The tenant finish improvements will be funded by cash
flow from operations and, if needed, cash reserves.
The Partnership had an earnings to fixed charges coverage deficiency of
$29,609 for the three months ended March 31, 1999. The Partnership's ratio of
earnings to fixed charges was 4.3:1 for the year ended December 31, 1998. The
Partnership had an earnings to fixed charges coverage deficiency of $558,678 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.
24
<PAGE>
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 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 $11,357,644, or
$340.11 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 $167.50
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 $11,357,644, or $340.11 per Interest, as
of March 31,
25
<PAGE>
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.
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 $219.73 as of March 31, 1999, subject to further
adjustment for tax exempt use property rules. Therefore, a maximum of
approximately $219.73 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
26
<PAGE>
a capital loss for federal income tax purposes for Limited Partners who hold
their Interests as capital assets.
Although the Partnership expects to sell Phase III in 2000, there can
be no assurance as to when or if the sale of Phase III will be consummated. The
Partnership preliminarily estimates that the sale of Phase III will create a
recognizable capital loss for the Partnership. The recognizable capital loss for
Limited Partners at the time that Phase III is sold, if it is sold, is
preliminarily estimated to be $34.87 per Interest. Limited Partners who tender
and sell Interests pursuant to this Offer will not recognize this anticipated
loss if the sale of Phase III is consummated after the Expiration Date.
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 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 amount paid, 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
27
<PAGE>
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."
Section 12. Transactions and Arrangements Concerning Interests. Based
upon the Partnership's records and information provided to the Partnership by
the General Partner and affiliates of the General Partner, neither the
Partnership, General Partner, nor, to the best of the Partnership's knowledge,
any controlling person of the Partnership or the General Partner has effected
any transactions in the Interests during the forty (40) business days prior to
the date hereof.
Section 13. Extensions of Tender Period; Terminations; Amendments. The
Partnership 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 Partnership, except to the extent that such
Interests may be withdrawn as set forth in Section 4, "Withdrawal Rights."
If the Offer is oversubscribed, the Partnership has the right to
purchase additional Interests. If the Partnership 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 Partnership has 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 Partnership may choose to make any public
announcement, except as provided by applicable law (including Rule 13e-4(e)(2)
under the Exchange Act), the Partnership has no obligation to publish,
28
<PAGE>
advertise or otherwise communicate any such public announcement, other than by
issuing a release to the Dow Jones News Service.
Section 14. Fees and Expenses. The Partnership will not pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
Interests pursuant to the Offer. The Partnership 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. The Partnership is not aware of any jurisdiction in which the
Offer or tenders pursuant thereto would not be in compliance with the laws of
such jurisdiction. The Partnership reserves the right to exclude Limited
Partners in any jurisdiction in which it is asserted that the Offer cannot
lawfully be made. The Partnership believes such exclusion is permissible under
applicable laws and regulations, provided the Partnership makes a good faith
effort to comply with any state law deemed applicable to the Offer.
29
<PAGE>
The Partnership has filed an Issuer Tender Offer Statement on Schedule
13E-4 with the Securities and Exchange Commission ("Commission") which includes
certain information relating to the Offer summarized herein. A copy of this
statement may be obtained from the Partnership by contacting NTS Investor
Services c/o Gemisys at the address and phone number set forth in this Section
15, "Address; Miscellaneous" or from the public reference office of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549.
The Commission also maintains a site on the World Wide Web at http://www.sec.gov
that contains reports electronically filed by the Partnership with the
Commission.
NTS-Properties V
June 25, 1999
30
<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 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.
31
<PAGE>
<TABLE>
<CAPTION>
NTS-PROPERTIES V,
A Maryland Limited Partnership
------------------------------
Unaudited Proforma
------------------
BALANCE SHEETS
--------------
Tender
Actual Proforma
As of As of
March 31,1999 March 31,1999
------------- -------------
<S> <C> <C>
ASSETS
Cash and equivalent ........................ $ 3,419,294 $ 3,251,794
Cash and equivalents - restricted .......... 155,137 155,137
Accounts receivable, net of
allowance for doubtful accounts ........... 120,918 120,918
Land, buildings and amenities, net ......... 14,719,958 14,719,958
Asset held for development, net ............ -- --
Asset held for sale ........................ 1,737,219 1,737,219
Other assets ............................... 474,753 474,753
$20,627,279 $20,459,779
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Mortgages and note payable ................. $11,278,515 $11,278,515
Accounts payable - operations .............. 214,664 214,664
Accounts payable - construction ............ 28,446 28,446
Distribution payable ....................... 12,649 12,649
Security deposits .......................... 132,785 132,785
Other liabilities .......................... 186,045 186,045
11,853,104 11,853,104
Commitments and Contingencies
Partners' equity ........................... 8,774,175 8,606,675
$20,627,279 $20,459,779
========== ==========
* The Offer will result in a reduction of Cash and Partners' equity and an
increase in Expenses.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NTS-PROPERTIES V,
A Maryland Limited Partnership
------------------------------
UNAUDITED PROFORMA
------------------
STATEMENTS OF OPERATIONS
------------------------
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 $ 935,185 $ 5,665,370 $ 935,185 $ 5,665,370
Gain on sale of assets -- 5,004,628 5,004,628
Interest and other income 50,048 87,607 50,048 87,607
------ ------ ------ ------
985,233 10,757,605 985,233 10,757,605
EXPENSES:
Operating expenses 208,661 1,147,506 208,661 1,147,506
Operating expenses - affiliated 133,756 518,742 133,756 518,742
Write-off of unamortized
building costs, improvements 9,833 14,390 9,833 14,390
Amortization of capitalized
leasing costs 3,323 14,430 3,323 14,430
Interest expense 220,531 1,497,171 220,531 1,497,171
Management fees 52,367 332,161 52,367 332,161
Real estate taxes 93,050 498,318 93,050 498,318
Professional and administrative
expenses 50,414 129,066 50,414 129,066
Tender offer costs -0- -0- 25,000 25,000
Professional and administrative
expenses - affiliated 46,150 203,157 46,150 203,157
Depreciation and amortization 196,757 1,364,183 196,757 1,364,183
------- --------- ------- ---------
1,014,842 5,719,124 1,039,842 5,744,124
Income(loss)before extraordinary $ (29,609) $ 5,038,481 $ (54,609) $ 5,013,481
item ========= ========= ========= =========
Net income allocated to the
limited partners:
Income (loss) before
extraordinary item $ (29,313) $ 4,988,096 $ (54,063) $ 49,633,460
========= ========= ========= ==========
Net income per limited partnership unit:
(loss)before extraordinary $ (0.87) $ 144.86 $ (1.65) $146.27
item ========= ========= ========= ==========
Weighted average number of
limited partnership units 33,674 34,433 32,674 33,933
========= ========= ========= ==========
* The Offer will result in a reduction of Cash and Partners' equity and an
increase in Expenses.
</TABLE>
<PAGE>
Exhibit (a)(2)
Form of Letter of Transmittal
<PAGE>
LETTER OF TRANSMITTAL
Regarding the Interests in
NTS - PROPERTIES V
Tendered Pursuant to the Offer to Purchase Dated June 25, 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 TUESDAY,
AUGUST 31, 1999 (THE "EXPIRATION DATE"), UNLESS THE
OFFER IS EXTENDED BY PARTNERSHIP.
[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 V. I hereby tender my limited
partnership interests or portion thereof, as described and specified below, to
NTS-Properties V (the "Partnership") upon the terms and conditions set forth in
the Offer to Purchase, dated June 25, 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 OFFEROR TO REJECT ANY AND ALL TENDERS DETERMINED BY IT, IN ITS 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 Partnership, and that the Partnership 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 V (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 Partnership, (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 Partnership 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 appropriatesignature(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 $167.50 per interest.
[ ] I tender ______ interests, representing only a portion of my interest in
the Partnership, for a price of $167.50 per interest.
PART 2. TELEPHONE NUMBER(S).
My telephone numbers are: ( ) [Daytime] and ( )
[Evening] and ( )
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
__________________________________
Title of Signatory Sworn to me this___day of_____, 1999.
_____________________________________
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 V, (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.
(Over)
<PAGE>
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 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 Maryland.
_______________________________________
Investor Signature (Please sign exactly
as name appears on certificate)
_______________________________________
Investor Signature (if held jointly)
Sworn to me this ______ day of _______________________________________
__________, 1999. Name
_________________________________ _______________________________________
Notary Public Address
My commission expires: ___/___/___ _______________________________________
<PAGE>
Exhibit (a)(4)
Form of Letter to Limited Partners
<PAGE>
[NTS letterhead]
June 25, 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 $167.50 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 1,000 interests may be purchased by the Partnership.
If more than 1,000 interests are tendered, the Partnership
may decide to purchase more than 1,000 interests or the
Partnership 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 Tuesday, August 31, 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 August 31, 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>
