SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT
(Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934)
NTS-PROPERTIES V
(Name of Subject Company)
ORIG, LLC
(Bidder)
LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
62942E308
(CUSIP Number of Class of Securities)
J.D. Nichols, Managing Member
ORIG, LLC
10172 Linn Station Road
Louisville, Kentucky 40223
(502) 426-4800
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person Filing Statement)
Copy to:
Michael J. Choate, Esq.
Shefsky & Froelich Ltd.
444 North Michigan Avenue, Suite 2500
Chicago, Illinois 60611
(312) 836-4066
November 5, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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| Transaction Valuation: $107,500 (a) | Amount of Filing Fee |
| Limited Partnership Interest at $215 per | Interest $21.50 (b) |
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(a) Calculated as the aggregate maximum purchase price for limited
partnership interests.
(b) Calculated as 1/50th of 1% of the Transaction Value.
|X| Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or
the form of Schedule and the date of its filing.
Amount Previously Paid: __________________________ $21.50
Form or Registration No.: _________________________Schedule 13E-4, No.__
Filing Party: _____________________________________NTS Properties V
Date Filed: ______________________________________ November 5, 1999
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1) Names of Reporting Persons, I.R.S. Identification Nos. of Above Persons
(entities only): ORIG, LLC
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2) Check the Appropriate Box if a Member of a Group (see instructions):
a. |X|
b. |_|
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3) SEC Use Only
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4) Sources of Funds (see instructions): WC
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5) |_| Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f)
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6) Citizenship or Place of Organization: ORIG, LLC is a Kentucky limited
liability company.
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7) Aggregate Amount Beneficially Owned by Each Reporting Person: ORIG, LLC
beneficially owns 4,495 of the limited liability interests in the
Partnership. (1)
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8) |_| Check if the Aggregate Amount in Row 7 Excludes Certain Shares
(see instructions)
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9) Percent of Class Represented by Amount in Row 7: 14.6%
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10) Type of Reporting Person (see instruction): 00
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(1) ORIG disclaims beneficial ownership of 2,637 of these Interests
consisting of: (i) 2,632 Interests owned by Ocean Ridge Investments, Ltd., a
Florida limited partnership ("Ocean Ridge"); and (ii) five Interests owned by
the General Partner.
2
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1) Names of Reporting Persons, I.R.S. Identification Nos. of Above Persons
(entities only): J. D. Nichols
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2) Check the Appropriate Box if a Member of a Group (see instructions):
a. |X|
b. |_|
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3) SEC Use Only
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4) Sources of Funds (see instructions): PF
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5) |_| Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f)
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6) Citizenship or Place of Organization: J. D. Nichols is a citizen of the
U.S.A.
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7) Aggregate Amount Beneficially Owned by Each Reporting Person: J. D.
Nichols beneficially owns 4,495 of the limited liability interests in
the Partnership. (1)
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8) |_| Check if the Aggregate Amount in Row 7 Excludes Certain Shares
(see instructions)
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9) Percent of Class Represented by Amount in Row 7: 14.6%
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10) Type of Reporting Person (see instruction): 00
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(1) Mr. Nichols disclaims beneficial ownership of 2,823 of these
Interests, consisting of: (i) 2,632 Interests owned by Ocean Ridge; (ii) five
Interests owned by the General Partner; and (iii) 186, or 10%, of the Interests
owned by ORIG.
3
<PAGE>
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1) Names of Reporting Persons, I.R.S. Identification Nos. of Above Persons
(entities only): Brian F. Lavin
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2) Check the Appropriate Box if a Member of a Group (see instructions):
a. |X|
b. |_|
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3) SEC Use Only
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4) Sources of Funds (see instructions): PF
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5) |_| Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f)
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6) Citizenship or Place of Organization:Brian F. Lavin is a citizen of the
U.S.A.
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7) Aggregate Amount Beneficially Owned by Each Reporting Person: Brian F.
Lavin beneficially owns 4,495 of the limited liability interests in the
Partnership. (1)
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8) |_| Check if the Aggregate Amount in Row 7 Excludes Certain Shares
(see instructions)
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9) Percent of Class Represented by Amount in Row 7: 14.6%
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10) Type of Reporting Person (see instruction): 00
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(1) Mr. Lavin disclaims beneficial ownership of 4,309 of these
Interests, consisting of: (i) 2,632 Interests owned by Ocean Ridge; (ii) five
Interests owned by the General Partner; and (vi) 1,672, or 90%, of the Interests
owned by ORIG.
4
<PAGE>
Item 1. Security and Issuer.
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(a) The name of the subject company is NTS-Properties V, a Maryland
limited partnership (the "Partnership" or the "Subject Company"). 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 November 5, 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 Offerors pursuant to the
Offer to Purchase.) This Offer is being made to all Limited Partners. As of
November 1, 1999, the Partnership had 30,871 outstanding Interests held by 2,126
holders of record. Subject to the conditions set forth in the Offer, the
Partnership and ORIG, LLC, a Kentucky limited liability company, and an
affiliate of the Partnership (the "Bidder" and, collectively with the
Partnership, the "Offerors") will purchase in the aggregate up to 500 Interests.
The purchase price of the Interests tendered to the Offerors will be equal to
$215 per Interest, net to the tendering Limited Partners in cash (the "Purchase
Price").
(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.
Item 2. Identity and Background.
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The information required under this Item 2 is provided for the Bidder
and each of the members of the Bidder.
ORIG, LLC:
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ORIG, LLC, a Kentucky limited liability company, is the Bidder for
purposes of this Schedule. The Bidder's address is 10172 Linn Station Road,
Louisville, Kentucky 40223. The principal business of the Bidder is to invest in
limited partnerships that own commercial and residential real estate. During the
past five years, the Bidder has not been the subject of any criminal
proceedings. During the past five years, the Bidder was not a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction, nor
was it subject to a judgment, decree or final order enjoining future violations
of, or prohibiting activities subject to, federal or state securities laws or
finding any violations of such laws.
5
<PAGE>
J.D. Nichols:
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(a) J. D. Nichols.
(b) Mr. Nichols' business address is 10172 Linn Station Road,
Louisville, Kentucky 40223.
(c)-(d) During the past 5 years, Mr. Nichols has served as Chairman of
the Board of Directors of NTS-Development Company, a real estate development
corporation and a wholly-owned subsidiary of NTS Capital Corporation. Mr.
Nichols is the Chairman of the Board of NTS Capital Corporation. Mr. Nichols is
also a general partner of NTS Properties Associates V, the general partner of
the Partnership (the "General Partner"). The address of NTS-Development Company,
NTS Capital Corporation and NTS Properties Associates V is 10172 Linn Station
Road, Louisville, Kentucky 40223.
(e) Mr. Nichols has not been the subject of any criminal proceedings.
(f) During the past five years, Mr. Nichols was not a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction, nor
was he subject to a judgment, decree or final order enjoining future violations
of, or prohibiting activities subject to, federal or state securities laws or
finding any violations of such laws.
(g) Mr. Nichols is a citizen of the U.S.A.
Brian F. Lavin:
- --------------
(a) Brian F. Lavin.
(b) Mr. Lavin's business address is 10172 Linn Station Road,
Louisville, Kentucky 40223.
(c)-(d) Since February, 1999, Mr. Lavin has served as President and
Chief Operating Officer of NTS-Development Company and NTS Capital Corporation,
the corporate general partner of the General Partner. From July, 1997 through
February, 1999, Mr. Lavin served as Executive Vice President of NTS-Development
Company and NTS Capital Corporation. Prior to July, 1997, Mr.Lavin served as the
Executive Vice President of Paragon Group, Inc. The address of Paragon Group,
Inc. is 7557 Rambler Road, Dallas, Texas, 75231.
(e) Mr. Lavin has not been the subject of any criminal proceedings.
(f) During the past five years, Mr. Lavin was not a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction, nor
was he subject to a judgment, decree
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<PAGE>
or final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violations of such laws.
(g) Mr. Lavin is a citizen of the U.S.A.
Item 3. Past Contracts, Transactions or Negotiations with Subject Company.
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(a) Except as described in (b) below, there have been no transactions
which have occurred since the commencement of the Partnership's third full
fiscal year proceeding the date of this schedule: (i) between the Bidder, Mr.
Nichols or Mr. Lavin and the Partnership or any of its affiliates which are
corporations, the aggregate amount of which was greater than 1% of the Subject
Company's consolidated revenues for that fiscal year or portion thereof, or (ii)
between the Bidder, Mr. Nichols or Mr. Lavin and any of the executive officers,
directors or affiliates of the Partnership which are not corporations the
aggregate amount of which exceeded $40,000.00 except as follows:
Pursuant to an agreement with the Partnership, property
management fees of $107,574 (through June 30, 1999), $332,161 (1998),
$352,933 (1997) and $342,292 (1996) were paid to NTS-Development
Company, an affiliate of the General Partner. The fee is equal to 5% of
gross revenues from residential properties and 6% of gross revenues
from commercial properties. Also pursuant to an agreement, NTS-
Development Company will receive a repair and maintenance fee equal to
5.9% of costs incurred which relate to capital improvements. The
Partnership has incurred $7,701 (through June 30, 1999), and $29,004
and $25,763 during the years ended December 31, 1998 and 1997,
respectively, as a repair and maintenance fee and has capitalized this
cost as part of land, building and amenities.
NTS-Development Company directs the management of the
Partnership's properties pursuant to a written agreement. Mr. Nichols
has a controlling interest in NTS Capital Corporation and is a general
partner of the General Partner. Under the agreement, NTS-Development
Company establishes rental policies and rates and directs the marketing
activity of leasing personnel. It also coordinates the purchase of
equipment and supplies, maintenance activity and the selection of all
vendors, suppliers and independent contractors.
As permitted by an agreement, the Partnership was charged the
following amounts from NTS-Development Company for the nine months
ended June 30, 1999 and for the years ended December 31, 1998, 1997 and
1996. These charges included items which have been expensed as
operating expenses - affiliated or professional and administrative
expenses - affiliated and items which have been capitalized as other
assets or as land, building and amenities.
7
<PAGE>
1999 1998 1997 1996
---- ---- ---- ----
(6 months)
----------
Leasing $117,956 $254,266 $216,100 $242,890
Administrative 124,492 184,283 279,933 236,800
Property Manager 106,050 324,439 353,002 313,048
Other 15,351 22,230 5,752 28,846
------- ------- ------- -------
$363,849 $785,218 $854,787 $821,584
======= ======= ======= =======
The management agreement requires the Partnership to purchase
all insurance relating to the managed properties, to pay the direct
out-of-pocket expenses of NTS- Development Company in connection with
the operation of the properties, including the cost of goods and
materials used for and on behalf of the Partnership, and to reimburse
NTS-Development Company for the salaries, commissions, fringe benefits,
and related employment expenses of on-site personnel.
The term of the Management Agreement between NTS-Development
Company and the Partnership was for an initial period of five years,
and thereafter for succeeding one-year periods, unless canceled. The
Agreement is subject to cancellation by either party upon sixty days
written notice. As of November 1, 1999, the Management Agreement is
still in effect.
On June 15, 1996, Mr. Nichols received a return of capital
from NTS Financial Partnership, a Kentucky general partnership ("NTS
Financial"), an affiliate of the Partnership, in the amount of $119,
154.86, and used such funds to pay a third party obligation.
On April 14, 1997, Mr. Nichols received a return of capital
from NTS Financial in the amount of $100,000.00. On April 28, 1997, Mr.
Nichols received a distribution from NTS/Whetstone Limited Partnership,
a Kentucky limited partnership, an affiliate of the Partnership, in the
amount of $427,700.00. On June 15, 1997, Mr. Nichols received a return
of capital from NTS Financial in the amount of $119,154.86, and used
such funds to pay a third party obligation. On September 26, 1997, Mr.
Nichols obtained a loan from NTS Financial in the amount of
$208,750.00, and used such funds to pay a third party obligation.
On May 20, 1998, Mr. Nichols purchased from a third party bank
a $1,950,000 promissory note made by NTS Corporation, an affiliate of
the
8
<PAGE>
Partnership, in favor of the bank. On May 21, 1998, Mr. Nichols
assigned all of his right, title and interest in this promissory note
to NTS Financial, as a capital contribution thereto. In 1998, Mr.
Nichols received from NTS Financial the following payments representing
a return of capital, all of which Mr. Nichols used to pay third party
obligations:
$119,154.86 June 30
$209,370.17 August 5
$146,000.00 August 10
$269,105.83 August 25
$280,079.33 August 27
On February 24, 1999, Mr. Nichols received a return of capital
from NTS Financial in the amount of $137,000 and used such funds to
make a capital contribution to ORIG to purchase limited partnership
interests in NTS-Properties IV, Ltd. On March 11, 1999, Mr. Nichols
received a return of capital from NTS Financial in the amount of
$96,000, and used such funds to make a capital contribution to ORIG to
purchase limited partnership interests in NTS-Properties VII, Ltd.
Since January 1, 1996, Mr. Nichols has personally guaranteed
various loans made to the Partnership's affiliates, including both
publicly-held affiliates and privately-held affiliates. As of December
31, 1996, Mr. Nichols had outstanding personal guarantees totaling
$46,332,682 on aggregate loan balances of $104,701,435 secured by
properties with an aggregate book value of $135,000,000. As of December
31, 1997, Mr. Nichols had outstanding personal guarantees totaling
$26,383,561 on aggregate loan balances of $32,986,920 secured by
properties with an aggregate book value of $33,000,000. As of December
31, 1998, Mr. Nichols had outstanding personal guarantees totaling
approximately $26,898,000 on aggregate loan balances of approximately
$32,000,000, secured by properties with an aggregate book value of
approximately $33,000,000. In October, 1998, Mr. Nichols and Mr. Lavin
each personally guaranteed $3,250,000 of a loan made to a
privately-held affiliate of the Partnership secured by a property, the
book value of which is $10,000,000.
(b) There have been no contracts, negotiations or transactions which
have occurred since the commencement of the Partnership's third full fiscal year
proceeding the date of this Schedule between the Bidder, Mr. Nichols or Mr.
Lavin and the Partnership or its affiliates concerning: a merger, consolidation
or acquisition; tender offer or other acquisition of securities; an election of
directors; or a sale or other transfer of a material amount of assets, except as
follows:
9
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(i) On October 13, 1998, the Bidder and the Partnership
jointly filed an Issuer Tender Offer Statement on Schedule 13E-4 for
the purchase of in the aggregate up to 1,200 Interests;
(ii) the Partnership, BKK Financial, Inc., an Indiana
corporation (which is wholly owned by Mr. Nichols' wife, Barbara, and
two majority-age daughters, and of which Mr. Nichols is the Chairman of
the Board) and Ocean Ridge Investments, Ltd., a Florida limited
partnership (of which Mrs. Nichols is the sole limited partner of which
BKK Financial, Inc. is the general partner) have purchased Interests
from time to time. Since January 1, 1995, Ocean Ridge Investments, Ltd.
and BKK Financial, Inc. have purchased 2,632 Interests at prices
ranging from $112-160. All of these Interests are owned by Ocean Ridge
Investments, Ltd. Mr. Nichols and Mr. Lavin disclaim beneficial
ownership of each of these Interests. The General Partner owns five
Interests. Mr. Nichols and Mr. Lavin disclaim beneficial ownership of
each of these Interests.
On February 5, 1999, the Bidder and the Partnership purchased
an aggregate of 2,458 Interests of the Partnership from Limited
Partners for $205 per Interest pursuant to a joint offer to purchase
interests. The Partnership purchased 600 of these Interests. The Bidder
purchased 1,858 of these Interests. Mr. Nichols disclaims beneficial
ownership of 186, or 10%, of the Interests purchased by the Bidder; Mr.
Lavin disclaims beneficial ownership of 1,672, or 90%, of the Interests
purchased by the Bidder.
On December 31, 1998, the Bidder and NTS-Properties III
purchased an aggregate of 729 limited partnership interests of
NTS-Properties III from limited partners for $250 per interest pursuant
to a joint offer to purchase interests. The Partnership purchased 500
of these interests. The Bidder purchased 229 of these interests. Mr.
Nichols disclaims beneficial ownership of 23, or 10%, of the interests
purchased by the Bidder; Mr. Lavin disclaims beneficial ownership of
206, or 90%, of the Interests purchased by the Bidder.
On February 19, 1999, the Bidder and NTS-Properties IV, Ltd.
purchased an aggregate of 1,259 limited partnership interests of
NTS-Properties IV., Ltd. from limited partners for $205 per interest
pursuant to a joint offer to purchase interests. The Partnership
purchased 600 of these interests. The Bidder purchased 659 of these
interests. Mr. Nichols disclaims beneficial ownership of 66, or 10%, of
the interests purchased by the Bidder; Mr. Lavin disclaims beneficial
ownership of 593, or 90%, of the interests purchased by the Bidder.
On January 18, 1999, the Bidder and NTS-Properties VI
purchased an aggregate of 2,103 limited partnership interests of
NTS-Properties VI from limited partners for $350 per interest pursuant
to a joint offer to purchase Interests. NTS-
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Properties VI purchased 750 of these interests. The Bidder purchased
1,353 of these Interests. Mr. Nichols disclaims beneficial ownership
of 135, or 10%, of the interests purchased by the Bidder; Mr. Lavin
disclaims beneficial ownership of 1,218, or 90% of the Interests
purchased by the Bidder.
On September 30, 1999, the Bidder and NTS-Properties VI
purchased an aggregate of 2,801 limited partnership interests of
NTS-Properties VI from limited partners at $370 per Interest pursuant
to a joint offer to purchase interests. NTS- Properties VI purchased
500 of these interests. The Bidder purchased 2,301 of these Interests,
Mr. Nichols disclaims beneficial ownership of 230, or 10% of the
Interests purchased by the Bidder; Mr. Lavin disclaims beneficial
ownership of 2,071 or 90% of the Interests purchased by the Bidder.
On March 6, 1999, the Bidder and NTS-Properties VII, Ltd.
purchased an aggregate of 25,794 limited partnership interests of
NTS-Properties VII, Ltd. from limited partners for $6 per interest
pursuant to a joint offer to purchase interests. The Partnership
purchased 10,000 of these interests. The Bidder purchased 15,794 of
these interests. Mr. Nichols disclaims beneficial ownership of 1,579,
or 10%, of the interests purchased by the Bidder; Mr. Lavin disclaims
beneficial ownership of 14,215, or 90%, of the interests purchased by
the Bidder.
Item 4. Source and Amount of Funds or Other Consideration.
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(a) The total amount of funds anticipated to complete the Offer is
approximately $132,500 (including approximately $107,500 to purchase 500
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 purchase the first 250 Interests tendered pursuant
to the Offer and will fund its purchases and its portion of the expenses of the
Offer from its cash reserves. If the Offer is oversubscribed, and the
Partnership, in its sole discretion, decides to purchase Interests in excess of
250 Interests, the Partnership will fund these additional purchases and
expenses, if any, from its cash reserves.
The Bidder will purchase the next 250 Interests tendered and will fund
its purchases and its portion of the expenses of the Offer from cash
contributions to be made to the Bidder by its members, pursuant to a binding
Capital Contribution Agreement executed by Mr. Nichols and Mr. Lavin. Mr.
Nichols anticipates contributing approximately 90% of the funds necessary for
the Bidder to purchase Interests pursuant to the Offer and to pay the Bidder's
proportionate share of the expenses of the Offer. Mr. Lavin anticipates
contributing approximately 10% of the funds necessary for the Bidder to purchase
Interests pursuant to the Offer and to pay the Bidder's proportionate share of
the expenses of the Offer. The members of the Bidder will make these cash
contributions immediately upon the expiration of the Offer. If the Offer is
oversubscribed and the Bidder, in its sole discretion, decides to purchase
Interests in excess of 250 Interests, the Bidder will fund these additional
purchases and expenses, if any, from these cash contributions.
11
<PAGE>
(b) Neither the Partnership, the Bidder nor either of Mr. Nichols or
Mr. Lavin intends to borrow funds to purchase any Interests tendered pursuant to
this Offer.
(c) Not applicable.
Reference is hereby made to Section 9, "Source and Amount of Funds," of
the Offer which is incorporated herein by reference.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
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The purpose of the Offer is to provide Limited Partners who desire to
liquidate their investment in the Partnership with a method for doing so. With
the exception of isolated transactions, no established secondary trading market
for the Interests exists and transfers of Interests are subject to certain
restrictions as set forth in the Partnership Agreement, including prior approval
of the General Partner. Interests that are tendered to the Partnership will be
retired, although the Partnership may issue interests from time to time in
compliance with the registration requirements of federal and state securities
laws or any exemptions therefrom. Interests that are tendered to the Bidder will
be held by the Bidder. Neither the Partnership nor the General Partner has plans
to offer for sale any other additional interests, but they each reserve the
right to do so in the future.
The Offer is generally not conditioned upon any minimum number of
Interests being tendered. The Offer is conditioned upon, among other things, the
absence of certain adverse conditions described in Section 6, "Certain
Conditions of the Offer." In particular, the Offer will not be consummated, if
in the opinion of the General Partner, there is a reasonable likelihood that
purchases under the Offer would result in termination of the Partnership (as a
partnership) under Section 708 of the Internal Revenue Code of 1986, as amended
(the "Code"); or termination of the Partnership's status as a partnership for
federal income tax purposes under Section 7704 of the Code. Further, the
Offerors will not purchase Interests, if the purchase of Interests would result
in the Interests being owned by fewer than three hundred (300) holders of
record.
The Offerors have agreed that the Partnership will purchase the first
250 Interests tendered during the Offer, and that, if more than 250 Interests
are tendered, the Bidder will purchase up to an additional 250 Interests
tendered on the same terms and conditions as those Interests purchased by the
Partnership. If, on the Expiration Date (defined below), the Offerors determine
that more than 500 Interests have been tendered during the Offer, each Offeror
may: (i) accept the additional Interests permitted to be accepted pursuant to
Rule 13e-4(f)(1) promulgated under the Securities Exchange Act of 1934, as
amended; or (ii) extend the Offer, if necessary, and increase the amount of
Interests that the Offeror is offering to purchase to an amount that the Offeror
believes to be sufficient to accommodate the excess Interests tendered as well
as any Interests tendered during the extended Offer.
If the Offer is oversubscribed, and the Offerors do not act in
accordance with (i) or (ii) above, or if the Offerors act in accordance with (i)
and (ii), above, but the Offer remains oversubscribed,
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then the Offerors will accept Interests tendered prior to or on the Expiration
Date (defined below) for payment on a pro rata basis. In the event of proration,
the number of Interests purchased from a Limited Partner will be equal to a
fraction of the Interests tendered, the numerator of which will be the total
number of Interests the Offerors are willing to purchase and the denominator of
which will be the total number of Interests properly tendered. Notwithstanding
the foregoing, the Offerors will not purchase Interests tendered by a Limited
Partner if, as a result of the purchase, the Limited Partner would continue to
be a Limited Partner and would hold fewer than five (5) Interests.
The term "Expiration Date" shall mean 12:00 Midnight, Eastern Standard
Time, on December 23, 1999, unless and until the Offerors extend the period of
time for which the Offer is open, in which event "Expiration Date" will mean the
latest time and date at which the Offer, as extended by the Offerors or the
Bidder, expires. The Partnership may extend the Offer in its sole discretion by
providing the Limited Partners with written notice of the extension; provided,
however, that if the Offer is oversubscribed, the Partnership or the Bidder may,
each in its sole discretion, extend the Offer by providing the Limited Partners
with written notice of the extension.
(a) Neither the Offerors, the General Partner nor either of Mr. Nichols
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.
(b) Reference is hereby made to Section 10, "Certain Information About
the Partnership," of the Offer, which is incorporated herein by reference.
(c) Neither the Offerors, the General Partner nor either of Mr. Nichols
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(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.
(d) Neither the Offerors, the General Partner nor either of Mr. Nichols
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.
(e) Neither the Offerors, the General Partner nor any of Mr. Nichols 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.
(f) Item (f) of this Item 5 is not applicable to the Partnership
because its securities are not listed on a national securities exchange and are
not authorized to be quoted on an inter-dealer quotation system of a registered
national securities association.
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(g) Neither the Partnership, the General Partner nor either of Mr.
Nichols or Mr. Lavin has any plans or proposals that would result in a class of
equity securities of the Partnership becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Act.
Reference is hereby made to the Introduction, Section 1, "Background
and Purposes of the Offer," Section 5, "Purchase of Interests; Payment of
Purchase Price," Section 6, "Certain Conditions of the Offer," and Section 10,
"Certain Information About the Partnership" of the Offer which are incorporated
herein by reference.
Item 6. Interest in Securities of the Subject Company.
- -------------------------------------------------------
(a) The Bidder, Mr. Nichols and Mr. Lavin each beneficially own 4,495,
or 14.6% of the outstanding Interests, (i) 1,858 of which are owned by the
Bidder, (ii) 2,632 of which are owned by Ocean Ridge, and (iii) five of which
are owned by the General Partner. The address of Ocean Ridge is 10172 Linn
Station Road, Louisville, Kentucky 40223. Mr. Nichols disclaims beneficial
ownership of 2,823 of these Interests. Mr. Lavin disclaims beneficial ownership
of 4,309 of these Interests. The Bidder disclaims beneficial ownership of 2,637
of these Interests. Reference is hereby made to cover pages 2-4 herein, which
are incorporated herein by reference.
(b) On September 30, 1999, the Partnership purchased 2,523 Interests
pursuant to a previous tender offer. Other than this transaction, there have not
been any transactions involving Interests that were effected during the past
sixty (60) business days by the Partnership, the General Partner, the Bidder,
Mr. Nichols, Mr. Lavin or any person controlling the Partnership, the General
Partner or the Bidder.
Reference is hereby made to Section 12, "Transactions and Arrangements
Concerning Interests" of the Offer, the Introduction of the Offer and Exhibit
(c)(2) hereto, which are incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
- --------------------------------------------------------------------------------
to the Subject Company'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. The Partnership, however, will not purchase Interests, if as
a result, the Limited Partner would continue to be a Limited Partner and would
hold fewer than five (5) Interests.
Mr. Nichols and Mr. Lavin have executed a binding Capital Contribution
Agreement which requires them to contribute the capital necessary to purchase
any and all Interests purchased by the Bidder pursuant to the Offer and to pay
the Bidder's proportionate share of the expenses of the Offer. Mr. Nichols
anticipates contributing approximately 90% of these funds. Mr. Lavin anticipates
contributing approximately 10% of these funds.
14
<PAGE>
Other than these agreements, the Offerors are not aware of any other
contract, arrangement, understanding or relationship relating, directly or
indirectly, to this Offer (whether or not legally enforceable) between the
Bidder, Mr. Nichols or Mr. Lavin and any person with respect to the Interests.
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 and to Exhibit (c)(2) hereto, each of which
are incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
- ---------------------------------------------------------
No persons have been employed, retained or are to be compensated by the
Offerors to make solicitations or recommendations in connection with the Offer.
Item 9. Financial Statements of Certain Bidders.
- -------------------------------------------------
Not applicable.
Item 10. Additional Information.
- ---------------------------------
(a) None.
(b) None.
(c) None.
(d) Not applicable.
(e) None.
(f) None.
Item 11. Material to be Filed as Exhibits.
- -------------------------------------------
(a)(1) Form of Offer to Purchase.
(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.
15
<PAGE>
(a)(6) Form of Amendment No. 1 to the Offer to Purchase dated January
25, 1999.
(b) None.
(c)(1) 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.
(c)(2) Capital Contribution Agreement dated January 20, 1999 executed
by the members of ORIG, LLC.
(d) None.
(e) None.
(f) None.
16
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: November 5, 1999 ORIG, LLC,
a Kentucky limited liability company.
By: /s/ J. D. Nichols
-----------------
J.D. Nichols,
Managing Member
/s/ J. D. Nichols
-----------------
J. D. Nichols
/s/ Brian Lavin
---------------
Brian Lavin
17
<PAGE>
EXHIBITS
Exhibit
Number Description
- ------ -----------
(a)(1) Form of Offer to Purchase.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership.
(a)(4) Form of Letter to Limited Partners.
(a)(5) Substitute Form W-9 with Guidelines.
(b) None.
(c)(1) Reference is hereby made to the Amended and Restated
Agreement of Limited Partnership of NTS-Properties V, dated
April 30, 1984, as previously filed with the Securities and
Exchange Commission on May 1, 1984 with the Partnership's
Registration Statement on Form S-11 No. 2- 90818, and
declared effective on August 1, 1984.
(c)(2) Capital Contribution Agreement dated January 20, 1999
executed by the members of ORIG, LLC.
(d) None.
(e) None.
(f) None.
18
<PAGE>
Exhibit (a)(1)
Form of Offer to Purchase, dated November 5, 1999
19
<PAGE>
Offer to Purchase for Cash
by
NTS-Properties V
and ORIG, LLC
of Up to
500 Limited Partnership Interests
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN STANDARD TIME, ON THURSDAY, DECEMBER 23, 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, and Brian F. Lavin, its President and Chief Operating Officer. Except as
otherwise provided in the Partnership Agreement (defined below), and as more
fully described in Section 10 "Certain Information About the Partnership," the
General Partner owns a one percent (1%) interest in the Partnership and the
limited partners, in the aggregate, own a ninety-nine percent (99%) interest in
the Partnership. The Partnership and ORIG, LLC, a Kentucky limited liability
company (the "Affiliate"), an affiliate of the Partnership (the Affiliate and
the Partnership are each an "Offeror" and collectively, the "Offerors"), are
offering to purchase for cash, upon the terms and conditions set forth in this
Offer to Purchase ("Offer to Purchase") and the related Letter of Transmittal
("Letter of Transmittal," which together with the Offer to Purchase constitutes
the "Offer"), in the aggregate up to 500 of the Partnership's limited
partnership interests (the "Interests") at a price equal to $215 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 $215 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 Neither the General Partner, on behalf of the
Partnership, nor the Affiliate has retained an
independent third party to evaluate the fairness of
the Offer.
o Conflicts in establishing the Purchase Price exist
between tendering Limited Partners and the
Partnership, the General Partner and non-tendering
Limited Partners.
o Negative tax consequences may exist for any Limited
Partner tendering its Interests.
o The General Partner makes no recommendation regarding
whether Limited Partners should tender or retain
their Interests.
Limited Partners continuing to hold all or any portion of their
Interests are subject to certain risks including:
o The Partnership may not make future cash
distributions to Limited Partners.
o The percentage ownership of Interests held by persons
controlling, controlled by or under common control
with the General Partner or its affiliates will
increase as a result of the Offer.
o The 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."
-----------------------------------------------------
<PAGE>
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."
-----------------------------------------------------
IMPORTANT
Any Limited Partner wishing to tender all or any portion of his, her or
its Interests should complete and sign the enclosed Letter of Transmittal in
accordance with the instructions in the Offer to Purchase and Letter of
Transmittal and deliver it together with the Certificate(s) of Ownership for the
Interests being tendered (or if the Certificate(s) of Ownership for the
Interests is (are) lost, stolen, misplaced or destroyed, the Affidavit and
Indemnification Agreement for Missing Certificate(s) of Ownership executed by
the Limited Partner attesting to such fact), the Substitute Form W-9 and any
other required documents to the Partnership. A Limited Partner having Interests
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact that broker, dealer, commercial bank, trust company
or other nominee if he, she or it desires to tender such Interests.
-----------------------------------------------------
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or any other documents relating to
this Offer may be directed to NTS Investor Services c/o Gemisys at (800)
387-7454.
The date of this Offer to Purchase is November 5, 1999.
2
<PAGE>
NEITHER THE OFFERORS 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 OFFERORS REGARDING WHETHER LIMITED PARTNERS SHOULD TENDER OR REFRAIN FROM
TENDERING INTERESTS PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. ANY RECOMMENDATION
OR INFORMATION, IF GIVEN OR MADE, MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE OFFERORS OR THE GENERAL PARTNER.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH
TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
3
<PAGE>
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............17
Section 6. Certain Conditions of the Offer.............................17
Section 7. Cash Distribution Policy....................................20
Section 8. Effects of the Offer........................................20
Section 9. Source and Amount of Funds..................................20
Section 10. Certain Information About the Partnership...................21
Section 11. Certain Federal Income Tax Consequences.....................24
Section 12. Transactions and Arrangements Concerning Interests..........27
Section 13. Extensions of Tender Period; Terminations; Amendments.......28
Section 14. Fees and Expenses...........................................28
Section 15. Address; Miscellaneous......................................28
Appendix A
The Partnership's Financial Statements Giving Pro Forma Effect of the
Offer................................................................30
4
<PAGE>
To Holders of Limited Partnership
Interests of NTS-Properties V
INTRODUCTION
NTS-Properties V is a Maryland limited partnership (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 and ORIG,
LLC, a Kentucky limited liability company (the "Affiliate"), an affiliate of the
Partnership (the Partnership and the Affiliate are each an "Offeror" and
collectively, the "Offerors"), hereby offer to purchase up to 500 of the
Partnership's limited partnership interests (the "Interests") at a purchase
price of $215 per Interest (the "Purchase Price") in cash to the seller upon the
terms and subject to the conditions set forth in this "Offer to Purchase" and in
the related "Letter of Transmittal" (together the "Offer to Purchase" and
"Letters of Transmittal" constitute the "Offer"). (As used herein, the term
"Interest" or "Interests," as the context requires, refers to the limited
partnership interests in the Partnership and portions thereof that constitute
the class of equity security that is the subject of this Offer or the limited
partnership interests or portions thereof that are tendered by the limited
partner to the Offerors pursuant to the Offer.) The Partnership, in its sole
discretion, may purchase more than 250 Interests, and the Affiliate, in its sole
discretion, may purchase more than 250 Interests, but neither has any current
intention of doing so. This Offer is being made to all limited partners in the
Partnership ("Limited Partners") and is generally not conditioned upon any
minimum amount of Interests being tendered, except as described herein. The
Interests are not traded on any established trading market and are subject to
certain restrictions on transferability set forth in the Amended and Restated
Agreement of Limited Partnership of NTS- Properties V dated April 30, 1984 (the
"Partnership Agreement"). The Partnership may purchase more than 250 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 June 30, 1999, the book value of
each Interest was approximately $302.40 and $264.92, 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 Offerors' tender offer of
$205 per Interest which commenced on October 14, 1998 and terminated on February
5, 1999 (the "First Offer"); (ii) the response to a second tender offer by the
Partnership which commenced on June 25, 1999 at a price of $167.50 per Interest,
the price of which was raised twice, to $180 per Interest on August 18, 1999,
and subsequently to $205 per Interest on August 31, 1999, and which terminated
on September 30, 1999 (the "Second Offer"); (iii) 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
associates of the Partnership or the General Partner; (iv) a
5
<PAGE>
tender offer made by an unaffiliated third party in August 1999 at a price of
$175 per Interest, the price of which was subsequently raised to $195 per
Interest; (v) a tender offer made by an unaffiliated third party in November
1999 at a price of $210 per Interest; (vi) sales of Interests by Limited
Partners to third parties in secondary market transactions from January 1, 1997
through August 31, 1999; (vii) repurchases of interests by the Partnership and
the Affiliate in 1996, 1997 and 1998; and (viii) purchases of Interests by the
Partnership's affiliate, Ocean Ridge Investments Ltd., a Florida limited
liability partnership ("Ocean Ridge") in 1998. Neither the Offerors nor the
General Partner has obtained an opinion from an independent third party
regarding the fairness of the Purchase Price.
Subject to the conditions set forth in the Offer, the Partnership will
purchase the first 250 Interests which are tendered and received by the
Partnership by, and not withdrawn prior to, 12:00 Midnight, Eastern Standard
Time, on Thursday, December 23, 1999, subject to any extension of the Offer by
the Offerors (the "Expiration Date"). If more than 250 Interests are tendered,
the Affiliate will purchase up to an additional 250 Interests which are tendered
and received by the Partnership by, and not withdrawn prior to, the Expiration
Date. If, on the Expiration Date, the Offerors determine that more than 500
Interests have been tendered during the Offer, each Offeror may: (i) accept the
additional Interests in accordance with Rule 13e-4(f)(1) promulgated under the
Securities Exchange Act of 1934 ("Exchange Act"), as amended; or (ii) extend the
Offer, if necessary, and increase the amount of Interests that the Offerors is
offering to purchase to an amount that the Offeror believes to be sufficient to
accommodate the excess Interests tendered as well as any Interests tendered
during the extended Offer.
If the Offer is oversubscribed and the Offerors do not act in
accordance with (i) or (ii), above, or if the Offerors act in accordance with
(i) and (ii), above, but the Offer remains oversubscribed, then the Offerors
will accept Interests tendered prior to or on the Expiration Date for payment on
a pro rata basis ("Proration"). If the Partnership pro rates, the number of
Interests purchased from a Limited Partner will be equal to a fraction of the
Interests tendered, the numerator of which will be the total number of Interests
the Offerors are willing to purchase and the denominator of which will be the
total number of Interests properly tendered. Any fractional interests resulting
from this calculation will be rounded down to the nearest whole number.
Fractions of Interests will not be purchased. The Partnership will notify, in
writing, all Limited Partners from whom the Offerors will purchase fewer than
the number of Interests tendered by the Limited Partner. For any Interest
tendered but not purchased by the Offerors, a book entry will be made on the
Partnership's books to reflect the Limited Partner's ownership of the Interests
not purchased. The Partnership will not issue a new Certificate of Ownership for
the Interests not purchased by the Offerors, except upon written request of the
Limited Partner.
The Offer is generally not conditioned on the tender of any minimum
number of Interests. The Offer, however, is conditioned upon, among other
things, the absence of certain adverse conditions described in Section 6,
"Certain Conditions of the Offer." In particular, the Offer will not be
consummated, if in the opinion of the General Partner, there is a reasonable
likelihood that purchases under the Offer would result in termination of the
Partnership (as a partnership) under
6
<PAGE>
Section 708 of the Internal Revenue Code of 1986, as amended (the "Code"), or
termination of the Partnership's status as a partnership for federal income tax
purposes under Section 7704 of the Code. Further, the Offerors will not purchase
Interests if the purchase of Interests would result in Interests being owned by
fewer than three hundred (300) holders of record. See Section 6, "Certain
Conditions of the Offer."
All purchases of Interests pursuant to the Offer will be effective as
of the Expiration Date. Each Limited Partner who tenders Interests pursuant to
the Offer will receive the Purchase Price and cash distributions declared and
payable prior to the Expiration Date, if any. Limited Partners will not be
entitled to receive cash distributions declared and payable after the Expiration
Date, if any, on any Interests tendered and accepted by the Offerors.
The tender and acceptance of an Interest will be treated as a sale of
the Interest for federal and most state income tax purposes which will result in
the Limited Partner recognizing gain or loss for income tax purposes. Limited
Partners are urged to review carefully all the information contained in or
referred to in this Offer including, without limitation, the information
presented herein in Section 11, "Certain Federal Income Tax Consequences."
As of October 1, 1999, the General Partner owned five (5) of the
Partnership's outstanding Interests and the Affiliate owned 1,858 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 14.6% of the
Partnership's 30,871 outstanding Interests. Although the Offer is being made to
all Limited Partners, the Partnership has been advised that neither the General
Partner, the Affiliate nor any of the partners, members, affiliates or
associates of the General Partner intends to tender any Interests pursuant to
the Offer. Assuming the Offer is fully subscribed, the General Partner, the
Affiliate and partners, members, affiliates and associates of the General
Partner or the Affiliate will own, after the Offer, an aggregate of 4,745
Interests, representing approximately 15.5% of the Partnership's 30,621
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, and the
Affiliate, a Kentucky limited liability company, invite all
of the Partnership's Limited Partners to tender their
Interests upon the terms and subject to the conditions set
forth in this Offer.
Purchase Price $215 per Interest in cash.
Expiration Date The Offer expires on Thursday, December 23, 1999 at 12:00
Midnight, Eastern Standard Time unless the Offer is
otherwise extended by the Offerors in accordance with the
provisions set forth herein. ALL INTERESTS BEING TENDERED
MUST BE RECEIVED BY THE PARTNERSHIP AT THE ADDRESS SET FORTH
IN SECTION 15, "ADDRESS; MISCELLANEOUS," ON OR BEFORE THE
EXPIRATION DATE.
Offer Conditions The Offerors will purchase in the aggregate up to 500
Interests. The first 250 Interests tendered will be
purchased by the Partnership; up to an additional 250
Interests will be purchased by the Affiliate. If the Offer
is oversubscribed, first the Partnership may purchase
additional Interests, and then the Affiliate may purchase
additional Interests, each in its sole discretion. If the
Offer remains oversubscribed, Interests will be purchased on
a pro rata basis. This Offer is being made to all Limited
Partners and is not conditioned on the tender of any minimum
number of Interests; provided however, no tender will be
accepted from a Limited Partner if, as a result of the
tender, the Limited Partner would continue to be a Limited
Partner and would hold fewer than five (5) Interests. The
Offer is subject to certain terms and conditions set forth
in the Offer.
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. A readily identifiable, liquid market for the
Interests does not exist and is not likely to exist in the near future. The
Partnership and the Affiliate purchased an aggregate of 2,458 Interests on
February 5, 1999 for $205 per Interest pursuant to the First Offer. The
Partnership purchased 600 of these Interests. The Affiliate purchased 1,858 of
these Interests. The Partnership purchased 2,523 Interests on September 30, 1999
at $205 per Interest, pursuant to the Second Offer. In addition, an unaffiliated
Third Party made a tender offer of $175 per Interest in August 1999 and
subsequently raised the price of the offer to $195 per Interest. In addition,
this third party made an offer in November 1999 at a price of $210 per Interest.
The Offerors are also aware of certain secondary market transactions by which
Interests were transferred at prices ranging from $150 to $201.15 per Interest
(including commissions and other mark-ups) by Limited Partners to third parties
during the period from January 1, 1997 to August 31, 1999. The Partnership
repurchased 1,882 interests, and its affiliate, Ocean Ridge, purchased 2,632
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 First Offer, the purchase price per Interest in the
Second Offer and the price offered by third parties in tender offers. None of
the Purchase Price per Interest in the prior offers, the price offered in third
party tender offers, the secondary market transactions described above or the
Purchase Price in this Offer necessarily reflects the value that Limited
Partners would realize from holding the Interests until termination or
liquidation of the Partnership, which could result in greater or lesser value.
The Purchase Price is less than the book value of the Interests. As of December
31, 1998 and June 30, 1999, the book value of each Interest was approximately
$302.40 and $264.92, respectively. As of December 31, 1998 and June 30, 1999,
the Partnership had $133.66 and $95.85 per Interest of unrestricted cash and
cash equivalents, respectively, representing 44% and 36% of the Partnership's
book value, respectively. The Offerors have not obtained an opinion from an
independent third party regarding the fairness of the Purchase Price.
Furthermore, the Offerors did not obtain an appraisal of the Partnership's
assets in establishing the Purchase Price.
Negative Tax Consequences May Exist for Any Limited Partner Tendering
-----------------------------------------------------------------------
Interests. Limited Partners selling Interests pursuant to this Offer generally
- ---------
will recognize a gain or loss on the sale of their Interests for federal and
most state income tax purposes. The amount of gain or loss realized will be, in
general, the excess of the amount realized by the seller (generally, the sum of
the Purchase Price plus the selling Limited Partner's share of Partnership
liabilities) minus the Limited Partner's adjusted tax basis in the Interests
sold. Generally, the sale of Interests held by a Limited Partner for more than
twelve (12) months will result in long-term capital gain or loss. Due to the
complexity of tax issues, Limited Partners are advised to consult their tax
advisors with respect to their
9
<PAGE>
individual tax situations before selling their Interests pursuant to the Offer.
See Section 11, "Certain Federal Income Tax Consequences."
Conflict of Interest. A conflict of interest exists between Limited
--------------------
Partners who are tendering their Interests and the Partnership, the General
Partner and non-tendering Limited Partners. Tendering Limited Partners would
prefer a higher Purchase Price; the Partnership, the General Partner and
non-tendering Limited Partners would prefer a lower Purchase Price.
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 $66,250 ($53,750 to purchase 250 Interests plus approximately
$12,500 for its Proportionate Share of the expenses associated with
administering the Offer); the expenses of the Offer will be apportioned between
the Offerors. 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
October 1, 1999, the General Partner owned five (5) of the Partnership's
outstanding Interests and the Affiliate owned 1,858 of the Partnership's
outstanding Interests. The General Partner, the Affiliate, and all partners,
members, affiliates and associates of the General Partner or the Affiliate
beneficially own, in the aggregate 4,495 Interests, representing approximately
14.6% of the Partnership's 30,871 outstanding Interests. Although this Offer is
made to all Limited Partners, the Partnership has been advised that none of the
General Partner, the Affiliate nor any of the partners, members, affiliates or
associates of the General Partner or the Affiliate intends to tender any
Interests pursuant to the Offer. Assuming the Offer is fully subscribed, the
General Partner, the Affiliate and partners, members, affiliates and associates
of the General Partner or the Affiliate will own, after the Offer, an aggregate
of 4,745 Interests, representing approximately 15.5% of the Partnership's 30,621
outstanding Interests, an increase of 0.9% 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
10
<PAGE>
have a greater influence on certain matters voted on by Limited Partners,
including removal of the General Partner and termination of the Partnership.
Partnership Has No Current Plan to Liquidate. The Partnership has no
---------------------------------------------
current plan to sell its assets and to distribute the proceeds to its Limited
Partners nor does the Partnership contemplate resuming distributions to the
Limited Partners. Therefore, Limited Partners who do not tender their Interests
may not be able to realize any return on or any distribution relating to their
investment in the Partnership in the foreseeable future.
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 Offerors nor the General Partner has any current plans or
proposals that relate to or would result in: (i) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Partnership; (ii) a sale or transfer of a material amount of assets of the
Partnership; (iii) any change in the identity of the General Partner or in the
management of the Partnership, including, but not limited to, any plans or
proposals to change the number or term of the General Partner(s), to fill any
existing vacancy for the General Partner, or to change any material term of the
management agreement between the General Partner and the Partnership; (iv) any
material change in the present distribution policy, indebtedness or
capitalization of the Partnership; (v) any other material change in the
structure or business of the Partnership; or (vi) 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 the Affiliate and other affiliates of the General Partner that own
Interests) who do not tender their Interests or tender only a portion of their
Interests. Limited Partners retaining their Interests may be subject to
increased risks including but not limited to: (1) reduction in the Partnership's
cash reserves, which may impact the Partnership's ability to fund its future
cash requirements, thus having a material adverse effect on the Partnership's
financial condition; and (2) increased voting control by the affiliates of the
General Partner (including the Affiliate) and persons controlling the
affiliates, which will increase the influence that affiliates of the General
Partner and persons controlling the affiliates have on certain matters voted on
by Limited Partners, including removal of the General Partner and termination of
the Partnership. See "Risk Factors -- Cash Distributions May be Reduced or
12
<PAGE>
Eliminated - Increased Voting Control By Affiliates of the Partnership".
Interests that are tendered to the Partnership in connection with this Offer
will be retired, although the Partnership may issue new interests from time to
time in compliance with the federal and state securities laws or any exemptions
therefrom. Interests purchased by the Affiliate will be held by the Affiliate.
Neither the Partnership nor the General Partner has plans to offer for sale any
other additional interests, but each reserves the right to do so in the future.
The Offer is the third tender offer made by the Partnership and the
Affiliate for Interests. On February 5, 1999, the Partnership and the Affiliate
purchased an aggregate of 2,458 interests for $205 per Interest pursuant to the
First Offer. The Partnership purchased 2,523 Interests on September 30, 1999
pursuant to the Second 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 Offerors will, upon the terms
------------------------------------
and subject to the conditions of the Offer, described below, purchase in the
aggregate up to 500 Interests that are properly tendered by, and not withdrawn
prior to, the Expiration Date at a price equal to $215 per Interest; provided
however, that no tender will be accepted from a Limited Partner if, as a result
of the tender, the Limited Partner would continue to be a Limited Partner and
would hold fewer than five (5) Interests. The Partnership will purchase the
first 250 Interests which are tendered and received by the Partnership by, and
not withdrawn prior to, the Expiration Date. If more than 250 Interests are
tendered and received by the Partnership as a result of this Offer, the
Affiliate will purchase up to an additional 250 Interests which are tendered by,
and not withdrawn prior to, the Expiration Date.
If, on the Expiration Date, the Offerors determine that more than 500
Interests have been tendered during the Offer, each Offeror may: (i) accept the
additional Interests permitted to be accepted pursuant to Rule 13e-4(f)(1)
promulgated under the Exchange Act, as amended; or (ii) extend the Offer, if
necessary, and increase the amount of Interests that the Offeror is offering to
purchase to an amount that the Offeror believes to be sufficient to accommodate
the excess Interests tendered as well as any Interests tendered during the
extended Offer.
Proration. If the Offer is oversubscribed and the Offerors do not act
---------
in accordance with (i) or (ii), above, or if the Offerors act in accordance with
(i) and (ii), above, but the Offer remains oversubscribed, then the Offerors
will accept Interests tendered prior to or on the Expiration Date for payment on
a pro rata basis. In the event of Proration, the number of Interests purchased
from a Limited Partner will be equal to a fraction of the Interests tendered,
the numerator of which will be the total number of Interests the Offerors are
willing to purchase and the denominator of which will be the total number of
Interests properly tendered. Any fractional interests resulting from this
calculation will be rounded down to the nearest whole number. Fractions of
Interests will not be
13
<PAGE>
purchased. The Partnership will notify, in writing, all Limited Partners from
whom the Offerors will purchase fewer than the number of Interests tendered by
the Limited Partner. For any Interest tendered but not purchased by the
Offerors, a book entry will be made on the Partnership's books to reflect the
Limited Partner's ownership of the Interests not purchased. The Partnership will
not issue a new Certificate of Ownership for Interests not purchased by the
Offerors, except upon written request of the Limited Partner.
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF INTERESTS BEING
TENDERED; PROVIDED, HOWEVER, NO TENDER WILL BE ACCEPTED FROM A LIMITED PARTNER
IF, AS A RESULT OF THE TENDER, THE LIMITED PARTNER WOULD CONTINUE TO BE A
LIMITED PARTNER AND WOULD HOLD FEWER THAN FIVE (5) INTERESTS.
Expiration Date. The term "Expiration Date" means 12:00 Midnight,
----------------
Eastern Standard Time, on Thursday, December 23, 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; provided, however, that if the Offer is oversubscribed, the
Partnership or the Affiliate may each in its sole discretion, extend the Offer.
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 Offers are willing to purchase Interests. No Limited Partner
approval is required or was sought regarding the determination of the Purchase
Price. No special committee of the Partnership, the Affiliate or the Limited
Partners has approved this Offer and no special committee or independent person
has been retained to act on behalf of the Partnership or the Affiliate. Neither
the Offerors nor the General Partner has obtained an opinion from an independent
third party regarding the fairness of the Purchase Price.
The Purchase Price offered by the Offerors was determined by the
General Partner in its sole discretion, based on: (i) the response to the First
Offer of $205 per Interest; (ii) the response to the Second Offer which
commenced on June 25, 1999 at a price of $167.50 per Interest, the price of
which was raised twice, to $180 per Interest on August 18, 1999, and
subsequently to $205 per Interest on August 31, 1999, and which terminated on
September 30, 1999 (the "Second Offer"); (iii) 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
associates of the Partnership or the General Partner; (iv) a tender offer made
by an unaffiliated third party in August 1999 at a price of $175 per Interest,
the price of which was subsequently raised to $195 per Interest; (v) a tender
offer made by an unaffiliated third party in November 1999 at a price of $210
per Interest; (vi) sales of Interests by Limited Partners to third parties in
secondary market transactions from January 1, 1997 through April 30, 1998; (vii)
repurchases of interests by the Partnership and the Affiliate in 1996, 1997 and
1998; and (viii) purchases of Interests by Ocean Ridge in 1998. The
14
<PAGE>
General Partner is aware of certain sales of Interests made at prices ranging
from $150.00 to $201.15 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 August 31, 1999. 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 June 30, 1999, the book
value of each Interest was approximately $302.40 and $264.92, respectively. As
of December 31, 1998 and June 30, 1999, the Partnership had $133.66 and $95.85
per Interest of unrestricted cash and cash equivalents, respectively,
representing 44% and 36% of the Partnership's book value, respectively.
In determining the Purchase Price, the General Partner did not estimate
or project the liquidation value per Interest or consider the book value per
Interest and did not appraise the value of its assets.
Section 3. Procedure for Tendering Interests. Limited Partners that
wish to tender Interests pursuant to this Offer must submit a properly completed
and duly executed Letter of Transmittal and Substitute Form W-9, together with
the Certificate(s) of Ownership for the Interests being tendered or if the
Certificate(s) of Ownership for the Interests is (are) lost, stolen, misplaced
or destroyed, the Affidavit and Indemnification Agreement for Missing
Certificate(s) of Ownership executed by the Limited Partner attesting to such
fact (the "Affidavit"), and any other required documents to NTS Investor
Services c/o Gemisys at the address listed in Section 15, "Address;
Miscellaneous." THE LETTER OF TRANSMITTAL, SUBSTITUTE FORM W-9, AND
CERTIFICATE(S) OF OWNERSHIP FOR THE INTERESTS BEING TENDERED (OR AFFIDAVIT, IF
APPLICABLE) AND ANY OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE PARTNERSHIP
ON OR BEFORE THE EXPIRATION DATE. NEITHER THE PARTNERSHIP NOR THE AFFILIATE WILL
ACCEPT INTERESTS RECEIVED BY THE PARTNERSHIP AFTER THE EXPIRATION DATE.
Method of Delivery. LIMITED PARTNERS ASSUME ANY RISK ASSOCIATED WITH
------------------
THE METHOD FOR DELIVERING THE LETTER OF TRANSMITTAL, SUBSTITUTE FORM W-9 AND
CERTIFICATE(S) OF OWNERSHIP FOR THE INTERESTS (OR THE AFFIDAVIT). THE
PARTNERSHIP RECOMMENDS THAT LIMITED PARTNERS SUBMIT ALL DOCUMENTS VIA REGISTERED
MAIL RETURN RECEIPT REQUESTED AND PROPERLY INSURED OR BY AN OVERNIGHT COURIER
SERVICE. LIMITED PARTNERS MAY CONFIRM RECEIPT OF A LETTER OF TRANSMITTAL BY
CONTACTING NTS INVESTOR SERVICES C/O GEMISYS AT THE ADDRESS AND TELEPHONE NUMBER
LISTED IN SECTION 15, "ADDRESS; MISCELLANEOUS."
Determination of Validity. All questions regarding the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
Interests will be determined by the Partnership,
15
<PAGE>
in its sole discretion. Notwithstanding the foregoing, if the Offer is
oversubscribed, the Partnership and the Affiliate may each decide to purchase
Interests in excess of the initial 500 Interests. In that case, all questions
regarding the validity, form or eligibility (including time of receipt) and
acceptance for payment of any additional interests purchased by either the
Partnership or the Affiliate will be determined by each respective party, in its
sole discretion. Each determination, whether made by the Partnership or the
Affiliate, will be final and binding. The Partnership or the Affiliate, if
applicable, has the absolute right to waive any of the conditions of the Offer
or any defect or irregularity in any tender, or in the related transmittal
documents. Unless waived, any defects or irregularities must be cured within the
time period established by the Partnership or the Affiliate. In any event,
tenders will not be deemed to have been made until all defects or irregularities
have been cured or waived. The Offerors are neither under any duty nor will they
incur any liability for failure to notify any tendering Limited Partner of any
defects, irregularities or rejections contained in the tenders.
Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Rule 14e-4 promulgated thereunder require that a person tendering
Interests on his, her or its behalf, must own the Interests tendered. Section
10(b) and Rule 14e-4 provide a similar restriction applicable to the tender or
guarantee of a tender on behalf of another person.
The tender of Interests pursuant to any of the procedures described
herein constitutes acceptance by the tendering Limited Partner of the terms and
conditions of the Offer, including a representation and warranty that (i) the
tendering Limited Partner owns the Interests being tendered within the meaning
of Rule 14e-4; and (ii) the tender complies with Rule 14e-4.
Section 4. Withdrawal Rights. Any Limited Partner tendering Interests
pursuant to this Offer may withdraw the tender at any time prior to the
Expiration Date. For a withdrawal to be effective, it must be in writing and
received by NTS Investor Services c/o Gemisys via mail or facsimile at the
address or facsimile number set forth in the Section 15, "Address;
Miscellaneous" on or before the Expiration Date. Any notice of withdrawal must
specify the name of the person withdrawing the tender and the amount of
Interests previously tendered that are being withdrawn.
All questions as to form and validity of the notice of withdrawal will
be determined by the Partnership, in its sole discretion. If the Offer is
oversubscribed, all questions as to form and validity of the notice of
withdrawal will be determined by the Partnership or the Affiliate, each in its
sole discretion, for any Interests purchased by the Partnership or the
Affiliate, as the case may be, in excess of the initial 500 Interests. 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.
16
<PAGE>
Section 5. Purchase of Interests; Payment of Purchase Price. Upon the
terms and subject to the conditions of the Offer, the Offerors will pay $215 per
Interest to each Limited Partner properly tendering its Interests. The Purchase
Price will be paid in the form of a check from the Purchasing Offeror to each
Limited Partner. All monies due to each Limited Partner will be delivered to the
Limited Partner by first class U.S. Mail deposited in the mailbox within five
(5) business days after the Expiration Date. Under no circumstances will
interest be paid on the Purchase Price to be paid by the Offerors for Interests
tendered, regardless of any extension of the Offer or any delay in making
payment. In the event of Proration as set forth in Section 2, "Offer to Purchase
and Purchase Price; Proration; Expiration Date; Determination of Purchase
Price," the Offerors may not be able to determine the proration factor and pay
for those Interests 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.
Interests Purchased by the Affiliate will be held by the Affiliate.
Neither the Partnership nor the General Partner has plans to offer for sale any
other additional interests, but each reserves the right to do so in the future.
Section 6. Certain Conditions of the Offer. Notwithstanding any other
provision of this Offer, the Offerors will not be required to purchase or pay
for any Interests tendered and may terminate the Offer as provided in Section
13, "Extensions of Tender Period; Terminations; Amendments" or may postpone the
purchase of, or payment for, Interests tendered if any of the following events
occur prior to the Expiration Date:
(a) there is a reasonable likelihood that consummation of the
Offer would result in the termination of the Partnership (as a
partnership) under Section 708 of the Code;
(b) there is a reasonable likelihood that consummation of the
Offer would result in termination of the Partnership's status as a
partnership for federal income tax purposes under Section 7704 of the
Code;
(c) as a result of the Offer, there would be fewer than three
hundred (300) holders of record, pursuant to Rule 13e-3 promulgated
under the Exchange Act;
(d) there shall have been instituted or threatened or shall be
pending any action or proceeding before or by any court or
governmental, regulatory or administrative agency or instrumentality,
or by any other person, which: (i) challenges the making of the Offer
or the acquisition by the Partnership or the Affiliate of Interests
pursuant to the Offer or otherwise directly or indirectly relates to
the Offer; or (ii) in the Partnership's reasonable
17
<PAGE>
judgment (determined within five (5) business days prior to the
Expiration Date), could materially affect the business, condition
(financial or other), income, operations or prospects of the
Partnership, taken as a whole, or otherwise materially impair in any
way the contemplated future conduct of the business of the Partnership
or materially impair the Offer's contemplated benefits to the
Partnership;
(e) there shall have been any action threatened or taken, or
approval withheld, or any statute, rule or regulation proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Partnership or the Affiliate, by any
government or governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, which, in the Offerors'
reasonable judgment, would or might directly or indirectly:
(i) delay or restrict the ability of the Partnership
or the Affiliate, or render the Partnership or the Affiliate
unable, to accept for payment or pay for some or all of the
Interests;
(ii) materially affect the business, condition
(financial or other), income, operations, or prospects of the
Partnership or the Affiliate, taken as a whole, or otherwise
materially impair in any way the contemplated future conduct
of the business of the Partnership or the Affiliate;
(f) there shall have occurred:
(i) the declaration of any banking moratorium or
suspension of payment in respect of banks in the United States;
(ii) any general suspension of trading in, or
limitation on prices for, securities on any United States
national securities exchange or in the over-the-counter
market;
(iii) the commencement of war, armed hostilities or
any other national or international crises directly or
indirectly involving the United States;
(iv) any limitation (whether or not mandatory) by any
governmental, regulatory or administrative agency or authority
on, or any event which, in the Offerors' reasonable judgment,
might affect, the extension of credit by banks or other
lending institutions in the United States;
(v) (A) any significant change, in the Offerors'
reasonable judgment, in the general level of market prices of
equity securities or securities convertible into or
exchangeable for equity securities in the United States or
abroad or (B) any change in the general political, market,
economic, or financial conditions in the United States
18
<PAGE>
or abroad that (1) could have a material adverse effect on the
business condition (financial or other), income, operations or
prospects of the Partnership, or (2) in the reasonable
judgment of the Offerors, makes it inadvisable to proceed with
the Offer; or
(vi) in the case of the foregoing existing at the
time of the commencement of the Offer, in the Offerors'
reasonable judgment, a material acceleration or worsening
thereof;
(g) any change shall occur or be threatened in the business,
condition (financial or otherwise), or operations of the Partnership,
that, in the Partnership's reasonable judgment, is or may be material
to the Partnership;
(h) a tender or exchange offer for any or all of the Interests
of the Partnership, or any merger, business combination or other
similar transaction with or involving the Partnership, shall have been
proposed, announced or made by any person;
(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
November 5, 1999 a Schedule 13G or a Schedule 13D with respect to any
of the Interests) shall have acquired or proposed to acquire beneficial
ownership of more than 5% of the outstanding Interests; or (ii) such
entity, group, or person that has publicly disclosed any such
beneficial ownership of more than 5% of the Interests prior to such
date shall have acquired, or proposed to acquire, beneficial ownership
of additional Interests constituting more than 2% of the outstanding
Interests or shall have been granted any option or right to acquire
beneficial ownership of more than 2% of the outstanding Interests; or
(iii) any person or group shall have filed a Notification and Report
Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or
made a public announcement reflecting an intent to acquire the
Partnership or its assets; or
(j) the General Partner determines that it is not in best
interest of the Partnership to purchase Interests pursuant to the
Offer;
which, in the reasonable judgment of the Offerors, in any such case and
regardless of the circumstances (including any action of the Partnership or the
Affiliate) giving rise to such event, makes it inadvisable to proceed with the
Offer or with such purchase or payment. The foregoing conditions are for the
sole benefit of the Partnership and the Affiliate and may be asserted by the
Partnership or the Affiliate on their respective behalf regardless of the
circumstances giving rise to any such condition (including any action or
inaction by the Partnership or the Affiliate) or may be waived by the
Partnership or the Affiliate in whole or in part. The Offerors' failure at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time. Any determination by the Partnership
or the Affiliate concerning the events described in this
19
<PAGE>
Section 6, "Certain Conditions of the Offer" shall be final and binding on all
parties. As of the date hereof, the Offerors believe that neither paragraph (a)
nor paragraph (b) of this Section 6, "Certain Conditions of the Offer" will
prohibit the consummation of the Offer.
Section 7. Cash Distribution Policy. The Partnership commenced
operations in 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. See Section
10, "Certain Information About the Partnership."
Section 8. Effects of the Offer. In addition to the effects of the
Offer on tendering and non-tendering Limited Partners and upon the General
Partner as set forth in the "Risk Factors" of this Offer to Purchase, the Offer
will affect the Partnership in several other respects:
If the Offer is fully subscribed, the Partnership will use
approximately $66,250 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 or to make future distributions and (ii)
reducing or eliminating the interest income that the Partnership would have been
able to earn had it invested this cash in interest-bearing investments.
Financial statements giving pro forma effect of the Offer, assuming the purchase
by the Partnership of 250 Interests at $215 per Interest, are attached hereto as
Appendix A.
Upon completion of the Offer, the Offerors may consider purchasing any
Interests not purchased in the Offer. Any such purchases may be on the same
terms as the terms of this Offer or on terms which are more favorable or less
favorable to Limited Partners than the terms of this Offer. Rule 13e-4
promulgated under the Exchange Act prohibits the Offerors from purchasing any
Interests, other than pursuant to the Offer, until at least ten (10) business
days after the Expiration Date. Any possible future purchases by the Partnership
will depend on many factors, including but not limited to, the market price of
Interests, the results of the Offer, the Partnership's business and financial
position and general economic market conditions.
Section 9. Source and Amount of Funds. The total amount of funds
required to complete this Offer is approximately $132,500 (including $107,500 to
purchase 500 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
(approximately $53,750 to purchase 250 Interests and approximately $12,500 for
its Proportionate Share of expenses related to administering the Offer). The
expenses of the Offer will be apportioned
20
<PAGE>
between the Offerors based on the number of Interests purchased by each Offeror.
As of June 30, 1999 and December 31, 1998 the Partnership had unrestricted cash
and cash equivalents equal to $3,200,826 and $4,543,666, or $95.85 and $133.66
per Interest, respectively. If the Offer is oversubscribed and the Partnership,
in its sole discretion, decides to purchase Interests in excess of 250
Interests, the Partnership will fund these additional purchases and expenses, if
any, from its cash reserves.
The Affiliate expects to fund monies required to complete its purchases
and to pay its portion of expenses (approximately $107,500 to purchase 500
Interests plus approximately $12,500 for its proportionate share of expenses
related to administering the Offer) from cash contributions to be made to the
Affiliate by its members. If the Offer is oversubscribed and the Affiliate, in
its sole discretion, decides to purchase Interests in excess of 250 Interests,
the Affiliate will fund these additional purchases and expenses, if any, from
these cash contributions.
Section 10. Certain Information About the Partnership
Certain Information About the Partnership. The Partnership was formed
-----------------------------------------
in April, 1984 under the laws of the State of Maryland. NTS-Properties
Associates V,a Kentucy 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, 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 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.
On September 16, 1999, the Partnership sold approximately 6.21 acres of
land, adjacent to the University Place development ("Phase III"), in Orlando,
Florida, which is zoned for commercial development, for $801,000.
21
<PAGE>
The Partnership currently owns the following property:
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 June 30,
1999 was 84%.
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 June 30,
1999. The occupancy level at the apartment complex at June 30,
1999 was 95%.
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 79.45% at July 1, 1999. On July 23, 1999, the L/U
II Joint Venture closed on the sale of 2.4 acres of land
adjacent to the Lakeshore Business Center for a purchase price
of $528,405. A description of the properties currently owned
by the L/U II Joint Venture appears below:
-- 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 June
30, 1999 was 71%.
-- 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 June 30, 1999 was 86%.
-- Outparcel Building Sites - approximately 3.8 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 2000 on the remaining 3.8 acres of this
property.
The construction cost of Lakeshore Business Center Phase III is
currently estimated to be $4,000,000. On June 30, 1999, the Partnership
contributed capital of $1,737,000 to the L/U II Joint
22
<PAGE>
Venture for the construction of the Lakeshore Business Center Phase III. At that
time, NTS- Properties Plus and NTS-Properties IV, which owned 12% and 18%
interests in the L/U II Joint Venture, respectively, were not in a position to
contribute additional capital required for the construction of Lakeshore
Business Center Phase III. NTS-Properties Plus and NTS Properties IV agreed that
the Partnership would make a capital contribution to the L/U II Joint Venture
with the knowledge that their interest in the Joint Venture would, as a result,
decrease. As a result of its $1,737,000 contribution to the L/U II Joint
Venture, the Partnership's percentage ownership in the joint venture increased
to 79.45%. After this contribution, the percentage ownership interests of NTS
Properties Plus and NTS Properties IV decreased to 8.4% and 11.93%,
respectively. The balance of the construction cost for Lakeshore Business Center
Phase III will be funded from the proceeds of a mortgage to be placed on the
property.
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 6/30/99: Due:
----------- ----
$ 2,708,405 January 5, 2013
$ 1,617,579 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 6/30/99: Encumbered Property: Due:
----------- -------------------- ----
$ 3,268,167 Lakeshore Business Center Phase II August 1, 2008
$ 3,516,198 Lakeshore Business Center Phase I August 1, 2008
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.
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.
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 October 1, 1999. However, the Partnership
may incur costs associated with improvements at the Partnership's
23
<PAGE>
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's ratio of earnings to fixed changes was 1.01:1 for the
three months ended June 30, 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.
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
24
<PAGE>
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 $10,997,255, or
$329.32 per Interest, as of June 30, 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 $215 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 $10,997,255, or $329.32 per Interest, as of June 30,
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.
25
<PAGE>
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 $226.60 as of June 30, 1999, subject to further
adjustment for tax exempt use property rules. Therefore, a maximum of
approximately $226.60 of the taxable gain per Interest will be considered to be
ordinary income with the balance of the taxable gain considered to be capital
gain for federal income tax purposes for the Limited Partners who hold their
Interests as capital assets. Ordinary income recognized in 1999 is taxed at a
stated maximum rate of 39.6% for federal income tax purposes. In the case of
real property, the amount of gain not taxed as ordinary income attributable to
depreciation is taxed at a maximum rate of 25%. Net capital gains are taxed for
federal income tax purposes at a stated maximum rate of 20% for Interests held
at least twelve (12) months. The tax rates may actually be somewhat higher,
depending on the taxpayer's personal exemptions and amount of adjusted gross
income. A taxable loss, if any, on the disposition of Interests will be
recognized as a capital loss for federal income tax purposes for Limited
Partners who hold their Interests as capital assets.
Tax exempt Limited Partners may be subject to 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
26
<PAGE>
regulations, the transferee of a partnership interest held by a foreign person
is generally required to deduct and withhold a tax equal to 10% of the amount
realized on the disposition. The Partnership or the Affiliate, as the case may
be, will withhold 10% of the amount realized by a tendering foreign Limited
Partner. Amounts withheld may be credited against a foreign Limited Partner's
federal income tax liability, and if in excess thereof, a refund can be obtained
from the IRS by filing a U.S.
income tax return.
Back-up Withholding. To prevent back-up federal income tax withholding
-------------------
equal to 31% of the payments made pursuant to the Offer, each Limited Partner
(except a foreign Limited Partner) who does not otherwise establish an exemption
from such withholding must notify the Partnership of the Limited Partner's
correct taxpayer identification number (or certify that such taxpayer is
awaiting a taxpayer identification number) and provide certain other information
by completing a Substitute Form W-9 to the Partnership. (For each Limited
Partner's convenience, a Substitute Form W-9 is enclosed herein). Certain
Limited Partners, including corporations, are not subject to the withholding and
reporting requirements. Foreign Limited Partners are subject to other
requirements.
See "Foreign Limited Partners," above.
Retirement Plan Investors. Qualified pension, profit sharing and stock
-------------------------
bonus plans and IRA's (collectively "Qualified Plans") are generally exempt from
taxation except to the extent that their UBTI, determined in accordance with
Code Sections 511-514, exceeds $1,000 in any taxable year. Code Section
512(b)(5) provides generally that UBTI does not include gains or losses from the
disposition of property other than inventory or property held primarily for sale
to customers in the ordinary course of business. However, Treasury Regulation
1.1245-6(b) provides that Code Section 1245 overrides the nonrecognition
provisions of subtitle A of the Code, including Code Section 512(b)(5), if
applicable; furthermore Code Section 512(b)(4) provides that notwithstanding
Code Section 512(b)(5), a portion of the gain from the sale of "debt-financed
property" (as defined in Section 514) may be treated as UBTI. Because a portion
of the Partnership's assets are "debt financed," a portion of the gain, if any,
recognized by a Qualified Plan on the sale of an interest will be UBTI. If a
Qualified Plan is not a "dealer" in securities, the remaining portion of any
gain from the sale of Interests will not be UBTI unless the Partnership is
deemed to be a "dealer" in real estate. The General Partner does not believe the
Partnership's business has been operated in such a manner as to make it a
dealer, but there is no assurance that the IRS will not contend that the
Partnership is a dealer. If the Partnership obtains financing to purchase
Interests, the IRS may contend that each nonredeeming Limited Partner has
acquired an interest in debt-financed property, in addition to the current
debt-financed property of the Partnership. See Section 9, "Source and Amount of
Funds."
Section 12. Transactions and Arrangements Concerning Interests. Based
upon the Partnership's and Affiliate's records and information provided to the
Partnership by the General Partner and affiliates of the General Partner,
neither the Partnership, General Partner, Affiliate, nor, to the best of the
Partnership's knowledge, any controlling person of the Partnership, General
Partner or Affiliate has effected any transactions in the Interests during the
forty (40) business days prior to the date hereof.
27
<PAGE>
Section 13. Extensions of Tender Period; Terminations; Amendments. The
Partnership has or, if the Offer is oversubscribed, each Offeror has, the right
at any time and from time to time, to extend the period of time during which the
Offer is open by giving written notice of the extension to each Limited Partner.
If there is any extension, all Interests previously tendered and not purchased
or withdrawn will remain subject to the Offer and may be purchased by the
Offerors, except to the extent that such Interests may be withdrawn as set forth
in Section 4, "Withdrawal Rights."
If the Offer is oversubscribed, each Offeror has the right to purchase
additional Interests. If either Offeror decides, in its sole discretion, to
increase the amount of Interests being sought and, at the time that the notice
of such increase is first published, sent or given to holders of Interests, the
Offer is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from, and including, the date that such notice
is first so published, sent or given, then the Offer will be extended until the
expiration of such period of ten (10) business days.
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 Midnight, Eastern Standard Time. The Offerors have the right:
(i) to terminate the Offer and not to purchase or pay for any Interests not
previously purchased or paid for upon the occurrence of any of the conditions
specified in Section 6, "Certain Conditions of the Offer," by giving written
notice of such termination to the Limited Partners and making a public
announcement thereof; or (ii) at any time and from time to time, to amend the
Offer in any respect. All extensions, delays in payment or amendments will be
followed by public announcements thereof, such announcements in the case of an
extension to be issued no later than 9:00 a.m. Eastern Standard Time, on the
next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Offerors may choose to make any public
announcement, except as provided by applicable law (including Rule 13e- 4(e)(2)
under the Exchange Act), the Offerors have no obligation to publish, advertise
or otherwise communicate any such public announcement, other than by issuing a
release to the Dow Jones News Service.
Section 14. Fees and Expenses. The Offerors will not pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
Interests pursuant to the Offer. The Offerors will reimburse brokers, dealers,
commercial banks and trust companies for customary handling and mailing expenses
incurred in forwarding the Offer to their customers.
Section 15. Address; Miscellaneous.
Address. All executed copies of the Letter of Transmittal, Substitute
-------
Form W-9 and the Certificate(s) of Ownership for the Interests being tendered
(or the Affidavit) must be sent via mail or overnight courier service to the
address set forth below. Manually signed facsimile copies of the Letter of
Transmittal will not be accepted. The Letter of Transmittal, Substitute Form W-9
and Certificate(s) of Ownership for the Interests being tendered (or the
Affidavit) should be sent or
28
<PAGE>
delivered by each Limited Partner or such Limited Partner's broker, dealer,
commercial bank, trust company or other nominee as follows:
By Mail, Hand Delivery or Overnight Mail/Express:
NTS Investor Services
c/o Gemisys
7103 S. Revere Parkway
Englewood, CO 80112
Any questions, requests for assistance, or requests for additional
copies of this Offer to Purchase, the Letter of Transmittal or any other
documents relating to this Offer also may be directed to NTS Investor Services
c/o Gemisys at the above-listed address or at: (800)387-7454 or by facsimile at:
(303) 705- 6171.
Miscellaneous. The Offer is not being made to, nor will tenders be
-------------
accepted from, Limited Partners in any jurisdiction in which the Offer or its
acceptance would not comply with the securities or Blue Sky laws of such
jurisdiction. Neither Offeror is aware of any jurisdiction in which the Offer or
tenders pursuant thereto would not be in compliance with the laws of such
jurisdiction. The Offerors reserve the right to exclude Limited Partners in any
jurisdiction in which it is asserted that the Offer cannot lawfully be made. The
Offerors believe such exclusion is permissible under applicable laws and
regulations, provided the Offerors make a good faith effort to comply with any
state law deemed applicable to the Offer.
The Partnership has filed an Issuer Tender Offer Statement on Schedule
13E-4 and the Affiliate has filed a Tender Offer Statement on Schedule 14D-1with
the Securities and Exchange Commission ("Commission") which includes certain
information relating to the Offer summarized herein. Copies of these statements
may be obtained from the Partnership by contacting NTS Investor Services c/o
Gemisys at the address and phone number set forth in this Section 15, "Address;
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
November 5, 1999
29
<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 June 30, 1999 and January 1, 1999. The
pro forma financial statements contain certain financial information for the
fiscal year ended December 31, 1998 extracted or derived from the Partnership's
Annual Report on Form 10-K and certain financial information for the quarter
ended June 30, 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 June 30, 1999 and January 1, 1999, 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 June 30, 1999, nor do they purport to represent the future
financial position of the Partnership.
30
<PAGE>
<TABLE>
<CAPTION>
NTS-PROPERTIES V,
A Maryland Limited Partnership
------------------------------
Unaudited Proforma
------------------
BALANCE SHEETS
--------------
Actual
As of After Tender
June 30,1999 June 30,1999
------------ ------------
ASSETS
- ------
<S> <C> <C>
Cash and equivalent $ 3,200,826 $ 3,134,576
Cash and equivalents - restricted 258,310 258,310
Accounts receivable, net of
Allowance for doubtful accounts 130,881 130,881
Land, buildings and amenities, net 14,686,418 14,686,418
Asset held for development, net -- --
Asset held for sale 1,737,219 1,737,219
Other assets 489,232 489,232
----------- -----------
$20,502,886 $20,231,636
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Mortgages and note payable $11,110,349 $11,110,349
Accounts payable - operations 183,884 183,884
Accounts payable - construction 21,073 21,073
Security deposits 158,071 158,071
Other liabilities 283,630 283,630
----------- -----------
11,757,007 11,757,007
Commitments and Contingencies
Partners' equity 8,745,879 8,679,629
----------- -----------
$20,502,886 $20,231.636
=========== ===========
</TABLE>
* The Offer will result in a reduction of Cash and Partners' Equity
and an increase in Expenses.
<PAGE>
<TABLE>
<CAPTION>
NTS-PROPERTIES V,
A Maryland Limited Partnership
------------------------------
Unaudited Proforma
------------------
STATEMENTS OF OPERATIONS
------------------------
Actual Actual Tender Proforma Tender Proforma
For three months for the year For three months for the year
ended ended ended ended
June 30, December 31, June 30, December 31,
1999 1998 1999 1998
---- ---- ---- ----
REVENUES:
<S> <C> <C> <C> <C>
Rental income $ 959,708 $ 5,665,370 $ 959,708 $ 5,665,370
Gain on sale of assets -- 5,004,628 -- 5,004,628
Interest and other income 38,530 87,607 38,530 87,607
------------ ------------ ------------ ------------
998,238 10,757,605 998,238 10,757,605
EXPENSES:
Operating expenses 223,430 1,147,506 223,430 1,147,506
Operating expenses - affiliated 104,667 518,742 104,667 518,742
Write-off of unamortized
building costs, improvements 15,067 14,390 15,067 14,390
Amortization of capitalized
leasing costs -- 14,430 -- 14,430
Interest expense 218,371 1,497,171 218,371 1,497,171
Management fees 55,207 332,161 55,207 332,161
Real estate taxes 84,701 498,318 84,701 498,318
Professional and administrative
expenses 55,339 129,006 55,339 129,066
Tender offer costs -- -- 12,500 12,500
Professional and administrative
expenses - affiliated 39,604 203,157 39,604 203,157
Depreciation and amortization 199,396 1,364,183 199,396 1,364.183
------------ ------------ ------------ ------------
995,782 5,719,124 1,008,282 5,731,624
------------ ------------ ------------ ------------
Income (loss) before extraordinary $ 2,456 $ 5,038,481 $ (10,044) $ 5,025,981
============ ============ ============ ============
item
Net income allocated to the limited partners:
Income (loss) before extraordinary $ 2,431 $ 4,988,096 $ (10,069) $ 4,975,596
============ ============ ============ ============
item
Net income per limited partnership unit:
Income (loss) before extraordinary $ 0.07 $ 144.86 $ (.30) $ 145.56
============ ============ ============ ============
item
Weighted average number of limited
partnership units 33,394 34,433 33,144 34,183
============ ============ ============ ============
</TABLE>
* The Offer will result in a reduction in Cash and Partners' Equity and an
increase in Expenses.
<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 November 5, 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 THURSDAY,
DECEMBER 23, 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
the Offerors, NTS-Properties V (the "Partnership") and the Partnership's
affiliate, ORIG, LLC (the "Affiliate" and the Partnership are each an "Offeror"
and collectively the "Offerors") upon the terms and conditions set forth in the
Offer to Purchase, dated November 5, 1999 (collectively, the "Offer to Purchase"
and "Letter of Transmittal" constitute the "Offer").
THIS LETTER OF TRANSMITTAL IS SUBJECT TO ALL THE TERMS AND CONDITIONS
SET FORTH IN THE OFFER TO PURCHASE, INCLUDING, BUT NOT LIMITED TO, THE ABSOLUTE
RIGHT OF THE OFFERORS TO REJECT ANY AND ALL TENDERS DETERMINED BY THEM, IN THEIR
SOLE DISCRETION, NOT TO BE IN THE APPROPRIATE FORM.
I hereby represent and warrant that I have full authority to sell my
interests, or portion thereof, to the Offerors, and that the Offerors will
acquire good title, free and clear of any adverse claim. Upon request, I will
execute and deliver any additional documents necessary to complete the sale of
my interests in accordance with the terms of the Offer. In the event of my death
or incapacity, all authority and obligation shall be placed with my heirs,
personal representatives and successors.
I hereby appoint NTS-Properties Associates 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 respective Offeror, (2) change the address of record
of my interests prior to or after completing the transfer, (3) execute and
deliver lost certificate indemnities and all other transfer documents, (4)
direct any custodian or trustee holding record title to the interests to do what
is necessary, including executing and delivering a copy of this Letter of
Transmittal, and (5) upon payment by the respective Offerors of the purchase
price, to receive all benefits and cash distributions and otherwise exercise all
rights of beneficial ownership of my interests hereby tendered.
(Over)
<PAGE>
INSTRUCTIONS TO TENDER INTERESTS
Please complete the following steps to tender your interests:
o Complete Part 1. by inserting the number of interests you wish to tender.
o Complete Part 2. by providing your telephone number(s).
o Complete Part 3. by providing the appropriate signature(s).
(Note: if your account is held by a Trustee or Custodian, sign below and
forward this form to the Trustee or Custodian at the address noted on the
first page of this Letter of Transmittal to complete the remaining steps).
All signatures must be notarized by a Notary Public.
o Return your original Certificate(s) of Ownership for the interests with
this form. If you are unable to locate your Certificate(s) of
Ownership, complete the Affidavit and Indemnification Agreement for
Missing Certificate(s) of Ownership.
PART 1. NUMBER OF INTERESTS IN THE PARTNERSHIP TO BE TENDERED:
[ ] I tender my entire interest in the Partnership, being _______ interests
for a price of $215.00 per interest.
[ ] I tender only a portion of my interest in the Partnership, being ______
interests for a price of $215.00 per interest.
PART 2. TELEPHONE NUMBER(S).
My telephone numbers are: (___)_______ [Daytime] and (___)________ [Evening]
PART 3. SIGNATURE(S).
FOR INDIVIDUALS/JOINT OWNERS:
- ----------------------------- ------------------------------
Print Name of Limited Partner Print Name of Joint Owner
- ----------------------------- ------------------------------
Signature of Limited Partner Signature of Joint Owner
Sworn to me this ___ day of Sworn to me this ___ day of
_____________, 199__. _____________, 199__.
- ----------------------------- -----------------------------
Notary Public Notary Public
FOR CUSTODIAL/TRUSTEE/IRA ACCOUNTS:
- ----------------------------- -----------------------------
Print Name of Signatory Signature
Sworn to me this ___ day of
_____________, 199__.
- ----------------------------- -----------------------------
Title of Signatory Notary Public
Return or Deliver: (1) this Letter of Transmittal; (2) your original
Certificate(s) of Ownership for the interests, or if you are unable to locate
your Certificate(s) of Ownership, the Affidavit and Indemnification Agreement
for Missing Certificate(s) of Ownership; and (3) the Substitute Form W-9 on or
before the Expiration Date to:
NTS INVESTOR SERVICES
C/O GEMISYS
7103 S. REVERE PARKWAY
ENGLEWOOD, CO 80112
For additional information, call: (800) 387-7454.
<PAGE>
Exhibit (a)(3)
Form of Affidavit and Indemnification Agreement
for Missing Certificate(s) of Ownership
<PAGE>
AFFIDAVIT AND INDEMNIFICATION AGREEMENT
FOR MISSING CERTIFICATE(S) OF OWNERSHIP
State of ______________
County of ____________
=====================================
- -------------------------------------
_____________________________________ (The "Investor")
being duly sworn, deposes and says:
1. The Investor is of legal age and is the true and lawful, present and
sole, record and beneficial owner of _________ (insert number of
interests) limited partnership interests (the "Interests") of
NTS-Properties 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]
November 5, 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 $215 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 250 Interests may be purchased by the Partnership
and an additional 250 Interests may be purchased by the
Partnership's Affiliate, ORIG, LLC. If more than 500
Interests are tendered, the Partnership may decide to
purchase more than 250 Interests and the Affiliate may
decide to purchase more than 250 Interests or the
Partnership and the Affiliate may decide to purchase less
than all of the interests tendered on a pro rata basis.
o The Offer will expire at 12:00 midnight, Eastern Standard
Time, on Thursday, December 23, 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 December 23, 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.
<PAGE>
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>
