SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
MUNICIPAL MORTGAGE AND EQUITY, L.L.C.
(Name of Issuer)
MUNICIPAL MORTGAGE AND EQUITY, L.L.C.
(Name of Person(s) Filing Statement)
Series I Preferred Shares
Series II Preferred Shares
Series I Preferred Capital Distribution Shares
Series II Preferred Capital Distribution Shares
(Title of Class of Securities)
Series I Preferred Shares - 62624B200
Series II Preferred Shares - 62624B408
Series I Preferred Capital Distribution Shares - 62624B309
Series II Preferred Capital Distribution Shares - 62624B507
(CUSIP Number of Class of Securities)
Mark K. Joseph
Chief Executive Officer and Chief Financial Officer
Municipal Mortgage and Equity, L.L.C.
218 North Charles Street, Suite 500
Baltimore, Maryland 21201
(410) 962-8044
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person(s) Filing Statement)
Frank R. Goldstein, Esquire
Brown & Wood LLP
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
(202) 973-0600
November 26, 1997
(Date Tender Offer First Published,
Sent or Given to Security Holders)
Calculation of Filing Fee
Transaction Valuation* Amount of Filing Fee
$4,211,517 $842.30
* The transaction value shown is only for the purpose of calculating
the filing fee. The amount shown reflects the cost of purchasing for
$4,211,517 the securities offered to be purchased. The amount of the
filing fee is calculated in accordance with Section 13(e)(3) of the
Securities Exchange Act of 1934, as amended.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.<PAGE>
<PAGE>
INTRODUCTORY STATEMENT
This Schedule 13E-4 relates to an offer (the "Offer") by Municipal
Mortgage and Equity, L.L.C., a Delaware limited liability company
("MuniMae"), to purchase for cash, on the terms and subject to the
conditions set forth in the attached Offer to Purchase, dated November
26, 1997 (the "Offer to Purchase") and the related Letter of Transmittal
(the "Letter of Transmittal"), up to 20% of the issued and outstanding
shares of the following classes of limited liability interests of MuniMae:
Series I Preferred Shares, Series II Preferred Shares, Series I Preferred
Capital Distribution ("CD") Shares and Series II Preferred CD Shares.
MuniMae is offering to purchase 3,266 Series I Preferred Shares, 1,528
Series II Preferred Shares, 1,782 Series I Preferred CD Shares and 762
Series II Preferred CD Shares. Copies of the Offer to Purchase and the
Letter of Transmittal are filed as exhibits 99(a)(1) and 99(a)(2) attached
hereto.
The following is a cross-reference sheet pursuant to General
Instruction B of Schedule 13E-4 showing the location in MuniMae's
Offer to Purchase, submitted herewith as Exhibit 99(a)(1), of the
information required by Schedule 13E-4. All of the information contained
under the below-referenced captions of the Offer to Purchase is hereby
incorporated by reference.
Schedule 13E-4 Item and Caption
Item 1. SECURITY AND ISSUER
(a) The information set forth in the sections of the Offer to Purchase
entitled "Special Notice" and "MuniMae" is incorporated herein by
reference.
(b) The information set forth in the sections of the Offer
to Purchase entitled "Special Notice," "Price; Number
of Preferred Shares" and "Source and Amount of
Funds" is incorporated herein by reference.
(c) The information set forth in the section of the Offer to
Purchase entitled "Price; Number of Preferred Shares"
is incorporated herein by reference.
(d) Inapplicable.
Item 2. SOURCE AND AMOUNT OF FUNDS OR OTHER
CONSIDERATION
(a) The information set forth in the section of the Offer to Purchase
entitled "Source and Amount of Funds" is incorporated herein by
reference.
(b) None.
Item 3. PURPOSE OF THE TENDER OFFER AND PLANS
OR PROPOSALS OF THE ISSUER OR AFFILIATE
(a) The information set forth in the sections of the Offer to Purchase
entitled "Purpose of the Offer" and "Certain Effects of the Offer"
is incorporated herein by reference.
(b) None.
(c) None.
(d) Inapplicable.
(e) The information set forth in the section of the Offer to Purchase
entitled "Certain Effects of the Offer" is incorporated herein by
reference.
(f)-(j) Inapplicable.
Item 4. INTEREST IN SECURITIES OF THE ISSUER
The information set forth in the section of the Offer to Purchase
entitled "Certain Important Considerations" is incorporated herein by
reference.
Item 5. CONTRACTS, ARRANGEMENTS
UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE ISSUER'S SECURITIES
None.
Item 6. PERSONS RETAINED, EMPLOYED OR TO BE
COMPENSATED
The information set forth in the section of the Offer to Purchase
entitled "The Transfer Agent" is incorporated herein by reference.
Item 7. FINANCIAL INFORMATION
(a) The information set forth in the sections of the Offer
to Purchase entitled "Available Information;
Incorporation by Reference" and "Selected Financial
Information" is incorporated herein by reference.
(b) Inapplicable.
Item 8. ADDITIONAL INFORMATION
(a) None.
(b) None, except for compliance with the Exchange Act and the rules and
regulations promulgated thereunder and compliance with applicable
requirements of state securities or "blue sky" laws.
(c) Inapplicable.
(d) None.
(e) Reference is hereby made to the exhibits hereto which are
incorporated in their entirety herein by reference.
Item 9. MATERIAL TO BE FILED AS EXHIBITS
99(a)(1) Offer to Purchase.
99(a)(2) Letter of Transmittal.
(b)-(f) Inapplicable.<PAGE>
<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.
Municipal Mortgage and Equity, L.L.C.
By: /s/ Mark K. Joseph
Name: Mark K. Joseph
Title: Chairman and CEO
Dated: November 26, 1997
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as part of this Issuer Tender Offer
Statement.
Exhibit
No. Description
99(a)(1) Offer to Purchase (including Selected Financial
Information)
99(a)(2) Letter of Transmittal
<PAGE>
Exhibit 99 (a)(1)
SPECIAL NOTICE
REGARDING OFFERS TO PURCHASE YOUR
SERIES I PREFERRED SHARES
November 26, 1997
Dear Series I Preferred Shareholder:
You may be receiving shortly, if you have not already received, a
tender offer from Sierra Fund 3 to purchase your Series I Preferred
Shares in Municipal Mortgage and Equity, L.L.C. ("MuniMae"). This
offer, which was unsolicited by MuniMae, offers to purchase up to 4.9%
of the outstanding shares of Series I Preferred Shares for the purchase
price listed in the table below. This table also lists the percentage of
September 30, 1997 book value of the Series I Preferred Shares that
Sierra Fund 3's offering price constitutes.
Sierra Fund 3 Offer: Offer Price Book Value
Series I Preferred Shares: $400 53.92%
WE RECOMMEND AGAINST ACCEPTING THE
SIERRA FUND 3 OFFER
If you would like to liquidate your Series I Preferred Shares at this
time, the enclosed Offer to Purchase describes an offer by MuniMae to
purchase up to 3,266 (20% of the outstanding shares) of the Series I
Preferred Shares for the following price and percentage of the September
30, 1997 book value.
MuniMae Offer: Offer Price Book Value
Series I Preferred Shares: $593.43 80%
Since each investor's situation is unique, we are not making a specific
recommendation as to whether you accept or reject MuniMae's offer.
You should evaluate all offers in light of your particular situation and
investment goals. In addition, you should read carefully the information
contained in this Offer to Purchase.
<PAGE>
This offer will remain in effect until December 26, 1997, and
MuniMae will purchase up to 3,266 shares of the Series I Preferred
Shares tendered by midnight on that date. If you wish to tender your
Series I Preferred Shares, please complete, sign and enclose the Letter of
Transmittal and send it along with your certificate(s) to MuniMae's
transfer agent, Registrar and Transfer Company, at the address indicated
below. No transfer or broker fees will be payable in connection with the
transfer of your Series I Preferred Shares to MuniMae.
Sincerely,
Mark K. Joseph
Chairman and CEO
The date of this offer is November 26, 1997.
It will expire on December 26, 1997.
The address of MuniMae's transfer agent is:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
(800) 368-5948
If you have any questions or would like to review your options, please
contact MuniMae Investor Relations toll free at 888-788-3863.
Municipal Mortgage and Equity, L.L.C.
218 N. Charles Street
Suite 500
Baltimore, MD 21201
<PAGE>
SPECIAL NOTICE
REGARDING OFFERS TO PURCHASE YOUR
SERIES II PREFERRED SHARES
November 26,1997
Dear Series II Preferred Shareholder:
You may be receiving shortly, if you have not already received, a
tender offer from Sierra Fund 3 to purchase your Series II Preferred
Shares in Municipal Mortgage and Equity, L.L.C. ("MuniMae"). This
offer, which was unsolicited by MuniMae, offers to purchase up to 4.9%
of the outstanding shares of Series II Preferred Shares for the purchase
price listed in the table below. This table also lists the percentage of the
September 30, 1997 book value of the Series II Preferred Shares that
Sierra Fund 3's offering price constitutes.
Sierra Fund 3 Offer: Offer Price Book Value
Series II Preferred Shares: $450 50.58%
WE RECOMMEND AGAINST ACCEPTING THE
SIERRA FUND 3 OFFER
If you would like to liquidate your Series II Preferred Shares at this
time, the enclosed Offer to Purchase describes an offer by MuniMae to
purchase up to 1,528 shares (20% of the outstanding shares) of the Series
II Preferred Shares for the following price and percentage of the
September 30, 1997 book value.
MuniMae Offer: Offer Price Book Value
Series II Preferred Shares: $711.77 80%
Since each investor's situation is unique, we are not making a specific
recommendation as to whether you accept or reject MuniMae's offer.
You should evaluate all offers in light of your particular situation and
investment goals. In addition, you should read carefully the information
contained in this Offer to Purchase.
This offer will remain in effect until December 26, 1997, and
MuniMae will purchase up to 1,528 shares of the Series II Preferred
Shares tendered by midnight on that date. If you wish to tender your
Series II Preferred Shares, please complete, sign and enclose the Letter of
Transmittal and send it along with your certificate(s) to MuniMae's
transfer agent, Registrar and Transfer Company, at the address indicated
below. No transfer or broker fees will be payable in connection with the
transfer of your Series II Preferred Shares to MuniMae.
Sincerely,
Mark K. Joseph
Chairman and CEO
The date of this offer is November 26, 1997.
It will expire on December 26, 1997.
The address of MuniMae's transfer agent is:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
(800) 368-5948
If you have any questions or would like to review your options, please
contact MuniMae Investor Relations toll free at 888-788-3863.
Municipal Mortgage and Equity, L.L.C.
218 N. Charles Street
Suite 500
Baltimore, MD 21201
<PAGE>
SPECIAL NOTICE
REGARDING OFFERS TO PURCHASE YOUR
SERIES I PREFERRED CD SHARES
November 26, 1997
Dear Series I Preferred CD Shareholder:
You may be receiving shortly, if you have not already received, a
tender offer from Sierra Fund 3 to purchase your Series I Preferred CD
Shares in Municipal Mortgage and Equity, L.L.C. ("MuniMae"). This
offer, which was unsolicited by MuniMae, offers to purchase up to 4.9%
of the outstanding shares of Series II Preferred Shares for the purchase
price listed in the table below. This table also lists the percentage of the
September 30, 1997 book value of the Series I Preferred CD Shares that
Sierra Fund 3's offering price constitutes.
Sierra Fund 3 Offer: Offer Price Book Value
Series I Preferred CD Shares: $325 57.94%
WE RECOMMEND AGAINST ACCEPTING THE
SIERRA FUND 3 OFFER
If you would like to liquidate your Series I Preferred CD Shares at
this time, the enclosed Offer to Purchase describes an offer by MuniMae
to purchase up to 1,782 shares (20% of the outstanding shares) of the
Series I Preferred CD Shares for the following price and percentage of
the September 30, 1997 book value.
MuniMae Offer: Offer Price Book Value
Series I Preferred CD Shares: $448.77 80%
Since each investor's situation is unique, we are not making a specific
recommendation as to whether you accept or reject MuniMae's offer.
You should evaluate all offers in light of your particular situation and
investment goals. In addition, you should read carefully the information
contained in this Offer to Purchase.
This offer will remain in effect until December 26, 1997, and
MuniMae will purchase up to 1,728 shares of the Series I Preferred CD
Shares tendered by midnight on that date. If you wish to tender your
Series I Preferred CD Shares, please complete, sign and enclose the
Letter of Transmittal and send it along with your certificate(s) to
MuniMae's transfer agent, Registrar and Transfer Company, at the
address indicated below. No transfer or broker fees will be payable in
connection with the transfer of your Series I Preferred CD Shares to
MuniMae.
Sincerely,
Mark K. Joseph
Chairman and CEO
The date of this offer is November 26, 1997.
It will expire on December 26, 1997.
The address of MuniMae's transfer agent is:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
(800) 368-5948
If you have any questions or would like to review your options, please
contact MuniMae Investor Relations toll free at 888-788-3863.
Municipal Mortgage and Equity, L.L.C.
218 N. Charles Street
Suite 500
Baltimore, MD 21201
<PAGE>
SPECIAL NOTICE
REGARDING OFFERS TO PURCHASE YOUR
SERIES II PREFERRED CD SHARES
November 26, 1997
Dear Series II Preferred CD Shareholder:
You may be receiving shortly, if you have not already received, a
tender offer from Sierra Fund 3 to purchase your Series II Preferred CD
Shares in Municipal Mortgage and Equity, L.L.C. ("MuniMae"). This
offer, which was unsolicited by MuniMae, offers to purchase up to 4.9%
of the outstanding shares of Series II Preferred Shares for the purchase
price listed in the table below. This table also lists the percentage of the
September 30, 1997 book value of the Series II Preferred CD Shares that
Sierra Fund 3's offering price constitutes.
Sierra Fund 3 Offer: Offer Price Book Value
Series II Preferred CD Shares: $375 59.21%
WE RECOMMEND AGAINST ACCEPTING THE
SIERRA FUND 3 OFFER
If you would like to liquidate your Series II Preferred CD Shares at
this time, the enclosed Offer to Purchase describes an offer by MuniMae
to purchase up to 762 shares (20% of the outstanding shares) of the
Series II Preferred CD Shares for the following price and percentage of
the September 30, 1997 book value.
MuniMae Offer: Offer Price Book Value
Series II Preferred CD Shares: $506.67 80%
Since each investor's situation is unique, we are not making a specific
recommendation as to whether you accept or reject MuniMae's offer.
You should evaluate all offers in light of your particular situation and
investment goals. In addition, you should read carefully the information
contained in this Offer to Purchase.
This offer will remain in effect until December 26, 1997, and
MuniMae will purchase up to 762 shares of the Series II Preferred CD
Shares tendered by midnight on that date. If you wish to tender your
Series II Preferred CD Shares, please complete, sign and enclose the
Letter of Transmittal and send it along with your certificate(s) to
MuniMae's transfer agent, Registrar and Transfer Company, at the
address indicated below. No transfer or broker fees will be payable in
connection with the transfer of your Series II Preferred CD Shares to
MuniMae.
Sincerely,
Mark K. Joseph
Chairman and CEO
The date of this offer is November 26, 1997.
It will expire on December 26, 1997.
The address of MuniMae's transfer agent is:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
(800) 368-5948
If you have any questions or would like to review your options, please
contact MuniMae Investor Relations toll free at 888-788-3863.
Municipal Mortgage and Equity, L.L.C.
218 N. Charles Street
Suite 500
Baltimore, MD 21201
<PAGE>
OFFER TO PURCHASE FOR CASH
TWENTY PERCENT
OF THE
ISSUED AND OUTSTANDING SHARES OF
the following classes of limited liability interest of Municipal Mortgage
and Equity, L.L.C.
Series I Preferred Shares
Series II Preferred shares
Series I Preferred CD Shares
Series II Preferred CD Shares
(collectively, the "Preferred Shares")
THE OFFER, PRORATION PERIOD AND THE WITHDRAWAL
RIGHTS WILL EXPIRE AT MIDNIGHT, EASTERN TIME, ON
FRIDAY, DECEMBER 26, 1997, UNLESS EXTENDED.
To the Holders of Shares of
MuniMae's Preferred Shares:
As of November 26, 1997, (the "Commencement Date") MuniMae is
offering to purchase up to 3,266 Series I Preferred Shares, 1,528 Series II
Preferred Shares, 1,782 Series I Preferred CD Shares and 762 Series II
Preferred CD Shares (each such number of shares, the "Designated
Number") for cash at the following prices:
MuniMae Offer Offer Price
Series I Preferred Shares: $593.43
Series II Preferred Shares: $711.77
Series I Preferred CD Shares: $448.77
Series II Preferred CD Shares: $506.67
MuniMae will purchase the Designated Number of each class of
Preferred Shares on December 26, 1997 (the "Initial Expiration Date"),
unless extended, upon the terms and conditions set forth in the Offer to
Purchase and the related Letter of Transmittal which together constitute
the "Offer." The later of the Initial Expiration Date or the latest time and
date to which an Offer is extended is hereinafter called the "Expiration
Date".
If more than the Designated Number of Preferred Shares of a class of
Preferred Shares are duly tendered prior to the Expiration Date and not
withdrawn, subject to the condition that there have been no changes in
the factors originally considered by MuniMae when it determined to make
the Offer, MuniMae will either (1) extend the Offer period, if necessary,
and increase the number of Preferred Shares that MuniMae is offering to
purchase to an amount which it believes will be sufficient to accommodate
the excess Preferred Shares tendered as well as any Preferred Shares
tendered during the extended Offer period or (2) purchase the Designated
Number (or such larger number of Preferred Shares sought) of the Preferred
Shares tendered on a pro rata basis.
MuniMae does not make any recommendation to any holder of a class
of Preferred Shares (the "Preferred Shareholders") as to whether to
tender or refrain from tendering such holder's Preferred Shares. Each
Preferred Shareholder must make an independent decision whether to
tender their Preferred Shares. No person has been authorized to make
any recommendation on behalf of MuniMae as to whether Preferred
Shareholders should tender Preferred Shares pursuant to the Offer. No
person has been authorized to give any information or to make any
representations in connection with the Offer other than those contained
herein or in the Letter of Transmittal. If given or made, such
recommendation and such information and representations must not be
relied upon as having been authorized by MuniMae.
Any questions, requests for assistance and requests for additional
copies of this Offer to Purchase and the Letter of Transmittal should be
directed to Municipal Mortgage and Equity, L.L.C., 218 North Charles
Street, Suite 500, Baltimore, Maryland 21201, Attention: Derek Cole,
(888) 788-3863.
MUNIMAE
MuniMae is a Delaware limited liability company that originates,
invests in and services tax-exempt mortgage revenue bonds issued by
state and local government authorities to finance multifamily housing
developments secured by nonrecourse first mortgage loans on the
underlying properties. MuniMae was organized in July 1996 and is the
successor to the business of SCA Tax Exempt Fund Limited Partnership,
which was merged (the "Merger") into MuniMae effective August 1,
1996. At September 30, 1997, MuniMae owned a portfolio of 36 bonds,
bond related investments and other investments, of which 24 bonds
enable MuniMae to participate in the appreciation of the underlying
multifamily housing apartments on a tax exempt basis. The bonds and
other bond related investments in MuniMae's portfolio are backed
primarily by garden apartments.
The principal executive offices of MuniMae are located at 218 North
Charles Street, Suite 500, Baltimore, Maryland 21201, and its telephone
number at that location is (410) 962-8044.
AVAILABLE INFORMATION; INCORPORATION BY REFERENCE
MuniMae is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith files reports, proxy statements, and other
information with the Commission. Such reports, proxy statements, and
other information filed with the Commission, can be inspected and copied
at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at Citicorp Center, 500 West -Madison
Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies of such
material also can be obtained from the Public Reference Section of the
Commission, Washington, D.C. 20549 at prescribed rates. MuniMae files
its reports, proxy statements, and other information with the Commission
electronically. The Commission maintains a Web site that contains
reports, proxy and information statements, and other information
regarding registrants that file electronically with the Commission at
http://www.sec.gov. MuniMae's Growth Shares are listed on the
American Stock Exchange, and reports, proxy statements and other
information concerning MuniMae can be inspected and copied at the
offices of the American Stock Exchange at 86 Trinity Place, New York,
New York 10006.
The following documents, which have been filed by MuniMae (File No.
1-11981) with the Commission under the Exchange Act, are incorporated
herein by reference:
(1) MuniMae's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.
(2) MuniMae's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997.
(3) MuniMae's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1997.
(4) MuniMae's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1997.
All documents filed by MuniMae pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Offer and prior to its
termination shall be deemed to be incorporated by reference in this Offer
and to be a part hereof from the dates of filing of such documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed modified or superseded
for the purposes of this Offer to the extent that a statement contained
herein or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of
this Offer.
MuniMae will furnish without charge to each person, including any
beneficial owner, to whom this Offer is delivered, upon the written or oral
request of such person, a copy of any or all of the documents
incorporated by reference herein by reference, other than exhibits to such
documents unless such exhibits are specifically incorporated by reference
into this Offer or into such other documents. Requests for documents
should be directed to Municipal Mortgage and Equity, L.L.C., 218 North
Charles Street, Suite 500, Baltimore, Maryland 21201, Attention: Derek
Cole, (410) 962-8044.
THE OFFER TO PURCHASE
1. Price; Number of Preferred Shares. MuniMae will, upon the terms
and subject to the conditions herein purchase up to the Designated
Numbers of each of its issued and outstanding class of Preferred Shares
which are tendered and not withdrawn prior to the Expiration Date,
unless it determines to accept none of them. The purchase price of each
class of the Preferred Shares will be 80% of the September 30, 1997 book
value of each class. MuniMae reserves the right to extend or terminate its
Offer (See Section 10).
The book value per share at September 30, 1997 for each class of
Preferred Shares was determined by dividing (a) the sum of (i) the total
equity allocable to the respective class of Preferred Shares depicted on
the September 30, 1997 balance sheet and (ii) the net unrealized gains on
mortgage revenue bonds and other bond related investments available for
sale depicted on the September 30, 1997 balance sheet allocable to that
respective class of Preferred Shares by (b) the number of shares issued
and outstanding for that respective class of Preferred Shares.
As of November 25, 1997, there were the following number of
Preferred Shares issued and outstanding: 16,329 Series I Preferred
Shares; 7,637 Series II Preferred Shares; 8,909 Series I Preferred CD
Shares; and 3,809 Series II Preferred CD Shares. As of November 25,
1997, there were the following number of shareholders of the Preferred
Shares: 949 Series I Preferred Shares; 402 Series II Preferred Shares;
479 Series I Preferred CD Shares; and 221 Series II Preferred CD Shares.
The Preferred Shares are not listed on any securities exchange, and there
is no established trading market for the Preferred Shares.
The Offer is being made to all Preferred Shareholders of MuniMae
and is not conditioned upon any minimum number of Preferred Shares
being tendered. If the number of Preferred Shares properly tendered
prior to the Expiration Date and not withdrawn is less than or equal to the
Designated Number (or such greater number of Preferred Shares as
MuniMae may elect to purchase pursuant to its Offer), MuniMae will,
upon the terms and subject to the conditions of its Offer, purchase at 80%
of their September 30, 1997 book value, all Preferred Shares so tendered.
If more than the Designated Number are duly tendered prior to the
Expiration Date and not withdrawn, subject to the condition that there
have been no changes in the factors originally considered by MuniMae
when it determined to make the Offer, MuniMae will either (1) extend the
Offer period, if necessary, and increase the number of Preferred Shares
that MuniMae is offering to purchase to an amount which it believes will
be sufficient to accommodate the excess Preferred Shares tendered as
well as any Preferred Shares tendered during the extended Offer period or
(2) purchase the Designated Number (or such larger number of Preferred
Shares sought) of the Preferred Shares tendered on a pro rata basis.
MuniMae reserves the right, in its sole discretion, at any time or from
time to time, to extend the period of time during which its Offer is open.
There can be no assurance, however, that MuniMae will exercise its right
to extend. If MuniMae decides, in its sole discretion, to increase (except
for any increase not in excess of 2% of each class of outstanding
Preferred Shares) or decrease the number of Preferred Shares being
sought and, at the time that notice of such increase or decrease is first
published, sent or given to Preferred Shareholders in the manner specified
below, its Offer is scheduled to expire at any time earlier than the tenth
business day from the date that such notice is first so published, sent or
given, the Offer will be extended at least until the end of such ten business
day period.
If the Preferred Shares to be tendered are registered in the Preferred
Shareholder's name and the necessary documents will be completed and
transmitted to MuniMae's transfer agent (the "Transfer Agent") by the
Preferred Shareholder, the procedure for tendering Preferred Shares for
purchase pursuant to the Offer is set forth in the Letter of Transmittal, the
provisions of which are incorporated herein by reference.
The address of MuniMae's transfer agent is:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
(800) 368-5948
Some Preferred Shareholders have their Preferred Shares held by
Registrar and Transfer Company on their behalf. Such shareholders
should not complete the Letter of Transmittal. Rather, they must
contract Registrar and Transfer Company prior to the expiration of the
Offer and direct it to tender their Preferred Shares on their behalf.
Similarly, a Letter of Transmittal is not required if a Preferred
Shareholder has its Preferred Shares registered in the name of someone
else (for example, with a bank, broker or trustee). Such Preferred
Shareholders must direct the entity holding their Preferred Shares to
tender such shares on their behalf. That entity must then contact the
Transfer Agent prior to the expiration of the Offer to tender the Preferred
Shares.
MuniMae has been advised that none of its directors, officers or
affiliates intends to tender any Preferred Shares pursuant to its Offer.
2. Proration of Tendered Shares. With respect to each class of
Preferred Shares, if more than the Designated Number of Preferred
Shares are tendered pursuant to the Offer, MuniMae will purchase the
Designated Number from tendering shareholders of each class of
Preferred Shares (with adjustments to avoid fractional shares), pro rata in
proportion to the number of shares of such class tendered by each
shareholder as compared to the total number of shares of that class duly
tendered in the Offer.
3. Purpose of the Offer. MuniMae has learned that an unaffiliated
third party, Sierra Fund 3, has made a tender offer to Preferred
Shareholders (the "Sierra Offer"). The Sierra Offer is for 4.9% of the
outstanding shares of each class of Preferred Shares. The Sierra Offer is
at prices ranging from between 50% to 60% of the September 30, 1997
book value of each class.
MuniMae recognizes that there may be Preferred Shareholders who
desire liquidity. Accordingly, MuniMae has determined to offer 80% of
the September 30, 1997 book value of each class so that Preferred
Shareholders who decide to liquidate their Preferred Shares will be able
to do so at a higher price. MuniMae does not currently believe that there
is or is likely to be an active secondary market for the Preferred Shares.
4. Certain Important Considerations. All Preferred Shareholders who
are considering tendering their Preferred Shares in this Offer, or in any
third party offer, should carefully consider the following.
A. Loss of Current Income. Accepting any such tender offer would
result in the loss of the tax-exempt distributions from the operations of
the properties which underlie the Preferred Shares. These distributions
are paid quarterly in February, May, August and November. Based on
the most recent distribution on November 3, 1997, the Preferred Shares
are paying annualized distributions per share of Series I Preferred Shares,
$54.00; Series II Preferred Shares, $61.40; Series I Preferred CD Shares,
$44.00; Series II Preferred Shares, $50.00. Although no assurances can
be made, MuniMae expects to continue making distributions in the future
with respect to its Preferred Shares.
On November 3, 1997, MuniMae made the following quarterly per
share distributions with respect to each class of Preferred Shares: Series I
Preferred Shares, $13.50; Series II Preferred Shares, $15.35; Series I
Preferred CD Shares, $11.00; Series II Preferred Shares, $12.50.
B. Relinquishing Right to Convert Preferred Shares. Preferred
Shareholders will be permitted to convert their Preferred Shares to either
MuniMae Growth Shares (traded on the American Stock Exchange) or
cash, once every two years beginning in June 2004, based upon the
Preferred Shares' book value at the time. The details of the conversion
are described in Section 5.1(b) of MuniMae's Operating Agreement.
There can be no assurances that any such conversion would occur at a
book value higher than any current offer. In accepting any tender offer, a
Preferred Shareholder would give up the right to such conversion.
C. Relinquishing Right to Future Cash Redemptions. Upon the
occurrence of a "Redemption Event," which refers to the sale or
repayment of a SCATEF asset (as defined in the Operating Agreement)
or receiving a par value appraisal for an asset allocated to a class of
Preferred Shares, the class would begin to be redeemed. If a redemption
occurs, the Preferred Shareholder would be entitled to a cash distribution.
There can be no assurance that such distribution would be higher than any
current offer. By accepting an offer, however, a Preferred Shareholder
would lose eligibility to receive any potential future cash redemptions.
The redemption of Preferred Shares in fully described in the Section 5.2
of MuniMae's Operating Agreement.
5. Source and Amount of Funds. Purchasing all the Preferred Shares
pursuant to this Offer will cost MuniMae $4,211,517. MuniMae will pay
for the Preferred Shares it acquires by utilizing its working capital.
6. Certain Effects of the Offer. The acquisition of Preferred Shares
will decrease MuniMae's total assets. All Preferred Shares purchased
pursuant to the Offer will be retired and cancelled.
MuniMae has no present plans or proposals which relate to or would
result in any extraordinary corporate transaction, such as: a merger,
reorganization, or liquidation, involving MuniMae; a sale or transfer of a
material amount of assets of MuniMae; any material changes in
MuniMae's present capitalization (except as resulting from the Offer
(although MuniMae may seek to raise additional capital from time to
time)); any material change in MuniMae's present distribution policies; or
any other material change in MuniMae's corporate structure or business.
7. Procedures for Tendering the Preferred Shares. The tender of the
Preferred Shares pursuant to any of the procedures set forth in this Offer
to Purchase and in the Letter of Transmittal will constitute a binding
agreement between the tendering Preferred Shareholder and MuniMae
upon the terms and subject to the conditions of the Offer. The tender of
the Preferred Shares will constitute an agreement to deliver good and
marketable title to all tendered Preferred Shares prior to the Expiration
Date free and clear of all liens, charges, claims, encumbrances, interests
and restrictions of any kind.
Each record Preferred Shareholder must complete and sign the Letter
of Transmittal, and mail or deliver such Letter of Transmittal, and any
other documents required by the Letter of Transmittal, together with
certificate(s) representing all tendered Preferred Shares, to MuniMae's
Transfer Agent, at its address set forth in the Letter of Transmittal.
Signatures on the Letter of Transmittal may be required to be
guaranteed by a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc.; a commercial
bank or trust company having an office, branch or agency in the United
States; or other Eligible Guarantor Institution as defined in Rule 17 Ad -
15(a)(2) under the Exchange Act.
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived). By executing a Letter of Transmittal, each
tendering Preferred Shareholder waives any right to receive any notice of
the acceptance for purchase of its Preferred Shares.
A. Lost or Missing Certificates. If a record Preferred
Shareholder desires to tender Preferred Shares pursuant to the Offer, but
the certificates representing such Preferred Shares have been mutilated,
lost, stolen or destroyed, such Preferred Shareholder should write to or
telephone the Transfer Agent about procedures for obtaining replacement
certificates representing such Preferred Shares, arranging for
indemnification or about any other matter which requires handling by the
Transfer Agent or MuniMae.
B. Effect of Letter of Transmittal. Subject to and effective
upon the acceptance for purchase of and payment for Preferred Shares
tendered thereby, by executing and delivering a Letter of Transmittal a
tendering Preferred Shareholder (i) irrevocably sells, assigns and transfers
to MuniMae, all right, title and interest in and to all the Preferred Shares
tendered thereby and (ii) waives any and all rights with respect to the
Preferred Shares, (iii) releases and discharges MuniMae and the Transfer
Agent from any and all claims such Preferred Shareholder may have now,
or may have in the future arising out of, or related to, the Preferred
Shares and (iv) irrevocably constitutes and appoints the Transfer Agent
the true and lawful agent and attorney-in-fact of such Preferred
Shareholder with respect to any such tendered Preferred Shares, with full
power of substitution and resubstitution (such power of attorney being
deemed to be an irrevocable power).
Preferred Shareholders who have their Preferred Shares registered in
the name of someone else (for example, with a bank, broker or trustee)
must direct the entity holding their Preferred Shares to tender such shares
on their behalf. That entity must then contact the Transfer Agent prior to
the expiration of the Offer to tender the Preferred Shares.
8. Tax Consequences. The following discussion is a general summary
of the federal income tax consequences of a tender of Preferred Shares
pursuant to the Offer. The summary is based on current law, which could
be amended retroactively. The summary does not discuss state, local, or
foreign tax considerations, and does not discuss all aspects of federal
income tax law that could be relevant to a Preferred Shareholder in view
of the Preferred Shareholder's particular status or circumstances. The
summary assumes that a Preferred Shareholder holds shares as capital
assets. Preferred Shareholders are urged to consult their own tax
advisors concerning the tax consequences of a tender of Preferred Shares.
MuniMae is classified as a partnership for federal income tax purposes
in which each Preferred Shareholder is a partner. When MuniMae pays
cash to a Preferred Shareholder for the shareholder's Preferred Shares,
the payment will be treated as a distribution from a partnership to a
partner.
Generally, a distribution of cash by a partnership to a partner is not
taxable, but is applied to reduce the partner's basis in its partner interest.
The Preferred Shares held by a Preferred Shareholder are treated as a
single partner interest in which the Preferred Shareholder has a single tax
basis even if the Preferred Shareholder acquired different Preferred
Shares at different times. If the amount of cash paid by MuniMae to a
Preferred Shareholder for some or all of its Preferred Shares does not
exceed the Preferred Shareholder's basis in all Preferred Shares held
immediately before the distribution, the distribution will not result in the
shareholder's recognition of gain.
If the amount of cash paid by MuniMae for the Preferred Shares
exceeds the Preferred Shareholder's basis in all of its Preferred Shares
immediately before the distribution, the Preferred Shareholder will
recognize capital gain in the amount of the excess.
If a Preferred Shareholder's basis in all of its Preferred Shares exceeds
the amount of cash paid by MuniMae for the shareholder's Preferred
Shares immediately before the payment, the shareholder will recognize a
capital loss in the amount of the excess if, and only if, all of the Preferred
Shares held by the Preferred Shareholder are acquired by MuniMae as a
result of the distribution.
Notwithstanding the general rules described above, a Preferred
Shareholder could recognize some ordinary income upon a payment by
MuniMae for the shareholder's Preferred Shares to the extent MuniMae
had unrealized receivables (e.g., accrued but unrecognized market
discount). MuniMae has only de minimis amounts of unrealized
receivables. Thus, potential for ordinary income recognition should be
minimal.
9. Withdrawal Rights. Tenders made pursuant to the Offer will be
irrevocable. However, Preferred Shareholders may withdraw Preferred
Shares tendered at any time up to the Expiration Date and, if the
Preferred Shares have not yet been accepted for payment by MuniMae, at
any time after the expiration of 40 Business Days following, and
including, the Commencement Date. Business Day means any day, other
than Saturday, Sunday, or a Federal holiday. Preferred Shareholders who
wish to withdraw their tender must contact the Transfer Agent on or
before the Expiration Date.
A Preferred Shareholder may withdraw its tender of Preferred Shares,
prior to the Expiration Date, by delivering to the Transfer Agent by mail,
hand delivery or facsimile transmission a notice of withdrawal. Any such
notice of withdrawal must (i) specify the name of the person who
tendered the Preferred Shares to be withdrawn; (ii) contain a description
of the Preferred Shares to be withdrawn and identify the certificate
number or numbers shown on the particular certificates evidencing such
Preferred Shares and (iii) be signed by the Preferred Shareholder of such
Preferred Shares in the same manner as the original signature on the
Letter of Transmittal by which such Preferred Shares were tendered
(including any required signature guarantees), or be accompanied by (x)
documents of transfer in a form acceptable to MuniMae, in its sole
discretion and (y) a properly completed irrevocable proxy that authorized
such person to effect such revocation on behalf of such Preferred
Shareholder.
Preferred Shareholders who have their Preferred Shares registered in
the name of someone else (for example, with Registrar and Transfer
Company, a bank, broker or trustee) and who directed that entity to
tender their Preferred Shares must contact that entity and instruct it to
withdraw the Preferred Shareholder's shares. That entity must deliver to
the Transfer Agent by mail, hand delivery or facsimile transmission a
notice of withdrawal specifying the name of the person who tendered the
Preferred Shares to be withdrawn and a description of the Preferred
Shares to be withdrawn. Such a notice must be received by the Transfer
Agent on or before the Expiration Date.
10. Extension of Tender Period; Termination; Amendment. MuniMae
reserves the right, at any time and from time to time, to extend the period
of time during which its Offer is pending by making a public
announcement thereof. During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer. MuniMae
also reserves the right, at any time and from time to time up to and
including the Expiration Date, to (a) terminate its Offer and not to
purchase or pay for any Shares, and (b) amend the Offer in any respect.
<PAGE>
SELECTED FINANCIAL INFORMATION
The following table presents selected historical financial data for
MuniMae for the periods indicated. The financial data has been derived
from MuniMae's financial statements for such periods. The financial data
for the year ended December 31, 1996 was derived from MuniMae's
audited financial statements. The other financial data is unaudited, but in
the opinion of MuniMae reflect all adjustments necessary for a fair
presentation of such data. The data should be read in conjunction with
the financial statements, related notes and other financial information of
MuniMae incorporated by reference in this Offer to Purchase. See
"Available Information."
(In thousands except per share and ratio data)
December 31, September 30, September 30,
1996 1997 1996
Income Statement:
Net operating revenues
and revenue $ 18,670 $ 16,349 $13,774
Income before
extraordinary items 10,868 13,908 6,789
Net income 10,868 13,908 6,789
Balance Sheet:
Working capital 27,204 8,688 50,425
Total assets 230,277 233,532 225,169
Total indebtedness 9,294 1,927 1,018
Shareholders' equity $220,983 $231,605 $224,151
Net Income per Share Subsequent
to the Merger on July 31, 1996:
Series I Preferred Shares $22.84 $41.99 $10.19
Series II Preferred Shares 27.24 47.96 11.14
Series I Preferred CD Shares 18.86 33.99 8.70
Series II Preferred CD Shares $21.53 $36.56 $ 8.92
Ratio of Earnings to Fixed Charges 2.9 5.7 2.3
Book Value per Share:
Series I Preferred Shares $710.78 $741.79 $728.16
Series II Preferred Shares 863.02 889.72 875.05
Series I Preferred CD Shares 533.31 560.97 548.45
Series II Preferred CD Shares $612.37 $633.34 $622.28
<PAGE>
THE TRANSFER AGENT
The Transfer Agent for the Offer is Registrar and Transfer Company.
All deliveries, correspondence and questions sent or presented to the
Transfer Agent relating to the Offer should be directed to the Transfer
Agent at the address or telephone number set forth above. Requests for
information or additional copies of the Offer to Purchase and the Letter
of Transmittal should be directed to the Transfer Agent.
MuniMae will pay the Transfer Agent reasonable and customary
compensation for their services in connection with the Offer, plus
reimbursement for reasonable out-of-pocket expenses.
Brokers, dealers, commercial banks and trust companies will be
reimbursed by MuniMae for customary mailing and handling expenses
incurred by them in forwarding material to their customers.
<PAGE>
Exhibit 99(a)(2)
LETTER OF TRANSMITTAL
To Be Used* To Tender Preferred Shares of
MUNICIPAL MORTGAGE AND EQUITY, L.L.C.
("MuniMae")
Pursuant to the Offer to Purchase
Dated November 26, 1997
THE EXPIRATION DATE AND THE WITHDRAWAL
DEADLINE IS 12:00 MIDNIGHT, EASTERN TIME, ON
DECEMBER 26, 1997, UNLESS EXTENDED
Please complete and mail this Letter of Transmittal to MuniMae's transfer
agent (the "Transfer Agent") at the following address:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
(800) 368-5948
Delivery to an address other than that shown above does not constitute
valid delivery.
* This Letter of Transmittal is to be used only if the Preferred Shares to
be tendered are registered in the Preferred Shareholder's name and the
necessary documents will be transmitted to the Transfer Agent at the
address listed above. Do not use this form if Registrar and Transfer
Company holds your Preferred Shares on your behalf. If it does, you
should contact Registrar and Transfer Company and direct it to tender
your Preferred Shares on your behalf. In addition, do not use this form if
a bank, broker, dealer or other selling group member is effecting the
transaction for the Preferred Shareholder. If your Preferred Shares are
held in the name of a bank, broker, dealer, trustee or other entity, contact
that entity and direct it to tender to the Transfer Agent the Preferred
Shares on your behalf.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Questions and requests for further assistance may be directed to:
Derek Cole, Investor Relations, at 1-888-788-3863.
<PAGE>
GENERAL INSTRUCTIONS
1. Delivery of Letter of Transmittal and Certificates
A properly completed and duly executed Letter of Transmittal,
together with certificates for any tendered Preferred Shares held in
certificate form, should be mailed or delivered to the Transfer Agent at
the address shown on the front of this Letter. All documents must be
received by the Transfer Agent on or prior to the Expiration Date (as
defined in the Offer to Purchase). Delivery to an address other than that
shown does not constitute valid delivery. The method of delivery of all
documents, including certificates for Preferred Shares, is at the election
and risk of the Preferred Shareholder making the tender. MuniMae, in its
sole discretion, may accept facsimiles of the Letter approved orally in
advance. By using facsimiles, the tendering Preferred Shareholder (the
"Tendering Shareholder") consents to their validity which is governed by
Maryland law.
2. Brokerage Fees and Transfer Taxes
MuniMae will pay all brokerage fees, if any, associated with its
purchase of the Preferred Shares. In addition, MuniMae will pay all
taxes, if any, payable on the transfer of Preferred Shares purchased
pursuant to the Offer. If, however, payment of the purchase price is to be
made to other than the registered holder, the amount of transfer taxes
(whether imposed on the registered holder or such other person) payable
on account of the transfer to such person will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes,
or exemption therefrom, is submitted.
3. Irregularities
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of any tender of Preferred Shares will be
determined by MuniMae, whose determination shall be final and binding.
MuniMae reserves the absolute right to reject any or all tenders
determined by it not to be in appropriate form or the acceptance of, or
payment for which would, in the opinion of MuniMae's counsel, be
unlawful. MuniMae also reserves the absolute right to waive any of the
conditions of its Offer or any defect in any tender with respect to any
particular Preferred Shares or any particular Preferred Shareholder.
MuniMae's interpretations of the terms and conditions of the Offer
(including these instructions) will be final and binding. Unless waived,
any defects or irregularities in connection with tenders must be cured
within such time as MuniMae shall determine. Tenders will not be
deemed to have been made until all defects and irregularities have been
cured or waived. Neither MuniMae, the Transfer Agent or any other person
shall be obligated to give notice of defects or irregularities in tenders,
nor shall any of them incur any liability for failure to give such
notice.
4. Separate Accounts
If the Preferred Shares tendered are registered in more than one
account, please complete, sign and submit a separate Letter of Transmittal
for each account.
5. Additional Copies
Additional copies of the Offer to Purchase and this Letter of Transmittal
may be obtained by contacting Municipal Mortgage and Equity, L.L.C. at
the telephone number shown below.
ADDITIONAL TERMS AND CONDITIONS
The Tendering Shareholder hereby sells to MuniMae all Preferred Shares
tendered hereby that are purchased pursuant to the Offer and hereby
irrevocably constitutes and appoints the Transfer Agent as attorney
in fact of the Tendering Shareholder, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled
with an interest), to present such Preferred Shares and any share
certificates for any cancellation of such Preferred Shares on MuniMae's books.
The Tendering Shareholder hereby warrants that the Tendering
Shareholder has full authority to sell the Preferred Shares tendered hereby
and that MuniMae will acquire good title thereto, free and clear of all
liens, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale thereof, and not subject to any adverse
claim, when and to the extent the same are purchased by it. Upon
request, the Tendering Shareholder will execute and deliver any additional
documents necessary to complete the sale in accordance with the terms of
the Offer.
The Tendering Shareholder recognizes that, under certain
circumstances set forth in the Offer to Purchase, MuniMae may not be
required to purchase any of the Preferred Shares tendered hereby. In that
event, the Tendering Shareholder understands that certificate(s) for any
Preferred Shares not purchased will be deposited and held in unissued
form in the Tendering Shareholder's account at MuniMae unless
specifically requested otherwise. The Tendering Shareholder recognizes
that MuniMae does not have an obligation, pursuant to the Special
Payment and Delivery Instructions, to transfer any Preferred Shares from
the name of the registered holder thereof if MuniMae purchases none of
the Preferred Shares originally tendered.
The check for the purchase price of the tendered Preferred Shares
purchased will be issued to the order of the Tendering Shareholder and
mailed to the address of record, unless otherwise indicated under Special
Payment and Delivery Instructions.
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the Tendering Shareholder and all obligations
of the Tendering Shareholder hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the Tendering
Shareholder. Except as stated in the Offer, this tender is irrevocable.
Questions and requests for further assistance may be directed to
Derek Cole, Investor Relations, at 1-888-788-3863.
<PAGE>
TENDER
The undersigned Preferred Shareholder (the "Tendering Shareholder")
hereby tenders the Preferred Shares designated below at the price
described in the Offer to Purchase on the Expiration Date (as defined in
the Offer to Purchase) in cash upon the terms and conditions set forth in
the Offer to Purchase, dated November 26, 1997, receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "Offer").
A. Description of Preferred Shares Tendered
(Check each one that is applicable):
[ ] Series I Preferred Shares
[ ] Series II Preferred Shares
[ ] Series I Preferred CD Shares
[ ] Series II Preferred CD Shares
B. Name(s) of Registered Holder(s) of the Preferred Shares
(Please fill in exactly as Preferred Shares are registered)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Please print
Account number________________________
Please provide your daytime telephone number:
__________________________
Please include area code
<PAGE>
C. Preferred Shares Tendered
Check all that are applicable:
[ ] Partial Tender - only the number of Preferred Shares entered are to
be tendered.
____________ Series I Preferred Shares
____________ Series II Preferred Shares
____________ Series I Preferred CD Shares
____________ Series II Preferred CD Shares
[ ] Complete Tender - all Preferred Shares are to be tendered.
____________ Series I Preferred Shares
____________ Series II Preferred Shares
____________ Series I Preferred CD Shares
____________ Series II Preferred CD Shares
Note: (1) Any Preferred Shares represented by certificates which
are not delivered will be excluded from Preferred
Shares tendered. If not specified above as either a
partial or complete tender, only Preferred Shares
represented by certificates delivered are deemed to
have been tendered.
(2) If desired, you may tender all Preferred Shares of one or more
classes and do a partial tender for any other classes of
Preferred Shares.
Certificates - The following certificates are enclosed herewith: (If
forwarded separately, check here [ ].)
Class of Preferred Certificate Issue Number of shares Number of shares
Shares Number Date On Certificate Tendered
__________________ __________ ____ _______________ ________________
__________________ __________ ____ _______________ ________________
__________________ __________ ____ _______________ ________________
__________________ __________ ____ _______________ ________________
Note: Certificates will be deposited to your account when delivered.
Any balance of Preferred Shares remaining after the
Expiration Date will be held in your account in unissued form
unless you specifically request otherwise.
<PAGE>
D. Taxpayer Identification
_________________________________________________
Taxpayer Identification Number (TIN) Certification
[ ] Enter your TIN (Social Security number of individuals or
Employer I.D. number of entities, including corporations,
partnerships, estates and trusts.)
(1) The number shown on this form or currently shown on my account is
my correct taxpayer identification number, and
(2) I am not subject to backup withholding because (a) I am exempt from
backup withholding, or (b) I have not been notified by the Internal
Revenue Service (IRS) that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding.
Certification Instructions - You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup
withholding because of under-reporting interest or dividends on your tax
return.
In signing this letter, I certify under penalties of perjury that the
information provided in this section is true, correct and complete.
E. Special Payment and Delivery Instructions
The check and any certificates requested for remaining Preferred
Shares will be issued in the name of the registered Preferred Shareholder
and mailed to the address of record unless alternative instructions are
authorized in this section.
____________________________________________________________
____________________________________________________________
_____________________________________________________________
[ ] Check this box if Preferred Shares are tendered within one
year following the date of death of the Preferred Shareholder
in whose name the tendered Preferred Shares are registered.
A certified copy of the Preferred Shareholder's death
certificate must be enclosed herewith.
<PAGE>
F. Signature(s) and Signature(s) Guarantee
Instructions:
If this Letter of Transmittal is signed by the registered holder(s) of the
Preferred Shares tendered, the signature(s) below must correspond exactly
with the name(s) in which the Preferred Shares are registered.
If the Preferred Shares are held of record by two or more joint
holders, all such holders must sign below.
If Preferred Shares are held of record by an IRA account, this Letter
of Transmittal must be signed by an authorized official of the Custodian
of the IRA.
If this Letter of Transmittal or any certificates or authorizations are
signed by trustees, executors, administrators, guardians, attorneys in fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and must submit
proper evidence satisfactory to MuniMae of their authority to so act.
All signatures must be guaranteed unless all of the following
conditions apply:
(1) This Letter of Transmittal is signed by the registered holder(s)
of the Preferred Shares;
(2) There is no change of registration of any remaining Preferred
Shares; and
(3) The payment of the tender offer proceeds and certificates for
any remaining Preferred Shares are to be sent to the registered
owner of the Preferred Shares.
In all other cases, all signatures on this Letter of Transmittal must be
guaranteed by a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc.; a commercial
bank or trust company having an office, branch or agency in the United
States; or other Eligible Guarantor Institution as defined in Rule 17 Ad -
15(a)(2) under the Securities and Exchange Act of 1934.
The Internal Revenue Service does not require your consent to any
provision of this document other than the certifications required to avoid
back-up withholding.
_______________________________________________________
_______________________________________________________
Signature(s) of owner(s) - EXACTLY as registered on the certificates
of Preferred Shares
Date __________________
Signature(s) Guaranteed by:
