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
Chairman of the Board and Chief Executive 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)
Copy to:
Robert E. King, Jr.
Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
(212) 878-8000
November 19, 1998
(Date Tender Offer First Published, Sent or Given to Security Holders)
-------------------------
CALCULATION OF FILING FEE
Transaction Valuation*: $4,102,956.74 Amount of Filing Fee*: $820.59
================================================================================
* For purposes of calculating the filing fee only. The amount assumes the
purchase of the maximum number of shares of all classes for a total
cost of $4,102,956.74. The amount of the filing fee, calculated in
accordance with Section 13(e)(3) of the Securities Exchange Act of
1934, as amended, equals 1/50th of one percent of the value of
securities offered to be purchased.
* 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.
-------------------------------------------------
1
<PAGE>
Introductory Statement
This Schedule 13E-4 relates to an 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 19, 1998 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together with any supplements or amendments
collectively constitute the "Offer"), up to 20% of the issued and outstanding
shares of the following classes of limited liability interest of MuniMae: Series
I Preferred Shares, Series II Preferred Shares, Series I Preferred Capital
Distribution ("CD") Shares and Series II Preferred CD Shares (collectively, the
"Preferred Shares"). MuniMae is offering to purchase up to 3,118 Series I
Preferred Shares, 1,470 Series II Preferred Shares, 1,665 Series I Preferred CD
Shares and 707 Series II Preferred CD Shares. Copies of the Offer to Purchase
and the Letter of Transmittal are filed as Exhibits (a)(1) and (a)(2) hereto,
respectively.
Item 1. Security and Issuer.
(a) The information set forth in the section of the Offer to
Purchase entitled "MuniMae" is incorporated herein by reference.
(b) The information set forth in Section 1 ("Price; Number of
Preferred Shares; Acceptance for Payment and Payment for Preferred Shares") and
Section 5 ("Source and Amount of Funds") of the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 1 ("Price; Number of
Preferred Shares; Acceptance for Payment and Payment for Preferred Shares") of
the Offer to Purchase is incorporated herein by reference.
(d) Not applicable.
Item 2. Source and Amount of Funds or Other Consideration.
(a) The information set forth in Section 5 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(b) None.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer
or Affiliate.
(a)-(f) The information set forth in Section 3 ("Purpose of the
Offer") and Section 6 ("Certain Effects of the Offer") of the Offer to Purchase
is incorporated herein by reference.
(g)-(j) Not applicable.
Item 4. Interest in Securities of the Issuer.
The information set forth in Section 4 ("Certain Important
Considerations") of the Offer to Purchase is incorporated herein by reference.
Except as described therein, no transactions in the Preferred Shares have been
effected by MuniMae or its executive officers or directors in the past 40 days.
2
<PAGE>
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) Not applicable.
Item 8. Additional Information.
(a) None.
(b) The information set forth in the section entitled "Available
Information; Incorporation by Reference" and in Section 11 ("Miscellaneous") of
the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
(d) None.
(e) The information set forth in the Offer to Purchase and the
related Letter of Transmittal, copies of which are filed as Exhibits (a)(1) and
(a)(2) hereto, respectively, is incorporated herein by reference in its
entirety.
Item 9. Material to be Filed as Exhibits.
(a)(1) Offer to Purchase, dated November 19, 1998.
(a)(2) Letter of Transmittal and Related Instructions.
(a)(3) Special Notices Regarding Offers to Purchase
Series I Preferred Shares, Series II Preferred
Shares, Series I Preferred CD Shares and Series II
Preferred Shares, each dated November 19, 1998.
(a)(4) Text of Press Release, dated November 19, 1998.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
3
<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
Mark K. Joseph
Chairman of the Board and
Chief Executive Officer
Dated: November 19, 1998
4
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
(a)(1) Offer to Purchase, dated November 19, 1998
(including Selected Financial Information).
(a)(2) Letter of Transmittal and Related Instructions.
(a)(3) Special Notices Regarding Offers to Purchase
Series I Preferred Shares, Series II Preferred
Shares, Series I Preferred CD Shares and Series II
Preferred Shares, each dated November 19, 1998.
(a)(4) Text of Press Release, dated November 19, 1998.
5
<PAGE>
----------------------------------------------------------------------
OFFER TO PURCHASE FOR CASH
UP TO 20%
OF THE
ISSUED AND OUTSTANDING SHARES OF
each 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 Capital Distribution Shares
Series II Preferred Capital Distribution Shares
(collectively, the "Preferred Shares")
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE
AT 12:00 NOON, EASTERN STANDARD TIME, ON FRIDAY, DECEMBER 18, 1998,
UNLESS THE OFFER IS EXTENDED.
-----------------------------------------------------------------------
To the Holders of
MuniMae's Preferred Shares:
INTRODUCTION
As of November 19, 1998, (the "Commencement Date") Municipal Mortgage
and Equity, L.L.C., a Delaware limited liability company ("MuniMae"), is
offering to purchase, upon the terms and conditions set forth in this Offer to
Purchase and the related Letter of Transmittal (which together constitute the
"Offer") up to 3,118 Series I Preferred Shares, 1,470 Series II Preferred
Shares, 1,665 Series I Preferred Capital Distribution ("CD") Shares and 707
Series II Preferred CD Shares (each such number of shares, the "Designated
Number") for cash at the following prices per share (each, the"Purchase Price"):
MuniMae Offer Offer Price
------------- -----------
Series I Preferred Shares: $597.46
Series II Preferred Shares: $746.83
Series I Preferred CD Shares: $455.02
Series II Preferred CD Shares: $544.02
Upon the terms and subject to the conditions of the Offer, MuniMae will
accept for payment (and thereby purchase) up to an aggregate of 6,960 Preferred
Shares (based on the maximum number of shares of each class, as described above)
that are validly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with the procedures set forth in Section 9. For purposes
of the Offer, the term "Expiration Date" means 12:00 noon, Eastern Standard
time, on December 18, 1998, unless MuniMae, in its sole discretion, shall have
extended the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date on which the Offer, as
extended by MuniMae, shall expire. See Section 10 for a description of MuniMae's
right to extend the period of time during which the Offer is open and to amend
or terminate the Offer.
1
<PAGE>
If more than the Designated Number of shares of a class of Preferred
Shares are duly tendered prior to the Expiration Date and not properly
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, pro rata according to the
number of Preferred Shares validly tendered and not properly withdrawn on or
prior to the Expiration Date, with appropriate adjustments to avoid purchases of
fractional Preferred Shares. In the event the Offer is withdrawn or otherwise
not completed, the Purchase Price will not be paid to tendering Preferred
Shareholders (as defined herein). MuniMae has been advised that none of its
directors, officers or affiliates intends to tender any Preferred Shares
pursuant to this Offer.
Holders of Preferred Shares ("Preferred Shareholders") who tender their
Preferred Shares will not be obligated to pay brokerage fees or commissions or,
except as otherwise provided in Instruction 2 of the Letter of Transmittal,
transfer taxes with respect to the purchase of Preferred Shares by MuniMae
pursuant to the Offer. MuniMae will pay all charges and expenses of Registrar
and Transfer Company (the "Transfer Agent") incurred in connection with the
Offer.
MuniMae does not make any recommendation to any Preferred Shareholder
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. Preferred Shareholders should
consult with their advisors regarding the financial, tax, legal and other
implications of accepting the Offer. Preferred Shareholders are urged to read
this Offer to Purchase and the related materials carefully and in their entirety
before deciding whether to tender Preferred Shares.
Any questions or requests for assistance and/or 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 is the
successor to the business of SCA Tax Exempt Fund Limited Partnership, which was
merged into MuniMae effective August 1, 1996. At September 30, 1998, MuniMae's
bond portfolio was secured by 57 multifamily housing communities located in 29
markets in 16 states and containing 14,838 units with an average occupancy of
95%. Most of MuniMae's assets provide for MuniMae to participate in the
appreciation of the underlying apartments on a tax-exempt basis.
The principal executive offices of MuniMae are located at 218 North
Charles Street, Suite 500, Baltimore, Maryland 21201, and its telephone number
at that address is (410) 962-8044.
2
<PAGE>
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
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information filed with the Commission, can be inspected
and copied at prescribed rates 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, 450 Fifth Street, N.W.,
Washington, D.C. 20549. MuniMae files its reports, proxy statements, and other
information with the Commission electronically. In addition, 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 of limited liability
company interest ("Growth Shares") are listed on the New York Stock Exchange,
and reports, proxy statements and other information concerning MuniMae can be
inspected and copied at the offices of the New York Stock Exchange, Inc. at 11
Wall Street, New York, New York 10005.
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, 1997;
(2) MuniMae's Amendment #1 to its Annual Report on Form 10-K for the fiscal
year ended December 31, 1997;
(3) MuniMae's Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 1998;
(4) MuniMae's Amendment #1 to its Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1998;
(5) MuniMae's Amendment #2 to its Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1998;
(6) MuniMae's Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 1998;
(7) MuniMae's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1998;
(8) MuniMae's Current Report on Form 8-K, filed on January 23, 1998;
(9) MuniMae's Current Report on Form 8-K, filed on January 29, 1998; and
(10) MuniMae's Current Report on Form 8-K, filed on July 24, 1998.
MuniMae also has filed an Issuer Tender Offer Statement on Schedule
13E-4, pursuant to Rule 13e-4(c) under the Exchange Act, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. The Schedule 13E-4 and any amendments thereto, including exhibits, may
be inspected and copies may be obtained at the same places and in the same
manner as set forth above (except that they will not be available at the
regional offices of the Commission).
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
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, (888) 788-3863.
3
<PAGE>
THE OFFER
1. Price; Number of Preferred Shares; Acceptance for Payment and
Payment for Preferred Shares. MuniMae will, upon the terms and subject to the
conditions herein and in the Letter of Transmittal, accept for payment and
purchase up to the Designated Number of each of its issued and outstanding
classes of Preferred Shares which are validly tendered and not properly
withdrawn in accordance with the procedures set forth in Section 9 on or prior
to the Expiration Date, unless it determines to accept none of them. The
Purchase Price of each class of the Preferred Shares represents 80% of the
difference between (a) book value per share calculated as of September 30, 1998
of each class and (b) the aggregate distributions paid to the holders of each of
its issued and outstanding classes of Preferred Shares on November 2, 1998 (the
"adjusted book value"). The Purchase Price for each of the Series I Preferred
Shares, Series II Preferred Shares, Series I Preferred CD Shares and Series II
Preferred CD Shares is $597.46, $746.83, $455.02 and $544.02, respectively.
MuniMae reserves the right to extend, amend or terminate its Offer. See Section
10. MuniMae makes no representation and expresses no opinion as to the fairness
or adequacy of the respective Purchase Prices.
The book value per share at September 30, 1998 for each class of
Preferred Shares was determined by dividing (i) the sum of (x) the total equity
allocable to the respective class of Preferred Shares depicted on the September
30, 1998 balance sheet and (y) the net unrealized gains on mortgage revenue
bonds and other bond related investments available for sale depicted on the
September 30, 1998 balance sheet allocable to that respective class of Preferred
Shares by (ii) the number of shares issued and outstanding for that respective
class of Preferred Shares. The adjusted book value was determined by subtracting
from the book value per share for each of the Series I Preferred Shares, Series
II Preferred Shares, Series I Preferred CD Shares and Series II Preferred CD
Shares an amount equal to $13.96, $17.13, $11.39 and $13.34, respectively,
representing the distributions per share paid to Preferred Shareholders on
November 2, 1998.
As of November 11, 1998, the following number of Preferred Shares were
issued and outstanding: 15,590 Series I Preferred Shares; 7,350 Series II
Preferred Shares; 8,325 Series I Preferred CD Shares; and 3,535 Series II
Preferred CD Shares. As of November 11, 1998, each class of Preferred Shares was
held by the following number of Preferred Shareholders: 870 shareholders of
Series I Preferred Shares; 363 shareholders of Series II Preferred Shares; 418
shareholders of Series I Preferred CD Shares; and 192 shareholders of 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 validly tendered on or prior to the Expiration
Date and not properly 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 the Offer, purchase all Preferred Shares so tendered at the
respective Purchase Prices. If more than the Designated Number are validly
tendered on or prior to the Expiration Date and not properly 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 greater number of Preferred Shares sought) of the
Preferred Shares tendered, on a pro rata basis. See Section 2.
If on or prior to the Expiration Date MuniMae increases the
consideration offered to Preferred Shareholders pursuant to the Offer, the
increased consideration will be paid for all Preferred Shares accepted for
payment pursuant to the Offer, regardless of whether the Preferred Shares were
tendered on or prior to the date the increase in the consideration was offered.
4
<PAGE>
MuniMae reserves the right, in its sole discretion, at any time or from
time to time, to extend the period of time during which the 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 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 10 business day period. In the event the Offer is withdrawn or otherwise
not completed, the Purchase Price will not be paid to tendering Preferred
Shareholders.
Upon the terms and subject to the conditions of the Offer, MuniMae will
accept for payment (and thereby purchase) and will pay for all Preferred Shares
validly tendered and not properly withdrawn in accordance with the procedures
specified in Section 9, as promptly as practicable following the Expiration
Date. In all cases, payment for Preferred Shares purchased pursuant to the Offer
will be made only after timely receipt by MuniMae of a properly completed and
duly executed Letter of Transmittal and any other documents required by the
Letter of Transmittal. Under no circumstances will interest be paid on the
Purchase Price by reason of any delay in making such payment.
For purposes of the Offer, MuniMae will be deemed to have accepted for
payment pursuant to the Offer and thereby purchased validly tendered Preferred
Shares if, as and when MuniMae gives verbal or written notice to the Transfer
Agent of MuniMae's acceptance of those Preferred Shares for payment. Upon the
terms and subject to the conditions of the Offer, payment for Preferred Shares
accepted for payment pursuant to the Offer will be made by direct payment to the
applicable Preferred Shareholder pursuant to instructions listed in the Letter
of Transmittal, as promptly as practicable following the Expiration Date.
If tendered Preferred Shares are not purchased for any reason (except
in connection with proration of Preferred Shares), the certificates with respect
to such unpurchased Preferred Shares will be returned, without expense to the
tendering Preferred Shareholder, as promptly as practicable following the
Expiration Date. If for any reason acceptance for payment of, or payment for,
any Preferred Shares tendered pursuant to the Offer is delayed or MuniMae is
unable to accept for payment, purchase or pay for Preferred Shares tendered
pursuant to the Offer, then MuniMae may retain tendered Preferred Shares, and
those Preferred Shares may not be withdrawn except to the extent that the
tendering Preferred Shareholders are entitled to withdrawal rights as described
in Section 9.
This Offer to Purchase and the related Letter of Transmittal are being
mailed by MuniMae to the persons shown by MuniMae's records to have been holders
of Preferred Shares as of November 11, 1998. 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 the Transfer Agent by the
Preferred Shareholder, such Preferred Shareholder should follow the procedure
for tendering Preferred Shares for purchase pursuant to the Offer set forth in
the Letter of Transmittal, the provisions of which are incorporated herein by
reference.
The address and telephone number of the Transfer Agent are:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
(800) 368-5948
A Preferred Shareholder whose Preferred Shares are held by the Transfer
Agent on its behalf should not complete the Letter of Transmittal. Rather, such
Preferred Shareholder must contact the Transfer Agent prior to the expiration of
the Offer and direct the Transfer Agent to tender its Preferred Shares on its
behalf. Similarly, a Letter of Transmittal is not required to be sent 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 its Preferred Shares to tender such shares on its
behalf. That entity must then contact the Transfer Agent prior to the expiration
of the Offer to tender the Preferred Shares.
5
<PAGE>
2. Proration of Tendered Shares. With respect to each class of Preferred
Shares, if more than the Designated Number of Preferred Shares are tendered in
accordance with the procedures specified in Section 7, MuniMae will, upon the
terms and conditions of the Offer, purchase the Designated Number from tendering
Preferred Shareholders of each class of Preferred Shares (with adjustments to
avoid purchases of fractional shares), pro rata in proportion to the number of
shares of such class validly tendered and not properly withdrawn by each
Preferred Shareholder as compared to the total number of shares of that class
validly tendered in the Offer.
If proration of tendered Preferred Shares is required, then, subject to
MuniMae's obligation of the Rule 14e-1(c) under the Exchange Act to pay
Preferred Shareholders the Purchase Price in respect of Preferred Shares
tendered or return those Preferred Shares promptly after the termination or
withdrawal of the Offer, MuniMae does not intend to pay for any Preferred Shares
accepted for payment pursuant to the Offer until the final proration results are
known. Notwithstanding any such delay in payment, no interest will be paid on
the Purchase Price.
3. Purpose of the Offer. MuniMae has learned that an unaffiliated third
party, Sierra Fund 3, has made a tender offer to holders of the Series I
Preferred Shares (the "Sierra Offer"). The Sierra Offer is for up to 700 Series
I Preferred Shares at a purchase price per share of $450, which represents 59%
of book value per share of the Series I Preferred Shares calculated as of
September 30, 1998.
Sierra Fund 3 and/or its affiliates have in the past commenced tender
offers for some or all of MuniMae's Preferred Shares, and it may do so again
during the Offer. Similarly, certain third parties unaffiliated with MuniMae or
Sierra Fund 3 have indicated their intent to commence future tender offers for
some or all of the outstanding classes of Preferred Shares at prices not
disclosed to MuniMae. As of the Commencement Date, however, except for the
Sierra Offer, MuniMae is not aware of any other outstanding tender offers for
its Preferred Shares.
MuniMae recognizes that there may be Preferred Shareholders who desire
liquidity. Accordingly, MuniMae has determined to offer 80% of adjusted book
value of the Preferred Shares, as described in Section 1, so that any
Preferred Shareholder who decides to liquidate its Preferred Shares will be
able to do so at a higher price.
MuniMae is offering Preferred Shareholders an opportunity for liquidity
that might not otherwise be available to them. MuniMae does not currently
believe that there is or is likely to be an active secondary market for the
Preferred Shares.
Following the completion of the Offer, MuniMae may acquire additional
Preferred Shares. Any such acquisition may be made through private purchases,
through one or more future tender offers or by any other means MuniMae deems
advisable. Any such acquisition may be at a price higher or lower than the price
to be paid for the Preferred Shares purchased pursuant to the Offer.
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 information below.
A. Loss of Current Income. If a Preferred Shareholder accepts any such
tender offer, such Preferred Shareholder would forfeit any future tax-exempt
distributions from the operations of the properties which underlie the tendered
Preferred Shares. These distributions are paid quarterly in February, May,
August and November. Based on the most recent distribution on November 2, 1998,
the Preferred Shares are paying annualized distributions per share with respect
to Series I Preferred Shares, Series II Preferred Shares, Series I Preferred CD
Shares and Series II Preferred CD Shares of $55.84, $68.52, $45.56 and $53.36,
respectively. Although no assurances can be made, MuniMae expects to continue
making distributions in the future with respect to its Preferred Shares.
6
<PAGE>
On November 2, 1998, MuniMae made quarterly per share distributions
with respect to the Series I Preferred Shares, Series II Preferred Shares,
Series I Preferred CD Shares, and Series II Preferred CD Shares of $13.96,
$17.13, $11.39 and $13.34, respectively.
B. Relinquishing Right to Convert Preferred Shares. Pursuant to Section
5.2(b) of MuniMae's Amended and Restated Certificate of Formation and Operating
Agreement (the "Operating Agreement"), Preferred Shareholders have the option to
convert their Preferred Shares to either MuniMae's Growth Shares (traded on the
New York Stock Exchange) or cash (as determined by MuniMae's Board of
Directors), once every two years beginning in June 2004, based upon the
Preferred Shares' book value at the time. There can be no assurance that any
such future conversion would be at values higher than those in the Offer.
Tendering Preferred Shareholders would forfeit their right to such conversion.
C. Relinquishing Right to Future Cash Redemptions. Upon the occurrence
of a "Redemption Event," MuniMae is obligated to redeem the portion of the class
of Preferred Shares related to the asset triggering such Redemption Event. The
Operating Agreement defines a Redemption Event as (i) the sale or repayment of a
SCATEF asset (as defined in the Operating Agreement) or (ii) MuniMae's receipt
of a "par value appraisal"(as defined in the Operating Agreement) for an asset
allocated to a class of Preferred Shares. If a Redemption Event occurs, MuniMae
must make a cash distribution (unless otherwise agreed) to a Preferred
Shareholder of the class related to the asset involved. There can be no
assurance that any Redemption Event will in fact occur or that such distribution
would be for an amount greater than the Purchase Prices in the Offer. A
Preferred Shareholder would lose eligibility to receive cash distributions from
any potential redemptions of one or more classes of Preferred Shares tendered
pursuant to the Offer. The redemption of Preferred Shares is fully described in
Section 5.2(a) of the Operating Agreement.
5. Source and Amount of Funds. MuniMae expects that approximately
$4,300,000 will be required to purchase the aggregate number of Preferred Shares
being sought in the Offer, if tendered, and to pay related fees and expenses.
MuniMae expects to obtain all of those funds from its cash on hand or 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 the following: the acquisition by any person of additional securities
of MuniMae, or the disposition of any securities of MuniMae; 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 change in the present board of directors or management of MuniMae; any
material changes in MuniMae's present capitalization (except as resulting from
the Offer (although MuniMae may seek to sell preferred or common equity 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 valid 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 valid tender of the Preferred Shares
will constitute an agreement to deliver good and marketable title to all
tendered Preferred Shares on or prior to the Expiration Date free and clear of
all liens, charges, claims, encumbrances, interests and restrictions of any
kind.
To validly tender Preferred Shares, each record Preferred Shareholder
must properly complete and duly execute 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 the Transfer Agent, at its address set forth in the Letter
of Transmittal.
If the Letter of Transmittal is signed by the registered holder of the
Preferred Shares and payment is to be made directly to that holder, then no
signature guarantee is required on the Letter of Transmittal.
7
<PAGE>
Similarly, if the Preferred Shares are tendered for the account of a member firm
of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank, savings bank,
credit union, savings and loan association or trust company having an office,
branch or agency in the United States (each an "Eligible Institution"), no
signature guarantee is required on the Letter of Transmittal. However, in all
other cases, all signatures on the Letter of Transmittal must be guaranteed by
an Eligible Institution.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of any tender of Preferred Shares pursuant to the Offer
will be determined by MuniMae, in its sole and absolute discretion, which
determination shall be final and binding. MuniMae reserves the absolute right to
reject any or all tenders of any particular Preferred Shares determined by it
not to be in proper form, or if the acceptance of, or payment for would, in the
opinion of MuniMae's counsel, be unlawful. MuniMae also reserves the absolute
right to waive or amend any of the conditions of the Offer and/or to waive any
defect or irregularity in any tender with respect to any particular Preferred
Shares of any particular Preferred Shareholder. MuniMae's interpretation of the
terms and conditions of the Offer will be final and binding. No tender of
Preferred Shares will be deemed to have been validly made until all defects and
irregularities have been cured or waived. MuniMae will use its best efforts to
give notification of any defects or irregularities in the tender of any
Preferred Shares, but will not incur any liability for failure to give any such
notification.
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived by MuniMae, in its sole and absolute discretion). 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.
The method of delivery of the Letter of Transmittal is at the option
and risk of the tendering Preferred Shareholder, and delivery will be deemed
made only when actually received by the Transfer Agent. In all cases, sufficient
time should be allowed to assure timely delivery.
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 regarding procedures for obtaining replacement certificates representing
such Preferred Shares, arranging for indemnification or any other matter
relating to such certificates.
B. Effect of Letter of Transmittal. Subject to and effective upon the
acceptance for purchase of and payment for Preferred Shares validly 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, (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 whose Preferred Shares are 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
certain of the federal income tax consequences of a tender of Preferred Shares
pursuant to the Offer. The summary is based on existing law, which is subject to
change or differing interpretation, which change or differing interpretation
could apply retroactively. The summary does not discuss state, local, or foreign
or other 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
8
<PAGE>
holds shares as capital assets. The summary also assumes that Preferred
Shareholders only hold Preferred Shares. Preferred Shareholders, including those
who also hold Growth Shares, 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 Preferred 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, the 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 January 19, 1999
(40 business days after the Commencement Date). Business Day means any day,
other than Saturday, Sunday, or a Federal holiday. Preferred Shareholders who
wish to withdraw previously tendered Preferred Shares must contact the Transfer
Agent on or before the Expiration Date.
A Preferred Shareholder may withdraw previously tendered Preferred
Shares, prior to the Expiration Date, by delivering a notice of withdrawal to
the Transfer Agent via mail, hand delivery or facsimile transmission. 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 authorizes
such person to effect such revocation on behalf of such Preferred Shareholder.
Preferred Shareholders whose Preferred Shares are registered in the
name of someone else (for example, with the Transfer Agent, 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 a notice of withdrawal
via mail, hand delivery or facsimile transmission specifying the name of the
person who tendered the Preferred Shares to be withdrawn and a description of
the Preferred Shares to be withdrawn including the certificate number or numbers
shown on the particular
9
<PAGE>
certificates evidencing such Preferred Shares. Such a notice must be received by
the Transfer Agent on or before the Expiration Date.
All questions as to the validity and form (including time of receipt)
of notices of withdrawal will be determined by MuniMae, in its sole discretion,
which determination shall be final and binding. MuniMae will use its best
efforts to give notification of, any defects or irregularities in any notice of
withdrawal, but will not incur any liability for failure to give any such
notification.
10. Extension of Tender Period; Termination; Amendment. MuniMae
expressly reserves the right, in its sole discretion, at any time and from time
to time, to extend the period of time during which the Offer is open by making a
public announcement thereof. During any such extension, all Preferred Shares
previously tendered and not properly 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 the Offer and not purchase or
pay for any Preferred Shares, or (b) amend the Offer in any respect (including,
without limitation, by increasing the consideration offered, increasing or
decreasing the number of Preferred Shares being sought, or both). Notice of any
such extension, termination or amendment will be disseminated promptly to
Preferred Shareholders in a manner reasonably designed to inform Preferred
Shareholders of such change. If, prior to the Expiration Date, MuniMae increases
the consideration offered to any Preferred Shareholder pursuant to the Offer,
the increased consideration will be paid for all Preferred Shares of the class
accepted for payment pursuant to the Offer, regardless of whether the Preferred
Shares of that class were tendered on, prior to, or after the date the increase
in the consideration was offered.
11. Miscellaneous. MuniMae is not aware of any jurisdiction in which
the making of the Offer is not in compliance with applicable law. If MuniMae
becomes aware of any jurisdiction in which the making of the Offer wold not be
in compliance with applicable law, MuniMae will make a good faith effort to
comply with any such law. If, after such good faith effort, MuniMae cannot
comply with any such law, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) Preferred Shareholders residing in such
jurisdiction. In those jurisdictions whose securities or blue sky laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on behalf of one or more registered brokers or dealers licensed under
the laws of that jurisdiction.
10
<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, 1997 was derived from MuniMae's audited financial statements.
The financial data for the nine-month periods ended September 30, 1998 and 1997
are 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; Incorporation by Reference."
<TABLE>
<CAPTION>
Year Ended
December 31, Nine Months Ended September 30,
(In thousands, except per share data and ratios) 1997 1998 1997
- ------------------------------------------------ ---- ---- ----
<S> <C> <C> <C>
Income Statement:
Net operating revenues and other revenues.......... $ 25,339 $ 23,352 $ 16,349
Income before extraordinary items.................. 18,797 19,850 13,908
Net income......................................... 18,797 19,850 13,908
Balance Sheet:
Working capital.................................... $ 7,842 $ 44,024 $ 8,688
Total assets....................................... 243,101 358,866 233,532
Total indebtedness................................. 1,702 2,628 1,927
Shareholders' equity............................... 241,399 356,238 231,605
Net Income per Share Subsequent to the Merger on July 31, 1996:
Series I Preferred Shares.......................... $ 43.07 $ 42.25 $ 41.99
Series II Preferred Shares......................... 64.84 50.75 47.96
Series I Preferred CD Shares....................... 32.59 34.71 33.99
Series II Preferred CD Shares...................... 49.70 39.26 36.56
Ratio of Earnings to Fixed Charges................... 375.94 423.34 387.33
Book Value per Share:
Series I Preferred Shares.......................... $ 757.00 $ 760.79 $ 741.79
Series II Preferred Shares......................... 928.45 950.67 889.72
Series I Preferred CD Shares....................... 576.17 580.16 560.97
Series II Preferred CD Shares...................... 671.33 693.36 633.34
</TABLE>
11
<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 in Section 1. 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.
12
<PAGE>
Exhibit (a)(2)
LETTER OF TRANSMITTAL
to be used to Tender Preferred Shares of
MUNICIPAL MORTGAGE AND EQUITY, L.L.C.
Pursuant to the Offer to Purchase Dated November 19, 1998
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT
12:00 NOON, EASTERN STANDARD TIME, ON DECEMBER 18, 1998, UNLESS EXTENDED.
Please complete and mail this Letter of Transmittal to the
transfer agent (the "Transfer Agent") of Municipal
Mortgage and Equity, L.L.C. ("MuniMae") 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
- --------------------------------------------------------------------------------
TENDER
The undersigned Preferred Shareholder hereby tenders the Preferred Shares
designated below at the prices (respectively, the "Purchase Price") stated in
the Offer to Purchase on or prior to the Expiration Date (as defined in the
Offer to Purchase) upon the terms and conditions set forth in the Offer to
Purchase, dated November 19, 1998, receipt of which is hereby acknowledged, and
in this Letter of Transmittal (which, together with the Offer to Purchase,
constitutes the "Offer").
A. Description of Preferred Shares B. Name(s) of Registered Holder(s)
Tendered of the Preferred Shares
(Check each one that is applicable): (Please fill in exactly as
Preferred Shares are registered)
o Series I Preferred Shares ___________________________________
o Series II Preferred Shares ___________________________________
Please print
o Series I Preferred CD Shares
Account number___________________
o Series II Preferred CD Shares Please provide your daytime
telephone number:
Please include area code__________
- --------------------------------------------------------------------------------
<PAGE>
C. Preferred Shares Tendered -- Check all that are applicable:
o Partial Tender-- only the number o Complete Tender - all
of Preferred Shares entered Preferred Shares are to
to be tendered. be tendered.
_______ Series I Preferred Shares ______ Series I Preferred Shares
_______ Series II Preferred Shares ______ Series II Preferred Shares
_______ Series I Preferred CD Shares ______ Series I Preferred CD Shares
_______ Series II Preferred CD Shares ______ Series II Preferred CD Shares
Note: (1) Any Preferred Shares represented by certificates which are
not delivered to the Transfer Agent will be excluded from the
number of 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 tender a portion of Preferred Shares for any other
classes of Preferred Shares.
Certificates -- The following certificates are enclosed herewith: (If forwarded
separately, check here o.)
- --------------------------------------------------------------------------------
Number of Shares Number of
Certificate Issue on Shares
Class of Preferred Shares Number Date 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.
- --------------------------------------------------------------------------------
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 of Transmittal, 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 below.
- --------------------------------------
- --------------------------------------
- --------------------------------------
o 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 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 Individual Retirement
Account ("IRA"), 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 proceeds from the Offer 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, a
member of the National Association of Securities Dealers, Inc. or a commercial
bank, savings bank, credit union, savings and loan association or trust company
having an office, branch or agency in the United States (each an "Eligible
Institution").
The IRS 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:___________________
- --------------------------------------------------------------------------------
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 of Transmittal. 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 tendering Preferred Shareholder.
MuniMae, in its sole discretion, may
<PAGE>
accept facsimiles of the Letter of Transmittal approved orally in advance. By
using facsimiles, the tendering Preferred Shareholder consents to their validity
under Delaware 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 pursuant to the Offer will be
determined by MuniMae, in its sole and absolute discretion, which determination
shall be final and binding. MuniMae reserves the absolute right to reject any or
all tenders determined by it not to be in the appropriate form or if acceptance
of, or payment for which would, in the opinion of MuniMae's counsel, be
unlawful. MuniMae also reserves the absolute right to waive or amend any of the
conditions of the Offer and/or waive any defect or irregularity 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. No tenders of Preferred Shares will be deemed
to have been validly made until all defects and irregularities have been cured
or waived. MuniMae will use its best efforts to give notification of any defects
or irregularities in the tender of any Preferred Shares, but will not incur any
liability for failure to give any such notification.
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 MuniMae at the telephone number shown below.
ADDITIONAL TERMS AND CONDITIONS
The tendering Preferred 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 Preferred 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 Preferred Shareholder hereby warrants that the tendering
Preferred 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 Preferred
Shareholder will execute and deliver any additional documents necessary to
complete the sale in accordance with the terms of the Offer.
The tendering Preferred 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
<PAGE>
event, the tendering Preferred Shareholder understands that certificate(s) for
any Preferred Shares not purchased will be deposited and held in unissued form
in the tendering Preferred Shareholder's account at MuniMae unless specifically
requested otherwise. The tendering Preferred 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 Preferred 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 Preferred Shareholder and all
obligations of the tendering Preferred Shareholder hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
tendering Preferred 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 (888) 788-3863.
<PAGE>
Exhibit (a)(3)
Special Notice
Regarding Offers to Purchase Your
Series I Preferred Shares
November 19, 1998
Dear Series I Preferred Shareholder:
You may have received a tender offer from Sierra Fund 3 ("Sierra"),
which was unsolicited by Municipal Mortgage and Equity, L.L.C. ("MuniMae"), to
purchase your Series I Preferred Shares in MuniMae. Sierra is offering to
purchase up to 700 Series I Preferred Shares for the purchase price listed in
the table below. This table also lists the percentage of Adjusted Book Value.
Adjusted Book Value represents the difference between (a) book value per share
of the Series I Preferred Shares calculated as of September 30, 1998 and (b)
$13.96, representing the distribution paid to the holders of the Series I
Preferred Shares on November 2, 1998 that Sierra's offering price represents.
Offer Price % of Adjusted Book Value
Sierra Offer: $450 60%
WE RECOMMEND AGAINST ACCEPTING THE
SIERRA 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 (the "MuniMae
Offer") to purchase up to 3,118 (representing 20% of the outstanding) Series I
Preferred Shares for the following per share price and percentage of Adjusted
Book Value:
Offer Price % of Adjusted Book Value
MuniMae Offer: $597.46 80%
Since each investor's situation is unique, we are not making a specific
recommendation as to whether you should accept or reject the MuniMae 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 the
enclosed Offer to Purchase.
This offer will expire on December 18, 1998, and MuniMae will accept
for purchase the Series I Preferred Shares validly tendered and not properly
withdrawn at or prior to 12:00 noon on such date. If you wish to tender your
Series I Preferred Shares, please complete, sign and send the enclosed Letter of
Transmittal, 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 tender of your Series I
Preferred Shares to MuniMae.
Sincerely,
Mark K. Joseph
Chairman and CEO
<PAGE>
The date of MuniMae's Offer to Purchase is November 19, 1998.
The MuniMae Offer will expire on December 18, 1998.
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
2
<PAGE>
Special Notice
Regarding Offers to Purchase Your
Series II Preferred Shares
November 19, 1998
Dear Series II Preferred Shareholder:
In response to an unsolicited offer by an unaffiliated third party to
purchase Series I Preferred Shares, Municipal Mortgage and Equity, L.L.C.
("MuniMae"), as a means of providing liquidity to interested shareholders, is
providing you with the attached Offer to Purchase. The Offer to Purchase
describes our offer (the "MuniMae Offer") to purchase up to 1,470 (representing
20% of the outstanding) Series II Preferred Shares for 80% of Adjusted Book
Value. Adjusted Book Value represents the difference between (a) book value per
share of the Series II Preferred Shares calculated as of September 30, 1998 and
(b) $17.13, representing the distribution paid to the holders of the Series II
Preferred Shares on November 2, 1998.
Offer Price % of Adjusted Book Value
MuniMae Offer: $746.83 80%
Since each investor's situation is unique, we are not making a specific
recommendation as to whether you should accept or reject MuniMae's offer. You
should evaluate this offer in light of your particular situation and investment
goals. In addition, you should read carefully the information contained in the
attached Offer to Purchase.
This offer will expire on December 18, 1998, and MuniMae will accept
for purchase the Series II Preferred Shares validly tendered and not properly
withdrawn at or prior to 12:00 noon on such date. If you wish to tender your
Series II Preferred Shares, please complete, sign and send the enclosed Letter
of Transmittal, 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 tender of your Series II
Preferred Shares to MuniMae.
Sincerely,
Mark K. Joseph
Chairman and CEO
The date of MuniMae's Offer is November 19, 1998.
The MuniMae Offer will expire on December 18, 1998.
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 19, 1998
Dear Series I Preferred CD Shareholder:
In response to an unsolicited offer by an unaffiliated third party to
purchase Series I Preferred Shares, Municipal Mortgage and Equity, L.L.C.
("MuniMae"), as a means of providing liquidity to interested shareholders, is
providing you with the attached Offer to Purchase. The Offer to Purchase
describes our offer (the "MuniMae Offer") to purchase up to 1,665 (representing
20% of the outstanding) Series I Preferred CD Shares for 80% of Adjusted Book
Value. Adjusted Book Value represents the difference between (a) book value per
share of the Series I Preferred CD Shares calculated as of September 30, 1998
and (b) $11.39, representing the distribution paid to the holders of the Series
I Preferred CD Shares on November 2, 1998.
Offer Price % of Adjusted Book Value
MuniMae Offer: $455.02 80%
Since each investor's situation is unique, we are not making a specific
recommendation as to whether you should accept or reject MuniMae's offer. You
should evaluate this offer in light of your particular situation and investment
goals. In addition, you should read carefully the information contained in the
attached Offer to Purchase.
This offer will expire on December 18, 1998, and MuniMae will accept
for purchase the Series I Preferred CD Shares validly tendered and not properly
withdrawn at or prior to 12:00 noon on such date. If you wish to tender your
Series I Preferred CD Shares, please complete, sign and send the enclosed Letter
of Transmittal, 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 tender of your Series I
Preferred CD Shares to MuniMae.
Sincerely,
Mark K. Joseph
Chairman and CEO
The date of MuniMae's Offer is November 19, 1998.
The MuniMae Offer will expire on December 18, 1998.
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 19, 1998
Dear Series II Preferred CD Shareholder:
In response to an unsolicited offer by an unaffiliated third party to
purchase Series I Preferred Shares, Municipal Mortgage and Equity, L.L.C.
("MuniMae"), as a means of providing liquidity to interested shareholders, is
providing you with the attached Offer to Purchase. The Offer to Purchase
describes our offer (the "MuniMae Offer") to purchase up to 707 (representing
20% of the outstanding) Series II Preferred CD Shares for 80% of Adjusted Book
Value. Adjusted Book Value represents the difference between (a) book value per
share of the Series II Preferred CD Shares calculated as of September 30, 1998
and (b) $13.34, representing the distribution paid to the holders of the Series
II Preferred CD Shares on November 2, 1998.
Offer Price % of Adjusted Book Value
MuniMae Offer: $544.02 80%
Since each investor's situation is unique, we are not making a specific
recommendation as to whether you should accept or reject MuniMae's offer. You
should evaluate this offer in light of your particular situation and investment
goals. In addition, you should read carefully the information contained in the
attached Offer to Purchase.
This offer will expire on December 18, 1998, and MuniMae will accept
for purchase the Series II Preferred CD Shares tendered and not properly
withdrawn at or prior to 12:00 noon on such date. If you wish to tender your
Series II Preferred CD Shares, please complete, sign and send the enclosed
Letter of Transmittal, 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 tender of your
Series II Preferred CD Shares to MuniMae.
Sincerely,
Mark K. Joseph
Chairman and CEO
The date of MuniMae's Offer is November 19, 1998.
The MuniMae Offer will expire on December 18, 1998.
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>
Exhibit (a)(4)
M u n i M a e 218 North Charles St., Suite 500
Municipal Mortgage & Equity, LLC Baltimore, Maryland 21201-4019
tel 410-962-8044 fax 410-727-5387
[email protected]
PRESS RELEASE Contact: Derek K. Cole
Director, Investor Relations
FOR IMMEDIATE RELEASE (888) 788-3863
- ---------------------
MuniMae Announces Preferred Share Repurchase
BALTIMORE, MD, November 19, 1998 -- Municipal Mortgage and Equity, L.L.C. (NYSE:
MMA), also known as MuniMae, announced today a tender offer to purchase up to
20% of each of its four outstanding classes of preferred shares.
MuniMae is making this offer in response to an unsolicited offer, by an
unaffiliated third party, to purchase MuniMae Series I Preferred Shares for
$450, or 59% of the shares' September 30, 1998 book value. MuniMae is
recommending against accepting that offer.
In order to provide liquidity options to its preferred shareholders, MuniMae is
offering to purchase for cash up to the share amounts and at the prices per
share described below:
Shares Offer Price
------ -----------
Series I Preferred Shares 3,118 $597.46
Series II Preferred Shares 1,470 $746.83
Series I Preferred CD Shares 1,665 $455.02
Series II Preferred CD Shares 707 $544.02
MuniMae Chairman and CEO, Mark K. Joseph, commented, "We are not recommending
that our preferred shareholder sell their shares at this time. We believe that
MuniMae remains an excellent long term investment. However, we do recognize that
some shareholders may need liquidity since these shares are not traded on
any exchange. We are making this offer to increase the options available to
the shareholders. In addition, the offer makes prudent use of our investment
resources for our growth shareholders."
The offer to purchase was made and filed with the Securities and Exchange
Commission on Thursday, November 19, 1998. The offer will expire at 12:00 noon,
Eastern Standard Time, on Thursday, December 18, 1998, unless extended by
MuniMae.
MuniMae originates, invests in and services tax-exempt multifamily housing
bonds. The 57 multifamily housing communities which secure MuniMae's portfolio
are located in 29 markets in 16 states and contain 14,838 units with an average
occupancy of 95%. The properties represent approximately $600 million in real
estate value. Most of MuniMae's assets provide for MuniMae to participate in the
appreciation of the underlying apartments on a tax-exempt basis.
MuniMae is organized as a limited liability company which provides for tax
advantages as well as the benefit of corporate governance. MuniMae, like real
estate investment trusts ("REITs"), is exempt from tax at the corporate level.
In addition, MuniMae passes through to its shareholders primarily tax-exempt
dividends which are generated by its municipal bond investments. Dividends to
shareholders are declared and paid quarterly.
MUNIMAE: TAX-EXEMPT DIVIDENDS AND GROWTH THROUGH REAL ESTATE
This press release contains statements which are forward looking in nature and
reflect management's current views with respect to future events and financial
performance. These statements are subject to many uncertainties and risks and
should not be considered guarantees of future performance. Actual results may
vary materially from projected results based on a number of factors, including
the actual performance of the properties pledged as collateral for the
portfolio, general conditions in the local real estate markets in which the
properties are located and prevailing interest rates.
<PAGE>
