EXHIBIT 17(c)(13)
AGREEMENT
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This Agreement (the "Agreement") is made this 6th day of November,
1996, by and between Dominium Tax Exempt Fund L.L.P., for itself and on behalf
of its partners and affiliates ("Dominium"), and Capital Apartment Properties,
Inc., for itself and on behalf of its affiliates ("CAPREIT") and on behalf of
Watermark Partners, L.P. and Watermark III Partners, L.P. (all collectively,
the "Parties").
RECITALS
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R-1. Capital Realty Investors Tax Exempt Fund Limited Partnership
("CRITEF I-II") and CRITEF Associates Limited Partnership ("CRITEF Associates")
are parties to a certain Fourth Amended and Restated Agreement and Plan of
Merger dated as of August 21, 1996, with CAPREIT and Watermark Partners, L.P.,
an affiliate of CAPREIT and others.
R-2. Capital Realty Investors Tax Exempt Fund III Limited Partnership
("CRITEF III") and CRITEF III Associates Limited Partnership ("CRITEF III
Associates") are parties to a certain Fourth Amended and Restated Agreement and
Plan of Merger dated as of August 21, 1996, with CAPREIT and Watermark III
Partners, L.P., an affiliate of CAPREIT and others.
R-3. CRITEF and CRITEF III together are referred to herein as the
"Funds". CRITEF Associates and CRITEF III Associates together are referred to
herein as the "General Partners." The Fourth Amended and Restated Agreements
and Plans of Merger referred to in Recital 1 and Recital 2 above are
collectively referred to herein as the "Merger Agreements."
R-4. Pursuant to the Merger Agreements, the Beneficial Assignee
Certificates ("BACs") owned by the holders of the beneficial interests in the
Funds (the "BAC Holders") would be redeemed for an aggregate amount of
approximately $160,301,663 (the "Original Merger Consideration"), which is net
of amounts payable to plaintiffs' counsel in certain BAC Holder class action
litigation relating to the Mergers (hereinafter defined) but subject to certain
adjustments relating to Available Cash.
R-5. The Funds have been soliciting proxies, pursuant to a joint
proxy statement dated September 20, 1996 (the "Joint Proxy Statement"), for
approval by BAC Holders of the mergers and related transactions contemplated by
the Merger Agreements (together, the "Mergers").
R-6. On September 27, 1996, Dominium filed suit against the Funds,
the General Partners, and others in the United States District Court for the
District of Minnesota, Court File No. 4-96-956 (the "Minnesota Action"),
alleging, among other things, that the Joint Proxy Statement contains
violations of Section 14(a) of the Securities Exchange Act of 1934.
R-7. On October 3, 1996, the Funds, the General Partners, and CAPREIT
filed suit against Dominium and others in the United States District Court for
the Southern District of New York, Case No. 96 Civ. 7534 (the "New York
Action"), alleging, among other things, that certain communications by Dominium
violated Section 14(a) of the Securities Exchange Act of 1934, and alleging
tortious interference with the Merger Agreements.
R-8. Dominium has been soliciting proxies in opposition to the
Mergers.
R-9. Dominium has advised CAPREIT that it has incurred substantial
out-of-pocket and other costs for due diligence with respect to the Funds'
assets and certain partnerships that own properties (the "Properties") that
secure the revenue bonds owned by the Funds, including, without limitation,
appraisals; engineering reports; environmental studies; transaction, proxy and
litigation legal work; accounting work; travel costs; consultants; financing
fees and expenses; proxy solicitations; and public relations. Dominium has
further advised CAPREIT that Dominium and its affiliates have devoted
significant resources to the Merger transaction and, as a result, have incurred
significant opportunity costs for matters that it was unable to pursue and take
advantage of due to its involvement with the Mergers. All of the costs and
expenses described herein or otherwise incurred by Dominium are hereinafter
referred to as the "Dominium Costs."
R-10. A meeting to vote on the Mergers by the BAC Holders was
scheduled for October 29, 1996 (the "Meeting," which term includes any
adjournment or postponement thereof).
R-11. On October 28, 1996, the Funds postponed the Meeting to
November 8, 1996.
R-12. The Funds and CAPREIT have agreed to increase the Original
Merger Consideration an aggregate of $6,498,604, allocated as provided for
herein. Dominium has advised CAPREIT and the Funds that, in its opinion, such
increase in the Original Merger Consideration will result in the Mergers being
in the best interests of the BAC Holders and, as a result, that it now endorses
and supports the Mergers.
R-13. To repay and recompense Dominium for the Dominium Costs, and in
consideration of Dominium and its affiliates giving up its claims pursuant to
the Mutual Releases hereinafter described, and the dismissal with prejudice by
Dominium and its affiliates of the Minnesota Action, and in recognition of the
efforts of Dominium leading to an increase in the Original Merger
Consideration, CAPREIT is willing to pay Dominium $3,000,000, subject to
certain conditions (the "Dominium Payment").
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. The Parties acknowledge and agree that the foregoing Recitals are
true and correct and are incorporated herein as though set forth herein in
full.
2. Simultaneously herewith CAPREIT will enter into amendments to the
Merger Agreements with the Funds, the General Partners, and other parties (and
will cause Watermark Partners, L.P., to enter into such amendments), which may
be further amended and revised from time to time (so long as the Improved
Merger Consideration, as hereinafter defined, allocable to each series is not
less than the amounts as provided for below), that, among other things:
A. increase the Original Merger Consideration by an aggregate of
$6,498,604, allocated as follows:
Series I -- $1,368,000
Series II -- $1,975,643
Series III -- $3,154,961
(the "Merger Consideration Increase" which amount, when added to the
Original Merger Consideration, is referred to herein as the "Improved Merger
Consideration");
B. reduce the aggregate consideration to be paid to the General
Partners or their affiliates by $500,000; and
C. cause the aggregate $500,000 reduction under paragraph 1.B. above
to constitute a portion of the Merger Consideration Increase.
3. CAPREIT and the Funds will promptly select a new date for the postponed
Meeting, will disseminate to the BAC Holders a supplement to the Joint Proxy
Statement describing the terms of the Revised Merger Agreements, this Agreement
and other matters, and will diligently solicit proxies for approval of the
revised mergers and the related transactions (together, the "Revised Mergers")
by the BAC Holders pursuant to the Revised Merger Agreements.
4. Simultaneously with the execution of this Agreement:
A. CAPREIT has deposited in escrow $2,500,000 of the Dominium Payment
(the "Escrow Fund") with Commonwealth Land Title Insurance Company, of St.
Xxxx, Minnesota (the "Escrow Agent"), to be held and disbursed as provided
for in an escrow agreement, a copy of which is attached hereto as Exhibit
"A." The payment of the Escrow Fund to Dominium in accordance with the
escrow agreement shall not be reduced, increased, or otherwise affected by
any subsequent increase in the Improved Merger Consideration.
B. Dominium, Dominium Management Services, Inc., Xxxx X. Xxxxx, Xxxxx
X. Xxxxxxxx, Xxxx X. Xxxxx, and Xxxxxx X. Xxxxxxxx, for their part, and
CAPREIT, the Funds, the General Partners, C.R.I., Inc. ("CRI"), X. Xxxxxxx
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Xxxxxxxxxx, and Xxxxxxx X. Xxxxxxx, for their parts, have exchanged mutual
releases, copies of which are attached hereto as Exhibit "B."
C. CAPREIT has paid the remaining $500,000 of the Dominium Payment to
Dominium, which amount is non-refundable. Dominium shall be entitled to
retain said amount notwithstanding the defeat of one or both of the
proposals to adopt and approve the Merger Agreements.
D. The Parties will promptly issue a joint press release
substantially in the form attached hereto as Exhibit "C" informing the
public of the improved merger terms and of this Agreement.
5. Promptly after the execution hereof, the parties hereto will execute,
deliver and file with the appropriate courts Stipulations of Dismissal,
dismissing with prejudice the New York Action and the Minnesota Action.
6. For as long as is requested by CAPREIT or the Funds, Dominium, at
CAPREIT's sole cost and expense, will take all necessary action to endorse and
support the approval of the Revised Mergers and to so advise the BAC Holders,
including, without limitation, to:
A. withdraw its opposition to the Mergers and the related
transactions, withdraw its solicitation of proxies in opposition to the
Mergers, and make appropriate filings with the Securities and Exchange
Commission indicating it has withdrawn its opposition and proxy
solicitation;
B. direct its proxy solicitor, Xxxxxxxxx & Co., Inc. ("Xxxxxxxxx"),
at CAPREIT's request and expense, to cooperate with CAPREIT and the Funds
in connection with the solicitation of proxies for approval of the Revised
Mergers and the related transactions, including the actions described under
paragraphs 6.C. and 6.E.
C. issue such letters and other forms of communication on Dominium's
letterhead, informing the BAC Holders and the public of Dominium's
endorsement and support of the Revised Mergers and related transactions,
and that Dominium believes that the Merger Consideration Increase,
Improved Merger Consideration, and this Agreement are fair to and in the
best interests of the BAC Holders, subject to Dominium's prior approval of
such letters or communications consistent with this Agreement, which
approval shall not be unreasonably withheld or delayed;
D. vote its BACs in favor of the Revised Mergers and the related
transactions; and
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E. promptly make available to CAPREIT and the Funds copies of all
proxies received by Dominium and its agents as a result of Dominium's
solicitation of proxies in opposition to the Mergers.
Any reasonable out-of-pocket expense incurred by Dominium in connection with
the foregoing after the date of this Agreement will be paid by CAPREIT
forthwith on demand, upon submission to CAPREIT of appropriate supporting
documentation.
7. Dominium shall not take, or cause to be taken, any action which is, or
could be, adverse to the approval of the Revised Mergers and related
transactions.
8. No alleged or actual breach by Dominium or any of its affiliates of any
obligation under this Agreement shall be the basis for any reduction of the
Dominium Payment or any claim of offset against the Dominium Payment.
9. This Agreement is solely for the benefit of the Parties hereto. No
party other than the Parties hereto shall be entitled to make any claim under
this Agreement based upon a theory of being a third party beneficiary or other
like theory.
10. CAPREIT and Dominium shall each provide to the other copies of all
correspondence to BAC Holders, press releases, and filings with the United
States Securities and Exchange Commission immediately upon mailing or filing.
CAPREIT shall give written notice to Dominium of the results of the vote by the
BAC Holders at the Meeting promptly following such vote.
11. Notwithstanding anything to the contrary contained in this Agreement:
A. In the event of a breach of any provision of this Agreement by
Dominium at or prior to the Meeting, CAPREIT shall not be entitled to
damages for such breach (it being agreed that damages would be an
inadequate remedy), but shall be entitled to seek all equitable remedies,
including, without limitation, injunctive relief, specific performance,
and corrective action.
B. Dominium shall not do any act (i) after approval by the BAC
Holders of the Revised Mergers and payment to Dominium of the Dominium
Payment that would obstruct or otherwise interfere with the consummation
of the Revised Mergers; or (ii) after the Meeting that would obstruct or
otherwise interfere with an "Alternative Transaction" as defined in the
Escrow Agreement, including, without limitation, any action, directly or
indirectly, through merger, tender offer, exchange offer, acquisition of
partnership interests or BACs, or otherwise to acquire a material portion
of the assets of the Funds, or any action, directly or indirectly, through
merger, tender offer, exchange offer, acquisition of partnership interests
or BACs, or otherwise to acquire
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any of the Properties or the Owner Partnerships whose mortgages secure
"Non-Performing Bonds" owned by the Funds.
C. In the event of (i) a breach by Dominium arising out of Section
11.B. of this Agreement or (ii) unlawful conduct by either Dominium or
CAPREIT after the Meeting, Dominium and CAPREIT, as the case may be, shall
be entitled to all remedies at law or in equity; provided that if the
Revised Mergers had theretofor been approved by the BAC Holders, but the
Revised Mergers were not consummated, Dominium shall have been paid the
Dominium Payment.
12. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument. Signatures by facsimile shall be effective as
originals.
IN WITNESS WHEREOF, CAPREIT has caused this Agreement to be signed by its
duly authorized officers for itself and on behalf of its affiliates, and on
behalf of Watermark Partners, L.P., and Watermark III Partners, L.P.; and
Dominium has caused this Agreement to be signed by its duly authorized partners
for itself and on behalf of its partners and affiliates, all as of the date
first above written.
CAPITAL APARTMENT PROPERTIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
DOMINIUM TAX EXEMPT FUND L.L.P.
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx, General Partner
By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, General Partner
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ACKNOWLEDGEMENT
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The undersigned, on this 6th day of November, 1996, hereby:
1. Acknowledge the Agreement dated the 6th day of November, 1996, by
and between Dominium Tax Exempt Fund L.L.P., for itself and on behalf of its
partners and affiliates ("Dominium") and Capital Apartment Properties, Inc.
("CAPREIT"), for itself and on behalf of its affiliates, and on behalf of
Watermark Partners, L.P. and Watermark III Partners, L.P. (the "Agreement"); and
2. Agree to take any action reasonably required of each of them to
carry out and effectuate the terms and intent of the Agreement, provided the
undersigned shall not be required to expend money not otherwise required under
the Agreement.
3. This Acknowledgement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. Signatures by facsimile shall be
effective as originals.
/s/ XXXX X. XXXXX
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XXXX X. XXXXX
/s/ XXXXX X. XXXXXXXX
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XXXXX X. XXXXXXXX
/s/ XXXX X. XXXXX
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XXXX X. XXXXX
/s/ XXXXXX X. XXXXXXXX
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XXXXXX X. XXXXXXXX
CAPITAL REALTY INVESTORS TAX
EXEMPT FUND LIMITED PARTNERSHIP
By: CRITEF Associates Limited Partnership,
its general partner
By: C.R.I., Inc., its general partner
By: /s/ H. Xxxxxxx Xxxxxxxxxx
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H. Xxxxxxx Xxxxxxxxxx, President
CAPITAL REALTY INVESTORS TAX
EXEMPT FUND III LIMITED PARTNERSHIP
By: CRITEF III Associates Limited Partnership
its general partner
By: C.R.I., Inc., its general partner
By: /s/ H. Xxxxxxx Xxxxxxxxxx
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H. Xxxxxxx Xxxxxxxxxx, President
WATERMARK PARTNERS, L.P.
By: Capital Apartment Properties, Inc.,
its general partner
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
WATERMARK III PARTNERS, L.P.
By: Capital Apartment Properties, Inc.,
its general partner
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
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CRITEF ASSOCIATES LIMITED
PARTNERSHIP
By: C.R.I., Inc., its general partner
By: /s/ H. Xxxxxxx Xxxxxxxxxx
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H. Xxxxxxx Xxxxxxxxxx, President
CRITEF ASSOCIATES III LIMITED
PARTNERSHIP
By: C.R.I., Inc., its general partner
By: /s/ H. Xxxxxxx Xxxxxxxxxx
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H. Xxxxxxx Xxxxxxxxxx, President
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C.R.I., INC.
By: /s/ H. Xxxxxxx Xxxxxxxxxx
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H. Xxxxxxx Xxxxxxxxxx, President
/s/ XXXXXXX X. XXXXXXX
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XXXXXXX X. XXXXXXX
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EXHIBIT A
ESCROW AGREEMENT
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THIS ESCROW AGREEMENT is dated as of the 6th day of November, 1996,
among CAPITAL APARTMENT PROPERTIES, INC., a Delaware corporation ("CAPREIT"),
DOMINIUM TAX EXEMPT FUND L.L.P., a Minnesota limited liability partnership
("Dominium"), and COMMONWEALTH LAND TITLE INSURANCE COMPANY OF MINNESOTA, a
Pennsylvania corporation (the "Escrow Agent").
R E C I T A L S :
R-1. CAPREIT and Dominium have entered into an agreement dated as of
the 6th day of November, 1996, relating to the proposed mergers of Capital
Realty Investors Tax Exempt Fund Limited Partnership and Capital Realty
Investors Tax Exempt Fund III Limited Partnership (together, the "Funds") with
CAPREIT and affiliates of CAPREIT (the "Agreement").
R-2. The Agreement provides for the deposit by CAPREIT of
$2,500,000.00 into the escrow account established hereby, to be held and
distributed by the Escrow Agent pursuant to the terms hereof.
R-3. Capitalized terms used but not defined herein shall have the
meanings specified in the Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties hereto agree as follows:
1. Establishment of Escrow Fund. Simultaneously with the execution
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and delivery of this Escrow Agreement, CAPREIT is depositing with the Escrow
Agent the sum of $2,500,000.00. Such sum, as from time to time invested and
reinvested as provided herein, and any accretion thereto and income or loss
with respect thereto, shall be referred to as the "Escrow Fund." The Escrow
Agent shall hold, invest, and dispose of the Escrow Fund in accordance with the
terms and conditions hereof.
2. Investment of the Escrow Fund.
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2.1. Investment. The Escrow Agent shall invest any or all of the
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Escrow Fund as directed in writing by CAPREIT in any of the following:
(i) obligations issued or guaranteed by the United States of
America or any agency or instrumentality thereof, or
(ii) any money market funds invested solely in, or repurchase
agreements collateralized solely by, the obligations described in Section
2.1(i).
(iii) insured checking or depository accounts at a
federally-insured depository institution, for the limited purpose of
facilitating investments pursuant to Sections (i) or (ii) or paying the
expenses of the Escrow Fund.
2.2. Escrow Ledger. The Escrow Agent shall maintain a ledger (the
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"Escrow Ledger") setting forth (i) the name and address of CAPREIT and
Dominium; (ii) the identity of investments of the Escrow Fund; (iii) all income
or other items added to and distributions from or other items charged against
the Escrow Fund; and (iv) with respect to any distribution pursuant to this
Escrow Agreement, the provisions of this Escrow Agreement pursuant to which
such distribution has been made. The Escrow Agent shall make the Escrow Ledger
available or will provide a copy thereof to CAPREIT or Dominium, as reasonably
requested by either of them.
3. Retention of Income. Any income of the Escrow Fund shall be
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accumulated and added to the Escrow Fund.
4. Entitlement to the Escrow Fund.
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4.1. Dominium shall be entitled to the entire Escrow Fund if, on or
before December 31, 1998, the Revised Merger Agreements, and all related
transactions required to be approved by BAC Holders to consummate the Mergers
(the "Related Transactions") are approved by a vote of holders of a majority in
interest of the BACs of both Funds.
4.2. Dominium shall be entitled to the percentage of the Escrow Fund
below if neither Section 4.1 nor Section 4.4 applies and if, on or before
December 31, 1998, CAPREIT or affiliates of CAPREIT have consummated a
transaction pursuant to which CAPREIT or its affiliates, directly or
indirectly, through merger, tender offer, exchange offer, acquisition of
partnership interests or BACs, or otherwise, have acquired control of either or
both of the Funds (an "Alternative Transaction"). Following are the percentages
of the Escrow Fund to be paid pursuant to this Section 4.2:
100% if control of both Funds is so acquired;
50% if control of only one Fund is so acquired;
0% if control of neither Fund is so acquired.
4.3. Dominium shall be entitled to fifty percent (50%) of the Escrow
Fund if, on or before December 31, 1998, one of the two Revised Mergers is
approved by BAC Holders holding a majority in interest of the BACs of one Fund
and CAPREIT, in its sole discretion, elects to consummate such Revised Merger
with such Fund.
4.4. Dominium shall be entitled to the percentage of the Escrow Fund
set forth below if neither Section 4.1, Section 4.2, nor Section 4.3 applies
and if, on or before December 31, 1998, CAPREIT or affiliates of CAPREIT have
acquired, directly or indirectly,
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through merger, tender offer, exchange offer, acquisition of partnership
interests, or otherwise, one or more of the 18 properties encumbered by
mortgages that secure the bonds owned by the Funds, together with each such
related mortgage (the "Properties") (also an "Alternative Transaction"). The
percentage of the Escrow Fund to be paid pursuant to this Section 4.4 is 5.556%
for each Property so acquired.
4.5. Subject to the proviso contained in subparagraph (iii) of this
Section 4.5, CAPREIT shall be entitled to the entire Escrow Fund if:
(i) By December 31, 1998, the Revised Merger Agreements and all
Related Transactions are not approved by a vote of holders of a majority in
interest of the BACs of both Funds;
(ii) By December 31, 1998, CAPREIT or affiliates of CAPREIT
have not consummated an Alternative Transaction; or
(iii) CAPREIT has announced that it has abandoned the Revised
Mergers and given written notice to Dominium that neither it nor its affiliates
will, prior to December 31, 1998, consummate an Alternative Transaction (the
"Announcement and Notice"); provided, however, in such event, if (x) CAPREIT
collects the "breakup fees" and the reimbursement of expenses as provided for
in the Revised Merger Agreements, CAPREIT shall promptly, upon receipt of such
breakup fees and the reimbursement of expenses, remit to Dominium the amount
distributed to it from the Escrow Fund because of this subparagraph (iii),
together with interest from the date of such distribution at the rate of six
percent (6%) per annum on the amount remitted or (y) prior to December 31,
1998, CAPREIT consummates an Alternative Transaction despite its Announcement
and Notice, CAPREIT shall, promptly upon such consummation, remit to Dominium
the amount distributed to it because of this subparagraph (iii), together with
interest from the date of such distribution at the rate of six percent (6%) per
annum on the amount remitted, which amount shall be deemed liquidated damages
and the sole and exclusive remedy for CAPREIT's breach of its Announcement and
Notice.
5. Disbursement of the Escrow Fund. The Escrow Agent shall hold the
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Escrow Fund until it delivers the same as provided in this Section 5, as
follows:
5.1. At any time, upon joint written instructions of CAPREIT and
Dominium, the Escrow Agent shall distribute all amounts held in the Escrow Fund
as directed by CAPREIT and Dominium.
5.2. If Dominium believes it is entitled to all or some portion of
the Escrow Fund pursuant to Sections 4.1, 4.2, 4.3 or 4.4 above, Dominium shall
deliver a notice (the "Dominium Notice") to the Escrow Agent, with a copy to
CAPREIT, expressly stating the full basis for its belief that it is entitled to
such amounts pursuant to Sections 4.1, 4.2, 4.3 or 4.4
above. Unless the Escrow Agent shall receive, within ten (10) days of its
receipt of the Dominium Notice and evidence of CAPREIT's receipt of a copy
thereof, a notice of objection by CAPREIT (the "CAPREIT Objection Notice")
stating the full basis for its belief that Dominium is not entitled to the
Escrow Fund pursuant to Sections 4.1, 4.2, 4.3 or 4.4 above, the Escrow Fund
shall be delivered to Dominium. If the Escrow Agent shall receive the CAPREIT
Objection Notice, it shall continue to hold the Escrow Fund until it has
received (i) written instructions signed by both Dominium and CAPREIT, or (ii)
a final, non-appealable order of a court directing delivery of the Escrow Fund,
in which case the Escrow Agent shall deliver the Escrow Fund in accordance with
such instructions or order.
5.3. If CAPREIT believes it is entitled to the Escrow Fund pursuant
to Section 4.5 above, CAPREIT shall deliver a notice (the "CAPREIT Notice") to
the Escrow Agent, with a copy to Dominium, expressly stating the full basis for
its belief that it is entitled to the Escrow Fund pursuant to Section 4.5
above. Unless the Escrow Agent shall receive, within ten (10) days of its
receipt of the CAPREIT Notice and evidence of Dominium's receipt of a copy
thereof, a notice of objection by Dominium (the "Dominium Objection Notice")
stating the full basis for its belief that CAPREIT is not entitled to the
Escrow Fund pursuant to Section 4.5 above, the Escrow Fund shall be delivered
to CAPREIT. If the Escrow Agent shall receive the Dominium Objection Notice, it
shall continue to hold the Escrow Fund until it has received (i) written
instructions signed by both CAPREIT and Dominium, or (ii) a final,
non-appealable order of a court directing delivery of the Escrow Fund, in which
case the Escrow Agent shall deliver the Escrow Fund in accordance with such
instructions or order.
5.4. If neither of a Dominium Notice or a CAPREIT Notice, nor any
other instruction described above, shall have been delivered by the Termination
Date, the Escrow Agent shall deliver the Escrow Fund upon the Termination Date
to CAPREIT.
6. Termination. This Escrow Agreement shall terminate (the
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"Termination Date") upon the sooner to occur of (i) distribution of all of the
Escrow Fund and all other sums held by the Escrow Agent pursuant to this Escrow
Agreement; (ii) December 31, 1998, if neither a CAPREIT Notice nor a Dominium
Notice has theretofore been given; (iii) the receipt by the Escrow Agent of
written instructions signed by CAPREIT and Dominium as provided for in Section
5.2 or 5.3; or (iv) the receipt by the Escrow Agent of a final court order as
provided for in Section 5.2 or 5.3.
7. Duties of Escrow Agent.
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7.1. Duties Limited. The Escrow Agent shall perform only the
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duties expressly set forth herein.
7.2. Reliance. The Escrow Agent may rely upon, and shall be
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protected in acting or refraining from acting upon, any written notice,
instruction, or request furnished to it
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hereunder and reasonably believed by it to be genuine and to have been signed
or presented by the proper party or parties.
7.3. Good Faith. CAPREIT and Dominium shall, jointly and severally,
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indemnify the Escrow Agent and hold it harmless against any loss, liability, or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with this Escrow Agreement, including the reasonable costs and
expenses incurred in defending any such claim of liability. The Escrow Agent
may consult with its own counsel, and shall have full and complete
authorization and protection for any action taken or suffered in good faith and
in accordance with the opinion of such counsel.
8. Resignation; Removal; Successor Escrow Agent.
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8.1. Resignation. The Escrow Agent may resign at any time by giving
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thirty (30) days' written notice of such resignation to CAPREIT and Dominium.
Thereafter, the Escrow Agent shall have no further obligation hereunder except
to hold the Escrow Fund as depository. In such event, the Escrow Agent shall
not take any further action until CAPREIT and Dominium shall have designated a
banking corporation, trust company, attorney, or other person as successor
Escrow Agent. Upon receipt of such instructions, the Escrow Agent shall
promptly deliver the Escrow Fund to such successor Escrow Agent and shall
thereafter have no further obligation hereunder.
8.2. Removal. CAPREIT and Dominium together may remove the Escrow
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Agent at any time upon ten (10) days' written notice specifying the date upon
which such removal shall take effect. In the event of such removal, CAPREIT and
Dominium shall within thirty (30) days of such notice jointly appoint a
successor Escrow Agent, and the Escrow Agent shall turn over to such successor
Escrow Agent all funds in the Escrow Fund and any other amount held by it
pursuant to this Escrow Agreement. Upon receipt of the funds and other amounts,
the successor Escrow Agent shall thereupon be bound by all of the provisions
hereof.
9. Fees and Expenses.
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9.1. Escrow Agent. Dominium and CAPREIT shall each pay and shall
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only be liable for one-half of (i) the Escrow Agent's fees, which shall be
$500.00 payable on the date hereof, and an additional $100.00 on each
successive anniversary date of this Escrow Agreement if the Escrow Fund shall
not then have been released; and (ii) all reasonable expenses, disbursements,
and advances (including reasonable attorneys' fees) incurred in carrying out
the Escrow Agent's duties hereunder (the "Escrow Agent's Fees"), payable
monthly upon submission of an itemized invoice therefor to CAPREIT and
Dominium.
9.2. Payment of Fees and Expenses. Each of CAPREIT and Dominium
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shall pay its portion of the Escrow Agent's Fees directly to the Escrow Agent as
set forth in
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Section 9.1. If CAPREIT or Dominium shall refuse to pay their respective
portions of the Escrow Agent's Fees upon written demand therefor, the Escrow
Agent's Fees may be deducted by the Escrow Agent from the Escrow Fund, provided
--------
that this sentence shall not affect, as between Dominium and CAPREIT, the
obligation of each to pay one-half of the fees and expenses as set forth in
Section 9.1. The Escrow Fund shall not otherwise be applied to pay the Escrow
Agent's Fees and, notwithstanding anything to the contrary herein, the Escrow
Agent shall not apply amounts in the Escrow Fund to the Escrow Agent's Fees so
as to cause the Escrow Fund to be less than the amount originally deposited by
CAPREIT.
10. Miscellaneous.
-------------
10.1. Notice. Any notice or other communication required or which
------
may be given hereunder shall be in writing and shall be delivered personally,
or sent by facsimile transmission or by certified, registered or express mail,
postage prepaid, and shall be deemed given when so delivered personally, sent
by facsimile transmission, or, if mailed, two days after the date of mailing,
as follows:
(i) if to CAPREIT, to:
-----------------
Capital Apartment Properties, Inc.
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, President
Facsimile: 000-000-0000
with a copy to:
--------------
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: 000-000-0000
(ii) if to Dominium, to:
------------------
Dominium Tax Exempt Fund L.L.P.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile: 000-000-0000
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with a copy to:
--------------
Faegre & Xxxxxx, P.L.L.P.
0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
and with a copy to:
------------------
Ravich Meyer Xxxxxx Xxxxxxx XxXxxxx & Xxxxxx P.A.
4545 IDS Center
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Facsimile: 000-000-0000
(iii) if to the Escrow Agent, to:
---------------------------
Commonwealth Land Title Insurance Company
000 Xxxx Xxxxxx Xxxxx
000 Xxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile: 000-000-0000
10.2. Entire Agreement. This Escrow Agreement is entered into and
----------------
delivered pursuant to the Agreement, and as such contains the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.
10.3. Waivers and Amendments. This Escrow Agreement may be amended,
----------------------
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties, or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any right, power or privilege hereunder, nor any single or partial
exercise of any right, power or privilege hereunder, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.
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10.4. Litigation. In the event of any dispute as to the distribution
----------
of the Escrow Fund, the Escrow Agent may interplead the funds in dispute, and
CAPREIT and Dominium shall not oppose any reasonable request for such
interpleader relief, with the prevailing party being entitled to reimbursement
of its attorneys' fees and costs in connection with the resolution of such
dispute.
10.5. Assignment. This Escrow Agreement shall be binding upon the
----------
successors and permitted assigns of the parties. No assignment of this Escrow
Agreement may be made by any party unless the assignee agrees to be bound by
the provisions of this Escrow Agreement and the Agreement to the same extent as
the assignor is bound.
10.6. Further Assurances. Each of the parties shall execute such
------------------
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.
10.7. Counterparts and Facsimile Signature Pages. This Escrow
------------------------------------------
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument. Signatures by facsimile shall be effective as originals.
10.8. Headings. The headings in this Escrow Agreement are for
--------
reference purposes only and shall not in any way affect meaning or
interpretation of this Escrow Agreement.
IN WITNESS WHEREOF, the parties have caused the execution of this Escrow
Agreement as of the date first above written.
CAPITAL APARTMENT PROPERTIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, President
DOMINIUM TAX EXEMPT FUND L.L.P.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Xxxx X. Xxxxx, Partner
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COMMONWEALTH LAND TITLE
INSURANCE COMPANY,
as Escrow Agent
By:
-----------------------------------
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EXHIBIT B
MUTUAL RELEASES
---------------
THESE MUTUAL RELEASES are made as of the 6th day of November, 1996.
1. Definitions. The following terms shall have the assigned meanings:
(a) An AFFILIATE of a party is any person or entity controlled by,
under common control with, or in control of the first party.
(b) DOMINIUM PARTIES means Dominium Tax Exempt Fund L.L.P., Dominium
Management Services, Inc., Xxxx X. Xxxxx, Xxxxx X. Xxxxxxxx, Xxxx X. Xxxxx, and
Xxxxxx X. Xxxxxxxx (collectively, "Dominium") and their partners, Affiliates,
successors and assigns and each of their officers, directors, employees, agents,
attorneys, accountants, consultants and representatives.
(c) CAPREIT PARTIES means Watermark Partners, L.P., and Watermark III
Partners, L.P. (collectively, "Watermark"), Capital Apartment Properties Inc.
("CAPREIT"), and their partners, Affiliates, successors and assigns and each of
their officers, directors, employees, agents, attorneys, accountants,
consultants and representatives.
(d) CRITEF PARTIES means Capital Realty Investors Tax Exempt Fund
Limited Partnership, Capital Realty Investors Tax Exempt Fund III Limited
Partnership (collectively, the "Funds"), CRITEF Associates Limited Partnership
and CRITEF III Associates Limited Partnership (collectively, the "General
Partners"), C.R.I., Inc., H. Xxxxxxx Xxxxxxxxxx, and Xxxxxxx X. Xxxxxxx, and
their partners, Affiliates, successors and assigns and each of their officers,
directors, employees, agents, attorneys, accountants, consultants and
representatives.
(e) MERGERS means mergers and related transactions involving
Watermark, CAPREIT, the Funds, the General Partners, and other parties pursuant
to two certain Fourth Amended and Restated Agreements and Plans of Merger dated
as of August 21, 1996, as the same may be further amended from time to time,
and all related preceding or succeeding Agreements and Plans of Merger, and the
mergers and transactions contemplated thereby.
(f) AGREEMENT means that certain agreement of even date by and
between Dominium, for itself and on behalf of its partners and affiliates, and
CAPREIT, for itself and on behalf of its affiliates, and on behalf of
Watermark.
(g) ESCROW AGREEMENT means the escrow agreement provided for in the
Agreement.
(h) MINNESOTA ACTION and NEW YORK ACTION have the same meanings given
to them in the Agreement.
(i) SUBJECT MATTER means the Mergers, solicitations of proxies
relating to the Mergers, any matters raised or that could have been raised in
the Minnesota Action or the New York Action, Dominium's efforts to acquire the
Funds and to oppose the Mergers, and all acts, facts, transactions or
occurrences relating thereto, excluding matters arising out of the breach or
failure to fulfill any obligations under the Agreement and the Escrow
Agreement.
2. Release of Dominium Parties. Each of the CAPREIT Parties and the
CRITEF Parties hereby releases and forever discharges the Dominium Parties from
all actions, causes of action, suits, proceedings, debts, dues, contracts,
judgments, damages, costs, claims and demands of any kind, whether in law,
equity, or mixed, which the CAPREIT Parties or the CRITEF Parties have or may
have, whether known or unknown, against any of the Dominium Parties, arising
out of or in any way relating to the Subject Matter.
3. Release of CRITEF Parties and CAPREIT Parties. Each of the Dominium
Parties hereby releases and forever discharges the CRITEF Parties and CAPREIT
Parties from all actions, causes of action, suits, proceedings, debts, dues,
contracts, judgments, damages, costs, claims and demands of any kind, whether
in law, equity, or mixed, which the Dominium Parties have or may have, whether
known or unknown, against any of the CAPREIT Parties or any of the CRITEF
Parties, arising out of or in any way relating to the Subject Matter.
4. Counterparts and Facsimile Signature Pages. This Mutual Releases may
be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
Signatures by facsimile shall be effective as originals.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first above written by their duly authorized officers or
general partners.
DOMINIUM TAX EXEMPT FUND L.L.P.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Xxxx X. Xxxxx, General Partner
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxx, General Partner
- 2 -
/s/ XXXX X. XXXXX
----------------------------------
XXXX X. XXXXX
/s/ XXXXX X. XXXXXXXX
----------------------------------
XXXXX X. XXXXXXXX
/s/ XXXX X. XXXXX
----------------------------------
XXXX X. XXXXX
/s/ XXXXXX X. XXXXXXXX
----------------------------------
XXXXXX X. XXXXXXXX
CAPITAL APARTMENT PROPERTIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx, President
WATERMARK PARTNERS, L.P.
By: Capital Apartment Properties, Inc.,
its general partner
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx, President
- 3 -
WATERMARK III PARTNERS, L.P.
By: Capital Apartment Properties, Inc.,
its general partner
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx, President
CAPITAL REALTY INVESTORS TAX
EXEMPT FUND LIMITED PARTNERSHIP
By: CRITEF Associates Limited Partnership,
its general partner
By: C.R.I., Inc., its general partner
By: /s/ H. Xxxxxxx Xxxxxxxxxx
-----------------------------
H. Xxxxxxx Xxxxxxxxxx
CAPITAL REALTY INVESTORS TAX
EXEMPT FUND III LIMITED
PARTNERSHIP
By: CRITEF III Associates Limited
Partnership, its general partner
By: C.R.I., Inc., its general partner
By: /s/ H. Xxxxxxx Xxxxxxxxxx
-----------------------------
H. Xxxxxxx Xxxxxxxxxx
CRITEF ASSOCIATES LIMITED
PARTNERSHIP
By: C.R.I., Inc., its general partner
By: /s/ H. Xxxxxxx Xxxxxxxxxx
-----------------------------
H. Xxxxxxx Xxxxxxxxxx
- 4 -
CRITEF III ASSOCIATES LIMITED
PARTNERSHIP
By: C.R.I., Inc., its general partner
By: /s/ H. Xxxxxxx Xxxxxxxxxx
-----------------------------
H. Xxxxxxx Xxxxxxxxxx
C.R.I., INC.
By: /s/ H. Xxxxxxx Xxxxxxxxxx
-----------------------------
H. Xxxxxxx Xxxxxxxxxx
/s/ XXXXXXX X. XXXXXXX
-----------------------------
XXXXXXX X. XXXXXXX
- 5 -
