<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
Amendment No. 11
Capital Realty Investors Tax Exempt Fund Limited Partnership ("CRITEF")
Capital Realty Investors Tax Exempt Fund III Limited Partnership ("CRITEF III")
(Names of Issuers)
Capital Realty Investors Tax Exempt Fund Limited Partnership
CRITEF Associates Limited Partnership
Capital Realty Investors Tax Exempt Fund III Limited Partnership
CRITEF III Associates Limited Partnership
(Names of Persons Filing Statement)
Beneficial Assignee Certificates, CRITEF, Series I and II
Beneficial Assignee Certificates, CRITEF III
(Titles of Classes of Securities)
140 437 10 4, CRITEF, Series I
140 437 20 3, CRITEF, Series II
140 438 10 2, CRITEF III
(CUSIP Numbers of Classes of Securities)
CRI, Inc.
William B. Dockser
Chairman of the Board
The CRI Building
11200 Rockville Pike
Rockville, Maryland 20852
(301) 468-9200
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Persons Filing Statement)
Copies to:
Robert B. Hirsch, Esq.
ARENT FOX KINTNER PLOTKIN & KAHN
1050 Connecticut Avenue
Washington, D.C. 20036
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This statement is filed in connection with (check the appropriate box):
a. /x/ The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. / / The filing of a registration statement under the Securities Act
of 1933.
c. / / A tender offer.
d. / / None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies. / /
Calculation of Filing Fee
Transaction valuation* Amount of filing fee
$168,800,257 $33,760
* Pursuant to the proposed merger, the public holders of beneficial assignee
certificates ("BACs") in CRITEF and CRITEF III, who hold in the aggregate
2,280,000 BACs in CRITEF, Series I, 3,238,760 BACs in CRITEF, Series II, and
5,258,268 BACs in CRITEF III, will be entitled to receive $15.60 per BAC in
CRITEF, Series I, $15.29 per BAC in CRITEF, Series II, and $15.92 per BAC in
CRITEF III, in each case, subject to adjustment.
/x/ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount previously Paid: $32,461
Form or Registration No: Schedule 14A
Filing Party: CRITEF and CRITEF III
Dates Filed: March 18, 1996, August 26, 1996, November 12, 1996
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INTRODUCTION
This Amendment No. 11 to the Rule 13e-3 Transaction Statement is being
filed by Capital Realty Investors Tax Exempt Fund Limited Partnership ("Fund
I-II"), Capital Realty Investors Tax Exempt Fund III Limited Partnership ("Fund
III", and together with Fund I-II, the "Funds"), CRITEF Associates Limited
Partnership, the general partner of Fund I-II ("Fund I-II GP"), CRITEF III
Associates Limited Partnership, (the general partner of Fund III, and together
with Fund I-II GP, the "General Partners") , Watermark Partners, L.P.
("Watermark"), Watermark III Partners, L.P. ("Watermark III"), Capital
Apartment Properties, Inc., the general partner of Watermark and Watermark III
("CAPREIT") and Apollo Real Estate Advisors, L.P., the beneficial owner of
99.83% of the outstanding capital stock of CAPREIT ("Apollo"), in connection
with the proposed mergers of Watermark and Watermark III with and into Fund
I-II and Fund III, respectively, and related transactions. Fund I-II and Fund
III are the issuers of the classes of securities which are the subject of the
Rule 13e-3 transaction.
On November 12, 1996, Fund I-II and Fund III filed with the Securities
and Exchange Commission their Supplement to a definitive Proxy Statement
relating to the solicitation of proxies by Fund I-II and Fund III to
vote upon : (1) a proposal to approve and adopt (a) with respect to Fund
I-II, the Fourth Amended and Restated Agreement and Plan of Merger,
dated as of August 21, 1996, as amended by Amendment No. 1 thereto dated
November 7, 1996, among Fund I-II, CRITEF Associates Limited Partnership
and Watermark, and others, and (b) with respect to Fund III, the Fourth
Amended and Restated Agreement and Plan of Merger, dated as of August
21, 1996, as amended by Amendment No. 1 thereto dated November 7, 1996,
among Fund III, CRITEF III Associates Limited Partnership and Watermark
III, and others, and in each case, to approve certain amendments to the
Agreements of Limited Partnership of each of the Funds to authorize
expressly the foregoing, (2) a proposal to approve, with respect to each
Fund, (i) the sale of the 1.01% general partner interest by such Fund's
general partner to CAPREIT GP, Inc., a newly-formed, wholly-owned
subsidiary of CAPREIT ("CAPREIT GP"), in exchange for $400,000, and the
substitution of CAPREIT GP as the general partner of such Fund in its
stead, and (ii) the issuance of limited partner interests in each of the
Funds to CAPREIT or its designees in exchange for the contribution of
real property or other assets, and the admission of CAPREIT or its
designees as limited partners of each of the Funds, and, in each case,
certain amendments to the Agreements of Limited Partnership of each of
the Funds to authorize expressly the foregoing, (3) any adjournments of
the Special Meetings to allow for the additional solicitation of BAC
Holder votes in order to obtain more votes in favor of the foregoing
proposals, and (4) any other business as may properly come before the
Special Meetings or any adjournments or postponements thereof.
A copy of the Supplement to the definitive Proxy Statement was attached
as Exhibit 17(d)(14) to Amendment No. 10 to the Rule 13e-3 Transaction
Statement. The definitive Proxy Statement was previously filed
as Exhibit 17(d)(1) to Amendment No. 3 to the Schedule 13e-3. The sole
purpose of this Amendment No. 11 to the Rule 13e-3 Transaction Statement
is to amend Item 17 "Material to be Filed as Exhibits" by filing an
additional exhibit.
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Item 17 Item 17 is hereby amended and restated as follows:
Material to be Filed as Exhibits
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(a).......................... Commitment Letter, dated March 29, 1996, between Capital
Apartment Properties, Inc. and CentRe Mortgage L.L.C.
(b)(1)....................... Fairness Opinion of Oppenheimer & Co., Inc. delivered to Fund I-
II, Series I, dated March 14,,1996, appears as Appendix B-1 to
the preliminary Proxy Statement filed as Exhibit 17(d) to
Amendment No. 3 to the Rule 13e-3 Transaction Statement.
(b)(2)....................... Fairness Opinion of Oppenheimer & Co., Inc. delivered to Fund
I-II, Series II, dated March 14, 1996, appears as Appendix B-2
to the preliminary Proxy Statement filed as Exhibit 17(d) to
Amendment No. 3 to the Rule 13e-3 Transaction Statement.
(b)(3)....................... Fairness Opinion of the Oppenheimer & Co., Inc. delivered to
Fund III, dated March 14, 1996, appears as Appendix B-3 to the
preliminary Proxy Statement filed as Exhibit 17(d) to Amendment
No. 3 to the Rule 13e-3 Transaction Statement.
(b)(4)....................... Report of Oppenheimer & Co., Inc. in connection with its
Fairness Opinions of March 14, 1996.
(b)(5)....................... Fairness Opinion of Oppenheimer & Co., Inc. delivered to Fund
I-II, Series I, dated September 20, 1996, appears as Appendix
B-1 to the definitive Proxy Statement filed as Exhibit 17(d) to
Amendment No. 3 to the Rule 13e-3 Transaction Statement.
(b)(6)....................... Fairness Opinion of Oppenheimer & Co., Inc. delivered to Fund
I-II, Series II, dated September 20, 1996, appears as
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10
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Appendix B-2 to the definitive Proxy Statement filed as Exhibit
17(d) to Amendment No. 3 to the Rule 13e-3 Transaction
Statement.
(b)(7)....................... Fairness Opinion of Oppenheimer & Co., Inc. delivered to Fund
III, dated September 20, 1996, appears as Appendix B-3 to the
definitive Proxy Statement filed as Exhibit 17(d) to Amendment
No. 3 to the Rule 13e-3 Transaction Statement.
(b)(8)....................... Report of Oppenheimer & Co., Inc. in connection with its
Fairness Opinions of September 20, 1996.
(c)(1)....................... Fourth Amended and Restated Agreement and Plan of Merger, dated
as of August 21, 1996, among Fund I-II, CRITEF Associates
Limited Partnership, Watermark and others, appears as Appendix
A-1 to the definitive Proxy Statement filed as Exhibit 17(d)(1)
to Amendment No. 3 to the Rule 13e-3 Transaction Statement.
(c)(2)....................... Fourth Amended and Restated Agreement and Plan of Merger, dated
as of August 21, 1996, among Fund III, CRITEF III Associates
Limited Partnership and Watermark III, and others, appears as
Appendix A-2 to the definitive Proxy Statement filed as Exhibit
17(d)(1) to Amendment No. 3 to the Rule 13e-3 Transaction
Statement.
(c)(3)....................... Complaint for Breach of Fiduciary Duty in the case styled Zakin
v. Dockser, et al. (C.A. No. 14558).
(c)(4)....................... Complaint for Breach of Fiduciary Duty in the case styled
Wingard v. Dockser, et al. (C.A. No. 14604).
(c)(5)....................... Stipulation of Settlement, dated as of May 13, 1996, relating to
the cases styled Zakin v. Dockser, et al. and Wingard v.
Dockser, et al.
(c)(6)....................... Amendment to Stipulation of Settlement, dated August 13, 1996,
relating to the cases styled Zakin v. Dockser, et al. and
Wingard v. Dockser, et al.
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11
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(c)(7)....................... Final Order and Judgment of the Court of Chancery of the State
of Delaware in and for New Castle County, dated August 14, 1996,
approving the Stipulation of Settlement as amended in the cases
styled Zakin v. Dockser, et al. and Wingard v. Dockser, et al.
(c)(8)....................... Complaint for False or Misleading Statements in the case styled
Dominium Tax Exempt Fund, L.L.P. v. Dockser, et al.
(c)(9)....................... Complaint for Preliminary and Permanent Injunction and Relief
against unlawful Proxy solicitation in the case styled Capital
Realty Investors Tax Exempt Fund Limited Partnership, et al. v.
Dominium Tax Exempt Fund L.L.P.
(c)(10)...................... Defendants' Emergency Motion to Enforce Court's Final Order In
Re Capital Realty Investors Tax Exempt Fund Limited
Partnership's Litigation.
(c)(11)...................... Memorandum Opinion in the case styled Capital Realty Investors
Tax Exempt Fund Limited Partnership, et al. v. Dominium Tax
Exempt Fund L.L.P.
(c)(12)...................... Order and Memorandum of Judge Lebedoff in the case styled
Dominium Tax Exempt Fund, L.L.P. v. Dockser, et. al.
(c)(13)...................... Agreement, dated November 6, 1996, between Dominium Tax Exempt
Fund L.L.P. and Capital Apartment Properties, Inc., including
the Escrow Agreement and Mutual Releases.
(c)(14)...................... Amendment No. 1 to the Fourth Amended and Restated Agrement and
Plan of Merger, dated November 7, 1996, among Fund I-II, CRITEF
Associates Limited Partnership, Watermark and others, appears as
Exhibit 1 to the Supplement to the definitive Proxy Statement
filed as Exhibit 17(d)(14) to this Rule 13e-3 Transaction
Statement.
(c)(15)...................... Amendment No. 1 to the Fourth Amended and Restated Agrement and
Plan of Merger, dated November 7, 1996, among Fund III, CRITEF
III Associates Limited Partnership, Watermark III and others,
appears as Exhibit 2 to the Supplement to the definitive Proxy
Statement filed as Exhibit 17(d)(14) to this Rule 13e-3
Transaction
</TABLE>
12
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Statement.
(d)(1)....................... Letters to BAC Holders, Notice of Special Meetings, definitive
Proxy Statement and forms of Proxy.
(d)(2)....................... October 3, 1996 Letter to BAC Holders from the Funds.
(d)(3)....................... October 4, 1996 Press Release issued by the Funds.
(d)(4)....................... October 3, 1996 Press Release issued by CAPREIT.
(d)(5)....................... October 11, 1996 Letter to BAC Holders from the Funds.
(d)(6)....................... October 14, 1996 Press Release issued by CAPREIT.
(d)(7)....................... October 16, 1996 Press Release issued by CAPREIT.
(d)(8)....................... October 18, 1996 Letter to BAC Holders from the Funds.
(d)(9)....................... October 18, 1996 Press Release issued by CAPREIT.
(d)(10)...................... October 22, 1996 Letter to BAC Holders From the Funds.
(d)(11)...................... October 28, 1995 Press Release issued by the Funds.
(d)(12)...................... October 29, 1996 Letter to BAC Holders from the Funds.
(d)(13)...................... November 6, 1996 Joint Press Release issued by the Funds,
CAPREIT and Dominium Tax Exempt Fund L.L.P.
(d)(14)...................... Letters to BAC Holders, Amended Notice of Special Meetings,
Supplement to definitive Proxy Statement and forms of Proxy.
(d)(15)...................... November 14, 1996 Letter to BAC Holders from the Funds.
(e).......................... Not applicable.
(f).......................... At this time no written instruction, form or other material
currently exists with respect to any oral solicitation or
</TABLE>
13
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recommendation that may be made (on behalf of the persons filing
this statement) to security holders in connection with the Rule
13e-3 transaction. Should any such written instruction, form or
material be generated, it will be supplied to the Commission as
a supplemental filing.
</TABLE>
14
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: November 22, 1996
CAPITAL REALTY INVESTORS TAX EXEMPT FUND LIMITED PARTNERSHIP
By: CRITEF Associates Limited Partnership,
its General Partner
By: C.R.I., Inc.,
its Managing General Partner
By: /s/ William B. Dockser
William B. Dockser
Chairman of the Board
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/ William B. Dockser
William B. Dockser
Chairman of the Board
CRITEF ASSOCIATES LIMITED PARTNERSHIP
By: C.R.I., Inc.,
its Managing General Partner
By: /s/ William B. Dockser
William B. Dockser
Chairman of the Board
15
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CRITEF III ASSOCIATES LIMITED PARTNERSHIP
By: C.R.I., Inc.,
its General Partner
By: /s/ William B. Dockser
William B. Dockser
Chairman of the Board
16
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: November 22, 1996
WATERMARK PARTNERS, L.P.
By: Capital Apartment Properties, Inc.,
its General Partner
By: /s/ Richard L. Kadish
Richard L. Kadish
President and Chief Executive Officer
WATERMARK III PARTNERS, L.P.
By: Capital Apartment Properties, Inc.,
its General Partner
By: /s/ Richard L. Kadish
Richard L. Kadish
President and Chief Executive Officer
CAPITAL APARTMENT PROPERTIES, INC.
By: /s/ Richard L. Kadish
Richard L. Kadish
President and Chief Executive Officer
APOLLO REAL ESTATE ADVISORS, L.P.
By: Apollo Real Estate Management, Inc.,
its General Partner
By: /s/ Michael D. Weiner
Michael D. Weiner
Vice President
17
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INDEX TO EXHIBITS
Exhibit No. Title
- ----------- -----
17(a)........................ Commitment Letter, dated March 29, 1996, between
Capital Apartment Properties, Inc. and CentRe
Mortgage L.L.C.*
17(b)(1)..................... Fairness Opinion of Oppenheimer & Co., Inc.
delivered to Fund I-II, Series I, dated March
14,,1996, appears as Appendix B-1 to the
preliminary Proxy Statement filed as Exhibit
17(d) to Amendment No. 3 to the Rule 13e-3
Transaction Statement.*
17(b)(2)..................... Fairness Opinion of Oppenheimer & Co., Inc.
delivered to Fund I-II, Series II, dated March
14, 1996, appears as Appendix B-2 to the
preliminary Proxy Statement filed as Exhibit
17(d) to Amendment No. 3 to the Rule 13e-3
Transaction Statement.*
17(b)(3)..................... Fairness Opinion of the Oppenheimer & Co.,
Inc. delivered to Fund III, dated March 14,
1996, appears as Appendix B-3 to the preliminary
Proxy Statement filed as Exhibit 17(d) to
Amendment No. 3 to the Rule 13e-3 Transaction
Statement.*
17(b)(4)..................... Report of Oppenheimer & Co., Inc. in connection
with its Fairness Opinions of March 14, 1996.*
17(b)(5)..................... Fairness Opinion of Oppenheimer & Co., Inc.
delivered to Fund I-II, Series I, dated
September 20, 1996, appears as Appendix B-1 to
the definitive Proxy Statement filed as Exhibit
17(d) to Amendment No. 3 to the Rule 13e-3
Transaction Statement.*
17(b)(6)..................... Fairness Opinion of Oppenheimer & Co., Inc.
delivered to Fund I-II, Series II, dated
September 20, 1996, appears as Appendix B-2 to
the definitive Proxy Statement filed as Exhibit
17(d) to Amendment No. 3 to the Rule 13e-3
Transaction Statement.*
17(b)(7)..................... Fairness Opinion of Oppenheimer & Co., Inc.
delivered to Fund III, dated September 20, 1996,
appears as Appendix
<PAGE>
B-3 to the definitive Proxy Statement filed as
Exhibit 17(d) to Amendment No. 3 to the Rule
13e-3 Transaction Statement.*
17(b)(8)..................... Report of Oppenheimer & Co., Inc. in connection
with its Fairness Opinions of September 20,
1996.*
17(c)(1)..................... Fourth Amended and Restated Agreement and Plan
of Merger, dated as of August 21, 1996, among
Fund I-II, CRITEF Associates Limited
Partnership, Watermark and others, appears as
Appendix A-1 to the definitive Proxy Statement
filed as Exhibit 17(d) to Amendment No. 3 to the
Rule 13e-3 Transaction Statement.*
17(c)(2)..................... Fourth Amended and Restated Agreement and Plan
of Merger, dated as of August 21, 1996, among
Fund III, CRITEF III Associates Limited
Partnership and Watermark III, and others,
appears as Appendix A-2 to the definitive Proxy
Statement filed as Exhibit 17(d) to Amendment
No. 3 to the Rule 13e-3 Transaction Statement.*
17(c)(3)..................... Complaint for Breach of Fiduciary Duty in the
case styled Zakin v. Dockser, et al. (C.A. No.
14558).*
17(c)(4)..................... Complaint for Breach of Fiduciary Duty in the
case styled Wingard v. Dockser, et al. (C.A. No.
14604).*
17(c)(5)..................... Stipulation of Settlement, dated as of May 13,
1996, relating to the cases styled Zakin v.
Dockser, et al. and Wingard v. Dockser, et al.*
17(c)(6)..................... Amendment to Stipulation of Settlement, dated
August 13, 1996, relating to the cases styled
Zakin v. Dockser, et al. and Wingard v. Dockser,
et al.*
17(c)(7)..................... Final Order and Judgment of the Court of
Chancery of the State of Delaware in and for New
Castle County, dated August 14, 1996, approving
the Stipulation of Settlement as amended in the
cases styled Zakin v. Dockser, et al. and
Wingard v. Dockser, et al.*
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17(c)(8)..................... Complaint for False or Misleading Statements
in the case styled Dominium Tax Exempt Fund,
L.L.P. v. Dockser, et al.*
17(c)(9)..................... Complaint for Preliminary and Permanent
Injunction and Relief against unlawful Proxy
solicitation in the case styled Capital Realty
Investors Tax Exempt Fund Limited Partnership,
et al. v. Dominium Tax Exempt Fund L.L.P.*
17(c)(10).................... Defendants' Emergency Motion to Enforce Court's
Final Order In Re Capital Realty Investors Tax
Exempt Fund Limited Partnership's Litigation.*
17(c)(11).................... Memorandum Opinion in the case styled Capital
Realty Investors Tax Exempt Fund Limited
Partnership, et al. v. Dominium Tax Exempt Fund
L.L.P.*
17(c)(12).................... Order and Memorandum of Judge Lebedoff in the
case styled Dominium Tax Exempt Fund, L.L.P. v.
Dockser, et. al.*
17(c)(13).................... Agreement, dated November 6, 1996, between
Dominium Tax Exempt Fund L.L.P. and Capital
Apartment Properties, Inc., including the Escrow
Agreement and Mutual Releases.
17(d)(1)..................... Letters to BAC Holders, Notice of Special
Meetings, definitive Proxy Statement and forms
of Proxy.*
17(d)(2)..................... October 3, 1996 Letter to BAC Holders from the
Funds.*
17(d)(3)..................... October 4, 1996 Press Release issued by the
Funds.*
17(d)(4)..................... October 3, 1996 Press Release issued by
CAPREIT.*
17(d)(5)..................... October 11, 1996 Letter to BAC Holders from the
Funds.*
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17(d)(6)..................... October 14, 1996 Press Release issued by
CAPREIT.*
17(d)(7)..................... October 16, 1996 Press Release issued by
CAPREIT.*
17(d)(8)..................... October 18, 1996 Letter to BAC Holders from
the Funds.*
17(d)(9)..................... October 18, 1996 Press Release issued by
CAPREIT.*
17(d)(10).................... October 22, 1996 Letter to BAC Holders From
the Funds.*
17(d)(11).................... October 28, 1995 Press Release issued by the
Funds.*
17(d)(12).................... October 29, 1996 Letter to BAC Holders from
the Funds.*
17(d)(13).................... November 6, 1996 Joint Press Release issued by
the Funds, CAPREIT and Dominium Tax Exempt
Fund L.L.P.*
17(d)(14).................... Letters to BAC Holders, Amended Notice of
Special Meetings, Supplement to definitive
Proxy Statement and forms of Proxy.*
17(d)(15).................... November 14, 1996 Letter to BAC Holders from
the Funds.
- ---------------
*Previously filed.
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CAPITAL REALTY INVESTORS TAX EXEMPT FUND
LIMITED PARTNERSHIP, SERIES I
C/O C.R.I., INC.
11200 ROCKVILLE PIKE
ROCKVILLE, MARYLAND 20852
November 14, 1996
Dear BAC Holder:
As you are aware, the General Partners of the CRITEF Funds have approved a
settlement of the disputes among CAPREIT, Dominium and the Funds as a result of
which CAPREIT has agreed to increase its purchase price for the Funds by $6
million, and the General Partners and CRI have agreed to reduce the payments to
them and to CRI by $500,000. This $6.5 million will be paid in full to BAC
Holders. THE RESULT IS AN INCREASE IN THE REDEMPTION PRICE FOR YOUR BACS OF $.60
PER BAC.
The chart below sets forth the AMEX trading price for the BACs as of the
date of the announcement of the mergers, the redemption price prior to the
latest increase and the current increased price as well as the premium
percentage of the current price to the pre-announcement AMEX price.
<TABLE>
<CAPTION>
PREMIUM TO
AMEX PRICE INITIAL PRICE INCREASED PRICE AMEX PRICE
- ----------------------- ----------------------- ----------------------- -----------------------
<S> <C> <C> <C>
11.75 14.82 15.42 31%
</TABLE>
FURTHER, WE ARE PLEASED TO REPORT THAT DOMINIUM NOW ENDORSES AND APPROVES
THE PROPOSED MERGERS AS FAIR TO THE BAC HOLDERS AND WILL ITSELF CAST ITS VOTES
IN FAVOR OF THE MERGERS.
TIME IS SHORT--VOTE YOUR PROXY TODAY
In view of the increased offer the BAC Holders, the General Partners of the
CRITEF Funds repeat their recommendation and urge each of you who have not voted
in favor of the proposed mergers to do so immediately. We wish to remind you of
the following:
o DOMINIUM NOW ENDORSES THE PROPOSED MERGERS and the redemption
prices to be paid to BAC Holders.
o The MERGER PRICES EXCEED the amount that BAC holders would have
received from Dominium if it had been able to obtain financing for
the bid it made last summer.
o The increased redemption prices constitute a SUBSTANTIAL PREMIUM
over the highest trading prices of the BACs prior to the
announcement of the mergers.
REMEMBER--FAILURE TO VOTE IS A VOTE AGAINST THE INCREASED PRICE
- --------------------------------------------------------------------------------
<PAGE>
o WE BELIEVE YOU WILL BE ABLE TO REINVEST YOUR MERGER REDEMPTION
PROCEEDS IN OTHER TAX EXEMPT BOND FUNDS that currently generate a
comparable or HIGHER tax-free yield while providing you with a much
more liquid investment(1).
DON'T FORGET TERMINATING THE MERGERS WOULD, IN ALL LIKELIHOOD, DRIVE DOWN
THE TRADING PRICES OF THE BACS SIGNIFICANTLY.
Each of the above points both supports the fairness of the proposed mergers
from the standpoint of BAC Holders and argues strongly that you should take
advantage of the present opportunity to sell at this premium price.
In view of the material increase in the redemption price and the withdrawal
of Dominium's solicitation of proxies in opposition to the mergers, the CRITEF
Funds have postponed the scheduled special meetings from Friday, November 8 to
Wednesday, November 27, 1996. Your meeting will be held at the Doubletree Hotel,
1750 Rockville Pike, Rockville, Maryland 1:00 PM E.S.T.
If you have not already voted, the General Partners urge you to vote in
favor of the proposed mergers by signing and returning the enclosed gold proxy
card. To make sure your vote is received in time, we encourage you to fax your
proxy to (212) 929-0308 as well. FAILURE TO VOTE CONSTITUTES AN INVESTMENT
DECISION BY YOU TO REJECT THE SIGNIFICANTLY INCREASED CASH REDEMPTION PRICE
OFFERED.
If you have any questions, please call MacKenzie Partners, our information
and proxy agent, at 1-800-322-2885.
Very truly yours,
CRITEF ASSOCIATES LIMITED PARTNERSHIP,
General Partner
By: C.R.I., Inc., its general partner
/s/ William B. Dockser /s/ H. William Willoughby
---------------------- -------------------------
William B. Dockser and H. William Willoughby
Chairman of the Board President
- ------------------
1 The gross yields currently paid by the Funds, based on the merger prices,
range from 7.3% for Series I, 7.7% for Series II and 7.9% for CRITEF III. The
current average annual gross yield for the following two comparable funds,
based on 11/12/96 closing prices, is 7.86%: 1) America First Tax Exempt
Mortgage Fund--current yield--8%, and 2) Summit Tax Exempt Bond Fund--current
yield 7.72%. Please consult your investment advisor before making any
investment decision.
2
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CAPITAL REALTY INVESTORS TAX EXEMPT FUND
LIMITED PARTNERSHIP, SERIES II
C/O C.R.I., INC.
11200 ROCKVILLE PIKE
ROCKVILLE, MARYLAND 20852
November 14, 1996
Dear BAC Holder:
As you are aware, the General Partners of the CRITEF Funds have approved a
settlement of the disputes among CAPREIT, Dominium and the Funds as a result of
which CAPREIT has agreed to increase its purchase price for the Funds by $6
million, and the General Partners and CRI have agreed to reduce the payments to
them and to CRI by $500,000. This $6.5 million will be paid in full to BAC
Holders. THE RESULT IS AN INCREASE IN THE REDEMPTION PRICE FOR YOUR BACS OF $.61
PER BAC.
The chart below sets forth the AMEX trading price for the BACs as of the
date of the announcement of the mergers, the redemption price prior to the
latest increase and the current increased price as well as the premium
percentage of the current price to the pre-announcement AMEX price.
<TABLE>
<CAPTION>
INCREASED PREMIUM TO AMEX
AMEX PRICE INITIAL PRICE PRICE PRICE
- ---------- ------------- --------- ---------------
<S> <C> <C> <C>
10.875 14.50 15.11 39%
</TABLE>
FURTHER, WE ARE PLEASED TO REPORT THAT DOMINIUM NOW ENDORSES AND APPROVES
THE PROPOSED MERGERS AS FAIR TO THE BAC HOLDERS AND WILL ITSELF CAST ITS VOTES
IN FAVOR OF THE MERGERS.
TIME IS SHORT--VOTE YOUR PROXY TODAY
In view of the increased offer the BAC Holders, the General Partners of the
CRITEF Funds repeat their recommendation and urge each of you who have not voted
in favor of the proposed mergers to do so immediately. We wish to remind you of
the following:
o DOMINIUM NOW ENDORSES THE PROPOSED MERGERS and the redemption
prices to be paid to BAC Holders.
o THE MERGER PRICES EXCEED the amount that BAC holders would have
received from Dominium if it had been able to obtain financing for
the bid it made last summer.
o The increased redemption prices constitute a SUBSTANTIAL PREMIUM
over the highest trading prices of the BACs prior to the
announcement of the mergers.
REMEMBER--FAILURE TO VOTE IS A VOTE AGAINST THE INCREASED PRICE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
o WE BELIEVE YOU WILL BE ABLE TO REINVEST YOUR MERGER REDEMPTION
PROCEEDS IN OTHER TAX EXEMPT BOND FUNDS that currently generate a
comparable or HIGHER tax-free yield while providing you with a much
more liquid investment(1).
DON'T FORGET TERMINATING THE MERGERS WOULD, IN ALL LIKELIHOOD, DRIVE DOWN
THE TRADING PRICES OF THE BACS SIGNIFICANTLY.
Each of the above points both supports the fairness of the proposed mergers
from the standpoint of BAC Holders and argues strongly that you should take
advantage of the present opportunity to sell at this premium price.
In view of the material increase in the redemption price and the withdrawal
of Dominium's solicitation of proxies in oppostion to the mergers, the CRITEF
Funds have postponed the scheduled special meetings from Friday, November 8 to
Wednesday, November 27, 1996. Your meeting will be held at the Doubletree Hotel,
1750 Rockville Pike, Rockville, Maryland at 1:00 P.M. E.S.T.
If you have not already voted, the General Partners urge you to vote in
favor of the proposed mergers by signing and returning the enclosed gold proxy
card. To make sure your vote is received in time, we encourage you to fax your
proxy to (212) 929-0308 as well. FAILURE TO VOTE CONSTITUTES AN INVESTMENT
DECISION BY YOU TO REJECT THE SIGNIFICANTLY INCREASED CASH REDEMPTION PRICE
OFFERED.
If you have any questions, please call MacKenzie Partners, our information
and proxy agent, at 1-800-322-2885.
Very truly yours,
CRITEF ASSOCIATES LIMITED PARTNERSHIP,
General Partner
By: C.R.I., Inc., its general partner
/s/ William B. Dockser /s/ H. William Willoughby
---------------------- -------------------------
William B. Dockser and H. William Willoughby
Chairman of the Board President
- ------------------
1 The gross yields currently paid by the Funds, based on the merger prices,
range from 7.3% for Series I, 7.7% for Series II and 7.9% for CRITEF III. The
current average annual gross yield for the following two comparable funds,
based on 11/12/96 closing prices, is 7.86%; 1) America First Tax Exempt
Mortgage Fund--current yield 8%, and 2) Summit Tax Exempt Bond Fund--current
yield 7.72%. Please consult your investment advisor before making any
investment decision.
2
<PAGE>
CAPITAL REALTY INVESTORS TAX EXEMPT FUND III
LIMITED PARTNERSHIP
C/O C.R.I., INC.
11200 ROCKVILLE PIKE
ROCKVILLE, MARYLAND 20852
November 14, 1996
Dear BAC Holder:
As you are aware, the General Partners of the CRITEF Funds have approved a
settlement of the disputes among CAPREIT, Dominium and the Funds as a result of
which CAPREIT has agreed to increase its purchase price for the Funds by $6
million, and the General Partners and CRI have agreed to reduce the payments to
them and to CRI by $500,000. This $6.5 million will be paid in full to BAC
Holders. THE RESULT IS AN INCREASE IN THE REDEMPTION PRICE FOR YOUR BACS OF $.60
PER BAC.
The chart below sets forth the AMEX trading price for the BACs as of the
date of the announcement of the mergers, the redemption price prior to the
latest increase and the current increased price as well as the premium
percentage of the current price to the pre-announcement AMEX price.
<TABLE>
<CAPTION>
INCREASED PREMIUM TO AMEX
AMEX PRICE INITIAL PRICE PRICE PRICE
- ---------- ------------- --------- ---------------
<S> <C> <C> <C>
12.00 15.13 15.73 31%
</TABLE>
FURTHER, WE ARE PLEASED TO REPORT THAT DOMINIUM NOW ENDORSES AND APPROVES
THE PROPOSED MERGERS AS FAIR TO THE BAC HOLDERS AND WILL ITSELF CAST ITS VOTES
IN FAVOR OF THE MERGERS.
TIME IS SHORT--VOTE YOUR PROXY TODAY
In view of the increased offer the BAC Holders, the General Partners of the
CRITEF Funds repeat their recommendation and urge each of you who have not voted
in favor of the proposed mergers to do so immediately. We wish to remind you of
the following:
o DOMINIUM NOW ENDORSES THE PROPOSED MERGERS and the redemption
prices to be paid to BAC Holders.
o The MERGER PRICES EXCEED the amount that BAC holders would have
received from Dominium if it had been able to obtain financing for
the bid it made last summer.
o The increased redemption prices constitute a SUBSTANTIAL PREMIUM
over the highest trading prices of the BACs prior to the
announcement of the mergers.
REMEMBER--FAILURE TO VOTE IS A VOTE AGAINST THE INCREASED PRICE
<PAGE>
o WE BELIEVE YOU WILL BE ABLE TO REINVEST YOUR MERGER REDEMPTION
PROCEEDS IN OTHER TAX EXEMPT BOND FUNDS that currently generate a
comparable or HIGHER tax-free yield while providing you with a much
more liquid investment(1).
DON'T FORGET TERMINATING THE MERGERS WOULD, IN ALL LIKELIHOOD, DRIVE DOWN
THE TRADING PRICES OF THE BACS SIGNIFICANTLY.
Each of the above points both supports the fairness of the proposed mergers
from the standpoint of BAC Holders and argues strongly that you should take
advantage of the present opportunity to sell at this premium price.
In view of the material increase in the redemption price and the withdrawal
of Dominium's solicitation of proxies in opposition to the mergers, the CRITEF
Funds have postponed the scheduled special meetings from Friday, November 8 to
Wednesday, November 27, 1996. Your meeting will be held at the Doubletree Hotel,
1750 Rockville Pike, Rockville, Maryland at 2:00 PM E.S.T.
If you have not already voted, the General Partners urge you to vote in
favor of the proposed mergers by signing and returning the enclosed gold proxy
card. To make sure your vote is received in time, we encourage you to fax your
proxy to (212) 929-0308 as well. FAILURE TO VOTE CONSTITUTES AN INVESTMENT
DECISION BY YOU TO REJECT THE SIGNIFICANTLY INCREASED CASH REDEMPTION PRICE
OFFERED.
If you have any questions, please call MacKenzie Partners, our information
and proxy agent, at 1-800-322-2885.
Very truly yours,
CRITEF III ASSOCIATES LIMITED PARTNERSHIP,
General Partner
By: C.R.I., Inc., its general partner
/s/ William B. Dockser /s/ H. William Willoughby
---------------------- -------------------------
William B. Dockser and H. William Willoughby
Chairman of the Board President
- ------------------
1 The gross yields currently paid by the Funds, based on the merger prices,
range from 7.3% for Series I, 7.7% for Series II and 7.9% for CRITEF III. The
current average annual gross yield for the following two comparable funds,
based on 11/12/96 closing prices, is 7.86%: 1) America First Tax Exempt
Mortgage Fund--current yield 8%, and 2) Summit Tax Exempt Bond Fund--current
yield 7.72%. Please consult your investment adivsor before making any
investment decision.
2
