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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ___)
De Anza Properties - X
(Name of Subject Company)
De Anza Properties - X
De Anza Corporation
(Name of Persons Filing Statement)
Units of Limited Partnership Interest
(Title of Class of Securities)
NONE
((CUSIP) Number of Class of Securities)
Herbert M. Gelfand
De Anza Corporation
9171 Wilshire Blvd.
Suite 627
Beverly Hills, California 90210
(310) 550-1111
(Name, address, and telephone number of person
authorized to receive notice and communications
on behalf of the person(s) filing statement)
with copies to:
Michael J. Connell
Rena L. O'Malley
Morrison & Foerster
555 West Fifth Street
Los Angeles, CA 90013-1024
(213) 892-5200
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The subject company is De Anza Properties-X, a California
limited partnership (the "Partnership"). The title of the class of equity
securities to which this Statement relates is units of limited partnership
interest ("Units") of the Partnership. The address of the principal executive
offices of the Partnership is 9171 Wilshire Boulevard, Suite 627, Beverly
Hills, California 90210.
ITEM 2. TENDER OFFER OF THE BIDDER.
This Statement relates to the offer (the "Offer") by Moraga
Capital, LLC, a newly-formed Delaware limited liability company (the "Bidder"),
to purchase for cash up to 5,665 Units at $450 per Unit as disclosed in the
Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") dated November
29, 1995 filed by the Bidder with the Securities and Exchange Commission.
According to the Schedule 14D-1, the principal place of business of the Bidder
is located at 1640 School Street, Suite 100, Moraga, California 94556.
ITEM 3. IDENTITY AND BACKGROUND.
(a) This Statement is being filed by the Partnership and
De Anza Corporation, a California corporation (the "Operating General
Partner"). The address of the principal executive offices of the Operating
General Partner is 9171 Wilshire Boulevard, Suite 627, Beverly Hills,
California 90210. The name and business address of the Partnership are set
forth in Item 1 above.
(b)(1) The Partnership is a limited partnership and has no
executive officers or directors. Except as described below, to the best
knowledge of the Partnership, there are no material contracts, agreements,
arrangements or understandings or any actual or potential conflicts of interest
between the Partnership on the one hand and its general partners including the
Operating General Partner or the directors and executive officers of the
Operating General Partner or affiliates thereof on the other hand, with respect
to the Offer.
Terra Vista Management, Inc., a California corporation (the
"Manager"), manages and operates Woodridge Meadows Apartments, the
Partnership's sole remaining property (the "Property"), pursuant to a
Management Agreement dated August 18, 1994 entered into by the Partnership with
the Manager (the "Management Agreement"). The President and sole stockholder
of the Manager is Michael D. Gelfand, who is also President and a member of the
Board of Directors of the Operating General Partner, and the son of Herbert M.
Gelfand (who is Chairman of the Board and sole shareholder, through his family
trust, of the Operating General Partner and a general partner of the
Partnership). The Management Agreement continues from year-to-year. However,
either party may, without penalty or obligation to the other party, by
providing sixty (60) days' written notice to the other, terminate the
Management Agreement with or without cause at any time. The Management
Agreement may be immediately cancelled in the event of violation of any of
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the provisions of the Management Agreement, or by the Partnership in the
event a petition in bankruptcy is filed by or against the Manager which
is not dismissed within ninety (90) days following the date of such filing.
The Manager is entitled to receive compensation for its services of a sum
equivalent to five percent (5%) of the aggregate gross receipts from the
operation of the Property (excluding all receipts from utilities or from
taxes of any kind or type). However, the Manager's compensation is
subordinated to the receipt (on a noncumulative basis) by the limited partners
of the Partnership of an annual cash distribution equal to six percent (6%) of
the adjusted aggregate capital contributions of the limited partners. Total
compensation paid to the Manager by the Partnership in 1994 since the Manager's
appointment pursuant to the Management Agreement was $74,818, and from
January 1, 1995 to September 30, 1995 was $140,127. The Management Agreement
is filed herewith as an exhibit and is incorporated herein by reference.
The Partnership has retained the Manager and an affiliate of
the Operating General Partner to provide accounting, data processing and
investor and other services to the Partnership. The Manager and the Operating
General Partner's affiliate are reimbursed on an allocated basis for their
costs and expenses for providing these services to the Partnership. The total
of such reimbursements paid by the Partnership in 1994 since the Manager's
appointment was $84,815, and from January 1, 1995 to September 30, 1995
was $115,318.
(b)(2) To the best knowledge of the Partnership, there are no
material contracts, agreements, arrangements or understandings or any actual or
potential conflicts of interest between the Partnership or its general partners
or executive officers or directors of the Operating General Partner or
affiliates thereof, on the one hand, and the Bidder or its executive officers,
directors or affiliates, on the other hand.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) The Operating General Partner has determined that the
Offer is inadequate and not in the best interest of the limited partners and
recommends that limited partners of the Partnership reject the Offer and not
tender their Units pursuant to the Offer.
(b) The reasons for the position taken by the Operating
General Partner are as follows:
1. The Offer price is too low to be fair to limited
partners. As reported to limited partners on October 3, 1995, in the Operating
General Partner's view, the Property of the Partnership is a valuable asset
despite the decline in California real estate generally. The Operating General
Partner believes that if the Property were sold today (but not in a forced
sale) each Unit would be worth about $762. The Operating General Partner
believes an offer significantly below the $762 estimate is too low to be
recommended by the Operating General Partner. In reaching this conclusion, the
Operating General Partner did not take into account individual tax
consequences, which may vary significantly among limited partners.
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In addition, the Offer is also lower than the liquidation
value of the underlying assets of the Partnership as of June 30, 1995 as
estimated by the Bidder to be $628 per Unit. As set forth in the Bidder's
materials mailed to each of the limited partners, the Bidder established the
purchase price of $450 per Unit by seeking the lowest price which might be
acceptable to limited partners consistent with the Bidder's objective to
maximize its own profit from an additional investment in the Units. Under the
terms of the Offer, the Bidder will receive any distribution made as of
December 31, 1995 with respect to any Unit tendered to the Bidder. The
Operating General Partner presently expects that a distribution with respect to
all Units will be made by the Partnership as of December 31, 1995.
The Partnership's Property was last valued by an appraiser in
December 1990 at $31,000,000. However, the real estate market has declined in
Southern California due to the recession. In view of the length of time that
has elapsed since the last appraisal, the Partnership engaged in November, 1995
an independent third party valuation expert to assist the Operating General
Partner in valuing the Property for Partnership internal purposes. The
valuation expert was not engaged to provide a valuation of or in connection
with the Offer, and the valuation is not expected to be completed prior to
December 31, 1995.
In determining the estimated liquidation value of $762 per
Unit the Operating General Partner first calculated the estimated current net
sales value of the Partnership's Property. The estimated net sales value has
been determined by dividing the Property's estimated net operating income
("NOI") of $2,131,500 for the twelve month period commencing on January 1, 1995
and ending December 31, 1995 (which amount was estimated by the Operating
General Partner by annualizing the Partnership's actual results of operations
for the nine months ended September 30, 1995, adjusted to take account of (i)
the portion of the NOI for such period estimated by the Operating General
Partner to be attributable to the operation of a property (Aptos Pines) which
was sold by the Partnership in July 1995, (ii) certain Partnership expenses
which a buyer of the Property would not take into account, and (iii) certain
year-end items). To determine the estimated net sales value of the Property,
the Operating General Partner then divided the estimated NOI by an 8%
capitalization rate (the "Cap Rate") and reduced such result by (i) $100,000
to take into account the estimated closing costs which would be incurred upon
the sale by the Partnership of the Property, including title costs, surveys,
legal fees and transfer taxes, (ii) a penalty for prepayment of the mortgage
debt encumbering the Property of approximately $167,109, and (iii) the
$4,774,530 of mortgage debt encumbering the Property as of September 30, 1995.
The resulting estimated net sales value of the Property is approximately
$21,608,361.
The Operating General Partner believes that the Cap Rate
utilized by it is within the range of capitalization rates currently employed
in the marketplace and is the Cap Rate at which the Property would most likely
sell today. The independent third party valuation expert retained by the
Partnership to assist the Operating General Partner in valuing the Property
for Partnership internal purposes has indicated it currently intends to use a
9% Cap Rate in preparing its valuation estimate. Nevertheless, the Operating
General Partner believes that the 9% Cap Rate utilized by the Bidder is higher
than would be used by a buyer for the Property and results in a lower
estimated value for the Partnership's Property by the Bidder.
To determine the estimated liquidation value of the
Partnership's assets, the Operating General Partner added to the estimated net
sales value of the Partnership's Property the Partnership's $1,236,731 of net
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current assets as of September 30, 1995. The resulting estimated
liquidation value of the Partnership's assets as of September 30, 1995 is
approximately $22,845,092 or $762 per Unit (based upon the percentage of net
sales proceeds the limited partners are entitled to receive under the
Partnership's partnership agreement (the "Partnership Agreement")).
2. The Operating General Partner believes the Bidder
intends to influence a sale of the Partnership's Property. If as a result of
consummation of the Offer, the Bidder is in a position to significantly
influence all Partnership decisions, the Bidder intends to vote the Units
acquired in the Offer in accordance its own investment objectives. That vote
may be different from or in conflict with the interests of other limited
partners who do not tender their Units. In particular, the Operating General
Partner believes that the Bidder favors a sale of the Partnership's Property
within the next year or so.
The Operating General Partner urges all limited partners to
carefully consider all the information contained herein and consult with their
own advisors, tax, financial or otherwise, in evaluating the terms of the Offer
before deciding whether to tender Units. In particular, the Operating General
Partner has not taken into account the tax consequences to individual limited
partners as a result of accepting or rejecting the Offer and those tax
consequences could vary significantly for each limited partner based on such
limited partner's unique tax situation or other circumstances. No independent
person has been retained to evaluate or render any opinion with respect to the
fairness of the Offer price.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Neither the Partnership nor any person acting on its behalf
intends to employ, retain or compensate any other person to make solicitations
or recommendations to the limited partners of the Partnership in connection
with the Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) To the best knowledge of the Partnership, no
transactions in the Units have been effected during the past 60 days by the
Partnership, by general partners of the Partnership, including by the Operating
General Partner or any executive officer or director of the Operating General
Partner, or any affiliates or subsidiaries of such persons.
(b) To the best knowledge of the Partnership, the
Operating General Partner, the officers and directors of the Operating General
Partner and any other affiliate of the Operating General Partner do not
presently intend to tender to the Bidder any Units currently held of record or
beneficially owned by such persons.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as described below, the Partnership is not
engaged in any negotiation in response to the Offer which relates to or would
result in: (1) An extraordinary transaction such as a merger or reorganization,
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involving the Partnership or any subsidiary of the Partnership; (2) A
purchase, sale or transfer of a material amount of assets by the Partnership
or any subsidiary of the Partnership; (3) A tender offer for or other
acquisition of securities by or of the Partnership; or (4) Any material change
in the present capitalization or dividend policy of the Partnership.
(b) Except as described below, there are no transactions,
board or partnership resolutions, agreements in principle, or signed contracts
in response to the Offer, which relate to or would result in one or more of the
matters referred to in this Item 7.
The Operating General Partner has considered and reviewed on a
preliminary basis the feasibility and desirability of exploring and
investigating a variety of possible alternative transactions to the Offer that
might provide a greater return to limited partners, including without
limitation the sale of the Partnership's Property to a third party or a tender
by the Partnership to redeem Units at a price higher than that offered by the
Bidder. After considerable evaluation, the Operating General Partner has
determined that pursuing any such alternative transaction is not presently in
the best interest of the Partnership. Because the Operating General Partner
believes that the Offer is inadequate and not in the best interest of limited
partners, the Operating General Partner recommends that limited partners
reject the Offer. The Operating General Partner may resume consideration of
alternative transactions depending upon the future actions of the Bidder.
On December 4, 1995, Herbert M. Gelfand, the Chairman of the
Board of the Operating General Partner, spoke with Messrs. Pat Patterson and
Michael L. Ashner, representatives of the Bidder, to discuss the terms of the
Offer and the intent of the Bidder in the event some limited partners choose to
tender their Units in accordance with the terms of the Offer. In that
conversation, the Bidder confirmed that its purpose for conducting the Offer
was for investment purposes and with the intention of making a profit for
itself from an investment in the additional Units. The Bidder stated to Mr.
Gelfand that it favors a sale of the Property within the next year or so and
that if as a result of consummation of the Offer the Bidder is in a position to
significantly influence all Partnership decisions it intends to do so in
accordance with its own investment objectives.
The Operating General Partner and the Partnership has made no
representation to or agreement with the Bidder with respect to the sale of the
Property, or any other transaction, other than the views expressed by the
Operating General Partner in communications to all limited partners.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
The general partners of the Partnership, including the
Operating General Partner and certain officers and directors of the Operating
General Partner and other affiliates of the Operating General Partner,
beneficially own limited partnership Units and general partner interests in
the Partnership. The total amount of Units owned by all general partners and
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the directors and key executive officers of the Operating General Partner is
1% of the outstanding Units.
Pursuant to the terms of the Partnership's Partnership
Agreement, in the event a general partner (including the Operating General
Partner) is removed as a general partner by vote of a majority in interest of
the limited partners, such general partner shall automatically become a limited
partner and if the vote of a majority in interest of the limited partners so
requires, sell his interest to the limited partners who shall purchase such
interest on behalf of the Partnership. If a removed general partner is
required by the limited partners to sell his interest in the Partnership, the
amount to be paid for such interest shall be computed as of the date of the
consummation of the purchase and in accordance with Section 15 of the
Partnership's Partnership Agreement.
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ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a) Letter to Limited Partners dated December 12, 1995.
(b) None.
(c) Management Agreement dated as of August 18, 1994 by
and between Terra Vista Management, Inc., a California corporation, and De Anza
Properties-X, a California limited partnership.*
_________________
* Not included in copies mailed to limited partners.
SIGNATURE
After reasonable 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.
December 12, 1995
-----------------
(Date)
DE ANZA PROPERTIES-X
By: DE ANZA CORPORATION
its general partner
By: /s/Herbert M. Gelfand
----------------------
Herbert M. Gelfand
Chairman of the Board
DE ANZA CORPORATION
By: /s/Herbert M. Gelfand
--------------------------
Herbert M. Gelfand
Chairman of the Board
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EXHIBIT INDEX
99.(1) Letter to Limited Partners dated December 12, 1995.
99.(2) Management Agreement dated as of August 18, 1994 by and
between Terra Vista Management, Inc., a California corporation, and De Anza
Properties-X, a California limited partnership.
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EXHIBIT 99.(1)
[DE ANZA PROPERTIES-X LETTERHEAD]
December 12, 1995
Dear Limited Partner:
We recently advised you that De Anza Properties-X (the "Partnership")
was studying the unsolicited tender offer made by Moraga Capital, LLC (the
"Bidder") to purchase units of limited partnership interest of the Partnership
("Units") for $450 per Unit. The Operating General Partner has completed its
evaluation and has determined that the offer is inadequate, and not in the best
interests of the Partnership or its limited partners. Accordingly, the
Operating General Partner recommends that the limited partners reject the offer
and urges you not to tender any of your limited partnership Units. None of the
Operating General Partner or any of its officers, directors or affiliates
intend to tender any Units.
In arriving at its determination, the Operating General Partner
carefully reviewed the offer with its advisors and management, and considered
many factors including the business, financial condition and prospects of the
Partnership.
The Operating General Partner's conclusions and recommendations
concerning the offer are based, in part, on the following:
1.The Operating General Partner's opinion that the amount being
offered by the Bidder is inadequate and not fair to the limited partners. The
Operating General Partner believes that the price does not fairly reflect the
value of the Partnership's underlying assets but instead is the lowest price
which the Bidder believes any limited partner would be willing to accept in
exchange for a Unit. According to the Bidder's own materials the Bidder
believes a Unit has a liquidating value of $628. Our estimate is $762. In
addition, limited partners who tender any Unit to the Bidder will not receive
any distribution to be made by the Partnership with respect to that Unit as of
December 31, 1995.
2.If Units are tendered to the Bidder, the Bidder intends to vote
those Units in accordance with its own investment objectives. That vote may be
different from or in conflict with the interests of other limited partners who
do not tender their Units. In particular, the Operating General Partner
believes that the Bidder favors a sale of the Partnership's property within the
next year or so.
The attached Schedule 14D-9, which has been filed with the Securities
and Exchange Commission, describes in more detail the reasons for the Operating
General Partner's determination concerning the Bidder's offer, and contains
additional information relating to the Operating General Partner's
recommendation and certain other actions taken by the Operating General Partner
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on behalf of the Partnership. We urge you to read the Schedule 14D-9
carefully. It will help you to understand why the Operating General Partner
decided to recommend against the offer on behalf of the Partnership and
recommend that you not tender any of your Units to the Bidder under the terms
of the offer.
If you have any questions concerning these matters please call
Investor Relations at (310) 777-2153.
You can be assured that the Operating General Partner will continue to act in
the manner in which the Operating General Partner believes to be in the best
interest of the Partnership and its limited partners. Again, the Operating
General Partner recommends that you reject the Bidder's inadequate offer and
not tender your Units to it.
Very truly yours,
DE ANZA PROPERTIES-X
By: DE ANZA CORPORATION,
Operating General Partner
By: /s/Herbert M. Gelfand
--------------------------
Herbert M. Gelfand
Chairman of the Board
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EXHIBIT 99.(2)
WOODBRIDGE/TERRA VISTA
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (the "Agreement") is made as of the 18th day
of August, 1994, by and between Terra Vista Management, Inc., a California
corporation, (the "Manager"), and De Anza Properties - X, a California limited
partnership, (the "Owner"), in Los Angeles, California, with reference to the
following facts:
A. Owner owns certain property located in the City of Irvine,
California, known as Woodbridge Meadows Apartments (hereinafter referred to as
the "Property").
B. De Anza Assets, Inc., a California corporation, is the
existing manager of the Property pursuant to a Management Agreement dated
October 1, 1985. De Anza Assets, Inc. is wholly owned by De Anza Group, Inc.,
which is being sold. Accordingly, De Anza Assets has withdrawn as manager,
which withdrawal has been accepted by Owner, and De Anza Assets has been
replaced by Terra Vista Management, Inc. The parties desire to enter into this
Management Agreement to reflect their obligations with respect to the ownership
and operation of the Property.
C. Owner desires that Manager maintain and operate the Property
on its behalf, and Manager desires to undertake said functions.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and agreements set forth herein, the parties agree as follows:
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1. Engagement. Owner hereby engages Manager as general manager
of the Property to the extent and subject to the conditions set forth herein,
and Manager hereby accepts such engagement.
2. Term and Termination. This Agreement shall continue from year
to year; provided, however, that Owner or Manager may, without penalty or
obligation to the other party to this Agreement, by providing sixty (60) days'
written notice to the other, terminate this Agreement with or without cause at
any time. This Agreement may be immediately canceled in the event of the
violation of any of the provisions hereof, or by Owner in the event a petition
in bankruptcy is filed by or against Manager which is not dismissed within
ninety (90) days following the date of such filing.
3. General Duties of Manager. Manager shall be directly
responsible for the day-to-day management of the Property, subject to such
general guidelines and instructions as the Owner may issue from time to time.
Notwithstanding anything to the contrary contained herein, all final decisions
respecting the management of the Property shall be made by Owner.
Manager shall at all times do and perform all things reasonably
necessary to effectuate the purposes and intentions embodied in this Agreement
so that the Property is operated at all times in a manner consistent with
prudent business practice and in accordance with any and all leases, subleases
and contracts to which the Property is subject, and any and all other laws,
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statutes, ordinances and regulations of any governmental authority having
jurisdiction over Owner, the Property or Manager.
4. Collection of Rent and Payment of Expenses. Manager shall
collect on behalf of Owner all rents and all other charges of every kind or
type whatsoever from all tenants or other occupants of the Property for
services provided in connection with, or for the use of, the Property or any
portion thereof, and shall deposit the same in depositories specifically
approved by Owner. Out of the foregoing rents and other charges collected on
behalf of Owner, Manager shall pay all expenses related to the operation and
maintenance of the Property and each of its facilities as and when the same
become due, all in accordance with specific instructions provided by Owner.
Manager may, with Owner's prior approval, and, when so requested by
Owner, shall, at Owner's expense, institute legal actions or proceedings to
collect charges, rent or other income or compensation due to Owner with respect
to the Property, or to oust persons unlawfully in possession of any portion of
the same. All such actions or proceedings and any related counterclaim,
crossclaims or other proceedings shall be at Owner's expense and may be brought
in the name of Owner or Manager.
5. Employees. Manager shall have the exclusive right to
discharge, supervise and fix the pay of such personnel as are necessary for the
efficient maintenance and operation of the Property. However, such personnel
shall be employed and paid by and shall be bonded to the satisfaction of Owner.
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6. Repair and Maintenance of Property. Manager, at Owner's
expense, shall make or attend to the making of ordinary and emergency repairs,
maintenance, decorations and alterations at the Property.
7. Taxes and Insurance. Owner shall pay all taxes, personal and
real, and assessments that are attributable to the Property. Manager shall
obtain and keep in force, at Owner's expense, such fire, comprehensive,
liability and other insurance policies as are generally carried with respect to
similar facilities in amounts sufficient to protect and maintain the Property
and Owner's interest therein in a form, manner and amount, and with companies
satisfactory to Owner. Owner and Manager shall be named as insured parties in
all liability insurance policies relating to the Property.
8. Accounting. Manager shall keep a detailed and complete set of
books and records of all the income and disbursements of the Property in
accordance with good accounting practices and Manager shall, on a monthly
basis, render to Owner each of the following:
(a) A report on all vacancies;
(b) A schedule showing all income received and
disbursements made during the preceding month, together with the balance on
hand, if any, at the end of said month; and
(c) A schedule describing the monthly and annual budget
for the Property, together with the amount expended in each category in the
preceding month and for the year to date.
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9. Books and Records. Manager shall keep adequate books and
records in connection with all matters arising under the terms of this
Agreement. During regular business hours, Manager shall allow Owner or any of
its duly authorized representatives access to Manager's records and
correspondence pertaining to any transaction arising out of this Agreement. At
the close of each fiscal year of Owner, Manager shall allow the books and
records which are the subject of this paragraph to be examined and audited by a
certified public accountant selected by Owner. In the event of the termination
of this Agreement, Manager shall turn over to Owner all records and
correspondence as may be reasonably necessary to assist Owner to carry to
completion any lease or other transaction and all contracts, records and
documents directly pertaining to the Property.
10. Compensation. Owner shall pay to Manager as compensation for
its services under this Agreement a sum equivalent to 5% of the aggregate gross
receipts from the operation of the Property (excluding all receipts from
utilities or from taxes of any kind or type). The foregoing compensation shall
be payable at the beginning of each monthly accounting period and shall be
calculated on the basis of the budgeted gross receipts (as determined by Owner)
from the operation of the Property during that period. The total amount of
compensation earned by Manager hereunder shall, as soon as possible after the
end of each calendar year during the term of this Agreement, be calculated on
the basis of the actual gross receipts from the operation of the Property
during that year, and any additional compensation that is
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due to Manager (because the actual gross receipts exceeded the budgeted gross
receipts) shall be paid to it by Owner at that time. Conversely, if Manager
collected more compensation than it was entitled to receive during any such
year (because the actual gross receipts were less than the budgeted gross
receipts), Manager shall return the excess compensation to Owner (without
interest thereon); provided, however, that such compensation shall be
subordinated to the receipt (on a noncumulative basis) by the limited partners
of Owner of an annual cash distribution equal to 6% of the aggregate capital
contributions of such limited partners.
The foregoing compensation shall be payment for Manager's conduct and
supervision of the ordinary and routine operation of the Property and is not
intended to compensate Manager for any other activities it may undertake with
respect to any operation of the Property which would not be considered ordinary
and routine when compared to the services provided by professional real
property management companies for other real properties that are comparable in
size, location and nature to the Property. In the event the nature of the
Property or the business conducted thereon changes, the compensation to be paid
to Manager hereunder will be altered in a manner which is mutually agreeable to
it and Owner, but in no event shall the amount of such compensation exceed the
amount that would be charged by nonaffiliated entities rendering comparable
services which could reasonably be made available to Owner.
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11. Indemnification. Owner shall indemnify, defend and hold
Manager harmless from any damages, costs, expenses or obligations incurred by
Manager as a result of any actions or omissions of Manager within the scope of
its authority as provided in this Agreement, or as a result of any other
actions or obligations as Owner may specifically authorize Manager to perform,
provided performance of such acts by Manager does not constitute fraud, bad
faith or willful misconduct.
12. Miscellaneous. To the extent possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law. However, if any provision hereof shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, and shall in
no way affect the validity of the remainder of such provision, or of any of the
remaining provisions of this Agreement.
This Agreement shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of California.
This Agreement and the rights of Owner and Manager hereunder shall not
be assignable by either of them. Manager may, however, subcontract the
performance of all or part of its duties under this Agreement to one or more
subsidiaries or affiliates of Manager or to one or more affiliated companies or
unaffiliated companies suitable to owner, but it shall remain responsible for
such performance. The right of Manager to receive compensation
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may be assigned, pledged or hypothecated at anytime without Owner's consent.
This Agreement contains the entire agreement of Owner and Manager with
respect to the subject matter hereof and may not be changed except by an
instrument executed by both of them.
IN WITNESS WHEREOF, the parties hereto have executed this Management
Agreement as of the date first above written.
OWNER: DE ANZA PROPERTIES - X
a California limited partnership
By De Anza Corporation,
Partner
By: Herbert M. Gelfand
---------------------------
Herbert M. Gelfand
Chairman of the Board
MANAGER: TERRA VISTA MANAGEMENT, INC.
a California corporation
By: Michael D. Gelfand
---------------------------
Michael D. Gelfand
President
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CONSENT
De Anza Assets, Inc., a California corporation, ("Assets") is the
Manager of Woodbridge Meadows Apartments pursuant to that certain Management
Agreement, dated as of October 1, 1985, by and between De Anza Properties - X,
a California limited partnership, as owner, (the "Partnership") and Assets.
Assets desires to withdraw as Manager and the Partnership desires to accept
such withdrawal and to replace Assets with Terra Vista Management, Inc.
The Partnership and Assets hereby consent to the withdrawal of Assets from the
Management Agreement and the replacement of Assets with Terra Vista Management,
Inc.
Dated: August 18,1994
De Anza Properties-X, De Anza Assets, Inc.,
a California limited partnership a California corporation
By: De Anza Corporation,
a California corporation By: Barry McCabe
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Its:
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By: Michael D. Gelfand
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Its: President
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