<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
APRIL 24, 1996
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DATE OF REPORT
(DATE OF EARLIEST EVENT REPORTED)
DE ANZA PROPERTIES-X
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 0-8942 95-3005938
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(STATE OR OTHER JURISDICTION (COMMISSION FILE NO.) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
9171 WILSHIRE BOULEVARD, SUITE 627
BEVERLY HILLS, CALIFORNIA 90210
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(310) 550-1111
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 5. OTHER EVENTS.
De Anza Properties - X (the "Registrant") received a letter dated
April 3, 1996 (the "April 3 Letter") from Moraga Capital, LLC ("Moraga") ,
certain members and certain affiliated holders (collectively the "Affiliated
Limited Partners"). The letter requested the Operating General Partner to
schedule a special meeting of limited partners. A copy of the April 3 Letter
is attached as Exhibit 1. The April 3 letter was transmitted to the Registrant
under cover of a letter dated April 3, 1996 (the "Cover Letter") from Moraga to
Herbert M. Gelfand, Chairman of the Board of De Anza Corporation, the Operating
General Partner of the Registrant. A copy of the Cover Letter is attached as
Exhibit 2.
The Cover Letter suggested that representatives of the parties should
meet. Accordingly, shortly after receipt of the letter, representatives of the
Registrant contacted representatives of the Affiliated Limited Partners and
Moraga to schedule a meeting to seek clarification of the purpose of the April
3 Letter and to determine if it would be necessary to hold a limited partner
meeting or whether there would be another way to address the concerns of the
signatories to the April 3 Letter consistent with the goals of the Registrant.
By letter dated April 10, 1996 (the "April 10 Letter") a
representative of Moraga withdrew the April 3 Letter, without prejudice to
reinstate the April 3 Letter in the future. A copy of the April 10 Letter is
attached as Exhibit 3.
On April 15, 1996 representatives of the Registrant and of Moraga and
their respective counsel met. No agreements were reached at this meeting, but
discussions are continuing.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit Number Description
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<S> <C>
99.1 Letter dated April 3, 1996 to De Anza Properties - X from Moraga
Capital, LLC, Real Estate Securities Fund 1983, MacKenzie Fund
III, Mackenzie Fund V, Mackenzie Fund VI, MacKenzie Specified
Income Fund, MacKenzie Patterson Special Fund, Previously Owned
Partnerships Income Fund 2, Previously Owned Mortgage
Partnerships Income Fund 3, L.P. and Vanderbilt Income and Growth
Associates, L.L.C.
99.2 Letter dated April 3, 1996 to Mr. Herbert M. Gelfand, Chairman of
the Board of De Anza Corporation, the Operating General Partner
of De Anza Properties - X, from Moraga Capital, LLC
99.3 Letter dated April 10, 1996 to De Anza Properties - X from
Skadden, Arps, Slate, Meagher & Flom
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 24, 1996 DE ANZA PROPERTIES - X
By: DE ANZA CORPORATION
its Operating General Partner
By: /s/ Herbert M. Gelfand
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Herbert M. Gelfand
Chairman of the Board
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
99.1 Letter dated April 3, 1996 to De Anza Properties - X from Moraga
Capital, LLC, Real Estate Securities Fund 1983, MacKenzie Fund
III, Mackenzie Fund V, Mackenzie Fund VI, MacKenzie Specified
Income Fund, MacKenzie Patterson Special Fund, Previously Owned
Partnerships Income Fund 2, Previously Owned Mortgage
Partnerships Income Fund 3, L.P. and Vanderbilt Income and Growth
Associates, L.L.C.
99.2 Letter dated April 3, 1996 to Mr. Herbert M. Gelfand, Chairman of
the Board of De Anza Corporation, the Operating General Partner
of De Anza Properties - X, from Moraga Capital, LLC
99.3 Letter dated April 10, 1996 to De Anza Properties - X from
Skadden, Arps, Slate, Meagher & Flom
</TABLE>
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Exhibit 99.1
April 3, 1996
De Anza Properties - X
c/o De Anza Corporation
Operating General Partner
9171 Wilshire Boulevard, Suite 627
Beverly Hills, California 90210
Re: Meeting of the Limited Partners
of De Anza Properties - X
Ladies and Gentlemen:
All capitalized terms used but not defined herein shall have the
meanings set forth in the Third Amended and Restated Agreement of Limited
Partnership of De Anza Properties - X, as amended (the "Partnership Agreement").
As you are aware, Moraga Capital, LLC ("Moraga Capital") is the
beneficial owner of 1,652 Units of De Anza Properties - X, constituting
approximately 7.3% of the outstanding Interests. In addition, each of the
following entities (together with Moraga Capital, the "Affiliated Limited
Partners") is the beneficial owner of the number of Units set forth opposite
its name, constituting, in the aggregate, approximately 7.19% of the
outstanding Interests:
<TABLE>
<CAPTION>
Entity Number of Units
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<S> <C>
Real Estate Securities Fund 1983 10
MacKenzie Fund III 81
MacKenzie Fund V 281
MacKenzie Fund VI 402
MacKenzie Specified Income Fund 279
MacKenzie Patterson Special Fund 270
Previously Owned Partnerships Income Fund 2 231
Previously Owned Mortgage Partnerships
Income Fund 3, L.P. 5
Vanderbilt Income and Growth Associates, L.L.C. 5
</TABLE>
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De Anza Properties - X
April 3, 1996
Page 2
Pursuant to Section 25.1 of the Partnership Agreement, the Affiliated Limited
Partners hereby request that a meeting of the Limited Partners (the "Special
Meeting") be called for the following purposes:
1. To consider and vote upon an amendment to the Partnership
Agreement that would (a) delete Section 12.3.1 thereof and (b) provide that
(i) any written property management agreement to be entered into by the
Partnership with respect to any Property must be the subject of a
competitive bidding process in which bids are solicited from not less than
three nationally or regionally recognized apartment property management
firms and (ii) any existing management agreement with respect to any
Property that was not the subject of such a competitive bidding process be
terminated as soon as practicable (but, in any event, no later than 60 days
following the adoption of such amendment by the Limited Partners) and that
the management of such Property following such termination be determined as
specified in clause (i);
2. To consider and vote upon an amendment to the Partnership
Agreement that would require that (a) the Partnership retain a qualified
and experienced firm to provide administrative services to the Partnership
that are necessary for the operation of the Partnership and its Properties,
including, without limitation, bookkeeping, computer services and transfer
services, such retention to be based upon a competitive bidding process in
which bids are solicited from not less than three such firms and (b) any
existing agreement, arrangement or understanding with respect to the
provision of such services that constitutes an Interested Partner
Transaction (without giving effect to the provisos contained in
<PAGE> 3
De Anza Properties - X
April 3, 1996
Page 3
the definition of "Interested Partner Transaction") be terminated as soon as
practicable (but, in any event, no later than 60 days following the adoption of
such amendment by the Limited Partners) and that such services thereafter be
provided in the manner specified in clause (a);
3. To consider and vote upon an amendment to the Partnership Agreement
that would (a) insert the word "Limited" in two instances: (i) prior to the
word "Partners" in the fifth line of Section 24.2 and (ii) prior to the word
"Partner" in the penultimate line of Section 24.2; and
4. To consider and vote upon an amendment to the Partnership Agreement
that would amend the relevant portions of Sections 10 and 11 of the Partnership
Agreement such that (i) each time the percentage of Distributable Cash or
Profits allocable to the General Partners is referenced as 23.6816%, such
percentage would be reduced by 5% of such amount as of the last day of each
month occurring in the period commencing 90 days following the adoption of such
amendment and continuing until such time as the sole remaining Property has
been sold and at least 95% of the proceeds attributable to such sale have been
distributed to the Partners (any such reduction, a "Reduction Percentage") and
(ii) each time the percentage of Distributable Cash or Profits allocable to the
Limited Partners is referenced as 76.3184%, such percentage would be increased
as of the last day of each month occurring in such period by the amount of the
Reduction Percentage applicable to such month.
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De Anza Properties - X
April 3, 1996
Page 4
Pursuant to Section 25.2 of the Partnership Agreement, the Affiliated
Limited Partners hereby elect to set the record date for the Special Meeting.
Upon your advising Moraga Capital of the date for the Special Meeting, the
Affiliated Limited Partners will advise you of such record date. The address
of Moraga Capital is: 1640 School Street, Suite 100, Moraga, California 94556.
Pursuant to Section 22.1 of the Partnership Agreement, the Affiliated
Partners hereby request the opportunity to inspect and copy the books and
records of the Partnership referred to in such Section. A representative of
the Affiliated Partners will notify you shortly of proposed dates and times for
such inspection.
Very truly yours,
Moraga Capital, LLC
By: /s/ C.E. Patterson
---------------------------------
Name: C.E. Patterson
Title: Member
Real Estate Securities Fund 1983
By: /s/ C.E. Patterson
---------------------------------
Name: C.E. Patterson
Title: President of GP
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De Anza Properties - X
April 3, 1996
Page 5
MacKenzie Fund III
By: /s/ C.E. Patterson
---------------------------------
Name: C.E. Patterson
Title: President of GP
MacKenzie Fund V
By: /s/ C.E. Patterson
---------------------------------
Name: C.E. Patterson
Title: President of GP
MacKenzie Fund VI
By: /s/ C.E. Patterson
---------------------------------
Name: C.E. Patterson
Title: President of GP
MacKenzie Specified Income Fund
By: /s/ C.E. Patterson
---------------------------------
Name: C.E. Patterson
Title: President of GP
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De Anza Properties - X
April 3, 1996
Page 6
MacKenzie Patterson Special Fund
By: /s/ C.E. Patterson
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Name: C.E. Patterson
Title: President of GP
Previously Owned Partnerships
Income Fund 2
By: /s/ C.E. Patterson
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Name: C.E. Patterson
Title: President of GP
Previously Owned Mortgage
Partnerships Income Fund 3, L.P.
By: /s/ C.E. Patterson
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Name: C.E. Patterson
Title: President of GP
Vanderbilt Income and Growth
Associates, L.L.C.
By: /s/ Michael L. Ashner
----------------------------
Name: Michael L. Ashner
Title: Managing Director
<PAGE> 1
Exhibit 99.2
MORAGA CAPITAL LLC
1640 School Street, Suite 100
Moraga, California 94556
April 3, 1996
Mr. Herbert M. Gelfand
Chairman of the Board
De Anza Corporation
Operating General Partner
De Anza Properties - X
9171 Wilshire Boulevard, Suite 627
Beverly Hills, California 90210
Re: De Anza Properties - X
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Dear Mr. Gelfand:
Enclosed is a letter from the undersigned and certain other limited
partners of De Anza Properties - X requesting a meeting of the limited partners
of De Anza Properties - X. The reasons for calling the meeting, which are
spelled out more fully in the enclosed letter, relate to:
o entering into a new management contract for the Woodbridge Meadows
Apartments with a nationally or regionally recognized, experienced
and qualified apartment property management firm following a
competitive bidding process;
o entering into an arrangement with a real estate syndication firm to
provide administrative services to the partnership that are necessary
for the operation of the partnership and its properties;
o amending Section 24.2 of the partnership agreement to require that
the consent of a limited partner to be adversely affected is required
in the case of an amendment to alter the
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De Anza properties - X
April 3, 1996
Page 2
interest of a limited partner in profits or losses or in
distributable cash or sale or refinancing proceeds; and
o amending the allocation of profits and distributable cash as between
the general partners and the limited partners such that the interest
of the general partners, which is currently 23.6816%, would be
reduced by 5% of such amount as of the last day of each month
occurring in the period commencing 90 days after the adoption of such
amendment and continuing until such time as the partnership's sole
remaining property has been sold and at least 95% of the proceeds
attributable to such sale have been distributed to the partners, and
the interest of the limited partners would be increased as of the
last day of each month occurring in such period by the amount of each
such reduction.
The first two proposed amendments referenced above relate to improving
the economics of De Anza Properties - X for the benefit of all the partners of
De Anza Properties - X. The Affiliated Partners (as such term is defined in
the enclosed letter) believe that the terms of the property management and
administrative arrangements that are currently in place at De Anza
Properties - X can be replaced with comparable services provided by unaffiliated
third parties at significant cost savings. In particular, we believe that
various property management firms would be willing to assume the management of
the Woodbridge Meadows Apartments for a fee equal to 4% of the aggregate gross
receipts from the operation of the property without the need for any additional
reimbursable cost or expense. Further, we believe that the administration of De
Anza Properties - X by the Operating General Partner is an uneconomical
endeavor, and that significant economies of scale could be recognized if
administrative services were provided by a third party that provides similar
services to other limited partnerships. We estimate that the cost savings that
could be realized from these two areas would allow the dividend rate for the
partnership to be increased from the current rate of 6% to approximately 10%.
<PAGE> 3
De Anza Properties - X
April 3, 1996
Page 3
As to the latter two proposed amendments, the Affiliated Partners
believe that the allocation of distributable cash and profits to the general
partners is too high, as any future growth in value disproportionately benefits
the general partners. We also believe that Woodbridge Meadows Apartments, the
sole remaining real property owned by the partnership, should be sold in an
expeditious manner. Further, we believe that the proposed reduction is an
equitable one since it would not take effect until three months following its
adoption and would then be implemented in steps on a monthly basis, creating an
incentive for the general partners to arrange for the sale of the Woodbridge
Meadows property and to distribute the proceeds therefrom in an expeditious
manner.
Representatives of the Affiliated Partners would be happy to meet with
you to discuss the proposed amendments after you have had an opportunity to
review the enclosed letter. You may contact the undersigned by telephone at
(516) 822-0022, or, if you prefer, your counsel may contact James E. Lyons of
Skadden, Arps, Slate, Meagher & Flom, counsel to the undersigned.
Very truly yours,
Moraga Capital, LLC
By: /s/ Michael L. Ashner
-------------------------
Name: Michael L. Ashner
Title: Member
<PAGE> 1
Exhibit 99.3
April 10, 1996
De Anza Properties - X
c/o De Anza Corporation
Operating General Partner
9171 Wilshire Boulevard, Suite 627
Beverly Hills, California 90210
Attention: Wendy Glenn
Re: Withdrawal of Request for Special Meeting of the
Limited Partners of De Anza Properties - X
Ladies and Gentlemen:
I am writing on behalf of our client, Moraga Capital, LLC ("Moraga
Capital"). All capitalized terms used but not defined herein shall have the
meanings set forth in the Request Letter (as defined below).
By letter dated April 3, 1996 to De Anza Properties - X (the "Request
Letter"), Moraga Capital and the other Affiliated Limited Partners requested
that a Special Meeting of the Limited Partners of De Anza Properties - X be
called for the purposes set forth in the Request Letter. Moraga Capital and
the other Affiliated Limited Partners have authorized us to hereby withdraw the
Request Letter, without prejudice to reinstating the Request Letter in the
future.
The Affiliated Limited Partners understand that, if they should
determine to request the reinstatement of the Request Letter, you will provide
the notice to the partners of De Anza Properties - X contemplated by the third
sentence of Section 25.1 of the Partnership Agreement within five business
days of such a request (notwithstanding the requirement of such Section 25.1
that such notice be provided within 10 days of receipt of a written request).
<PAGE> 2
De Anza Properties - X
April 10, 1996
Page 2
Please acknowledge your agreement with the foregoing by signing in the
space indicated below and returning a copy of this letter to the undersigned.
Very truly yours,
/s/ James E. Lyons
James E. Lyons
Accepted and agreed as of
the date first above written
De Anza Properties - X
By: _________________________________
Name:
Title:
cc: Moraga Capital, LLC
