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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
FOR FISCAL YEAR ENDED: DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 1-12428
OASIS RESIDENTIAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
NEVADA 88-0297457
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
4041 EAST SUNSET ROAD, HENDERSON, NEVADA 89014
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES (ZIP CODE)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (702) 435-9800
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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<S> <C>
Common Stock, $.01 par value New York Stock Exchange
$2.25 Series A Cumulative Convertible New York Stock Exchange
Preferred Stock, $.01 par value
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of March 24, 1997, the aggregate market value of Common Stock of Oasis
Residential, Inc. held by non-affiliates was $373,465,858 based upon the closing
price of the stock on the NYSE. The number of shares of common stock outstanding
as of that date was 16,237,646.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Proxy Statement for the Annual Meeting of
Stockholders of Oasis Residential, Inc. to be held on May 12, 1997 are
incorporated by the reference into Part III as set forth herein. With the
exception of these portions which are expressly incorporated herein by
reference, the Proxy Statement is not deemed filed as a part hereof.
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CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE LITIGATION REFORM ACT OF 1995. Statements contained or incorporated by
reference in this document that are not based upon historical fact are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be identified by
the use of forward-looking terminology such as "may", "will", "expect",
"estimate", "anticipate", "continue" or similar terms, variations of those terms
or the negative of those terms. The "Risk Factors" set forth below in this
document constitute cautionary statements identifying important factors that
could cause actual results to differ materially from those in the
forward-looking statements.
PART I
ITEM 1. BUSINESS
Oasis Residential, Inc. (the "Company") is a fully integrated Real Estate
Investment Trust (a "REIT"), with in-house acquisition, development, property
management and finance expertise. The Company is strategically focused on the
development and operation of apartment communities in Las Vegas and Reno,
Nevada, Denver, Colorado and Southern California. The Company is the largest
active developer and owner of predominantly upscale apartment communities in the
greater Las Vegas metropolitan area based on the number of apartment units
developed and owned. The Company is active in the development of apartment
communities in Las Vegas and Reno, Nevada and Denver, Colorado, and has entered
into an agreement to purchase a parcel of land in Mission Viejo, California on
which it intends to develop an apartment community. Oasis commenced operations
as a public company in October 1993 with an initial portfolio of 23 apartment
communities containing 5,215 units and a 30,000 square foot commercial center in
Henderson, Nevada in which the Company's headquarters is located (the
"Commercial Center"). As of January 31, 1997, the Company owned and operated 49
apartment communities comprising a total of 13,428 apartment units (the
"Properties") with an average age of less than seven years, as well as the
Commercial Center. Forty-five of the Properties are located in the greater Las
Vegas area. The Company's weighted average occupancy was 94%, 95% and 95% for
the years ended December 31, 1996, 1995 and 1994, respectively. During these
periods, average monthly rental income per unit was $606, $570 and $549,
respectively. As of the end of January 1997, the weighted average occupancy rate
of the Properties (excluding one community in lease-up) was 95.7% and the
Commercial Center was 100% occupied. The Company currently has five communities
comprising 1,897 units under construction, consisting of 675 units in Las Vegas,
772 units in Denver and 450 units in Reno. As of January 31, 1997, Oasis
employed approximately 570 people.
The Company has adhered to a strategy of concentrating on the acquisition,
development and management of primarily upscale apartment communities. The
Company believes it has certain competitive advantages in operating its
business, including the following:
- with more than a 10% share of the total Las Vegas apartment market, Oasis
has benefited from significant economies of scale in operations, which
reduce on-site and administrative expenses;
- the Oasis brand name operating strategy has increased consumer
recognition of the Company's high operating standards and has improved
resident retention;
- extensive development experience in multiple markets enables the Company
to identify locations for its apartment communities which provide
residents with a feeling of quality, community, security and
accessibility;
- experience in obtaining necessary zoning, governmental permits and
authorizations for multifamily construction which in recent years have
become increasingly costly and complex to obtain;
- the ability to provide high quality living areas and attractive
amenities, common areas and landscaping;
- a consistent policy of regularly scheduled maintenance, which results in
lower overall operating costs and a higher quality living environment for
the Company's residents;
- a responsive management team that is service-oriented and attentive to
its residents' needs; and
- ongoing training programs that enhance the performance of on-site
personnel.
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The Company's executive offices are located at 4041 East Sunset Road,
Henderson, Nevada 89014. Its telephone number is (702) 435-9800.
RECENT DEVELOPMENTS
1996 Development Activities:
- The Company completed construction on seven apartment communities and one
community expansion in the Las Vegas and Denver metropolitan areas
comprising an aggregate of 1,889 units with a total investment of $132.1
million as follows: Oasis Pointe (252 units), Oasis Meadows (383 units),
Oasis Tiara (400 units), Oasis Deerwood (342 units in Denver), Oasis
Crossings (72 units), Oasis Villas (84 units), Oasis Harbor I (336 units)
and Oasis Cove II (20 units). As of January 31, 1997, all of the Las
Vegas completions had achieved stabilization (93% occupancy).
- As of January 31, 1997, the Company had five apartment communities under
construction comprising 1,897 units with an estimated investment at
completion of $149.8 million, consisting of 675 units in Las Vegas, 772
units in Denver and 450 units in Reno, all of which are projected to be
completed in 1997.
1996 Financing Activities:
- In July 1996, the Company was the recipient of senior unsecured debt
ratings from Moody's (Baa3), Standard and Poor's (BBB-) and Duff and
Phelps (BBB-).
- In August 1996, the Company increased the funding capacity on its
unsecured credit facility from $150.0 million to $200.0 million.
- In November 1996, the Company completed a $150.0 million senior unsecured
note offering in three equal $50.0 million tranches with maturities of
five years, seven years and ten years each. The notes were priced with
coupon rates of 6.75% for the five year notes, 7.00% for the seven year
notes and 7.25% for the ten year notes. The Company utilized
approximately $53.6 million of the proceeds of the offering to pay off
certain mortgage debt which enabled the Company to generate 64% of its
EBITDA (earnings before interest, tax, depreciation and amortization
["EBITDA"]) from unencumbered properties in the fourth quarter of 1996.
- In December 1996, the Company sold two of its Las Vegas communities,
Oasis Star I (44 units) and Oasis Reef (60 units), for approximately $6.6
million and realized a book gain in excess of $2.4 million.
- During 1996, the Company lowered the London Interbank Offered Rate
("LIBOR") based borrowing rate on its unsecured credit facility to LIBOR
+ 1.25% from LIBOR + 1.75%.
- As of December 31, 1996, the Company had a debt to total market
capitalization ratio and EBITDA to interest expense ratio of 45% and
4.0x, respectively.
STRATEGIES FOR GROWTH
The Company's primary business strategy is to generate increasing cash flow
and enhanced portfolio value by focusing on the upscale apartment market. The
Company has implemented this strategy principally by (i) realizing internal
growth in income from its existing portfolio of apartment communities and (ii)
pursuing external growth through the selective development and acquisition of
new apartment communities.
The Company believes its strong local market presence, brand name identity
and resident-oriented approach reduce turnover and encourages resident
referrals, resulting in higher occupancies, higher effective rents and reduced
expenses as compared to its competitors.
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Brand name Operating Strategy
In order to take advantage of the Company's significant presence and market
leadership position in Las Vegas, the Company implemented a customer focused
brand name operating strategy in 1995. The brand name program is designed to
build customer recognition of the Company and its apartment communities and to
impart an image of distinction, quality and consistency. All of the Company's
Properties incorporate the Oasis brand name and all Company on-site associates
wear uniforms advertising the Oasis brand name and logo. The Company believes
the Oasis brand name enhances its ability to attract new residents, retain
existing residents, gain additional resident referrals, and retain more
residents transferring from one Oasis community to another. The Company has
incorporated the same brand name operating strategy in Denver and Reno to
develop market identity as it establishes its presence in those markets.
Internal Growth Strategy
The Company is committed to increasing cash flow and Funds from Operations
"FFO" (as defined below under "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Calculation of Funds from
Operations and Funds Available for Distribution")from its existing portfolio of
Properties by utilizing the experience and quality of the Company's senior
management, which has developed, leased and managed in excess of 16,500
apartment units in the greater Las Vegas metropolitan area and 8,000 apartment
units in other states. The Company's operating priorities are: (i) to provide
the residents with the highest quality lifestyle possible in an apartment
community; (ii) to emphasize a clean, pleasant living environment by maintaining
all buildings, grounds and landscaping in excellent condition; and (iii) to
attract the caliber of residents who desire to live in a high-quality, clean
apartment community with premium service at a reasonable cost.
External Growth Strategy
The Company pursues external growth by selectively developing new apartment
communities in areas where it has first-hand knowledge of growth patterns and
local economic conditions and believes that it has or can create a competitive
advantage due to its brand name identity, extensive experience and reputation as
a developer and access to lower cost of capital than that available to many of
its local competitors. The Company also intends to continue its strategy of
selectively acquiring apartment communities to supplement its program of
developing new properties.
In evaluating whether to develop a new property, the Company analyzes
salient geographic, demographic, economic and financial data, including the
following factors: (i) prevailing rental and occupancy rates in the area; (ii)
prospective resident income levels and the ability of those income levels to
service the property's requisite rents; (iii) the site's location and aesthetic
appeal; and (iv) the size and growth rate of the employment base in the area. In
order to provide its residents with a feeling of quality, community, security
and accessibility, the Company is extremely selective in seeking development
sites which are located in quality single-family neighborhoods having convenient
access to employment centers and plentiful amenities.
In certain circumstances, the Company also may expand its portfolio of
properties through the selective acquisition of existing apartment properties.
The Company seeks to acquire properties which are: (i) strategically located in
the Company's existing or target markets; (ii) capable of increased operating
cash flow after benefiting from the Company's renovation and management
expertise; (iii) priced below replacement cost, thereby enabling the Company to
operate the properties profitably at lower rents than those realized from new
properties; and (iv) able to generate returns comfortably in excess of the
Company's weighted average cost of capital.
The Company may from time to time dispose of properties in order to enhance
shareholder value.
It is also the Company's strategy to expand through acquisition and
development beyond the greater Las Vegas metropolitan area to certain target
markets located in Nevada, Colorado and California. Pursuant to the strategy,
the Company has commenced operations and construction of multifamily apartment
communi-
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ties in the greater Denver, Colorado metropolitan area and Reno, Nevada. The
Company believes these target markets share many of the favorable investment
characteristics found in the Las Vegas area and are in sufficient proximity to
allow the Company to continue to benefit from its successful "hands-on" property
management philosophy. Furthermore, the Company has entered into an agreement to
purchase a 19.8 acre parcel in Mission Viejo, California, subject to the
satisfaction of certain entitlement conditions. If the conditions are satisfied
and the purchase is completed, the Company intends to build a 380 unit apartment
community slated to begin construction in late 1997.
Financing Strategy
In conducting its operations and pursuing its external growth strategy, the
Company intends to maintain a conservative balance sheet to provide the Company
with the financial flexibility to choose the optimal source of capital (whether
debt or equity) with which to finance external growth. It is the Company's
policy to maintain a debt to total market capitalization ratio (i.e., total
consolidated debt of the Company as a percentage of market value of its capital
stock plus total consolidated debt) of less than 50%. For purposes of this
calculation, the Company's $2.25 Series A Cumulative Convertible Preferred Stock
(the "Series A Preferred Stock") is valued at the greater of its liquidation
preference or its market value.
INVESTMENT POLICIES
The Company intends to continue to develop and acquire apartment
communities for long term investment. The investment policies of the Company may
be unilaterally changed by the Company's Board of Directors. Any change would be
made by the Board only after a review and analysis of the change, in light of
then existing business and other circumstances, and then only if, in the
exercise of its business judgment, it believes the change is in the best
interests of the Company's shareholders. At all times, the Company intends to
make investments in a manner consistent with requirements of the Internal
Revenue Code of 1986, as amended (the "Code"), for the Company to qualify as a
REIT unless, because of changing circumstances or changes in the law, the Board
of Directors of the Company, with the consent of a majority of the stockholders
approving the Board's determination, determines that it is no longer in the best
interest of the Company to qualify as a REIT.
The Company pursues its investment objectives through the development and
ownership of apartment communities. While the Company intends to diversify in
terms of property location, size and market, the Company does not intend to
invest in properties other than communities (with the exception of the
Commercial Center). The Company currently intends selectively to purchase
existing apartment properties. The Company may also purchase undeveloped land
and construct apartment communities.
While the Company will emphasize equity real estate investments, the
Company may, in its discretion, invest in mortgages and other real estate
interests consistent with its qualification as a REIT. The Company does not
presently intend to invest in mortgages or deeds of trust, but may invest in
participating or convertible mortgages if the Company concludes that it may
benefit from the cash flow or any appreciation in the value of a property.
Subject to the percentage of ownership limitations and gross income and
asset tests necessary for REIT qualification, the Company also may invest in
securities of other entities engaged in real estate activities or securities of
their issuers. The Company may in the future acquire all or substantially all of
the economic interest in a real estate-related operating business; however, the
Company does not currently intend to invest in the securities of any other
issuer.
While the Company will actively manage its capital structure, it intends to
maintain a conservative balance sheet to provide the Company with the financial
flexibility to choose the optimal source of capital (whether debt or equity)
with which to finance external growth. It is the Company's policy to maintain a
debt to total market capitalization ratio (i.e., total consolidated debt of the
Company as a percentage of market value of the Common Stock and Preferred Stock
plus total consolidated debt) of less than 50%. It is the intent of the Board of
Directors, however, to retain the ability to raise additional capital, including
additional debt, to pursue attractive opportunities that may arise and to
otherwise act in a manner that it believes to be in the best
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interests of the Company and its stockholders. The Company, therefore, may from
time to time re-evaluate its borrowing policies in light of then current
economic conditions, relative costs of debt and equity capital, market value of
properties, growth and acquisition opportunities and other factors and, in light
of such information, the Company may modify its borrowing policy and may
increase or decrease its ratio of debt to total market capitalization.
The Company has not established any limit on the number or amount of
mortgages that may be placed on any single property or on its portfolio as a
whole.
Capital for new acquisitions or developments will be raised either as debt
or equity depending on the then current leverage of the Company and market
conditions. The Company also may determine to issue securities senior to the
shares of common stock, including preferred stock and debt securities (either of
which may be convertible into common stock or be accompanied by warrants to
purchase common stock). The Board of Directors may determine to issue shares of
Common Stock or other securities of the Company in exchange for property. The
Company also may determine to finance acquisitions through the exchange of
properties or issuance of additional shares of Common Stock or other securities.
CONFLICT OF INTEREST POLICIES
The Company has adopted certain policies and entered into certain
agreements designed to reduce potential conflicts of interest. The Company's
employment agreements with Robert V. Jones, Scott S. Ingraham, Allan O. Hunter
Jr., and Walter B. Eeds prohibit each of them, during his employment by the
Company, from engaging, without the Company's consent, in any business
competitive with that of the Company. Each agreement also provides that during
the one year period following termination of employment, so long as employment
has not been terminated without cause (as defined in the agreement), the
individual will not engage in the development, acquisition, construction or
management of multifamily apartment properties, other than through the Company,
in the states of Nevada, California, Arizona, Utah, New Mexico and Colorado.
Mr. Jones has entered into a noncompetition agreement with the Company
which provides that he will not engage in the development, acquisition,
construction or management of multifamily apartment properties in the states of
Nevada, California, Arizona, Utah, New Mexico and Colorado for such time as Mr.
Jones is an executive officer, Director or greater than 5% stockholder of the
Company.
REGULATION
General
Multifamily apartment properties are subject to various laws, ordinances
and regulations, including regulations relating to recreational facilities such
as swimming pools, activity centers and other common areas. The Company believes
that its properties have the necessary permits and approvals to operate its
business.
Restrictions Imposed by Laws Benefiting Disabled Persons
Under the Americans with Disabilities Act of 1990 (the "ADA"), all places
of public accommodation are required to meet certain federal requirements
related to access and use by disabled persons. These requirements became
effective in 1992. Compliance with the ADA requires removal of structural
barriers to handicapped access in certain public areas of the Company's
properties, where removal is "readily achievable." The ADA does not, however,
consider residential properties, such as apartment communities, to be public
accommodations or commercial facilities, except to the extent portions of the
facilities, such as a leasing office, are open to the public. A number of
additional federal, state and local laws exist which also may require
modifications to the Properties and the Commercial Center or restrict certain
further renovations for the purpose of providing access for disabled persons.
For example, the Fair Housing Amendments Act of 1988 (the "FHAA") requires
apartment communities first occupied after March 13, 1991 to be accessible to
the handicapped. Noncompliance with the ADA, the FHAA or other federal, state or
local laws governing access by the disabled could result in the imposition of
fines or an award of damages to private litigants. Management
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of the Company believes that the Properties and the Commercial Center are
substantially in compliance with present requirements of the ADA and that the
Properties and the Commercial Center that are subject to the FHAA are
substantially in compliance with that law.
Additional legislation may impose further burdens or restrictions on owners
with respect to access by disabled persons. Although costs of compliance with
the ADA and such additional legislation are not currently ascertainable, such
costs could be substantial. Limitations or restrictions on the completion of
certain renovations as a result of the ADA or such other legislation may limit
application of the Company's investment strategy in certain instances or reduce
overall returns on the Company's investments.
Rent Control Legislation
State and local rent control laws in certain jurisdictions limit a property
owners' ability to increase rents and to recover increases in operating expenses
and the costs of capital improvements. No rent control laws are currently
applicable to the Properties or the Commercial Center, and management is not
aware of any intention on the part of applicable governing bodies to enact any
rent control legislation. The Company does not presently intend to develop or
acquire multifamily apartment communities in markets that are either subject to
rent control or in which rent limiting legislation exists. Tax-exempt financing
on the Company's two Denver properties, however, may impair the Company's
ability to achieve increased rental rates on portions of these properties (see
"Item 2. Properties").
ENVIRONMENTAL MATTERS
Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real estate may be
required to investigate and clean up hazardous or toxic substances or petroleum
product releases at the property, and may be held liable to a governmental
entity or to third parties for property damage and for investigation and cleanup
costs incurred by those parties in connection with the contamination. These laws
typically impose cleanup responsibility and liability without regard to whether
the owner knew of or caused the presence of the contaminants, and the liability
under those laws has been interpreted to be joint and several unless the harm is
divisible and there is a reasonable basis for allocation of responsibility. The
costs of investigation, remediation or removal of such substances may be
substantial, and the presence of such substances, or the failure to properly
remediate the property, may adversely affect the owner's ability to sell or rent
the property or to borrow using the property as collateral. In addition, some
environmental laws create a lien on the contaminated site in favor of the
government for damages and costs it incurs in connection with the contamination.
Persons who arrange for the disposal or treatment of hazardous or toxic
substances also may be liable for the costs of removal or remediation of those
substances at the disposal or treatment facility, whether or not the facility is
owned or operated by that person. Finally, the owner of a contaminated site may
be subject to common law claims by third parties based on damages and costs
resulting from environmental contamination emanating from the site.
Certain federal, state and local laws, regulations and ordinances govern
the removal, encapsulation or disturbance of asbestos-containing materials
("ACMs") when the materials are in poor condition or in the event of building
remodeling, renovation or demolition. The laws may impose liability for release
of ACMs and may enable third parties to seek recovery from owners or operators
of real properties for personal injury associated with ACMs. In connection with
its ownership and operation of properties, the Company could be potentially
liable for these costs.
All of the Properties, the development properties and the Commercial Center
owned by the Company have been subject to Phase I or similar environmental
audits by independent environmental consultants. Environmental assessments have
disclosed the existence or possible existence of ACMs on the Oasis Morning,
Oasis Plaza, Oasis Ridge, Oasis Topaz, Oasis View and Oasis Winds Properties.
The reports did not recommend any remedial action be taken. The reports did
recommend, however, that the Company conduct further testing in the relevant
areas for ACMs in the event it renovates or demolishes any of these Properties.
The Company does not currently have any plans to engage in any renovation or
demolition of these Properties that would necessitate further testing. Phase I
assessments are intended to discover information regarding, and
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to evaluate the environmental condition of, the surveyed properties and
surrounding properties. Phase I assessments generally include an historical
review, a public records review, a preliminary investigation of the site and
surrounding properties, screening for the presence of asbestos and equipment
containing polychlorinated biphenyls ("PCBs"), and underground storage tanks and
the preparation and issuance of a written report, but do not include soil
sampling or subsurface investigations.
The Phase I assessments have not revealed any environmental liability that
the Company believes would have a material adverse effect on the Company's
business, assets or results of operations, nor is the Company aware of any
environmental liability. Nevertheless, it is possible that the Company's
assessments did not reveal all environmental liabilities or that there are
material environmental liabilities of which the Company is unaware. The Company
believes that its properties are in compliance in all material respects with all
federal, state and local laws, ordinances and regulations regarding hazardous or
toxic substances or petroleum products. The Company has not been notified by any
governmental authority, and is not otherwise aware, of any material
noncompliance liability or claim relating to hazardous or toxic substances or
petroleum products in connection with any of its present properties.
EMPLOYEES
As of January 31, 1997, the Company employed approximately 570 persons.
COMPETITION
All of the Properties are located in developed areas that include other
apartment properties. The number of competitive multifamily apartment properties
in a particular area could have a material effect on the Company's ability to
lease apartment units at the Properties or at any newly developed or acquired
properties and on the rents charged. In addition, other forms of multifamily
residential properties and single-family homes provide housing alternatives to
potential residents of apartment properties.
INSURANCE
Management believes that the communities and the Commercial Center are
covered by adequate fire, flood and property insurance, and that its development
properties are also covered by adequate insurance for their stage of
development, in each case provided by reputable companies and with commercially
reasonable deductibles and limits. There are, however, certain types of losses
(generally of a catastrophic nature, such as wars or earthquakes) which may be
either uninsurable or not economically insurable. Should an uninsured loss
occur, the Company could lose both its invested capital in and anticipated
profits from the affected property and could continue to be obligated to repay
any mortgage indebtedness on the property.
TAXATION OF THE COMPANY
Management of the Company believes that the Company has operated in such a
manner as to qualify for taxation as a "REIT" under Sections 856 to 860 of the
Internal Revenue Code of 1986, as amended (the "Code"), commencing with its
taxable year ended December 31, 1993, and the Company intends to continue to
operate in that manner. No assurance can be given, however, that it has operated
or will be able to continue to operate in a manner that will enable it to
qualify or to remain so qualified.
If the Company qualifies for taxation as a "REIT", it will generally not be
subject to federal corporate income taxes on net income that is currently
distributed to stockholders. This treatment substantially eliminates the "double
taxation" (e.g., at the corporate and stockholder levels) that generally results
from investment in stock of a corporation. The Company will continue to be
subject, however, to federal income tax under certain circumstances.
The Company and its stockholders may be subject to state or local taxation
in various state or local jurisdictions, including those in which it or they
transact business or reside. The state and local tax treatment of the Company
and its stockholders may not conform to the federal income tax treatment.
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RISK FACTORS
In addition to the matters set forth in the foregoing discussion of the
Company's business, the operations and financial performance of the Company are
subject to the risks described below.
Lack of Geographic Diversification; Dependence on Greater Las Vegas
Metropolitan Area
A majority of the Properties are located in the greater Las Vegas
metropolitan area. The Company's performance may therefore be influenced by
economic conditions in this region and the market for apartment units therein. A
decline in the economy in this market may adversely affect the ability of the
Company to make distributions to stockholders.
Expansion Into New Markets
Pursuant to the Company's plans to expand beyond the greater Las Vegas
metropolitan area, the Company has commenced operations and construction of
multifamily apartment communities in the greater Denver, Colorado metropolitan
area and Reno, Nevada. Furthermore, the Company has entered into an agreement to
purchase a 19.8 acre parcel in Mission Viejo, California, subject to the
satisfaction of certain entitlement conditions. If the conditions are satisfied
and the purchase is completed the Company intends to build a 380 unit apartment
community slated to begin construction in late 1997. The performance of the
Company's properties in these new markets may be linked to economic conditions
in these regions and in the market for apartments therein.
Development and Acquisition Risks; Increased Project Costs; Failure to Obtain
Financing; Inability to Meet
Operating Expenses
General Development and Acquisition Risks. The Company intends to continue
selective development and acquisition of multifamily properties. New project
development is subject to a number of risks, including risks of construction
delays and cost overruns that may increase project costs, risks that lease-up
may not be completed on schedule or that the properties will not achieve
anticipated occupancy levels or sustain anticipated rent levels sufficient to
generate income to cover operating expenses, and new project commencement risks
such as the receipt of zoning, occupancy and other required governmental permits
and authorizations and the incurrence of development costs in connection with
projects that are not pursued to completion. Acquisitions entail risks that
investments will fail to perform in accordance with expectations and that
judgments with respect to the costs of improvements to bring an acquired
property up to standards established for the market position intended for that
property will prove inaccurate, as well as general investment risks associated
with any new real estate investment.
Risks Relating to Financing; Distributions. The Company anticipates that
its development and acquisition activities will be largely financed through
externally generated funds from borrowings under credit facilities and other
secured and unsecured debt financing and from equity financing. In addition, new
development activities may be financed under lines of credit or other forms of
secured or unsecured construction financing that would result in a risk that
permanent financing for newly developed projects might not be available or would
be available only on disadvantageous terms. Because the Company must distribute
95% of its taxable income to maintain its qualifications as a REIT, the
Company's ability to rely upon income from operations or cash flow from
operations to finance new development or acquisitions will be limited.
Furthermore, it has been the Company's practice to make distributions in excess
of the 95% requirement, further limiting the cash flow available to the Company
for reinvestment. Accordingly, were the Company unable to obtain funds from
borrowings or the capital markets to refinance new development or acquisitions
undertaken without permanent financing, the Company's ability to grow through
additional development and acquisition activities could be curtailed, Funds
Available for Distribution "FAD" (as defined below under "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Calculation of Funds from Operations and Funds Available for Distribution")
could be adversely affected and the Company could be required to reduce
distributions.
8
<PAGE> 10
The Company's income will consist primarily of income from its properties.
Differences in timing between the actual receipt of income and the actual
payment of expenses and the inclusion of the income and deduction of the
expenses in arriving at taxable income of the Company, or the effect of required
debt amortization payments, could require the Company to borrow funds on a
short-term (or, possibly, long-term) basis to meet the distribution requirements
that are necessary to achieve the tax benefits associated with qualifying as a
REIT even if management believed that then prevailing interest rates, terms and
other market conditions were not generally favorable for such borrowings or that
the borrowings would not be advisable in the absence of these tax
considerations.
Debt Risks; Possible Increase in Leverage
No Limitations on Debt. The Board of Directors of the Company currently
has a policy of limiting its indebtedness to approximately 50% of its market
capitalization (i.e., total consolidated debt of the Company as a percentage of
market value of its capital stock plus total consolidated debt; for purposes of
this calculation, total consolidated debt will be calculated net of amounts
collateralized with cash, and the Series A Preferred Stock will be valued at the
greater of its liquidation preference or its market value, but the
organizational documents of the Company do not contain any limitation on the
amount or percentage of indebtedness, funded or otherwise, the Company might
incur. Accordingly, the Board of Directors could alter or eliminate its current
policy on borrowing. If this policy were changed, the Company could become more
highly leveraged, resulting in an increase in debt service that could adversely
affect the Company's FAD and subsequently its ability to make expected
distributions to its stockholders, resulting in an increased risk of default on
its obligations.
Use of Debt Financing. The Company is subject to the risks normally
associated with debt financing, including the risk that the Company will have
insufficient cash available to meet required payments of principal and interest.
As a result of the Company's use of indebtedness and leverage, including the use
of debt to finance development and acquisitions and the use of variable rate
financing, the cumulative effect of the risks associated with borrowing is
greater than that of each of these risks considered individually. In addition,
if a property or properties are mortgaged to secure payment indebtedness and the
Company is unable to meet mortgage payments or if certain other events of
default occur, the property could be foreclosed upon by or otherwise transferred
to the mortgagee with a consequent loss of income and asset value to the
Company. Any borrowings under the Company's unsecured credit facility (the
"Credit Facility"), the Company's outstanding notes due 2001, 2003, 2006 in the
aggregate principal amount of $150 million and certain construction loans are
general recourse obligations of the Company. In addition, the Credit Facility is
secured by cross-collateralized liens on certain of the Properties and,
accordingly, default under the Credit Facility could result in foreclosure on
multiple Properties.
Existing Debt Maturities. At December 31, 1996, the Company had
outstanding $394.3 million of indebtedness, $158.8 million of which was secured
by certain of the Properties. Most of that indebtedness will mature during the
period 1998 through 2008. Since the Company anticipates that only a small
portion of the principal of the indebtedness will be repaid prior to maturity
and the Company will not have on hand funds sufficient to repay the indebtedness
in full at maturity, it will be necessary for the Company to refinance the debt
either through additional debt offerings or additional equity offerings. If, at
the time of refinancing, prevailing interest rates or other factors result in
higher interest rates on refinancings, the Company's interest expenses would
increase, which would adversely affect the Company's Funds Available for
Distribution and subsequently its ability to make distributions to stockholders.
In addition, in the event the Company were unable to refinance the indebtedness
on acceptable terms, the Company might dispose of properties upon
disadvantageous terms, which might result in losses to the Company and might
adversely affect FAD.
Risks of Rising Interest Rates. The Company has incurred and expects in
the future to incur variable rate indebtedness in connection with the
construction of multifamily apartment communities, as well as for other
purposes. In addition, financing under the Credit Facility is variable rate
indebtedness. An increase in interest rates would increase the interest on
variable rate indebtedness, and could have an adverse effect on net income and
FAD.
9
<PAGE> 11
Real Estate Investment Risks; Adverse Impact on Ability to Make Distributions;
Effect on Value of the
Properties
General. Real property investments are subject to varying degrees of risk.
The yields available from equity investments in real estate depend on the amount
of income generated and expenses incurred. If the Company's properties do not
generate income sufficient to meet operating expenses, including debt service
and capital expenditures, the Company's income and ability to make distributions
to its stockholders will be adversely affected. Income from properties may be
adversely affected by the general economic climate, local conditions such as
oversupply of apartments or a reduction in demand for apartments in the area,
the attractiveness of the properties to tenants, competition from other
available apartments, the ability of the owner to provide adequate maintenance
and insurance, and increased operating costs (including real estate taxes). The
Company's income would also be adversely affected if a significant number of
tenants were unable to pay rent or apartments could not be rented on favorable
terms. Certain significant expenditures associated with each property investment
(such as mortgage payments, real estate taxes and maintenance costs) generally
are not reduced when circumstances cause a reduction in income from the
investment.
Illiquidity of Real Estate. Real estate investments may be illiquid and,
therefore, could tend to limit the ability of the Company to vary its portfolio
promptly in response to changes in economic or other conditions. In addition,
the Code places limits on the ability of the Company, as a REIT, to sell
properties held for fewer than four years, which may affect the Company's
ability to sell properties without adversely affecting returns to stockholders
Adverse Tax Consequences of Failure to Qualify as a REIT.
The Company intends at all times to qualify as a REIT under the relevant
provisions of the Code. Although the Company believes that it has been and will
continue to be organized and operated in that manner, no assurance can be given
that the Company will qualify or continue to qualify as a REIT. Qualification as
a REIT involves the application of highly technical and complex provisions of
the Code for which there are only limited judicial or administrative
interpretations, and the determination of various factual matters and
circumstances not entirely within the Company's control. In addition, no
assurance can be given that legislation, new regulations, administrative
interpretations or court decisions will not change the tax laws with respect to
qualification as a REIT or the federal income tax consequences of qualification.
If in any taxable year the Company fails to qualify as a REIT, the Company
would not be allowed a deduction for distributions to stockholders in computing
its taxable income and would be subject to federal income tax (including any
applicable alternative minimum tax) on its taxable income at corporate rates. In
addition, unless entitled to relief under certain statutory provisions, the
Company would also be disqualified from treatment as a REIT for the four taxable
years following the year during which qualification is lost. An exception to
this four-year rule exists if, among other things, the Company can satisfy the
Internal Revenue Service that its failure to qualify as a REIT was due to
reasonable cause and not to willful neglect of the qualification provisions of
the Code. If this exception is not applicable and the Company becomes
disqualified from treatment as a REIT, the FAD would be reduced for each of the
years involved. In addition, the Company would not be compelled to make
distributions under the Code. To the extent that distributions to stockholders
would have been made in anticipation of the Company's qualifying as a REIT, the
Company might be required to borrow funds or to liquidate certain of its
investments to pay the applicable tax. Although the Company currently intends to
operate in a manner designed to qualify as a REIT, it is possible that future
economic, market, legal, tax or other considerations may cause the Company to
fail to qualify as a REIT or may cause the Company's Board of Directors to
revoke the REIT election.
Ownership Limit Necessary to Maintain REIT Qualification; Exception for Robert
Jones and Related
Persons
In order for the Company to maintain its qualification as a REIT, not more
than 50% of the value of its outstanding stock may be owned, directly or
constructively, by five or fewer individuals or entities (as set forth in the
Code). For the purpose of preserving the Company's REIT qualification, the
Company's articles of
10
<PAGE> 12
incorporation prohibit direct or constructive ownership of more than 8% by value
of the outstanding shares of capital stock (the "Ownership Limit") by any person
(with exception for Robert Jones, members of his family, affiliated entities and
their transferees), subject to adjustments as described below. The constructive
ownership rules are complex and may cause shares of capital stock owned directly
or constructively by a group of related individuals or entities to be
constructively owned by one individual or entity. There are certain exceptions
for corporations or certain investment funds for which shares of capital stock
are treated as proportionately owned by the owners of those entities.
The number of shares of Common Stock held by Robert V. Jones and certain
members of his family and affiliates exceeds the Ownership Limit and may
continue to exceed it. The Company's articles of incorporation provide that any
of Mr. Jones, members of his family, affiliated entities and their transferees
may acquire additional shares up to a specified limit, which currently is 17.8%
by value of the outstanding shares of capital stock (the "Existing Holder
Limit").
The Board of Directors may increase the Ownership Limit (but not in excess
of 9.8% by value of the outstanding shares of capital stock) with respect to a
particular stockholder and may increase the Existing Holder Limit so long as
after giving effect to the increase of the five largest beneficial owners of
shares of capital stock, taking into account the Ownership Limit and the
Existing Holder Limit, could not hold more than 49% of the outstanding shares of
capital stock and the Board of Directors is satisfied, based upon the advice of
tax counsel, that ownership at the increased limit will not jeopardize the
Company's status as a REIT. A transfer of shares to a person who, as a result of
the transfer, violates the Ownership Limit may be void under some circumstances
or may be exchanged for Excess Stock which has very limited rights and no rights
to distributions.
Limitation on Acquisition and Change in Control
Ownership Limit. The Ownership Limit may have the effect of precluding
acquisition of control of the Company by a third party without the consent of
the Board of Directors.
Staggered Board. The Board of Directors of the Company is comprised of
three classes of Directors, whose terms expire in 1997, 1998 and 1999,
respectively. The staggered terms for Directors may affect the stockholder's
ability to change control of the Company even if a change in control were in the
stockholder's interest.
Preferred Stock. The Company's articles of incorporation authorize the
Board of Directors to issue shares of preferred stock and to establish the
preferences and rights of any shares issued. The issuance of preferred stock
could have the effect of delaying or preventing a change of control of the
Company even if a change in control were in the stockholders' interest.
ITEM 2. PROPERTIES
General
As of January 31, 1997, the Company owned and operated 49 apartment
communities containing 13,428 apartment units, as well as the Commercial Center
in which the Company's headquarters is located and had under development an
additional 1,897 units. The Properties typically consist of one- and two-story
buildings in a landscaped setting. Forty of the Properties (comprising
approximately 74% of the total units) were completed less than 10 years ago. The
Properties are predominantly upscale garden apartment complexes consisting of
one, two and three bedroom apartments. Forty-four of the Properties have in
excess of 100 apartment units, with the largest having 720 apartment units. As
of the end of January 1997, the weighted average occupancy rate of the
Properties (excluding one community in lease-up) was 95.7%.
The Properties generally provide residents with a variety of attractive
amenities, such as in-unit laundry facilities, oversized luxury bath tubs,
monitored security systems, swimming pools, spas and saunas, extensive
landscaping and, in certain cases, tennis courts, racquetball courts, and weight
and exercise facilities. The Properties generally are located in or adjacent to
attractive and desirable single-family residential neighborhoods and are easily
accessible to significant areas of employment.
11
<PAGE> 13
The 30,000 square foot Commercial Center was constructed in 1989. The
Company occupies 15,100 square feet of the building as its headquarters, and the
remainder is leased to third parties, consisting predominantly of banking,
professional and service businesses. As of January 31, 1997, the Commercial
Center was 100% leased, with third party tenants paying an average annualized
rent per square foot of $19.26. Aside from the Company, one tenant, a bank,
occupies more than 10% of the Commercial Center. The bank's lease expires in May
2008 and has two five-year renewal options priced at fair market value. None of
the Company's properties account for 10% or more of the book value of the
Company's assets.
PROPERTY INFORMATION
The following table presents certain information concerning the Properties:
<TABLE>
<CAPTION>
MONTH ENDED
JAN. 1997
OCCUPANCY AVERAGE MONTHLY
APPROXIMATE AVERAGE FOR THE RENTAL RATE(2)
NUMBER RENTABLE UNIT 1996 MONTH ENDED ----------------
OF AREA TOTAL YEAR SIZE AVERAGE JANUARY PER PER
THE COMMUNITIES UNITS (SQ. FT.) ACREAGE(1) COMPLETED (SQ. FT.) OCCUPANCY 1997 UNIT SQ. FT.
- ----------------------- ------ ----------- ---------- ---------- --------- --------- ----------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Las Vegas
Oasis Bay............ 128 108,032 5.6 1990 844 96.6% 93.8% $ 702 $0.83
Oasis Bel Air........ 296 296,512 14.3 1995 1,002 --(3) 97.0% 765 0.76
Oasis Breeze......... 320 275,920 13.3 1989 862 96.3% 95.0% 660 0.77
Oasis Canyon......... 200 197,408 10.0 1995 987 93.2% 93.5% 773 0.78
Oasis Cliffs......... 376 351,920 18.5 1988 936 98.2% 96.3% 692 0.74
Oasis Club........... 320 286,560 14.8 1989 896 97.7% 98.1% 694 0.78
Oasis Cove........... 124 111,290 5.2 1990/96 898 93.0%(4) 96.8% 663 0.74
Oasis Crossings...... 72 70,752 4.0 1996 983 --(3) 97.2% 744 0.76
Oasis Del Mar........ 560 552,040 24.2 1995 986 --(3) 94.8% 797 0.81
Oasis Emerald........ 132 115,180 6.2 1988 873 94.9% 97.0% 621 0.71
Oasis Glen........... 113 89,488 4.8 1994 792 96.6% 98.2% 683 0.86
Oasis Greens......... 432 385,216 18.0 1990 892 97.3% 94.7% 676 0.76
Oasis Harbor I....... 336 338,696 18.5 1996 1,008 --(3) 95.5% 764 0.76
Oasis Heights........ 240 204,160 9.5 1989 851 97.6% 96.7% 621 0.73
Oasis Heritage....... 720 678,760 45.4 1985/86/87 943 92.2% 92.6% 579 0.61
Oasis Hills.......... 184 106,472 5.3 1991 579 98.2% 98.9% 485 0.84
Oasis Island......... 118 106,260 5.8 1990 901 92.7% 94.9% 632 0.70
Oasis Landing........ 144 124,752 6.4 1990 866 95.9% 93.8% 656 0.76
Oasis Meadows........ 383 397,276 20.7 1996 1,037 --(3) 95.0% 761 0.73
Oasis Morning........ 106 53,772 2.6 1978/85 507 94.6% 92.5% 454 0.90
Oasis Orchid......... 280 315,640 16.9 1989 1,127 90.9% 90.7% 717 0.64
Oasis Palms.......... 208 184,272 12.7 1989 886 94.2% 90.4% 642 0.72
Oasis Paradise....... 624 560,896 35.6 1990/91 899 93.7% 95.0% 713 0.79
Oasis Pearl.......... 90 82,332 4.3 1987/89/92 915 97.3% 97.8% 670 0.73
Oasis Place.......... 240 105,600 5.3 1992 440 94.3% 96.3% 453 1.03
Oasis Plaza.......... 300 245,936 11.9 1976 820 95.8% 96.3% 580 0.71
Oasis Pointe......... 252 249,216 12.6 1996 989 --(3) 96.0% 746 0.75
Oasis Rainbow........ 232 202,600 12.0 1988 873 95.3% 97.8% 647 0.74
Oasis Ridge.......... 477 187,833 11.2 1984 394 91.6% 95.6% 440 1.12
Oasis Rose........... 212 213,888 13.3 1994 1,009 94.5% 92.0% 705 0.70
Oasis Sands.......... 48 54,000 2.1 1994 1,125 93.9% 93.8% 751 0.67
Oasis Springs........ 304 246,912 12.0 1988 812 95.6% 98.0% 605 0.74
Oasis Star II........ 24 21,720 1.3 1991 905 96.5% 100.0% 659 0.73
Oasis Suites......... 409 163,200 8.1 1988 399 90.3% 96.6% 436 1.09
Oasis Summit......... 234 277,836 24.2 1994/95 1,187 98.0% 99.1% 1,016 0.86
Oasis Terrace........ 336 334,848 15.2 1995 997 89.5% 96.4% 685 0.69
</TABLE>
12
<PAGE> 14
<TABLE>
<CAPTION>
MONTH ENDED
OCCUPANCY JAN. 1997
APPROXIMATE AVERAGE FOR THE AVERAGE MONTHLY
NUMBER RENTABLE UNIT 1996 MONTH ENDED RENTAL RATE(2)
OF AREA TOTAL YEAR SIZE AVERAGE JANUARY PER PER
THE COMMUNITIES UNITS (SQ. FT.) ACREAGE(1) COMPLETED (SQ. FT.) OCCUPANCY 1997 UNIT SQ. FT.
- ----------------------- ------ ---------- ----- ----- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Oasis Tiara.......... 400 417,016 22.3 1996 1,043 --(3) 98.0% 813 0.78
Oasis Topaz.......... 270 223,268 12.6 1978 827 96.5% 99.3% 594 0.72
Oasis Trails......... 360 322,956 12.3 1990 897 95.0% 95.6% 660 0.74
Oasis View........... 180 169,200 11.4 1983 940 95.6% 97.1% 630 0.67
Oasis Villas......... 84 86,856 4.7 1996 1,034 --(3) 90.5% 792 0.77
Oasis Vinings........ 234 269,574 11.1 1993/1994 1,152 90.0% 86.3% 741 0.64
Oasis Vintage........ 368 366,048 17.0 1993/1994 995 90.1% 92.1% 708 0.71
Oasis Vista.......... 408 363,196 30.0 1985 890 97.3% 98.3% 517 0.58
Oasis Winds.......... 350 282,500 12.5 1978 807 97.1% 97.7% 575 0.71
------ ---------- ----- ----- ---- ---- ------ -----
Subtotals/
Wtd. Avg......... 12,228 10,797,809 585.5 883 94.4% 95.5% 660 0.75
Denver
Oasis Centennial..... 276 205,380 9.1 1985 744 95.4% 96.4% 640 0.86
Oasis Deerwood....... 342 391,590 23.4 1996 1,145 --(3) 77.8%(3) 1,068 0.93
Oasis Park........... 224 167,600 6.3 1985 748 92.6% 99.6% 650 0.87
Oasis Wexford........ 358 289,968 16.9 1986 810 93.3% 99.7% 690 0.85
------ ---------- ----- ----- ---- ---- ------ -----
Subtotals/
Wtd. Avg......... 1,200 1,054,538 55.7 879 93.8% 98.6% 779 0.89
Total/Wtd. Avg. ... 13,428 11,852,347 641.4 883 94.3% 95.7% $ 670 $0.76
====== ========== ===== ===== ==== ==== ====== =====
Lease-up
Las Vegas:
Oasis Gateway........ 360 418,680 19.3 1997(5) 1,163 --(3) 2.5% $ 838 $0.72
Oasis Pines.......... 315 313,950 17.6 1997(5) 997 --(3) 4.1% 825 0.83
Reno:
Oasis Bluffs I....... 450 501,687 50.1 1997(5) 1,115 --(3) 15.8% 959 0.86
Denver:
Oasis Denver West.... 321 324,375 20.8 1997(5) 1,011 --(3) 4.8% 971 0.96
Oasis Lakeway........ 451 425,770 28.0 1997(5) 944 --(3) 3.1% 937 0.99
------ ---------- ----- ----- ---- ---- ------ -----
Lease-up Totals/
Wtd. Avg. ....... 1,897 1,984,462 135.8 1,046 -- 6.4% 911 0.87
Grand Totals/
Wtd. Avg. ....... 15,325 13,836,809 777.2 903 94.3% 84.2% $ 700 $0.78
====== ========== ===== ===== ==== ==== ====== =====
</TABLE>
- ---------------
(1) Reflects gross acreage for each community.
(2) Reflects a weighted average of current contract rents for occupied units and
market rents for unoccupied units for each community.
(3) Under development and/or in lease-up during Period. Accordingly, its
occupancy is not included in the subtotal or total.
(4) Average occupancy for the 104 unit phase I; phase II was completed and
stabilized in 1996.
(5) Estimated year of completion.
In order to maintain favorable tax-exempt financing on two of the
Properties in the Denver market (Oasis Park and Oasis Wexford), the Company is
required to comply with affordable housing restrictions that require a certain
percentage of the units at these communities to be leased to persons with
incomes below a certain percentage of the local median income. This obligation
may impair the Company's ability to achieve increased rental rates on portions
of these communities.
13
<PAGE> 15
Development Information
The following table presents certain information concerning the Company's
development activities:
<TABLE>
<CAPTION>
APPROXIMATE ESTIMATED
NUMBER RENTABLE APPROXIMATE AVERAGE ANTICIPATED TOTAL
OF AREA TOTAL UNIT SIZE CONSTRUCTION CONSTRUCTION INVESTMENT
COMMUNITIES UNITS (SQ. FT.) ACREAGE(1) (SQ. FT.) COMMENCEMENT COMPLETION (2)
- --------------------------- ------ ----------- ----------- ---------- -------------- --------------- ----------
(DOLLARS
IN
MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Under Construction
Las Vegas:
Oasis Gateway.......... 360 418,680 19.3 1,163 1st Qtr. 1996 2nd Qtr. 1997 25.4
Oasis Pines............ 315 313,950 17.6 997 1st Qtr. 1996 2nd Qtr. 1997 22.8
Denver:
Oasis Denver West(3)... 321 324,375 20.8 1,011 2nd Qtr. 1996 4th Qtr. 1997 27.2
Oasis Lakeway.......... 451 425,770 28.0 944 1st Qtr. 1996 4th Qtr. 1997 37.3
Reno:
Oasis Bluffs I......... 450 501,687 50.1 1,115 2nd Qtr. 1996 3rd Qtr. 1997 37.1
----- --------- ----- ----- ------
Subtotal/weighted
average.............. 1,897 1,984,462 126.5 1,046 $149.8
======
Future Construction
Las Vegas:
Oasis Bluffs II........ 414 461,552 50.6 1,115 (4) (4)
Oasis Harbor II........ 248 250,026 13.6 1,008 (4) (4)
Oasis Miramar.......... 352 350,112 19.6 995 (4) (4)
----- --------- ----- -----
Subtotal/weighted
average.............. 1,014 1,061,690 83.8 1,047
----- --------- ----- -----
Total/weighted average... 2,911 3,046,162 210.3 1,046
===== ========= ===== =====
</TABLE>
- ---------------
(1) Reflects gross acreage for each community.
(2) Includes cost of land.
(3) Owned 50% by the Company through its member interest in Denver West
Apartments, L.L.C. Accordingly, the Company's share of the estimated total
investment will be $13.6 million.
(4) In preliminary planning stage; no construction schedule has been
established. Commencement of construction is contingent upon a number of
factors, including suitable financing, and there can be no assurances as to
when or if such financing will be obtained. See "Risk Factors -- Development
and Acquisition Risks."
The time required to complete the lease-up phase of development varies from
project to project. The Company typically develops its properties in phases,
opening a portion of the total units to occupancy at one time. The Company
begins leasing activities approximately 60 days before the first phase is opened
for occupancy, setting up a temporary leasing office at the property.
The Company has entered into an agreement to purchase a 19.8 acre parcel in
Mission Viejo, California, subject to the satisfaction of certain entitlement
conditions. If the conditions are satisfied and the purchase is completed the
Company intends to build a 380 unit apartment community slated to begin
construction in late 1997. The Company has also entered into an agreement to
purchase a 19.5 acre parcel in the Interlaken High-Technology Business Park,
along Highway 36 which connects Denver and Boulder, Colorado, subject to the
satisfaction of certain development conditions. If the conditions are satisfied
and the purchase is completed the Company intends to build a 340 unit apartment
community slated to begin construction in late 1997.
14
<PAGE> 16
The following table sets forth information regarding stabilization dates of
the Company's completed developments since the Company's initial public
offering:
<TABLE>
<CAPTION>
NUMBER DATE OF STABILIZATION
PROPERTY OF UNITS COMPLETION DATE(1)
- ----------------------------------------------- --------- --------------- ---------------
<S> <C> <C> <C>
Oasis Summit I................................. 78 June 1994 August 1994
Oasis Sands.................................... 48 August 1994 October 1994
Oasis Vintage II............................... 32 August 1994 September 1994
Oasis Vinings II............................... 132 September 1994 January 1995
Oasis Rose..................................... 212 October 1994 January 1995
Oasis Terrace.................................. 336 February 1995 August 1995
Oasis Summit II................................ 156 May 1995 October 1995
Oasis Canyon................................... 200 July 1995 October 1995
Oasis Del Mar.................................. 560 December 1995 June 1996
Oasis Bel Air.................................. 296 December 1995 December 1996
Oasis Pointe................................... 252 March 1996 May 1996
Oasis Cove II.................................. 20 April 1996 August 1996
Oasis Meadows.................................. 383 April 1996 December 1996
Oasis Harbor I................................. 336 November 1996 January 1997
Oasis Deerwood................................. 342 September 1996 May 1997(2)
Oasis Crossings................................ 72 September 1996 December 1996
Oasis Tiara.................................... 400 September 1996 November 1996
Oasis Villas................................... 84 September 1996 February 1997
-----
Total........................................ 3,939
=====
</TABLE>
- ---------------
(1) Date on which the community achieved an occupancy rate of 93%.
(2) Estimated date on which community will achieve an occupancy rate of 93%.
ITEM 3. LEGAL PROCEEDINGS
Neither the Company, the Properties, the development properties, nor the
Commercial Center are subject to any material litigation nor, to the Company's
knowledge, is any material litigation threatened against the Company, the
Properties, the development properties or the Commercial Center, other than
routine litigation and administrative proceedings arising in the ordinary course
of business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
15
<PAGE> 17
PART II
ITEM 5. MARKET FOR REGISTRANTS' COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The Company's common stock is traded on the New York Stock Exchange (the
"NYSE"). As of March 24, 1997, there were approximately 355 stockholders of
record and in excess of 9,000 beneficial stockholders of the Company's common
stock. The Company's common stock first traded on October 22, 1993. Set forth
below are the high and low sales prices as reported on the NYSE of the Company's
common stock for the periods indicated, as well as the dividends declared by the
Company per share of common stock for each period:
<TABLE>
<CAPTION>
DIVIDENDS
DECLARED
HIGH LOW PER SHARE
----- ----- ---------
<S> <C> <C> <C>
1995
First Quarter........................................... $24 5/8 $21 3/4 $ .41
Second Quarter.......................................... 24 1/4 21 .41
Third Quarter........................................... 23 3/4 21 1/2 .41
Fourth Quarter.......................................... 23 3/4 19 1/2 .435
1996
First Quarter........................................... 24 1/2 22 .435
Second Quarter.......................................... 23 1/2 21 .435
Third Quarter........................................... 22 21 1/8 .435
Fourth Quarter.......................................... 23 1/2 20 1/2 .435
1997
First Quarter (through March 24, 1997).................. 23 22 3/4 N/A
</TABLE>
The closing price of the Company's common stock at December 31, 1996 and
1995 was $22.75.
16
<PAGE> 18
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected historical financial information
for the Company and for the multifamily apartment communities and Commercial
Center owned by the Company's predecessors prior to the Company's initial public
offering (the "Original Properties and Commercial Center"). The historical
information for the Company reflects the actual operations of the Company from
the date of the initial public offering and the operating data for the Original
Properties and Commercial Center prior to the date of the Company's initial
public offering.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PROPERTY DATA)
<S> <C> <C> <C> <C> <C>
OPERATING DATA
Revenue....................................................... $ 95,999 $ 76,329 $ 51,897 $ 22,552 $ 15,481
Property operating and maintenance.......................... 27,226 21,485 14,978 6,782 5,242
Property management fees (related party).................... -- -- -- 391 424
General and administrative.................................. 3,230 2,645 2,352 338 --
Real estate taxes........................................... 5,230 4,079 2,814 1,372 980
Interest.................................................... 15,216 7,310 6,371 7,538 7,160
Interest (related party).................................... -- -- -- 1,294 1,533
Interest (non-cash)......................................... 1,118 1,332 673 1,791 1,309
Depreciation and amortization............................... 15,637 12,062 8,689 4,343 3,472
----------- ----------- ----------- -------- --------
Total expenses.......................................... 67,657 48,913 35,877 23,849 20,120
----------- ----------- ----------- -------- --------
Income before gain on sale of real estate assets and
extraordinary item.......................................... 28,342 27,416 16,020 (1,297) (4,639)
----------- ----------- ----------- -------- --------
Gain on sale of real estate assets............................ 2,444 -- -- -- --
Less extraordinary item....................................... 1,403 1,952 -- -- --
----------- -----------
Net income (loss)............................................. 29,383 25,464 16,020 (1,297) (4,639)
OTHER DATA
Funds from Operations(1)...................................... $ 43,766 $ 39,329 $ 24,350
PER SHARE AMOUNTS
Income before extraordinary item (net of preferred
dividend)................................................... $ 1.32 $ 1.29 $ 1.24
Less extraordinary item....................................... .09 .12 --
Net income available for common stockholders.................. $ 1.23 $ 1.17 $ 1.24
Common stock dividends declared............................... $ 1.74 $ 1.64 $ 1.43
RATIOS
Common stock dividend payout(2)............................... 82% 81% 81%
Fixed charge coverage(3),(4).................................. 1.74x 2.10x 2.19x 0.88x 0.52x
EBITDA to interest expense(5)................................. 3.96x 6.58x 4.98x 1.55x 1.02x
PROPERTY DATA(6)
Total communities, end of year................................ 49 43 38 24 15
Total apartment units, end of year............................ 13,428 11,643 9,819 5,317 2,586
Total apartment units, weighted average....................... 12,671 10,610 7,416 3,501 2,546
Weighted average monthly rental income per apartment
unit(7)..................................................... $ 606 $ 570 $ 549 $ 507 $ 480
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Real estate assets............................................ $ 689,265 $ 548,397 $ 434,237 $206,678 $ 97,238
Total assets.................................................. 774,773 641,936 502,432 208,789 102,116
Debt.......................................................... 394,274 250,825 212,093 49,426 110,155
Total liabilities............................................. 402,561 261,482 215,834 50,870 114,572
Stockholders' equity.......................................... 372,212 380,454 286,598 157,919 (12,456)
Weighted average common shares outstanding.................... 16,237,646 16,230,429 12,957,175
</TABLE>
- ---------------
(1) Defined below under "Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Calculation of Funds from
Operations and Funds Available for Distribution."
(2) The common stock dividend payout ratio was computed by dividing common stock
dividends by primary Funds from Operations.
(3) The fixed charge coverage ratio was computed by dividing earnings to fixed
charges. For this purpose, earnings consists of pre-tax income from
continuing operations plus interest expense and amortization of debt
issuance costs. Fixed charges consist of interest expense, capitalized
interest amortization of debt issuance costs.
(4) Earnings for the years ended December 1993 and 1992 were inadequate to cover
fixed charges. For those years, fixed charges exceeded earnings by $1,328
and $5,021, respectively.
(5) The EBITDA to interest expense ratio is computed by dividing the Company's
earnings before interest, income taxes, depreciation and amortization
("EBITDA") by interest expense.
(6) Excludes communities under development.
(7) Excludes rental income from commercial properties.
17
<PAGE> 19
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL BACKGROUND
The following discussion should be read in conjunction with the Selected
Financial Data and the Consolidated Financial Statements and Notes thereto
appearing elsewhere in this report. Oasis Residential, Inc. (the "Company")
became an operating entity on October 22, 1993, when it completed an initial
public offering of common stock (the "Initial Offering"). In connection with the
Initial Offering, the Company acquired 17 properties from the Robert V. Jones,
Corp. and other affiliates (the "Original Properties and Commercial Center") and
acquired 2,023 apartment units.
In July 1994, the Company completed a second public offering of 5,750,000
shares of common stock. The net proceeds of the offering (approximately
$132,000,000) were used to acquire five multifamily communities containing 2,441
units for approximately $98,811,000 including the assumption of $38,880,000 of
mortgage indebtedness, to effectively repay $16,067,000 of construction loan
indebtedness and to reduce the amounts drawn on the Company's credit facilities
by approximately $51,000,000. The balance of the net proceeds was used for
general corporate purposes, including other acquisitions and development
activities.
In April 1995, the Company completed a public offering of 4,165,000 shares
of $2.25 Series A Cumulative Convertible Preferred Stock at $25.00 per share.
The net proceeds of the offering were approximately $99,200,000 of which
$63,000,000 was used to repay credit facility debt, $6,100,000 was used to repay
short-term debt and $23,214,000 was used to repay construction debt. The balance
of the net proceeds was used for working capital purposes.
RESULTS OF OPERATIONS
Increases in the operating results for the periods discussed below are
primarily the result of increases in the number of properties owned and
operated, as well as a result of increased rental rates. Where applicable,
comparisons have been made on a weighted average per unit basis in order to
adjust for such changes in the number of units owned. In computing the weighted
average per unit amounts, income and expenses of the commercial properties have
been eliminated.
Comparison of year ended December 31, 1996 to year ended December 31, 1995
The weighted average number of apartment units increased by 2,061, or 19%,
from 10,610 units in 1995 to 12,671 units in 1996. This increase is primarily
the result of the development of 1,889 units during 1996, as well as the
acquisition and development of 276 and 856 units, respectively, during the
second half of 1995. This increase was partially offset by the sale of two
apartment communities comprising 104 apartment units during December 1996. Total
apartment units owned at the end of each period were 13,428 and 11,643,
respectively.
For the year ended December 31, 1996, net income increased by $3,919,000 as
compared to the year ended December 31, 1995. For the year ended December 31,
1996, net income included an extraordinary charge of $1,403,000 and a gain on
sale of real estate assets of $2,444,000. The extraordinary charge for the year
ended December 31, 1996 related to the unamortized loan fees and prepayment
penalty fees associated with the mortgage notes payable which were repaid with
the proceeds from the issuance of $150,000,000 in notes payable in the fourth
quarter of 1996. The gain on sale of real estate assets related to the sale of
Oasis Star I (44 units) and Oasis Reef (60 units) in the fourth quarter of 1996.
For the year ended December 31, 1995, net income included an extraordinary
charge of $1,952,000 for unamortized loan fees and costs associated with the
credit facility debt that was retired during the third quarter of 1995. When
examining income on an income before gain on sale of real estate assets and
extraordinary charge basis, income for the year ended December 31, 1996
increased by $926,000 as compared to the year ended December 31, 1995. This
increase was due to increased rental and other income of $19,594,000 and
$76,000, respectively, as well as a decrease in interest expense (non-cash),
which represents amortization of loan fees and costs, of $214,000. Offsetting
these factors were increases in property operating and maintenance expenses of
$5,741,000, general and administrative expenses of $585,000, real estate taxes
of $1,151,000, interest expense
18
<PAGE> 20
of $7,906,000, and depreciation and amortization of $3,575,000. The increases in
revenue and expenses were primarily the result of operating a greater number of
apartment units in 1996 as compared to 1995.
Multifamily Communities
The following table presents the operations of the Company's multifamily
apartment communities (excluding the commercial properties and corporate general
and administrative expenses) for the year ended December 31, 1996 with
comparative amounts for 1995:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1996 1995 % CHANGE
------- ------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C> <C>
Rental income......................................... $92,196 $72,595 27%
Other income.......................................... 2,858 2,388 20%
--
------- -------
Total income..................................... 95,054 74,983 27%
--
------- -------
Property operating and maintenance.................... 27,085 21,356 27%
Real estate taxes..................................... 5,189 4,038 29%
--
------- -------
Total property operating expenses................ 32,274 25,394 27%
--
------- -------
Property net operating income, before interest
expense and depreciation and amortization...... $62,780 $49,589 27%
======= ======= ==
</TABLE>
Rental income increased by $19,601,000, or 27%, from $72,595,000 in 1995 to
$92,196,000 in 1996. Of the increase, $16,533,000 was attributable to
development communities, $1,412,000 was attributable to Oasis Centennial, which
was acquired in the third quarter of 1995, and the balance was attributable to
increased rents at communities owned during both periods. The weighted average
monthly rental income per apartment unit was approximately $606 in 1996 compared
to $570 in 1995.
Other income (consisting primarily of nonrefundable security deposits,
application and cleaning fees, laundry and vending income) increased by
$470,000, or 20%, from $2,388,000 in 1995 to $2,858,000 in 1996, primarily due
to the operation of additional apartment communities in 1996 as compared to
1995.
Property operating and maintenance expenses increased by $5,729,000, or
27%. On a weighted average per unit, per month basis, these expenses increased
by $10, or 6%, from $168 in 1995 to $178 in 1996. These increases are primarily
attributable to general increases in utility rates during 1996, as well as to
additional costs associated with the Company's implementation of its brand name
operating strategy.
Real estate taxes increased by $1,151,000, or 29%, primarily due to the
acquisition and development of additional apartment communities in 1996 and
during the second half of 1995. On a weighted average per unit, per month basis,
real estate taxes increased by $2, or 6%, from $32 in 1995 to $34 in 1996. This
increase is primarily due to the periodic re-assessment of the value of the
Company's communities. Nevada law requires the taxing authorities to re-assess
approximately twenty percent of all properties each year. Accordingly, each of
the Company's properties will be re-assessed for tax purposes approximately once
every five years.
19
<PAGE> 21
"Same Store" Portfolio
The operating performance of the 40 communities and the first phase of one
community containing an aggregate of 9,819 apartment units which the Company
owned and operated (excluding communities under development) as of January 1,
1995, are summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1996 1995 % CHANGE
------- ------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C> <C>
Rental income......................................... $67,850 $66,194 3%
Other income.......................................... 2,163 2,315 (7)%
--
------- -------
Total income..................................... 70,013 68,509 2%
--
------- -------
Property operating and maintenance.................... 20,424 19,630 4%
Real estate taxes..................................... 3,934 3,769 4%
--
------- -------
Total property operating expenses................ 24,358 23,399 4%
--
------- -------
Property net operating income, before interest
expense and depreciation and amortization...... $45,655 $45,110 1%
======= ======= ==
</TABLE>
The increase in rental income of $1,656,000, or 3%, was primarily due to an
increase in the average rental rates.
Other income decreased by $152,000, or 7%, primarily due to a decrease in
fees unrelated to rent such as nonrefundable security deposits, application and
cleaning fees, and late fees. This decrease is directly correlated to the
reduction in turnover experienced by the Company during 1996 resulting from the
implementation of its brand name operating strategy.
The increase in property operating and maintenance expenses of $794,000, or
4%, was due to increased utility costs of $383,000, increased payroll costs of
$247,000, increased marketing costs of $92,000 and increased administrative
costs of $80,000, which were partially offset by decreases in other operating
expenses of $8,000.
Real estate taxes increased by $165,000, or 4%, from $3,769,000 in 1995 to
$3,934,000 in 1996, primarily due to the re-assessment of certain communities by
the taxing authorities.
Comparison of year ended December 31, 1995 to year ended December 31, 1994
The weighted average number of apartment units increased by 3,194, or 43%,
from 7,416 units in 1994 to 10,610 units in 1995. This increase is primarily the
result of the development of 1,548 units and the acquisition of 276 units during
1995, as well as the acquisition of 3,136 units during the second half of 1994.
Total apartment units owned at the end of each period were 11,643 and 9,819,
respectively.
For the year ended December 31, 1995, income before extraordinary item
increased by $11,396,000 as compared to the year ended December 31, 1994. This
increase was due to increased rental and other income of $23,933,000 and
$499,000, respectively. Offsetting these factors were increases in property
operating and maintenance expenses of $6,507,000, general and administrative
expenses of $293,000, real estate taxes of $1,265,000, interest expense of
$939,000, interest expense (non-cash), which represents amortization of loan
fees and costs, of $659,000, and depreciation and amortization of $3,373,000.
These increases were primarily the result of operating a greater number of
apartment units in 1995 as compared to 1994.
In September 1995, the Company executed a new two year revolving line of
credit and retired two lines of credit that were previously outstanding. In
connection with the retirement of these lines of credit, the Company wrote-off
$1,952,000 of loan fees and costs that remained unamortized as of the date of
retirement.
20
<PAGE> 22
Multifamily Communities
The following table presents the operations of the Company's multifamily
apartment communities (excluding the commercial properties and corporate general
and administrative expenses) for the year ended December 31, 1995 with
comparative amounts for 1994:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1995 1994 % CHANGE
------- ------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C> <C>
Rental income......................................... $72,595 $48,881 49%
Other income.......................................... 2,388 1,794 33%
--
------- -------
Total income..................................... 74,983 50,675 48%
--
------- -------
Property operating and maintenance.................... 21,356 14,898 43%
Real estate taxes..................................... 4,038 2,781 45%
--
------- -------
Total property operating expenses................ 25,394 17,679 44%
--
------- -------
Property net operating income, before interest
expense and depreciation and amortization...... $49,589 $32,996 50%
======= ======= ==
</TABLE>
Rental income increased by $23,714,000, or 49%, from $48,881,000 in 1994 to
$72,595,000 in 1995. Of the increase, $14,081,000 was attributable to
acquisition communities, $8,730,000 was attributable to development communities
and the balance was attributable to increased rents at communities owned during
both periods. The weighted average monthly rental income per apartment unit was
approximately $570 in 1995 compared to $549 in 1994.
Other income (consisting primarily of nonrefundable security deposits,
laundry and vending income) increased by $594,000, or 33%, from $1,794,000 to
$2,388,000, primarily due to the operation of additional apartment communities
in 1995 as compared to 1994.
Property operating and maintenance expenses increased by $6,458,000, or
43%. On a weighted average per unit basis, these expenses increased by $4, or
less than 1%, from $2,009 in 1994 to $2,013 in 1995. Of the $6,458,000 increase,
$4,217,000 was attributable to acquired communities, $2,083,000 was attributable
to developed communities and the balance was attributable to communities owned
during both periods.
Real estate taxes increased by $1,257,000, or 45%, primarily due to the
acquisition and development of additional apartment communities in 1995 and
during the second half of 1994. On a weighted average per unit basis, real
estate taxes increased by $6, or 2%, from $375 in 1994 to $381 in 1995. This
increase is primarily due to the periodic re-assessment of the value of the
Company's communities.
21
<PAGE> 23
"Same Store" Portfolio
The following summarized financial information presents a comparison of 24
operating apartment communities, containing 5,317 apartment units which the
Company owned and operated (excluding communities under development) as of
January 1, 1994:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1995 1994 % CHANGE
------- ------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C> <C>
Rental income......................................... $36,307 $34,768 4%
Other income.......................................... 1,128 1,170 (4)%
------- ------- ----
Total income..................................... 37,435 35,938 4%
------- ------- ----
Property operating and maintenance.................... 10,665 10,507 2%
Real estate taxes..................................... 2,103 2,031 4%
------- ------- ----
Total property operating expenses..................... 12,768 12,538 2%
------- ------- ----
Property net operating income, before interest expense
and depreciation and amortization................... $24,667 $23,400 5%
======= ======= ====
</TABLE>
The increase in rental income of $1,539,000, or 4%, was primarily due to
increases in average rental rates.
Other income decreased by $42,000, or 4%, primarily due to a decrease in
fees unrelated to rent such as late fees and other miscellaneous charges.
The increase in property operating and maintenance expenses of $158,000, or
2%, was due to increased payroll costs of $92,000, increased repairs and
maintenance of $116,000 which were partially offset by decreases in marketing
expenses of $43,000, utilities of $5,000 and other operating expenses of $2,000.
Real estate taxes increased by $72,000, or 4%, from $2,031,000 in 1994 to
$2,103,000 in 1995, primarily due to the re-assessment of certain communities by
the taxing authorities.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities decreased by $2,136,000 from
$41,392,000 in 1995 to $39,256,000 in 1996. This decrease is primarily due to a
reduction in accounts payable and accrued expenses, as well as a result of the
payment of prepayment penalty fees in the amount of $689,000. This decrease was
partially offset by increased rental income resulting from an increase in the
number of properties owned and operated, and as a result of a reduction in the
increase of deferred assets and other costs.
Net cash used in investing activities decreased by $7,854,000, from
$155,023,000 in 1995 to $147,169,000 in 1996. During 1995, the Company had 18
communities under construction comprising 5,314 apartment units, of which six
communities comprised of 1,548 apartment units were substantially completed at
December 31, 1995. During the year ended December 31, 1996, the Company had 15
communities under construction (including a 321 unit apartment community being
developed as part of a joint venture agreement), comprising 4,448 apartment
units, of which eight communities comprising 1,889 apartment units were
completed during the period. The estimated total investment upon completion of
the 1,897 apartment units scheduled to be completed in 1997 is $149,800,000. The
estimated total investment for the remaining 662 apartment units will be
finalized prior to the commencement of construction.
In December 1996, the Company sold Oasis Star I, a 44 unit apartment
community, and Oasis Reef, a 60 unit apartment community, both located in Las
Vegas, for $2,700,000 and $3,900,000, respectively, resulting in a combined gain
of $2,444,000. The cash proceeds to the Company were $5,302,000. Additionally,
in connection with the sale of Oasis Reef, the sale agreement provided for a
$1,100,000 note receivable which was issued in favor of the Company. The note
bears interest at a fixed rate of 9%, requires interest-only payments beginning
in December 1997 with the entire balance to be paid in full by December 1999.
22
<PAGE> 24
The Company funds its development activities through a combination of
working capital, construction loans and credit facility. In September 1996, the
Company increased the borrowing capacity on the credit facility from
$150,000,000 to $200,000,000. Advances under the credit facility bear interest,
at the Company's election, of either London Interbank Offered Rate ("LIBOR")
plus 1.25% or the prime lending rate, which reflects the interest rate
reductions obtained by the Company during 1996. In July 1996, the LIBOR-based
rate on the credit facility was reduced to LIBOR plus 1.50% from LIBOR plus
1.75%, and then in December 1996, the rate was once again reduced to LIBOR plus
1.25%. At December 31, 1996, the Company had available borrowing capacity under
the credit facility of $114,264,000.
Net cash provided by financing activities declined by $7,204,000 from
$112,544,000 in 1995 to $105,340,000 in 1996. This decrease is primarily
because, unlike 1995, there was no issuance of stock (net proceeds in 1995 from
the issuance of convertible preferred stock was $99,197,000), as well as due to
an increase in dividends paid during 1996 as compared to 1995 primarily
resulting from the preferred stock issuance. Partially offsetting these factors
is an increase in proceeds from debt as a result of the issuance in November
1996 of $150,000,000 in notes payable.
In March 1996, the Company refinanced a $16,000,000 loan with Allstate
Insurance Company, collateralized by the 368 unit Oasis Paradise I apartment
community. The new interest rate is 7.10%, a reduction of 1.93% from the
previous rate of 9.03%. The loan maturity was also extended from April 1996 to
April 2008.
In November 1996, the Company completed the issuance of $150,000,000 in
notes payable which priced in three tranches. The Company borrowed $50,000,000
in notes payable due November 15, 2001 at a coupon rate of 6.75% discounted to
yield 6.76%, $50,000,000 in notes payable due November 15, 2003 at a coupon rate
of 7.00% discounted to yield 7.03% and $50,000,000 in notes payable due November
15, 2006 at a coupon rate of 7.25% discounted to yield 7.28%.
The net proceeds from the offering were used to retire five mortgage notes
payable in the amount of approximately $53,087,000 and to reduce the outstanding
balance on the credit facility. The Company recorded an extraordinary charge in
the amount of $1,403,000 for the remaining unamortized deferred financing costs
and prepayment penalties associated with these mortgage notes payable.
At December 31, 1996, the Company had total indebtedness of approximately
$394,274,000, which includes $149,786,000 (net of a discount of $214,000) of
unsecured fixed rate debt, $135,062,000 of fixed rate mortgage debt, $85,736,000
of credit facility debt and $23,690,000 of fixed rate tax-exempt debt.
The Company anticipates meeting its short-term liquidity requirements
through a combination of cash flow from operations retained for investment
purposes, cash available from its credit facility and construction loans plus
additional long-term borrowings. The Company believes that net cash provided by
operations will be adequate to meet its operating requirements and to pay
dividends in accordance with real estate investment trust ("REIT") requirements.
The Company expects to meet its long-term liquidity requirements, such as
funds for acquisition and development activity and the repayment of debt,
through new long-term borrowings and the issuance of additional debt securities
or equity securities. In March 1997, the Company filed a shelf registration
statement with the Securities and Exchange Commission which covers up to an
aggregate of $250,000,000 of debt securities, preferred stock, depositary stock,
common stock and warrants to purchase common stock and preferred stock which the
Company may issue from time to time.
23
<PAGE> 25
The following table presents certain information concerning the development
and expansion activities of the Company during 1996:
<TABLE>
<CAPTION>
COST PRIMARY SOURCE OF FUNDING
NUMBER ESTIMATED EXPENDED --------------------------------
OF TOTAL THROUGH CONSTRUCTION WORKING CAPITAL/
COMMUNITIES UNITS INVESTMENT(1) 12/31/96(1) LOAN CREDIT FACILITY
- --------------------------------- ------ ------------- ----------- ------------ ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Completed developments/expansions
Oasis Cove II.................. 20 $ 1,250 $ 1,250 $ 1,250
Oasis Crossings................ 72 5,252 5,252 5,252
Oasis Deerwood................. 342 28,585 28,585 28,585
Oasis Harbor I................. 336 22,307 22,307 22,307
Oasis Meadows.................. 383 24,458 24,458 24,458
Oasis Pointe................... 252 16,883 16,883 16,883
Oasis Tiara.................... 400 26,997 26,997 26,997
Oasis Villas................... 84 6,393 6,393 6,393
----- -------- -------- --------
Subtotal.................... 1,889 132,125 132,125 132,125
Under construction
1997 completions:
Oasis Bluffs I.............. 450 37,100 29,590 37,100
Oasis Denver West(2)........ 321 27,200 13,529 $ 15,430 11,770
Oasis Gateway............... 360 25,400 23,124 25,400
Oasis Lakeway............... 451 37,300 24,261 37,300
Oasis Pines................. 315 22,800 20,606 22,800
----- -------- -------- ------- --------
1,897 149,800 111,110 15,430 134,370
1998 completions:
Oasis Bluffs II(3).......... 414 (3) 5,821(4) 5,821
Oasis Harbor II(3).......... 248 (3) 5,800(4) 5,800
----- -------- -------- ------- --------
662 11,621 11,621
Subtotal....................... 2,559 149,800 122,731 15,430 145,991
Land held for future development
Oasis Miramar.................. 352 3,766(4) 3,766
----- -------- -------- ------- --------
Total....................... 4,800 $ 281,925 $ 258,622 $ 15,430 $281,882
===== ======== ======== ======= ========
</TABLE>
- ---------------
(1) Includes cost of land.
(2) Owned 50% by the Company through its member interest in Denver West
Apartments, L.L.C. As of December 31, 1996, costs expended include the
Company's and the co-owner's equity contributions, as well as a loan from
the Company to the joint venture.
(3) Estimated total investment for these projects will be finalized prior to the
commencement of construction.
(4) Represents cost of land and infrastructure.
24
<PAGE> 26
The following table sets forth certain information with respect to debt at
December 31, 1996. As of that date, 8,632 of the Company's operating apartment
units and the commercial properties were unencumbered:
<TABLE>
<CAPTION>
NUMBER BALANCE
ENCUMBERED OF DECEMBER 31,
LENDER COMMUNITIES UNITS MATURITY INTEREST RATE 1996
- -------------------------- ----------------- ------ -------- ------------- ------------
(DOLLARS IN
THOUSANDS)
<S> <C> <C> <C> <C> <C>
Credit facility:
Wells Fargo Bank........ Unsecured 09/97(1) LIBOR + 1.25%(2) $ 85,736
--------
Notes payable:
5 year notes payable.... Unsecured 11/01 6.75% 50,000
7 year notes payable.... Unsecured 11/03 7.00% 50,000
10 year notes payable... Unsecured 11/06 7.25% 50,000
--------
150,000(3)
--------
Mortgage notes payable:
Lutheran Brotherhood.... Oasis Club 320 10/98 6.90% 9,059
Teachers Insurance...... Oasis Del Mar 560 12/02 8.46% 21,732
FNMA-MBS................ Oasis Greens 432 08/01 8.63% 12,000
FNMA.................... Oasis Hills 184 10/03 7.50% 2,630
FNMA.................... Oasis Landing 144 10/03 7.50% 3,967
Allstate................ Oasis Paradise I 368 04/08 7.10% 15,822
FNMA-MBS................ Oasis Plaza 300 08/01 8.63% 6,000
FNMA.................... Oasis Rainbow 232 10/03 7.50% 6,384
FNMA.................... Oasis Topaz 270 12/01 9.50% 6,541
FNMA.................... Oasis Vintage I 336 10/03 7.50% 10,947
Teachers Insurance...... Various(4) 1,068 12/05 8.13% 39,980
----- --------
4,214 135,062
----- --------
Tax-exempt bonds:
Bonds................... Oasis Park 224 01/26 7.29% 7,669(5)
Bonds................... Oasis Wexford 358 11/25 6.45% 16,021
----- --------
582 23,690
----- --------
Subtotal............. 4,796 394,488
----- --------
Unamortized discount on
notes payable........ (214)
========
Total................ 4,796 $394,274
===== ========
</TABLE>
- ---------------
(1) The Company has the option to extend the maturity of the credit facility for
one additional year.
(2) During 1996, the LIBOR-based rate on the credit facility was reduced to
LIBOR + 1.25% from LIBOR + 1.75%.
(3) $149,786 net after discount.
(4) Communities collateralized are Oasis Bel Air, Oasis Canyon, Oasis Rose, and
Oasis Trails.
(5) $1,090 of the outstanding balance is taxable.
25
<PAGE> 27
The following table sets forth certain information with respect to
unencumbered properties at December 31, 1996:
<TABLE>
<CAPTION>
NUMBER APPROXIMATE
UNENCUMBERED COMMUNITIES OF UNITS INVESTMENT
------------------------------------------------ -------- ----------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Operating communities........................... 8,632 $431,036
Development communities......................... 1,576 97,584
------ --------
Total...................................... 10,208 $528,620
====== ========
</TABLE>
CAPITAL EXPENDITURES
The Company capitalizes the direct and indirect costs of expenditures for
the acquisition or development of apartment communities and replacements and
improvements. Non-revenue generating capital expenditures are those replacements
which recur on a regular basis, but which have estimated useful lives of more
than one year, such as roofing, heating, ventilation and air conditioning and
exterior repainting. Revenue generating expenditures are those improvements
which enhance the community's net operating income generating capability either
through increased rental rates or reduced operating expenses.
During 1995, the Company implemented its customer focused brand name
operating strategy. The process required many on-site improvements, including
the changing of property signage (which includes the Oasis name and logo) and
was completed in 1996. These costs are considered revenue generating capital
expenditures in that the Company believes that the Oasis brand name enhances the
Company's ability to attract new residents, retain existing residents, gain
additional resident referrals and retain more residents transferring from one
Oasis community to another.
At newly acquired communities, the Company often finds it necessary to
upgrade the physical appearance of the properties and to complete maintenance
and repair work which had been deferred by the prior owners. These activities
often result in heavier capital expenditures in the early years of Company
ownership. Some of these expenditures which would normally be considered
non-revenue generating capital expenditures or expense items are classified as
revenue generating expenditures when carpets and appliances are replaced and the
community is substantially upgraded to meet the image and quality standards
represented by the Oasis brand name. Upon completion of the rehabilitation
process, normal recurring capital expenditures such as carpet and appliances are
expensed as incurred.
Interest, real estate taxes and other carrying costs incurred during the
development period of communities under construction are capitalized and, upon
completion of the project, depreciated over the lives of the project.
INFLATION
The Company leases apartments to its residents under lease terms generally
ranging from six to 12 months. Management believes that the short-term lease
contracts lessen the impact of inflation by giving the Company the ability to
adjust rental rates to market levels as leases expire. The impact of recent low
rates of inflation has not been significant to the Company's operations, except
for the positive effect that low inflation has had on reducing the Company's
interest cost. Inflation and inflationary expectations and their effect on
interest rates may affect the Company in the future by changing the underlying
value of the Company's real estate assets or by affecting the Company's costs of
financing its operations.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
None.
26
<PAGE> 28
CALCULATION OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR DISTRIBUTION
The Company considers Funds from Operations ("FFO") to be an appropriate
measure of performance of an equity REIT. FFO, as defined by the National
Association of Real Estate Investment Trusts ("NAREIT"), is defined as income
before gains (losses) on investments and extraordinary items (computed in
accordance with generally accepted accounting principles) plus real estate
depreciation and after adjustments for significant non-recurring items, if any.
Funds Available for Distribution ("FAD") is defined as FFO less non-revenue
producing capital expenditures and includes an "add back" to net income for the
amortization of deferred financing costs and depreciation of non-real estate
assets and other amortization. The Company believes that to facilitate a clear
understanding of the Company's operating results, FFO and FAD should be examined
in conjunction with net income and should not be considered as alternatives to
net income as an indication of the Company's operating performance or as
alternatives to cash flow as a measure of liquidity.
The following table presents the calculations of FFO and FAD:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Calculation of Funds from Operations:
Income before gain on sale of real estate assets and
extraordinary item................................. $ 28,342
Depreciation on real estate assets.................... 15,424
-------
Funds from Operations............................ $ 43,766
=======
Calculation of Funds Available for Distribution:
Funds from Operations................................. $ 43,766
Add:
Amortization of deferred financing costs........... 1,118
Depreciation of non-real estate assets............. 199
Other amortization................................. 14
Less: Non-revenue generating capital expenditures..... (2,569)
-------
Funds Available for Distribution................. $ 42,528
=======
</TABLE>
- ---------------
NOTES TO CALCULATIONS OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR
DISTRIBUTION
1. The Company generally expenses most recurring non-revenue generating property
expenditures, including carpet and appliance replacements, except for certain
expenditures on acquisition communities where major improvements are required
to bring the community up to the operating standards of the Oasis portfolio.
2. Non-revenue generating expenditures at the communities consist of
replacements and equipment additions that do not enhance the revenue
generating capabilities of the communities.
3. Non-revenue generating expenditures at the corporate office consist primarily
of computer and office equipment acquisitions.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The report of the independent accountants and consolidated financial
statements and schedule listed in the accompanying index are filed as part of
this report. See "Index to Financial Statements" on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
27
<PAGE> 29
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There is hereby incorporated herein by reference the information appearing
under the caption "Proposal 1: Election of Directors" and under the caption
"Board of Directors and Officers" of the registrant's definitive Proxy Statement
for its 1997 Annual Meeting filed with the Securities and Exchange Commission.
ITEM 11. EXECUTIVE COMPENSATION
There is hereby incorporated herein by reference the information appearing
under the caption "Executive Compensation" of the registrant's definitive Proxy
Statement for its 1997 Annual Meeting filed with the Securities and Exchange
Commission.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is hereby incorporated herein by reference the information appearing
under the caption "Security Ownership of Certain Beneficial Owners and
Management" of the registrant's definitive Proxy Statement for its 1997 Annual
Meeting filed with the Securities and Exchange Commission.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is hereby incorporated herein by reference the information appearing
under the caption "Executive Compensation -- Employment and Other Contracts" of
the registrant's definitive Proxy Statement for its 1997 Annual Meeting filed
with the Securities and Exchange Commission.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements
1. The financial statements listed in the accompanying Index to
Financial Statements, including the Report of Independent Accountants, are
filed as part of this Report.
2. The financial statement schedule listed in the accompanying Index
to Financial Statements is filed as part of this Report.
3. Exhibits: The exhibits listed in the accompanying Index to Exhibits
are filed as part of this Report.
(b) Reports on Form 8-K.
1. Company filed Form 8-K dated November 18, 1996 setting forth under
Item 5 fixed charge coverage ratios.
2. Company filed Form 8-K dated November 18, 1996 setting forth under
Item 5 certain earnings before interest, income taxes, depreciation and
amortization ("EBITDA") to fixed charge ratios and EBITDA to interest
expense ratios.
3. Company filed Form 8-K dated November 20, 1996 setting forth under
Item 7 and filing as exhibits an Underwriting Agreement dated November 20,
1996, a Form of Indenture dated November 25, 1996 and a Form of
Supplemental Indenture dated November 25, 1996.
28
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant and has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
OASIS RESIDENTIAL, INC.
By: /s/ ROBERT V. JONES
------------------------------------
Robert V. Jones
Chief Executive Officer and
Chairman of the Board
Date: March 24, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------- ---------------
<C> <S> <C>
/s/ ROBERT V. JONES Chief Executive Officer and March 24, 1997
- ------------------------------------------ Chairman of the Board
Robert V. Jones (Principal Executive Officer)
/s/ SCOTT S. INGRAHAM President, Chief Operating March 24, 1997
- ------------------------------------------ Officer
Scott S. Ingraham and Director
/s/ ALLAN O. HUNTER, JR. Executive Vice President and March 24, 1997
- ------------------------------------------ Director
Allan O. Hunter, Jr.
/s/ WALTER B. EEDS Executive Vice President and March 24, 1997
- ------------------------------------------ Director
Walter B. Eeds
/s/ JOHN M. CLAYTON Senior Vice President and Chief March 24, 1997
- ------------------------------------------ Financial Officer (Principal
John M. Clayton Financial Officer)
/s/ MARIANNE K. AGUIAR Vice President and Controller March 24, 1997
- ------------------------------------------ (Principal Accounting Officer)
Marianne K. Aguiar
/s/ JOHN M. GALVIN Director March 24, 1997
- ------------------------------------------
John M. Galvin
/s/ KENNY C. GUINN Director March 24, 1997
- ------------------------------------------
Kenny C. Guinn
/s/ PETER L. RHEIN Director March 24, 1997
- ------------------------------------------
Peter L. Rhein
/s/ ROBERT H. SMITH Director March 24, 1997
- ------------------------------------------
Robert H. Smith
/s/ EDWARD R. MULLER Director March 24, 1997
- ------------------------------------------
Edward R. Muller
</TABLE>
29
<PAGE> 31
OASIS RESIDENTIAL, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
OASIS RESIDENTIAL, INC.
Report of Independent Accountants................................................... F-2
Consolidated Balance Sheets at December 31, 1996 and 1995........................... F-3
Consolidated Statements of Operations for the Years ended December 31, 1996, 1995
and 1994......................................................................... F-4
Consolidated Statements of Changes in Stockholders' Equity for the Years ended
December 31, 1996, 1995 and 1994................................................. F-5
Consolidated Statements of Cash Flows for the Years ended December 31, 1996, 1995
and 1994......................................................................... F-6
Notes to the Consolidated Financial Statements...................................... F-7
Schedule III: Real Estate and Accumulated Depreciation.............................. F-20
</TABLE>
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted or the
information is presented in the consolidated financial statements or related
notes.
F-1
<PAGE> 32
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors and
Stockholders Oasis Residential, Inc.
We have audited the accompanying consolidated financial statements and the
financial statement schedule of Oasis Residential, Inc. and its subsidiaries
(the "Company") as of December 31, 1996 and 1995 and for each of the three years
in the period ended December 31, 1996 as listed on page F-1 of this Form 10-K.
These consolidated financial statements and the financial statement schedule are
the responsibility of the management of the Company. Our responsibility is to
express an opinion on these consolidated financial statements and the financial
statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
the Company as of December 31, 1996 and 1995 and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1996 in conformity with generally accepted accounting principles. In addition,
in our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
San Francisco, California
January 24, 1997, except for Note 13
as to which the date is March 6, 1997.
F-2
<PAGE> 33
OASIS RESIDENTIAL, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1995
-------- --------
<S> <C> <C>
ASSETS
Real estate assets:
Land................................................................. $ 93,484 $ 79,860
Buildings and improvements........................................... 552,500 434,341
Furniture and fixtures............................................... 39,515 28,132
-------- --------
685,499 542,333
Less accumulated depreciation........................................ 53,049 38,743
-------- --------
632,450 503,590
Land held for development............................................ 3,766 6,064
Construction in progress............................................. 109,202 113,525
-------- --------
Net real estate assets....................................... 745,418 623,179
Cash and cash equivalents.............................................. 3,397 5,970
Restricted cash........................................................ 2,976 2,495
Investment in and advances to joint venture............................ 9,574 --
Deposits on real estate assets......................................... 2,000 --
Deferred costs and other assets (net of accumulated amortization of
$1,802 and $934 at December 31, 1996 and 1995, respectively)......... 11,408 10,292
-------- --------
Total assets................................................. $774,773 $641,936
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Debt................................................................. $394,274 $250,825
Resident deposits and prepaid rent................................... 2,066 1,688
Accounts payable and accrued expenses................................ 6,221 8,969
-------- --------
Total liabilities............................................ 402,561 261,482
-------- --------
Commitments and contingencies (Notes 4 and 14)
Stockholders' equity:
Preferred stock, $2.25 Series A Cumulative Convertible, $.01 par
value, liquidation preference of $25 per share, 15,000,000 shares
authorized, 4,165,000 share issued and outstanding at December 31,
1996 and 1995..................................................... 42 42
Common stock, $.01 par value, 100,000,000 shares authorized,
16,237,646 shares issued and outstanding at December 31, 1996 and
1995.............................................................. 162 162
Paid-in capital...................................................... 386,910 386,910
Distributions in excess of accumulated earnings...................... (14,902) (6,660)
-------- --------
Total stockholders' equity................................... 372,212 380,454
-------- --------
Total liabilities and stockholders' equity................... $774,773 $641,936
======== ========
</TABLE>
See notes to consolidated financial statements
F-3
<PAGE> 34
OASIS RESIDENTIAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Rental income........................................ $ 92,843 $ 73,249 $ 49,316
Other income......................................... 3,156 3,080 2,581
---------- ---------- ----------
95,999 76,329 51,897
---------- ---------- ----------
Expenses:
Property operating and maintenance................... 27,226 21,485 14,978
General and administrative........................... 3,230 2,645 2,352
Real estate taxes.................................... 5,230 4,079 2,814
Interest............................................. 15,216 7,310 6,371
Interest (non-cash).................................. 1,118 1,332 673
Depreciation and amortization........................ 15,637 12,062 8,689
---------- ---------- ----------
67,657 48,913 35,877
---------- ---------- ----------
Income before gain on sale of real estate assets and
extraordinary item................................... 28,342 27,416 16,020
Gain on sale of real estate assets..................... 2,444 -- --
---------- ---------- ----------
Income before extraordinary item....................... 30,786 27,416 16,020
Extraordinary item..................................... (1,403) (1,952) --
---------- ---------- ----------
Net income............................................. 29,383 25,464 16,020
Less preferred dividend requirement.................... 9,372 6,534 --
---------- ---------- ----------
Earnings available for common stockholders............. $ 20,011 $ 18,930 $ 16,020
========== ========== ==========
Per share amounts:
Income before extraordinary item (net of preferred
dividend requirement)............................. $ 1.32 $ 1.29 $ 1.24
Less extraordinary item.............................. 0.09 0.12 --
---------- ---------- ----------
Earnings available for common stockholders........... $ 1.23 $ 1.17 $ 1.24
========== ========== ==========
Weighted average number of common shares outstanding... 16,237,646 16,230,429 12,957,175
========== ========== ==========
</TABLE>
See notes to consolidated financial statements
F-4
<PAGE> 35
OASIS RESIDENTIAL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DISTRIBUTIONS
PREFERRED STOCK COMMON STOCK IN EXCESS
$.01 PAR VALUE $.01 PAR VALUE OF TOTAL
------------------ ------------------- PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS EQUITY
---------- ------ ----------- ------ -------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993... -- -- 10,468,134 $105 $155,813 $ 2,001 $ 157,919
Shares issued for cash (net
of issuance costs)...... -- -- 5,750,000 57 131,942 -- 131,999
Net income................. -- -- -- -- -- 16,020 16,020
Dividends paid............. -- -- -- -- -- (19,340) (19,340)
--------- --- ---------- ---- -------- -------- --------
Balance, December 31, 1994... -- -- 16,218,134 162 287,755 (1,319) 286,598
Shares issued for cash (net
of issuance costs)...... 4,165,000 $ 42 19,512 -- 99,155 -- 99,197
Net income................. -- -- -- -- -- 25,464 25,464
Dividends paid:
Preferred stock......... -- -- -- -- -- (4,191) (4,191)
Common stock............ -- -- -- -- -- (26,614) (26,614)
--------- --- ---------- ---- -------- -------- --------
Balance, December 31, 1995... 4,165,000 42 16,237,646 162 386,910 (6,660) 380,454
Net income................. -- -- -- -- -- 29,383 29,383
Dividends paid:
Preferred stock......... -- -- -- -- -- (9,372) (9,372)
Common stock............ -- -- -- -- -- (28,253) (28,253)
--------- --- ---------- ---- -------- -------- --------
Balance, December 31, 1996... 4,165,000 $ 42 16,237,646 $162 $386,910 $ (14,902) $ 372,212
========= === ========== ==== ======== ======== ========
</TABLE>
See notes to consolidated financial statements
F-5
<PAGE> 36
OASIS RESIDENTIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income...................................................... $ 29,383 $ 25,464 $ 16,020
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization................................ 15,637 12,062 8,689
Amortization of discount on notes payable.................... 2 -- --
Gain on sale of real estate assets........................... (2,444) -- --
Extraordinary item (write-off of unamortized loan fees)...... 714 1,952 --
Interest (non-cash).......................................... 1,118 1,332 673
Increase in deferred costs and other assets.................. (2,784) (6,334) (5,393)
Increase (decrease) in liabilities:
Resident deposits and prepaid rent......................... 378 141 862
Accounts payable and accrued expenses...................... (2,748) 6,775 1,435
--------- --------- ---------
Net cash provided by operating activities.................. 39,256 41,392 22,286
--------- --------- ---------
Cash flows from investing activities:
Purchase of real estate assets.................................. (15,241) (28,640) (120,981)
Deposits on real estate assets.................................. (2,000) -- --
Net proceeds from the sale of real estate assets................ 5,302 -- --
Investment in and advances to joint venture..................... (9,574) -- --
Construction of real estate assets.............................. (125,656) (126,383) (98,467)
--------- --------- ---------
Net cash used in investing activities...................... (147,169) (155,023) (219,448)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from debt.............................................. 329,284 232,235 140,693
Proceeds from related party notes payable....................... -- -- 1,500
Principal payments on debt...................................... (185,838) (193,503) (57,320)
Principal payments on related party notes payable............... -- -- (1,500)
(Increase) decrease in restricted cash.......................... (481) 5,420 (7,313)
Net proceeds from public offerings of stock..................... -- 99,197 131,999
Cash dividends paid -- preferred stock.......................... (9,372) (4,191) --
Cash dividends paid -- common stock............................. (28,253) (26,614) (19,340)
--------- --------- ---------
Net cash provided by financing activities.................. 105,340 112,544 188,719
--------- --------- ---------
Net decrease in cash and cash equivalents.................. (2,573) (1,087) (8,443)
Cash and cash equivalents, beginning of year...................... 5,970 7,057 15,500
--------- --------- ---------
Cash and cash equivalents, end of year............................ $ 3,397 $ 5,970 $ 7,057
========= ========= =========
Supplemental information:
Cash paid during the year for interest.......................... $ 23,274 $ 15,553 $ 9,863
========= ========= =========
Supplemental schedule of non-cash investing and financing
activities:
Note receivable in connection with the sale of real estate
assets...................................................... $ 1,100 -- --
========= ========= =========
Assumption of debt in connection with acquisitions........... -- -- $ 79,294
========= ========= =========
</TABLE>
See notes to consolidated financial statements
F-6
<PAGE> 37
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. ORGANIZATION AND FORMATION OF THE COMPANY
Oasis Residential, Inc. (the "Company"), which was incorporated in the
State of Nevada on March 23, 1993, is a self-administered and self-managed real
estate investment trust ("REIT"), engaged in the development, acquisition and
operation of predominantly upscale apartment communities in the greater Las
Vegas, Reno and Denver metropolitan areas. The Company commenced operations as a
public company on October 22, 1993 with an initial portfolio of 23 apartment
communities comprising 5,215 units and a 30,000 square foot commercial center in
Henderson, Nevada in which the Company's headquarters is located. At December
31, 1996, the Company owned and operated 49 apartment communities containing
13,428 apartment units.
The Company has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended, (the "Code") commencing with the taxable year ended
December 31, 1993. In order for the Company to qualify as a REIT, it must
distribute annually at least 95% of its REIT taxable income, as defined in the
Code, to its stockholders and comply with certain other requirements.
Accordingly, no provision has been made for federal income taxes in the
accompanying consolidated financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Financial Statement Presentation:
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
The Company's investment in the joint venture is accounted for using the
equity method.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenue and expenses during the reporting
periods. Actual results could differ from those estimates.
Real Estate Assets and Depreciation:
Rental property is stated at the lower of cost or fair value. Expenditures
which increase the revenue potential of a property or which extend the useful
life of the asset are generally capitalized. Maintenance and repair expenditures
necessary to maintain a property in operating condition are charged to expense
when incurred. Depreciation is calculated on a straight-line basis over the
estimated useful lives of the depreciable real estate assets, which range from
18 to 40 years for buildings and improvements and 5 to 12 years for furniture
and fixtures.
Costs are capitalized during the development of constructed assets
(including interest, property taxes and other direct and indirect costs)
beginning when active development commences and ending when construction is
substantially complete and the property is ready for occupancy.
Losses in carrying values of investment assets are provided by management
when the losses become apparent and the investment asset is considered impaired.
Management evaluates its investment properties, at least quarterly, to assess
whether any impairment indications are present. If an asset is considered to be
impaired, a loss is provided to reduce the carrying value of the property to its
estimated fair value. No such losses have been required or provided in the
accompanying financial statements.
F-7
<PAGE> 38
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Cash and Cash Equivalents:
The Company considers highly liquid short-term investments with initial
maturities of three months or less to be cash equivalents.
Cash and cash equivalents are primarily held in a single financial
institution, and at times, such balances may be in excess of the Federal Deposit
Insurance Corporation insurance limit.
Restricted Cash:
Restricted cash balances at December 31, 1996 and 1995 are required under
certain debt agreements for property tax and insurance expenses and to secure
the payment of certain replacement and capital improvement costs.
Deferred Financing Costs:
Included in deferred costs and other assets are costs associated with
obtaining debt financing and credit enhancements. Such costs are being amortized
over the term of the associated debt or credit enhancement.
Accounting for Stock-Based Compensation:
The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" ("APB 25"), and related interpretations in
accounting for its stock-based compensation plans.
Per Share Data:
Earnings per share for the years ended December 31, 1996, 1995 and 1994 is
computed based upon the weighted average number of shares outstanding during the
period plus (in periods where they have a dilutive effect) the net additional
number of shares which would be issuable upon the exercise of stock options
assuming that the Company used the proceeds received to repurchase outstanding
shares at market prices.
Additionally, other potentially dilutive securities, which may not qualify
as common stock equivalents, are considered when calculating earnings per share
on a primary and fully diluted basis. No such securities were outstanding during
1994 and the assumed conversion of such securities in 1996 and 1995 results in
an anti-dilutive effect; therefore, earnings per share presentation on a primary
and fully diluted basis is unnecessary.
Interest Rate Protection Agreements:
Premiums paid to purchase interest rate protection agreements are
capitalized and amortized over the terms of those agreements using the
straight-line method which approximates the effective interest method.
Unamortized premiums are included in deferred costs and other assets.
3. INTEREST CAPITALIZED
Interest costs associated with projects under development aggregating
$9,350, $8,499 and $3,510 for the years ended December 31, 1996, 1995 and 1994,
respectively, were capitalized.
4. INVESTMENT IN AND ADVANCES TO JOINT VENTURE
In April 1995, the Company and Stevinson Partnership, Ltd. ("Stevinson")
entered into an operating agreement to form Denver West Apartments, L.L.C., a
limited liability company (the "Joint Venture"). Under the terms of the
agreement, the Company and Stevinson each have a 50% interest in Oasis Denver
F-8
<PAGE> 39
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
West, a 321 unit apartment community located in Denver, Colorado. In November
1996, the Joint Venture finalized the loan agreement with Northwestern Mutual
Life Company for the construction and permanent financing of the community in
the amount of $15,430 which the Company has guaranteed. The loan bears interest
at a rate of 8.30% and matures on August 1, 2007.
At December 31, 1996, the Company had contributed capital of $3,955 and had
advanced to the Joint Venture a loan of approximately $4,400. The loan bears
interest at the prime lending rate plus 2% (prime rate at December 31, 1996 was
8.25%) and will be repaid from operations once construction is completed.
Additionally, the Company has incurred $1,219 of additional costs that are not
accounted for at the joint-venture level. At December 31, 1996, the underlying
asset of the Joint Venture was under construction and had no operating activity.
5. DEFERRED COSTS AND OTHER ASSETS
Deferred financing costs which are included in deferred costs and other
assets aggregated to $7,006 and $6,871 at December 31, 1996 and 1995,
respectively. Accumulated amortization which related to deferred financing costs
aggregated to $1,766 and $912 at December 31, 1996 and 1995, respectively.
6. DEBT
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1995
-------- --------
<S> <C> <C>
Notes Payable: $150,000 --
In November 1996, the Company completed a public offering of $150,000
of unsecured, fixed rate notes payable which priced in three tranches
(the "Notes Payable"). The Company borrowed $50,000 due November 15,
2001 at a coupon rate of 6.75%, $50,000 due November 15, 2003 at a
coupon rate of 7.00% and $50,000 due November 15, 2006 at a coupon
rate of 7.25%. The Notes Payable were sold at a discount, and at
December 31, 1996, the unamortized discount was $214.
The Notes Payable may be redeemed at any time at the option of the
Company, in whole or in part, upon payment of certain yield
maintenance penalties.
The Notes Payable contain certain covenants, the most restrictive of
which, requires that the Company may not at any time own Total
Unencumbered Assets, as defined, equal to less than 150% of the
aggregate outstanding principal amount of the unsecured indebtedness
of the Company on a consolidated basis.
The net proceeds from the offering were used to retire approximately
$53,087 in Mortgage Notes Payable and to reduce the outstanding
balance on the Credit Facility. The Company recorded an extraordinary
charge in the amount of $1,403 for the remaining unamortized deferred
financing costs and prepayment penalties in connection with the
retirement of these Mortgage Notes Payable.
</TABLE>
F-9
<PAGE> 40
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1995
-------- --------
<S> <C> <C>
Mortgage Notes Payable: 135,062 189,788
Mortgage Notes Payable were comprised of seven loans at December 31,
1996 and twelve loans at December 31, 1995, each of which is
collateralized by one or more apartment community. The Mortgage Notes
Payable generally require monthly installments of interest and
principal over various terms extending through the year 2008.
Interest rates on fixed rate Mortgage Notes Payable, which aggregated
$135,062 and $159,788 at December 31, 1996 and 1995, respectively,
ranged from 6.45% to 9.50% (weighted average interest rate was 7.81%
at December 31, 1996). Variable rate Mortgage Notes Payable
aggregated to $0 and $30,000 at December 31, 1996 and 1995,
respectively.
In March 1996, the Company refinanced a $16,000 loan with Allstate
Insurance Company collateralized by the 368 unit Oasis Paradise I
apartment community. The new interest rate is 7.10%, a reduction from
the previous rate of 9.03%. The loan maturity was extended from April
1996 to April 2008.
In November 1996, five Mortgage Notes Payable totaling $53,087 were
repaid with proceeds from the issuance of the Notes Payable.
Credit Facility: 85,736 37,086
In 1995, the Company entered into a $150,000 credit facility agreement
(the "Credit Facility") with various banks led by Wells Fargo Bank
and retired its two lines of credit that were previously outstanding.
In connection with the retirement of the two prior lines of credit,
the Company, for the year ended December 31, 1995, recorded an
extraordinary charge of $1,952 for the remaining unamortized deferred
financing costs and other costs associated with those loans. Advances
under the Credit Facility initially bore an interest rate, at the
Company's election, of either the London Interbank Offered Rate
("LIBOR") plus 1.75% or the prime lending rate. During 1996, the
Credit Facility was amended to increase the facility to $200,000 and
reduce the LIBOR-based interest rate to LIBOR plus 1.25%. At December
31, 1996, LIBOR ranged from 5.53% to 5.78% for one, three, six and
twelve-month indices, and the prime rate was at 8.25%. At December
31, 1996, the weighted average interest rate on borrowings
outstanding on the Credit Facility was 6.96%. The Company has the
option to extend the Credit Facility for one additional year.
The Credit Facility contains certain covenants, the most restrictive of
which limits the borrowing capacity of the Company to 50% of Gross
Asset Value, as defined, and restricts distributions to stockholders
to 95% of Funds from Operations, as defined. The Company does not
anticipate that these covenants will affect its ability to pay
dividends in accordance with the Company's current dividend policy.
</TABLE>
F-10
<PAGE> 41
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1995
-------- --------
<S> <C> <C>
Tax-Exempt Bonds: 23,690 23,949
The Company has tax-exempt housing bonds in the principal amount of
$16,235 collateralized by Oasis Wexford. The bonds are payable in
monthly installments of principal and interest. The interest rate on
the tax-exempt bonds is 6.45% and is subject to "reset" on December
1, 2005 based upon market conditions at that time. The bonds are due
on November 1, 2025.
The Company has $6,660 (Series 1995A) of tax-exempt housing bonds and
$1,090 (Series 1995B) of taxable housing bonds collateralized by
Oasis Park. The bonds are payable in monthly installments of
principal and interest. The interest rate on these bonds is 7.29%.
The Series 1995A bonds are due on January 1, 2026 and the Series
1995B bonds are due on July 1, 2006.
Construction Debt: -- 2
At December 31, 1995, the Company had outstanding a construction loan
on its Oasis Deerwood community. The loan was payable monthly at
LIBOR plus 1.90% and matured in June 2000. In December 1996, the loan
was repaid and closed.
394,488 250,825
Less unamortized discount on Notes Payable 214 --
-------- --------
Total $394,274 $250,825
======== ========
</TABLE>
Scheduled principal payments on debt, assuming that the Company exercises
its option to extend the maturity date on the Credit Facility, are as follows:
<TABLE>
<CAPTION>
MORTGAGE
NOTES NOTES CREDIT TAX-EXEMPT
PAYABLE PAYABLE FACILITY BONDS TOTAL
-------- -------- ------- ---------- --------
<S> <C> <C> <C> <C> <C>
1997................................ $ 1,601 $ 240 $ 1,841
1998................................ 31,682 $85,736 295 117,713
1999................................ 1,400 320 1,720
2000................................ 1,514 345 1,859
2001................................ $ 50,000 25,610 355 75,965
Thereafter.......................... 100,000 73,255 22,135 195,390
-------- -------- ------- ------- --------
$150,000 $135,062 $85,736 $ 23,690 $394,488
======== ======== ======= ======= ========
</TABLE>
At December 31, 1996 and 1995, management estimates that the carrying
amount of debt approximates fair value; however, current estimates of fair value
could differ significantly from amounts realized in market exchanges.
7. STOCKHOLDERS' EQUITY
In October 1993, the Company completed a public offering of 8,970,000
shares of common stock at a price per share of $21.75. The net proceeds from
this offering were approximately $180,000 and were used for
F-11
<PAGE> 42
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
the acquisition of communities, the repayment of first and second lien
preexisting mortgage indebtedness and for working capital purposes.
In July 1994, the Company completed a second public offering of 5,750,000
shares of common stock at a price per share of $24.50. The net proceeds from
this offering were approximately $132,000 and were used for the acquisition of
five multifamily communities containing 2,441 units for approximately $98,800,
including the assumption of $38,800 of mortgage indebtedness, the repayment of
certain adjustable rate debt, the reduction of the balance owing on the
Company's credit facility and for working capital purposes.
In April 1995, the Company issued 4,165,000 shares of Series A Cumulative
Convertible Preferred Stock ("Preferred Stock") at $25.00 per share. The net
proceeds from the offering were approximately $99,200 and were used for the
repayment of certain short-term and construction debt, the reduction of the
balance owing on the credit facility and for working capital purposes. The
shares pay a cumulative dividend quarterly in arrears in an amount per share
equal to the greater of $2.25 per annum or the cash dividends paid or payable on
a number of shares of common stock equal to the number of shares of common stock
into which a share of Preferred Stock is convertible. The shares generally have
no voting rights and have a liquidation preference of $25.00 per share plus
accrued and unpaid distributions. The Preferred Stock is convertible at the
option of the holder at any time into shares of common stock, at a conversion
price of $24.64 per share of common stock (equivalent to a conversion rate of
1.0146 shares of common stock per share of Preferred Stock), subject to
adjustment in certain circumstances. The Preferred Stock is not redeemable by
the Company prior to April 30, 2001.
In 1995, the Company adopted a Dividend Reinvestment and Share Purchase
Plan (the "Plan"). The Company has reserved 1,000,000 shares for issuance under
the Plan. The Plan allows stockholders to acquire additional shares of the
Company by automatically reinvesting dividends and making voluntary cash
payments. For the year ended December 31, 1996, the Company issued no new common
shares to stockholders who elected to participate in this Plan; all shares were
purchased in the open market.
As described in Note 1, the Company has elected to be treated, for federal
income tax purposes, as a REIT. As such, the Company is required to distribute
annually, in the form of dividends to its common stockholders, at least 95% of
its taxable income. In reporting periods where taxable income exceeds net
income, stockholders' equity will be reduced by the distributions in excess of
net income and will be increased by the excess of net income over distributions
in periods where net income exceeds taxable income. For tax reporting purposes,
a portion of the common dividends declared during the years ended December 31,
1996 and 1995 represents a return of capital.
For federal income tax purposes, the following tables, on a per share
basis, summarize the taxability of dividends paid in 1996 and 1995:
Year ended December 31, 1996
<TABLE>
<CAPTION>
COMMON SHARES PREFERRED SHARES
----------------------- -----------------------
DIVIDEND PERCENTAGE DIVIDEND PERCENTAGE
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Ordinary income.................................... $ 1.13 65% $ 2.25 100%
Return of capital.................................. 0.61 35% -- --
----- --- ----- ---
$ 1.74 100% $ 2.25 100%
===== === ===== ===
</TABLE>
F-12
<PAGE> 43
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Year ended December 31, 1995
<TABLE>
<CAPTION>
COMMON SHARES PREFERRED SHARES
----------------------- -----------------------
DIVIDEND PERCENTAGE DIVIDEND PERCENTAGE
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Ordinary income.................................... $ 1.35 82% $ 1.01 100%
Return of capital.................................. 0.29 18% -- --
----- --- ----- ---
$ 1.64 100% $ 1.01 100%
===== === ===== ===
</TABLE>
8. RELATED PARTY TRANSACTIONS
An affiliated company leased space in one of the commercial properties
through May 1995. Related party rental revenue was $0, $30 and $72 for the years
ended December 31, 1996, 1995 and 1994, respectively.
9. OPERATING LEASES
The Company owns two commercial properties, one of which also partially
serves as its headquarters building. The portion of the commercial properties
not used by the Company is leased to tenants under net operating leases with
initial terms extending to the year 2008. Future minimum rentals under
noncancellable operating leases at both commercial properties, excluding tenant
reimbursements of expenses, as of December 31, 1996, are as follows:
<TABLE>
<S> <C>
1997................................................ $ 378
1998................................................ 356
1999................................................ 317
2000................................................ 184
2001................................................ 135
Thereafter.......................................... 631
------
Total..................................... $2,001
======
</TABLE>
10. STOCK-BASED COMPENSATION PLANS
In May 1995, the Company adopted the 1995 Equity Participation Plan (the
"1995 Plan") to supplement the Company's 1993 Stock Option Plan (the "1993
Plan"). The Company also has a Stock Option Plan for Outside Directors (the
"Outside Directors Plan").
The 1995 Plan provides incentives for officers, key employees and
consultants through the grant or issuance of options, restricted stock
performance awards, dividend equivalents, deferred stock, stock payments and
stock appreciation rights ("SARs"). The aggregate number of shares that may be
issued under the 1995 Plan may not exceed 1,135,000, less the number of shares
covered by options outstanding under the 1993 Plan and the Outside Directors
Plan. The 1995 Plan limits the number of shares that any individual may receive
in any year under the plan to 150,000 and limits the dollar value of awards,
other than options and SARs that may be paid to any employee for any year to
$100.
The 1993 Plan provides for the issuance of incentive and non-qualified
stock options under the Code and grants of the Company's common stock contingent
upon the attainment of certain performance goals or subject to other
restrictions. A total of 700,000 shares of the Company's common stock have been
reserved for issuance under the 1993 Plan and the Outside Directors Plan.
F-13
<PAGE> 44
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Options awarded under both the 1993 and 1995 Plans provide for the options
to be granted at a price equal to the market value of the Company's common stock
at the date of grant, to vest ratably over a four year period and to expire ten
years from the date the options were granted.
Under the Outside Directors Plan, each of the Company's non-employee
directors is granted an option to purchase 3,000 shares of common stock at the
time of appointment/election to the Board of Directors. In addition, following
each annual meeting of stockholders, each of the Company's non-employee
directors, who have served as a member for one year or more, will receive an
option to purchase up to 3,000 shares of common stock at the market price of the
shares on the date of grant. All options granted under the Outside Directors
Plan will vest one year after the date of grant. The Outside Directors Plan is
administered by the Board of Directors.
The following table shows the activity and balances for each stock option
plan:
<TABLE>
<CAPTION>
OUTSIDE
1993 PLAN & OPTION PRICE DIRECTORS OPTION PRICE
1995 PLAN PER SHARE PLAN PER SHARE
----------- ----------------- --------- -----------------
<S> <C> <C> <C> <C>
Balance, December 31, 1993....... 300,000 $21.75 15,000 $24.00
Options granted................ 320,000 $24.50 - $25.625 -- --
------- ------
Balance, December 31, 1994....... 620,000 15,000
Options granted................ 5,000 $22.50 15,000 $22.625 - $22.875
Options cancelled.............. (10,000) (3,000)
------- ------
Balance, December 31, 1995....... 615,000 27,000
Options granted................ 351,000 $22.375 - $22.625 12,000 $22.50
Options cancelled.............. (20,000) --
------- ------
Balance, December 31, 1996....... 946,000 39,000
======= ======
</TABLE>
The number of shares available for grant as of December 31, 1996, in
connection with all the plans was 150,000 shares. None of the options granted
are contingent upon the attainment of performance goals or subject to other
restrictions. As of December 31, 1996, outstanding options to purchase 405,750
shares of common stock were exercisable.
The Company applies APB 25 and related interpretations in accounting for
its stock-based compensation plans. Accordingly, no compensation expense has
been recognized for its stock-based compensation plans. Had compensation cost
for the Company's stock option plans been determined based upon the fair value
at the grant date for awards under these plans consistent with the methodology
prescribed under Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," the Company's net income and earnings
per share would have been reduced by approximately $634 or $0.04 per share for
the year ended December 31, 1996, and approximately $123 or $0.01 per share for
the year ended December 31, 1995. The estimated fair value of the options
granted during 1996 ranged from $1.43 to $1.45 per share on the date of grant
using the Black-Scholes option pricing model with the following assumptions:
dividend yield of 7.26%, volatility of 16.82%, risk free rates of 4.19% to 5.60%
and an expected life of four years. The estimated fair value of the options
granted during 1995 ranged from $1.63 to $1.78 per share on the date of grant
using the Black-Scholes option pricing model with the following assumptions:
dividend yield of 7.26%, volatility of 16.82%, risk free rates of 4.72% to 5.60%
and an expected life of four years.
11. EMPLOYEE BENEFITS
Effective February 1995, the Company adopted an employee investment plan
(the "Plan"), under Section 401(k) of the Internal Revenue Code. Employees who
are at least 21 years old and who have
F-14
<PAGE> 45
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
completed one year of eligibility service may become participants in the Plan.
Each participant may make contributions to the Plan through salary deferrals in
amounts of at least 1% to a maximum of 15% of the participant's compensation,
subject to certain limitations imposed by the Internal Revenue Code. The Company
contributes an amount equal to 50% of the first 6% of the participant's
compensation contributed. A participant's contribution to the Plan is 100%
vested and nonforfeitable. A participant will become vested in 20% of the
Company's contributions after one year of service while enrolled in the Plan and
increasing by 20% for each additional year of service while enrolled in the
Plan.
12. GAIN ON SALE OF REAL ESTATE ASSETS
In December 1996, the Company sold, in separate transactions, Oasis Star I,
a 44 unit apartment community, and Oasis Reef, a 60 unit apartment community,
both located in Las Vegas, for an aggregate consideration of $6,600 including a
$1,100 note receivable, resulting in a combined gain of $2,444. The note
receivable bears interest at 9.00% and requires interest-only payments beginning
in December 1997 until maturity in December 1999. At December 31, 1996, this
note receivable was included in deferred costs and other assets.
13. SUBSEQUENT EVENTS
On January 27, 1997, the Company declared a quarterly dividend of $0.4525
per common share to stockholders of record on February 6, 1997, payable on
February 19, 1997. In addition, the Company declared a quarterly dividend for
its Series A Cumulative Convertible Preferred Stock of $0.5625 per share payable
on February 17, 1997 to stockholders of record on February 3, 1997.
In the first quarter of 1997, the Company entered into an agreement to
purchase a 19.5 acre parcel in the Interlaken High-Technology Business Park in
the Denver metro area, subject to the satisfaction of certain development
conditions. If the conditions are satisfied and the purchase is completed, the
Company intends to build a 340 unit apartment community slated to begin
construction in late 1997. In connection with this agreement, the Company has
delivered to the seller a deposit in the amount of $493, which is nonrefundable
except in the event of the seller's default, or the failure of any condition to
closing.
In March 1997, the Company filed a shelf registration statement with the
Securities and Exchange Commission which covers up to an aggregate of $250,000
of debt securities, preferred stock, depositary stock, common stock and warrants
to purchase common stock and preferred stock which the Company may issue from
time to time.
14. COMMITMENTS AND CONTINGENCIES
The Company is presently under construction or grading on seven additional
communities totaling 2,559 units in its three markets, Las Vegas, Reno and
Denver. The Company anticipates completing 1,897 of these units in 1997. The
estimated total investment upon completion of the 1,897 units scheduled to be
completed in 1997 is $149,800. The estimated total investment for the remaining
662 units will be finalized prior to the commencement of construction.
In 1994, the Company entered into an agreement with an executive officer
that provided for the Company's acquisition from the executive officer of
certain contractual rights to acquire two properties for development in
Colorado. The agreement provides that when development of the two Colorado
properties is completed and stabilized, and subject to the properties meeting
certain performance criteria, the executive officer will have the right to
receive up to $1,000 in the Company's common stock. In the event that the
executive officer's employment is terminated for cause, the executive officer's
rights under the agreement will be forfeited. At December 31, 1996, such
criteria had not yet been satisfied.
F-15
<PAGE> 46
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
In November 1996, the Company entered into an agreement to purchase a 19.8
acre parcel in Mission Viejo, California, subject to the satisfaction of certain
entitlement conditions. If the conditions are satisfied and the purchase is
completed, the Company intends to build a 380 unit apartment community slated to
begin construction in late 1997. In accordance with the terms of the agreement,
the Company made a deposit in the amount of $2,000 into an escrow account. The
payment is fully refundable until the seller completes certain obligations under
the agreement and thereafter, is considered nonrefundable but may be applied to
reduce the amounts due to the seller at the close of escrow.
The Company is party to various legal actions which are incidental to its
business. Management believes that these actions will not have a material
adverse affect on the financial position or the results of operations of the
Company.
15. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarterly financial information for the years ended 1996 and 1995 are as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue................................... $ 21,752 $ 23,207 $ 24,875 $ 26,165
Income before gain on sale of real and
extraordinary item...................... 6,955 7,057 7,104 7,226
Gain on sale of real estate assets........ -- -- -- 2,444
Extraordinary item........................ -- -- -- (1,403)
Net income................................ 6,955 7,057 7,104 8,267
Preferred dividend requirement............ 2,343 2,343 2,343 2,343
Earnings available for common
stockholders............................ 4,612 4,714 4,761 5,924
Per share data:
Income before gain on sale of real
assets and extraordinary item (net of
preferred dividend requirement)...... $ 0.28 $ 0.29 $ 0.29 $ 0.60
Gain on sale of real estate assets...... -- -- -- (0.15)
Extraordinary Item...................... -- -- -- (0.09)
Earnings available for common
stockholders......................... 0.28 0.29 0.29 0.36
Weighted average number of common shares
outstanding............................. 16,237,646 16,237,646 16,237,646 16,237,646
</TABLE>
F-16
<PAGE> 47
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue................................... $ 17,759 $ 18,370 $ 19,508 $ 20,692
Income before extraordinary item.......... 5,605 7,115 7,197 7,499
Extraordinary item........................ -- -- (1,952) --
Net income................................ 5,605 7,115 5,245 7,499
Preferred dividend requirement............ -- 1,848 2,343 2,343
Earnings available for common
stockholders............................ 5,605 5,267 2,902 5,156
Per share data:
Income before extraordinary item (net
preferred dividend requirement)...... $ 0.35 $ 0.32 $ 0.30 $ 0.32
Extraordinary Item...................... -- -- (0.12) --
Earnings available for common
stockholders......................... 0.35 0.32 0.18 0.32
Weighted average number of common shares
outstanding............................. 16,218,134 16,228,212 16,237,646 16,237,646
</TABLE>
F-17
<PAGE> 48
SCHEDULE III
OASIS RESIDENTIAL, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
INITIAL COST TOTAL COST(A)
---------------------------------- COST ----------------------------------
BUILDINGS FURNITURE SUBSEQUENT TO BUILDINGS FURNITURE
12/31/96 AND AND CONSTRUCTION/ AND AND
PROPERTY NAME ENCUMBRANCES LAND IMPROVEMENTS FIXTURES ACQUISITION LAND IMPROVEMENTS FIXTURES
- ------------------ ------------ ------- ------------ --------- ------------- ------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Oasis Bay $ 1,321 $ 3,342 $ 283 $ 259 $ 1,321 $ 3,401 $ 483
Oasis Bel Air $ 11,079(C) 2,206 16,118 549 135 2,206 16,207 595
Oasis Breeze 2,340 11,538 226 908 2,340 12,051 621
Oasis Canyon 7,484(C) 1,724 10,706 359 73 1,724 10,737 401
Oasis Centennial 2,592 9,803 276 198 2,592 9,942 335
Oasis Centre 423 1,159 19 325 425 1,471 30
Oasis Cliffs 1,619 9,730 1,630 1,178 1,619 10,344 2,194
Oasis Club 9,059 3,177 10,462 751 1,078 3,177 11,206 1,085
Oasis Cove(B) 1,003 4,068 386 180 1,018 4,095 524
Oasis Crossings 673 4,426 153 -- 673 4,426 153
Oasis Deerwood 1,868 26,245 472 -- 1,868 26,245 472
Oasis Del Mar 21,732 4,073 31,439 1,032 111 4,073 31,488 1,094
Oasis Emerald 579 3,335 533 446 580 3,627 686
Oasis Glen 1,120 4,939 112 165 1,120 5,019 197
Oasis Greens 12,000 709 17,077 295 1,415 709 17,747 1,040
Oasis Harbor I 2,446 19,137 724 -- 2,446 19,137 724
Oasis Heights 1,485 8,761 245 765 1,486 9,020 750
Oasis Heritage 3,628 26,162 540 4,407 3,628 27,414 3,695
Oasis Hills 2,630 550 4,469 300 234 550 4,586 417
Oasis Island 760 4,095 196 179 761 4,069 400
Oasis Landing 3,967 505 5,937 104 350 505 6,109 282
Oasis Meadows 2,216 21,447 795 -- 2,216 21,447 795
Oasis Mini Storage 304 976 2 154 304 1,087 45
Oasis Morning 42 1,468 135 423 49 1,623 396
Oasis Nellis
Commercial 288 576 -- 1 288 576 1
Oasis Orchid 2,056 10,270 1,527 764 2,056 10,364 2,197
Oasis Palms 1,021 6,586 799 589 1,022 6,769 1,204
Oasis Paradise 15,822 7,640 27,280 624 1,142 7,843 27,437 1,406
Oasis Park 7,669 1,217 8,087 224 605 1,217 8,610 306
Oasis Pearl 585 1,581 224 194 587 1,653 344
<CAPTION>
DATE OF
ACCUMULATED CONSTRUCTION/ DEPRECIABLE
PROPERTY NAME TOTAL DEPRECIATION ACQUISITION LIFE
- ------------------ -------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Oasis Bay $ 5,205 $ 954 8/90 5-40 Years
Oasis Bel Air 19,008 414 12/95 5-40 Years
Oasis Breeze 15,012 1,026 10/93 5-40 Years
Oasis Canyon 12,862 448 7/95 5-40 Years
Oasis Centennial 12,869 360 9/95 5-40 Years
Oasis Centre 1,926 441 10/89 5-40 Years
Oasis Cliffs 14,157 4,575 7/88 5-40 Years
Oasis Club 15,468 2,583 12/89 5-40 Years
Oasis Cove(B) 5,637 930 5/90 & 4/96 5-40 Years
Oasis Crossings 5,252 12 9/96 5-40 Years
Oasis Deerwood 28,585 268 9/96 5-40 Years
Oasis Del Mar 36,655 952 10/95 5-40 Years
Oasis Emerald 4,893 1,473 11/88 5-40 Years
Oasis Glen 6,336 391 7/94 5-40 Years
Oasis Greens 19,496 1,585 10/93 5-40 Years
Oasis Harbor I 22,307 96 11/96 5-40 Years
Oasis Heights 11,256 754 2/94 5-40 Years
Oasis Heritage 34,737 2,043 7/94 5-40 Years
Oasis Hills 5,553 1,140 6/91 5-40 Years
Oasis Island 5,230 899 6/90 5-40 Years
Oasis Landing 6,896 532 10/93 5-40 Years
Oasis Meadows 24,458 256 4/96 5-40 Years
Oasis Mini Storage 1,436 67 7/94 5-40 Years
Oasis Morning 2,068 1,122 1978 5-40 Years
Oasis Nellis
Commercial 865 35 7/94 5-40 Years
Oasis Orchid 14,617 3,972 9/89 5-40 Years
Oasis Palms 8,995 2,330 9/94 5-40 Years
Oasis Paradise 36,686 2,124 3/94 5-40 Years
Oasis Park 10,133 525 9/94 5-40 Years
Oasis Pearl 2,584 668 7/87 5-40 Years
</TABLE>
F-18
<PAGE> 49
<TABLE>
<CAPTION>
INITIAL COST TOTAL COST(A)
---------------------------------- COST ----------------------------------
BUILDINGS FURNITURE SUBSEQUENT TO BUILDINGS FURNITURE
12/31/96 AND AND CONSTRUCTION/ AND AND
PROPERTY NAME ENCUMBRANCES LAND IMPROVEMENTS FIXTURES ACQUISITION LAND IMPROVEMENTS FIXTURES
- ------------------ ------------ ------- ------------ --------- ------------- ------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
DATE OF
ACCUMULATED CONSTRUCTION/ DEPRECIABLE
PROPERTY NAME TOTAL DEPRECIATION ACQUISITION LIFE
- ------------------ -------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Oasis Place 2,189 5,950 196 179 2,195 6,024 295
Oasis Plaza 6,000 2,541 6,677 151 2,157 2,541 8,127 858
Oasis Pointe 2,056 14,273 554 -- 2,056 14,273 554
Oasis Rainbow 6,384 714 6,245 962 713 714 6,603 1,317
Oasis Ridge 1,899 9,869 219 723 1,899 10,070 741
Oasis Rose 7,936(C) 1,943 9,926 453 186 1,964 10,043 501
Oasis Sands 601 2,417 56 76 601 2,474 75
Oasis Springs 1,638 11,547 231 698 1,638 11,803 673
Oasis Star(D) 211 312 39 119 212 379 90
Oasis Suites 1,464 8,470 306 608 1,464 8,635 749
Oasis Summit 2,275 17,537 479 329 2,352 17,637 631
Oasis Terrace 1,568 14,869 530 648 1,568 15,346 701
Oasis Tiara 4,129 22,086 782 -- 4,129 22,086 782
Oasis Topaz 6,541 2,377 6,353 143 2,953 2,377 8,694 755
Oasis Trails 13,481(C) 3,247 15,222 298 1,029 3,226 15,801 769
Oasis View 341 3,908 316 1,133 341 4,094 1,263
Oasis Villas 996 5,235 162 -- 996 5,235 162
Oasis Vinings 1,857 11,624 365 184 1,857 11,732 441
Oasis Vintage 10,947 2,942 14,237 1,019 212 2,943 14,369 1,098
Oasis Vista 2,856 12,930 50 972 2,856 13,500 452
Oasis Wexford 16,021 2,843 16,111 358 648 2,843 16,553 564
Oasis Winds 2,309 9,425 152 2,619 2,309 11,112 1,084
-------- ------- -------- ------- ------- ------- -------- -------
158,752 93,166 536,442 21,336 32,464 93,484 552,497 37,427
Land held for
development 3,766
-------- ------- -------- ------- ------- ------- -------- -------
158,752 93,166 536,442 21,336 32,464 97,250 552,497 37,427
Construction in
progress
-------- ------- -------- ------- ------- ------- -------- -------
$158,752 $93,166 $536,442 $21,336 $32,464 $97,250 $552,497 $37,427
======== ======= ======== ======= ======= ======= ======== =======
<CAPTION>
Oasis Place 8,514 427 7/94 5-40 Years
Oasis Plaza 11,526 779 10/93 5-40 Years
Oasis Pointe 16,883 308 3/96 5-40 Years
Oasis Rainbow 8,634 2,745 11/88 5-40 Years
Oasis Ridge 12,710 935 10/93 5-40 Years
Oasis Rose 12,508 682 10/94 5-40 Years
Oasis Sands 3,150 156 9/94 5-40 Years
Oasis Springs 14,114 816 7/94 5-40 Years
Oasis Star(D) 681 138 6/91 5-40 Years
Oasis Suites 10,848 644 7/94 5-40 Years
Oasis Summit 20,620 974 7/94 & 7/95 5-40 Years
Oasis Terrace 17,615 782 2/95 5-40 Years
Oasis Tiara 26,997 177 9/96 5-40 Years
Oasis Topaz 11,826 798 5/93 5-40 Years
Oasis Trails 19,796 1,067 7/94 5-40 Years
Oasis View 5,698 3,172 1983 5-40 Years
Oasis Villas 6,393 14 9/96 5-40 Years
Oasis Vinings 14,030 863 12/93 5-40 Years
Oasis Vintage 18,410 1,768 1/93 5-40 Years
Oasis Vista 16,808 879 7/94 5-40 Years
Oasis Wexford 19,960 912 12/94 5-40 Years
Oasis Winds 14,505 913 10/93 5-40 Years
-------- -------
683,408 52,924
Land held for
development 3,766
-------- -------
687,174 52,924
Construction in
progress 109,202
-------- -------
$796,376 $ 52,924
======== =======
</TABLE>
- ---------------
(A) The aggregate cost for federal income tax purposes at December 31, 1996 is
$706,050.
(B) Initial cost includes the expansion of Oasis Cove totaling 20 units.
(C) Encumbrance represents a portion of the $39,980 Teachers Insurance and
Annuity Association loan allocated to the property based upon relative size.
(D) Initial cost was reduced to reflect the sale of 44 units at Oasis Star I.
F-19
<PAGE> 50
OASIS RESIDENTIAL, INC.
NOTE TO SCHEDULE III
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
1. RECONCILIATION OF REAL ESTATE AND ACCUMULATED DEPRECIATION:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Real estate investments:
Balance at beginning of year............................. $547,181 $433,450 $206,361
Additions................................................ 144,312 113,731 227,089
Dispositions............................................. (4,319) -- --
-------- -------- --------
Balance at end of year................................... $687,174 $547,181 $433,450
======== ======== ========
Accumulated depreciation:
Balance at beginning of year............................. $ 38,499 $ 26,605 $ 18,281
Additions................................................ 15,438 11,894 8,324
Dispositions............................................. (1,013) -- --
-------- -------- --------
Balance at end of year................................... $ 52,924 $ 38,499 $ 26,605
======== ======== ========
</TABLE>
F-20
<PAGE> 51
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -------------------------------------------------------------------------------------
<C> <S>
3.1 Third Amended and Restated Articles of Incorporation of Oasis Residential, Inc.(1)
3.2 Fourth Amended and Restated Bylaws of Oasis Residential, Inc.(1)
10.1 Purchase and Sale Agreement for Cypress Springs between the Company and Ty-De
Development, Inc. (Oasis Landing)(1)
10.1.1 Amendment to Purchase and Sale Agreement for Cypress Springs dated May 28, 1993
(Oasis Landing)(1)
10.1.2 Addendum to Purchase and Sale Agreement for Cypress Springs dated September 3, 1993
(Oasis Landing)(1)
10.2 Purchase and Sale Agreement for The Verandas between the Company and Smoke Ranch
Verandas Limited Partnership (Oasis Breeze)(1)
10.2.1 Addendum to Purchase and Sale Agreement for The Verandas dated September 1, 1993
(Oasis Breeze)(1)
10.3 Purchase and Sale Agreement for SunDunes between the Company and SunDunes Apartments
(Oasis Ridge)(1)
10.3.1 Addendum to Purchase and Sale Agreement for SunDunes dated September 1, 1993 (Oasis
Ridge)(1)
10.4 Purchase and Sale Agreement for Sandpiper Village between the Company and National
Real Estate Limited Partnership-IV (Oasis Plaza)(1)
10.4.1 Addendum to Purchase and Sale Agreement for Sandpiper Village dated August 31, 1993
(Oasis Plaza)(1)
10.5 Purchase and Sale Agreement for Foxwood Village between the Company and Daniel
Properties XIV Limited Partnership (Oasis Winds)(1)
10.5.1 Addendum to Purchase and Sale Agreement for Foxwood Village dated August 31, 1993
(Oasis Winds)(1)
10.6 Purchase and Sale Agreement for Club at the Greens between the Company and Silver
Ridge Apartments, Ltd. (Oasis Greens)(1)
10.7 Purchase and Sale Agreement for Los Montanas West between the Company and Becker
Investment Co. dated July 28, 1993 (Oasis Morning)(1)
10.8 Purchase and Sale Agreement for Candlewood and Los Montanas East between the Company
and Fremont West Shopping Center dated July 28, 1993 and an Amendment thereto dated
September 15, 1993 (Oasis View, Oasis Morning)(1)
10.9 Purchase and Sale Agreement for Shadow Hills between the Company and Shadow Hills
Apartment Co. dated July 28, 1993 (Oasis Hills)(1)
10.10.1 Purchase and Sale Agreement for Turf Club, Sunset Cliffs, Sunset Center, Sea Island,
Moonshadow 1, Emerald Cove, Whalers Cove, Bay Colony, Sandcastle, Seacliffs and Topaz
Village between the Company and RVJ dated July 15, 1993 (Oasis Club, Oasis Cliffs,
Oasis Island, Oasis Pearl, Oasis Emerald, Oasis Cove, Oasis Bay, Oasis Sands, Oasis
Topaz)(1)
10.10.2 Purchase and Sale Agreement for Rainbow Ridge between the Company and RVJ dated July
28, 1993 (Oasis Rainbow)(1)
10.10.3 Purchase and Sale Agreement for Tealbriar/Westchase between the Company and RVJ dated
July 15, 1993 (Oasis Orchid, Oasis Palms)(1)
10.10.4 Purchase and Sale Agreement for Lighthouse Cove between the Company and RVJ dated
July 15, 1993 (Oasis Reef)(1)
</TABLE>
<PAGE> 52
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -------------------------------------------------------------------------------------
<C> <S>
10.10.5 Purchase and Sale Agreement for Morningstar between the Company and RVJ dated July
15, 1993 (Oasis Star)(1)
10.10.6 Purchase and Sale Agreement for Seaview between the Company and RVJ dated July 15,
1993 (Oasis Pearl)(1)
10.11 Option Agreement for Boardwalk Apartments between the Company and RVJ dated September
24, 1993 (Oasis Place)(1)
10.12 Option Agreement for The Vinings between the Company and The Vinings Partners Limited
Partnership dated September 8, 1993 (Oasis Vinings)(1)
10.13 Option Agreement for Legacy Highlands between the Company and RVJ dated September 24,
1993 (Oasis Glen)(1)
10.14 Contract for sale of Vinings II property between the Company and Lewis Homes of
Nevada dated September 24, 1993 (Oasis Vinings II)(1)
10.15 Option Agreement between the Company and RVJ dated September 20, 1993 relating to the
purchase of the Whitehorse Property (Oasis Terrace)(1)
10.16 Form of Employment Agreement(l)
10.16.1 Amended and Restated Employment Contract between the Company and Robert V. Jones
10.16.2 Amended and Restated Employment Contract between the Company and Scott S. Ingraham
10.16.3 Amended and Restated Employment Contract between the Company and Allan O. Hunter, Jr.
10.16.4 Amended and Restated Employment Contract between the Company and Walter B. Eeds
10.16.5 First Amendment to Amended and Restated Employment Contract between the Company and
Robert V. Jones
10.16.6 First Amendment to Amended and Restated Employment Contract between the Company and
Scott S. Ingraham
10.16.7 First Amendment to Amended and Restated Employment Contract between the Company and
Allan O. Hunter
10.16.8 First Amendment to Amended and Restated Employment Contract between the Company and
Walter B. Eeds
10.17 Noncompetition Agreement between the Company and RVJ(1)
10.18 1993 Stock Option Plan of Oasis Residential, Inc.(1)
10.19 Form of Incentive Stock Option Agreement(l)
10.20 Form of Nonqualified Stock Option Agreement(l)
10.21 Stock Option Plan for Outside Directors(l)
10.22 Form of Nonqualified Stock Option Agreement for Outside Directors(l)
10.23 Form of Officers and Directors Indemnification Agreement(l)
10.24 Form of Lock-Up Agreement between the Representatives and the persons named
therein(1)
10.25 Form of Management Agreement(l)
10.26 Form of Lease Agreement between the Company and RVJ(1)
10.27 Form of Amended and Restated Loan Agreement between the Company and Credit
Lyonnais(2)
10.28 Form of Loan Agreement between the Company and Bank One of Arizona(l)
10.29 Form of Promissory Note and related documentation between the Company and Lutheran
Brotherhood(l)
10.30 Form of Promissory Note and related documentation between the Company and Washington
Pacific Financial Group Ltd.(1)
</TABLE>
<PAGE> 53
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -------------------------------------------------------------------------------------
<C> <S>
10.31 Multifamily Note in favor of GMAC Mortgage Corporation of Pennsylvania(l)
10.32.1 Promissory Note of Morningstar, Inc. in favor of Manns Haggerskjold(l)
10.32.2 Promissory Note of Seaview, Inc. in favor of Manns Haggerskjold(l)
10.32.3 Promissory Note of Lighthouse Cove, Inc. in favor of Manns Haggerskjold(l)
10.33 Purchase and Sale Agreement between Legacy Funding and the Company date April 6,
1994, and Addendum thereto (Oasis Heritage, Oasis Suites)(2)
10.34 Purchase and Sale Agreement between LWFT and Capital Realty Advisers Corp. dated May
12, 1994, and Assignment thereof to the Company (Oasis Springs)(2)
10.35 Purchase and Sale Agreement between Creekside Limited Partnership and the Company
dated May 19, 1994 (Oasis Trails)(2)
10.36 Purchase and Sale Agreement between Rio Vista Apartments Limited Partnership and the
Company dated May 25, 1994 (Oasis Vista)(2)
10.37 Contract between the Company and American Construction Management dated February 1,
1994(2)
10.38 Amended and Restated Acquisition Agreement between the Company and Walter B. Eeds(3)
10.39 Purchase and Sale Agreement for Oasis Deerwood between Mission Viejo Company and
Greystone Group, Inc. dated July 5, 1994(3)
10.40 Purchase and Sale Agreement for Oasis Wexford between Wexford Station Apartments,
Inc. and the Company dated September 22, 1994(3)
10.40.1 Amendment to Sale and Purchase Agreement between Wexford Station Apartments, Inc. and
the Company dated October 27, 1994(3)
10.41 Purchase and Sale Agreement for Oasis Parc by and between Eagle Chase, Ltd. and ORI-
Colorado, Inc. dated September 14, 1994(3)
10.42 Real Estate Option Agreement for Oasis Tiara by and between Lewis Homes of Nevada,
Oakrest Development and the Company dated June 28, 1994(3)
10.42.1 Amendment No. I to Real Estate Option Agreement between Lewis Homes of Nevada,
Oakrest Development and the Company dated September 21, 1994(3)
10.43 Purchase and Sale Agreement for Oasis Bluffs by and between Embassy Suites, Inc. and
the Company dated April 26, 1994(3)
10.43.1 Addendum No. I to Purchase and Sale Agreement by and between Embassy Suites, Inc. and
the Company dated June 15, 1994(3)
10.43.2 Addendum to Purchase and Sale Agreement by and between Embassy Suites, Inc. and the
Company dated August 30, 1994(3)
10.44 Offer and Acceptance Agreement and Eamest Money Receipt for Oasis Meadows between
Robert V. Jones and Sam Lawson Trust and Eugenia Lawson Trust dated October 15,
1993(3)
10.44.1 Agreement of Nomination between Robert V. Jones and the Company dated November 18,
1993(3)
10.45 Agreement for the Sale and Purchase of Oasis Miramar by and between Nevada Exchange
Counselors, Inc. and the Company dated June 14, 1994(3)
10.46 Purchase Agreement for Oasis Del Mar between Peccole Ranch Partnership and the
Company dated December 10, 1993(3)
10.46.1 Addendum to Purchase Agreement between Peccole Ranch Partnership and the Company
dated February 18, 1994(3)
10.47 Purchase and Sale Agreement for Oasis Paradise by and between Paradise Palms,
Paradise Point and the Company dated January 28, 1994(3)
</TABLE>
<PAGE> 54
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -------------------------------------------------------------------------------------
<C> <S>
10.47.1 Addendum to Purchase and Sale Agreement for Paradise Palms and Paradise Point
Apartment Complexes by and between Paradise Palms, Paradise Point and the Company
dated February 21, 1994(3)
10.48 Purchase and Sale Agreement for Oasis Heights by and between Crystal Springs Limited
Partnership and the Company dated February 10, 1994(3)
10.49 Real Estate Purchase Option and Sale Agreement for Oasis Gateway by and between the
Company and Lied Foundation Trust, Christina M. Hixson, as Trustee, dated February
28, 1994(3)
10.50 Assumption and Release Agreement for Oasis Springs between the Company, LWFT and
Federal National Mortgage Association dated November 17, 1994(3)
10.51 Loan Agreement (Construction and Mini-Perm Loan) for Oasis Canyon between the Company
and Bank One, Arizona, NA dated October 20, 1994(3)
10.52 Loan Agreement (Construction Loan) for Oasis Del Mar between the Company and Bank
One, Arizona for Oasis Del Mar dated December 7, 1994(3)
10.53 Loan Agreement (Construction and Mini-Perm Loan) for Oasis Terrace between the
Company and Bank One, Arizona, NA dated May 11, 1994(3)
10.54 Credit Agreement among the Company, certain lenders, and Wells Fargo Bank, National
Association. as Agent dated January 9, 1995(3)
10.55 Loan Agreement for Oasis Parc between ORI-Colorado, Inc. and Bank One, Arizona, NA
dated September 29, 1994(3)
10.56 Letter of Credit Reimbursement Agreement between ORI-Colorado, Inc. and Bank One,
Arizona, NA relating to City of Westminster, Colorado Multifamily Housing Revenue
Bonds (Wexford Station A Project) 1985 Series A dated December 1, 1994(3)
10.57 Loan Agreement between City of Westminster, Colorado and Wexford Venture dated
December 1, 1985(3)
10.57.1 Amendment to Loan Agreement between City of Westminster, Colorado and ORI-Colorado,
Inc. dated December 1, 1994, relating to Oasis Wexford(3)
10.57.2 Transcript $6,690,000 Adams County, Colorado Multifamily Housing Revenue Refunding
Bonds Series 1986A; Sale of Project and Purchase in Lieu of Redemption dated October
3, 1994(3)
10.58 Promissory Note of ORI-Colorado, Inc. in favor of Eagle Chase, Ltd. dated September
29, 1994(3)
10.59 Loan Agreement between ORI-Colorado, Inc. and Bank One, Arizona, NA dated September
29, 1994(3)
10.60 Assignment and Assumption Agreement between Eagle Chase, Ltd. and ORI-Colorado,
Inc.(3)
10.61 Assignment and Assumption Agreement by and among U.S. Customs Service, the Company
and Robert V. Jones(3)
10.62 Promissory Note for Oasis Terrace between the Company and Bank One, Arizona, NA dated
May 11, 1994(3)
10.63 Promissory Note for Oasis Del Mar between the Company and Bank One, Arizona, NA(3)
10.64 Promissory Note for Oasis Canyon between the Company and Bank One, Arizona, NA(3)
10.65 Multifamily Deed of Trust, Assignment of Rents and Security Agreement and Multifamily
Note by and between the Company and Washington Mortgage Group Financial Group,
Inc.(3)
10.66 Multifamily Deed of Trust, Assignment of Rents and Security Agreement and Multifamily
Note by and between Washington Mortgage Group Financial Group, Inc. and the
Company(3)
</TABLE>
<PAGE> 55
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -------------------------------------------------------------------------------------
<C> <S>
10.67 Purchase and Sale Agreement for Oasis Villas by and between Jan Jacoby and Natalie
Jacoby Hollander and the Company dated April 29, 1994(3)
10.68 Purchase and Sale Agreement for Oasis Vintage by and between Birdrock Limited
Partnership and the Company dated October 8, 1993(3)
10.69 Real Estate Purchase Contract for Oasis Canyon by and between Capital Realty Advisors
Corp. and the Company dated December 21, 1993(3)
10.70 Articles of Incorporation of Denver West Apartments, L.L.C.(4)
10.71 Operating Agreement of Denver West Apartments, L.L.C., a Colorado Limited Liability
Company, effective as of April 21, 1995 by and between Stevinson Partnership, Ltd., a
Colorado limited partnership, and ORI-Colorado, Inc., a Nevada corporation(4)
10.72 Purchase and Sale Agreement by and between Aetna Life Insurance Company and
ORI-Colorado Inc. dated August 4, 1995 (Oasis Centennial)(4)
10.72.1 Amendment to Purchase and Sale Agreement by and between Aetna Life Insurance Company
and ORI-Colorado, Inc. dated August 31, 1995 (Oasis Centennial)(4)
10.73 Purchase Contract by and between RSRF Ranch Company, LLC, a Colorado limited
liability company, and ORI-Colorado, Inc. dated August 31, 1995 (Oasis Lakeway)(4)
10.74 Amended and Restated Credit Agreement among the Company, The Lenders Listed Therein,
Wells Fargo Bank as Administrative Agent, and Morgan Guaranty Trust Company of New
York dated as of September 25, 1995(4)
10.74.1 Promissory Note of the Company in favor of Wells Fargo Bank dated September 25,
1995(4)
10.74.2 Promissory Note of the Company in favor of Morgan Guaranty Trust Company of New York
dated September 25, 1995(4)
10.74.3 Promissory Note of the Company in favor of Bank One Arizona, N.A. dated September 25,
1995(4)
10.74.4 Promissory Note of the Company in favor of Dresdner Bank AG, Los Angeles Agency and
Grand Cayman Branch dated September 25, 1995(4)
10.74.5 Promissory Note of the Company in favor of Union Bank dated September 25, 1995(4)
10.75 Multifamily Deed of Trust, Assignment of Rents and Security Agreement, Multifamily
Note, Financing Agreement, Indenture of Trust, and Regulatory Agreement by and
between BOCC Funding Corporation and the Company dated as of November 1, 1995 (Oasis
Wexford)(4)
10.76 Multifamily Deed of Trust, Assignment of Rents and Security Agreement, Multifamily
Note, Financing Agreement and Indenture of Trust by and between BOCC Funding
Corporation and the Company dated as of December 1, 1995 (Oasis Park)(4)
10.77 Nevada Deed of Trust and Assignment of Rents and Security Agreement and Fixture
Filing Statement, Nevada Deed of Trust Note, and Note Agreement by and between
Teachers Insurance and Annuity Association of America and Company dated December 29,
1995 (Oasis Bel Air, Oasis Canyon, Oasis Trails, Oasis Rose)(4)
10.78 Nevada Deed of Trust and Assignment of Rents and Security Agreement and Fixture
Filing Statement, Nevada Deed of Trust Note, and Letter of Credit Agreement by and
between Teachers Insurance and Annuity Association of America and Company dated
December 29, 1995 (Oasis Del Mar)(4)
10.79 First Modification Agreement to the Amended and Restated Credit Agreement among the
Company, The Lenders, therein, Wells Fargo Bank as Administrative Agent, and Morgan
Guaranty Trust Company of New York and Bank One, Arizona, N.A., dated as of February
25, 1996(5)
</TABLE>
<PAGE> 56
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -------------------------------------------------------------------------------------
<C> <S>
10.80 Second Modification Agreement to the Amended and Restated Credit Agreement among the
Company, The Lenders, therein, Wells Fargo Bank as Administrative Agent, and Morgan
Guaranty Trust Company of New York and Bank One, Arizona, N.A., dated as of July 25,
1996(5)
10.81 Third Modification Agreement to the Amended and Restated Credit Agreement among the
Company, The Lenders, therein, Wells Fargo Bank as Administrative Agent, and Morgan
Guaranty Trust Company of New York and Bank One, Arizona, N.A., dated as of September
24, 1996(5)
10.81.1 Promissory Note of the Company in favor of Wells Fargo Bank dated September 24,
1996(5)
10.81.2 Promissory Note of the Company in favor of Morgan Guaranty Trust Company dated
September 24, 1996(5)
10.81.3 Promissory Note of the Company in favor of Bank One Arizona, N.A. dated September 24,
1996(5)
10.81.4 Promissory Note of the Company in favor of Dresdner Bank AG, New York Brand and Grand
Cayman Branch dated September 24, 1996(5)
10.81.5 Promissory Note of the Company in favor of Union Bank of California, N.A. dated
September 24, 1996(5)
10.82 Amended and Restated Acquisition Agreement between Oasis Residential Inc. and Walter
B. Eeds and Greystone Group Inc. dated May, 14, 1996
10.83 Amended and Restated Mortgage Note with Oasis Residential, Inc. as Maker payable to
Allstate Life Insurance Company dated March 14, 1996 (Oasis Reef)
10.84 Purchase Agreement between Oasis Residential, Inc. as Seller and Siefert Investments,
a Nevada Limited Partnership as Buyer dated December 11, 1996, for sale of Oasis Reef
Apartments
21.1 List of Subsidiaries(4)
27.1 Financial Data Schedule
</TABLE>
- ---------------
(1) Incorporated by reference from the Company's Registration Statement on Form
S-11, Registration No. 33-67564
(2) Incorporated by reference from the Company's Registration Statement on Form
S-11, Registration No. 33-79564
(3) Incorporated by reference from the Company's 1994 Form 10-K
(4) Incorporated by reference from the Company's 1995 Form 10-K
(5) Incorporated by reference from the Company's Form 10-Q dated September 30,
1996
<PAGE> 1
EXHIBIT 10.16.1
AMENDED AND RESTATED EMPLOYMENT CONTRACT
OASIS RESIDENTIAL, INC.
A Nevada Corporation
THIS EMPLOYMENT CONTRACT is executed as of October 28, 1996, by and
between OASIS RESIDENTIAL, INC., a Nevada corporation ("Company") and ROBERT V.
JONES ("Employee").
1. EMPLOYMENT
The Company hereby employs Employee and Employee hereby accepts
employment upon the terms and conditions set forth below.
2. TERM AND RENEWAL
2.1 Term. The term of this Contract shall be deemed to have
commenced on the date of this Contract (the "Effective Date"), and shall
continue for three (3) years from the Effective Date (the "Term") on the terms
and conditions set forth below, unless sooner terminated as provided in Article
5 below.
2.2 Extension. Following the expiration of each year of the Term
and provided that this Contract has not been terminated pursuant to Article 5
below, and every year thereafter, the Contract shall be automatically renewed
for an additional 12 month period, effective on each anniversary date of the
Effective Date.
3. COMPENSATION
3.1 Base Compensation. For the services to be rendered by
Employee under this Contract, Employee shall be entitled to receive, commencing
as of the Effective Date, an initial annual base compensation ("Base
Compensation") of $300,000 payable in twelve (12) equal monthly payments. This
Base Compensation shall be reviewed and adjusted annually as determined by the
Compensation Committee of the Board of Directors (the "Board"), but in no event
will the annual Base Compensation be less than the initial amount set forth
above.
3.2 Options. The Compensation Committee may, at its discretion
and pursuant to the provisions of the Company's Stock Option Plan, issue to
Employee additional Options to purchase shares of the Company's stock to
compensate Employee for services rendered to the Company and/or as an incentive
for services to be performed in the future.
<PAGE> 2
3.3 Insurance Benefits.
(a) The Company shall provide to Employee, his spouse and
dependent children, at its sole cost, such health, dental and optical insurance
as the Company may from time to time make available to its other executive
employees.
(b) The Company shall provide Employee such disability
and/or life insurance as the Company in its sole discretion may from time to
time make available to its other executive employees.
3.4 Bonus Compensation. At least annually, the Compensation
Committee of the Board shall review Employee's performance and may award
Employee a cash bonus which the Board shall reasonably determine as fairly
compensating and awarding Employee for service to the Company and/or as an
incentive for continued service to the Company. The amount of such cash bonus
is dependent on, among other things, the achievement of certain performance
levels by the Company, including growth in funds from operations, and
Employee's performance and contribution to increasing the Company's funds from
operations. The amount of such bonus shall be limited to 100% of Employee's
Base Compensation for the year awarded.
3.5 Method of Payment. The monetary compensation payable to
Employee hereunder may be paid in whole or in part, from time to time, by the
Company, its subsidiaries and/or its affiliates, but shall at all times remain
the responsibility of the Company.
4. DUTIES
4.1 Service. Employee shall serve as Chairman of the Board of
Directors and Chief Executive Officer of the Board of the Company, which office
shall at all times hereunder have the status and duties currently set forth in
the Company's Bylaws. At the request of the Board, subject to shareholder
approval when required, Employee shall serve as a director and/or officer of
such of the Company's subsidiaries and/or affiliates as the board may request.
Employee may, at his discretion, serve the Company in other offices and
capacities in addition to the foregoing, but shall not be required to do so.
In the event the Company and the Employee voluntarily agree that Employee shall
terminate his service in any one or more of the aforementioned-capacities, or
Employee's service in one or more of the aforementioned capacities is
terminated, Employee's compensation as specified in this Contract, shall not be
diminished or reduced in any manner.
Any change of Employee's status as an officer of the Company as herein
provided or any material decease in Employee's authority or responsibilities
hereunder, without Employee's written consent shall, at Employee's election,
constitute a material breach of this Contract and immediate termination without
cause of Employee's employment hereunder.
<PAGE> 3
4.2 Devotion of Time and Effort. Employee shall use his good
faith best efforts and judgment in performing his duties as required hereunder
and to act in the best interests of the Company. Employee shall devote such
time, attention and energies to the business of the Company as are reasonably
necessary to satisfy Employee's required responsibilities and duties hereunder.
4.3 Other Activities. Employee may engage in other activities for
his own account during the term of this Contract including charitable
activities, community activities and/or other business activities, subject to
Article 7 below.
4.4 Vacation. It is understood and agreed that Employee shall be
entitled to four (4) weeks vacation per year. During such vacation periods,
Employee shall not be relieved of his duties under this Contract and there will
be no abatement or reduction of Employee's compensation hereunder.
4.5 The Company's Obligations. The Company shall provide Employee
with any and all necessary or appropriate current financial information and
access to current information and records regarding all material transactions
involving the Company and/or its subsidiaries and/or affiliates, including but
not limited to acquisition of assets, personnel contracts, dispositions of
assets, service agreements and registration statements or other state or
federal filings or disclosures to carry out his duties and responsibilities
hereunder. In addition, the Company agrees to provide Employee, as a condition
to his services hereunder, such staff, equipment and office space as is
reasonably necessary for Employee to perform his duties hereunder.
5. TERMINATION.
5.1 By Company Without Cause. The Company may terminate this
Contract without "cause" (as that term is hereinafter defined), provided that
the Company first delivers to Employee the Company's written election to
terminate this Contract at least ninety (90) days prior to the effective date
of termination.
5.2 Severance Payment.
5.2.1 Amount. In the event the Company terminates Employee's
services hereunder pursuant to Section 5.1, Employee shall continue to render
services pursuant hereto until the date of termination and shall continue to
receive compensation, as provided hereunder, through the termination date. In
addition to other compensation payable to Employee for services through the
termination date, the Company shall pay Employee, as a single severance
payment, an amount equal to three times the sum of Employee's current annual
Base Compensation and the bonus paid to Employee on account of service during
the most recently completed twelve month fiscal period (or, if Employee has
been employed less than twelve months, the average annual base compensation and
bonus for the period employed) (the "Severance Amount").
<PAGE> 4
5.2.2 Excise Tax Gross-Up.
(a) Notwithstanding anything contained in this
Agreement to the contrary, in the event it shall be determined
(pursuant to (b) below) or finally determined (as defined in
(c) below) that any payment, distribution or benefit by the
Company or its predecessors, or the subsidiaries or affiliates
of the Company or its predecessors, to or for the benefit of
Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional
payments required under this Section 5.2.2) (a "PAYMENT") is
or was subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended, or any interest
or penalties are or were incurred by Employee with respect to
such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred
to as the "EXCISE TAX"), then, within 10 days after such
determination or final determination, as the case may be, the
Company shall pay to Employee an additional cash payment or
additional cash payments (hereinafter referred to in the
aggregate as the "GROSS-UP PAYMENT") in an aggregate amount
such that after payment by Employee of all taxes, interest and
penalties imposed with respect to the Gross-Up Payment
(including, without limitation, any excise taxes imposed upon
the Gross-Up Payment), Employee retains an amount of the
Gross-Up Payment equal to the Excise tax imposed upon the
payments.
(b) Except as provided in subsection (c) below,
the determination that a Payment is subject to an Excise Tax
shall be made by a certified public accounting firm engaged by
Employee ("Employee's Accountant"). Such determination shall
include the amount of the Gross-Up Payment, including when a
Gross-Up Payment is to be paid and the assumptions to be
utilized in arriving at such determination, which
determination shall provide detailed supporting calculations
both to the Company and to the Employee within 15 business
days of the receipt of notice from the Employee that there has
been a Payment. The calculations prepared by Employee's
Accountant shall be reviewed on behalf of the Company by a
certified public accounting firm engaged by the Company. The
Company shall notify Employee within 10 business days of any
disagreement or dispute with the findings of Employee's
Accountant, and failure to so notify shall be considered a
determination in favor of the findings of Employee's
Accountant, obligating the Company to make payment as provided
in subsection (a) above. In the event of a dispute between
the Company's accounting firm and Employee's Accountant, such
firms shall jointly select a third nationally recognized
certified public accounting firm to resolve the dispute and
the decision of such third firm shall be final, binding and
conclusive upon the Employee and the Company. In such a case,
the third accounting firm's findings (rather than those of the
Employee's Accountant) shall be deemed the binding
determination, obligating the Company to make payment as
provided in subsection (a) above. All fees and expenses of
each of the accounting firms shall be borne solely by the
Company.
(c) (i) Employee shall notify the Company in
writing of any claim by the Internal Revenue Service (or any
successor thereof) that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no
later than 30 days after Employee receives written notice of
such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be
paid. Employee shall not pay such claim prior to the
expiration of the 30-day period following the date on which
Employee gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes, interest
or penalties with respect to such claim is due). If the
Company notifies Employee in writing prior to the expiration
of such period that it desires to contest such claim (and
demonstrates to the reasonable satisfaction of Employee its
ability to make the payments to Employee which may ultimately
be required under this section before assuming responsibility
for the claim), Employee shall:
<PAGE> 5
(A) give the Company any information
reasonably requested by the Company relating to such
claim,
(B) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including,
without limitation, accepting legal representation
with respect to such claim by an attorney selected by
the Company that is reasonably acceptable to
Employee,
(C) cooperate with the Company in good
faith in order effectively to contest such claim, and
(D) permit the Company to participate in
any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly
all attorneys fees, costs and expenses (including
additional interest and penalties) incurred in
connection with such contest and shall indemnify and
hold Employee harmless, on an after-tax basis, for
all taxes, interest and penalties imposed as a result
of such representation, payment of costs and expenses
or indemnification. Without limitation on the
foregoing provisions of this Section 5.2.2, the
Company shall control all proceedings taken in
connection with such contest and, at its sole option,
may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and
may, at its sole option, either direct Employee to
pay the tax, interest or penalties claimed and sue
for a refund or contest the claim in any permissible
manner, and Employee agrees to prosecute such contest
to a determination before any administrative
tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall
determine; provided, however, that if the Company
directs Employee to pay such claim and sue for a
refund, the Company shall advance an amount equal to
such payment to Employee, on an interest-free basis,
and shall indemnify and hold Employee harmless, on an
after-tax basis, from all taxes, interest or
penalties imposed with respect to such advance or
with respect to any imputed income with respect to
such advance; and, further, provided, that any
extension of the statute of limitations relating to
payment of taxes, interest or penalties for the
taxable year of Employee with respect to which such
contested amount is claimed to be due is limited
solely to such contested amount; and, provided,
further, that any settlement of any claim shall be
reasonably acceptable to Employee and the Company's
control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be
payable hereunder, and Employee shall be entitled to
settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any
other taxing authority.
<PAGE> 6
(ii) If, after receipt by Employee of an amount
advanced by the Company pursuant to Section 5.2.2(c)(i),
Employee receives any refund with respect to such claim,
Employee shall (subject to the Company's complying with the
requirements of Section 5.2.2) promptly pay to the Company an
amount equal to such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If,
after the receipt by Employee of an amount advanced by the
Company pursuant to Section 5.2.2(c)(i), it is finally
determined that Employee is not entitled to any refund with
respect to such claim, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
(iii) For purposes of this Section 5.2.2, whether
the Excise Tax is applicable to a Payment shall be deemed to
be "finally determined" upon the earliest of (A) the
expiration of 30 days following the rendering of a decision by
the Internal Revenue Service (or any successor thereto) or a
court of competent jurisdiction unless, within such 30-day
period, the Company notifies Employee in writing of its intent
to contest such decision, (B) the rendering of a decision by
the Internal Revenue Service (or any successor thereto) or a
court of competent jurisdiction, from which decision no
further right of appeal exists, or (C) the expiration of the
statutory period (including any extensions thereto) for the
assessment and collection of the Excise Tax.
5.2.3 The Employee acknowledges that, if he or she
should exercise any portion of the Options more than three (3) months
following the date of Employee's Termination of Employment for any reason other
than death or disability (within the meaning of Section 22(e)(3) of the Code,
he or she will be taxed as to such portion of the Option so exercised, as if
such portion of the Option did not qualify as an "incentive stock option"
(within the meaning of Section 422 of the Code) but rather as if such portion
was a non-qualified option. Employee shall be required to pay any and all
withholding taxes payable at the time of the exercise of the option or the
Company shall have the right to withhold stock in an amount equal to the amount
of the withholding tax for payment on Employee's behalf.
5.2.4 All vested stock options shall immediately
vest upon termination under Section 5.1, and Employee shall have the right to
exercise any vested option during the balance of their ten year term. All
unvested stock options which vest shall be exercisable within ten years from
issuance.
<PAGE> 7
5.3 By the Company for Cause. The Company may terminate Employee
for cause at any time, upon written notice. For the purposes hereof, "cause"
shall mean:
5.3.1 Employee's conviction for a felony; or
5.3.2 Employee's conviction for the crime of theft,
embezzlement or misappropriation against the Company; or
5.3.3 The final determination by a court of
competent jurisdiction or by the Board that Employee has materially breached
Sections 4, 6 or 7 of this Contract, if such breach is incurable; or, if
curable, a determination that Employee had been given reasonable opportunity to
cure and had not done so; or
5.3.4 Employee's death or permanent disability.
In the event Employee is terminated for cause pursuant to this
Section, Employee shall have the right to receive his compensation as otherwise
provided under this Contract through the effective date of termination.
Employee shall have no further right to receive compensation or other
consideration from the Company, or have any other remedy whatsoever against the
Company, as a result of this Contract or the termination thereof.
The foregoing notwithstanding, in the event Employee is terminated by
reason of his permanent disability or death, the Company shall immediately pay
Employee or his representative a single severance payment as set forth under
Section 5.2, and the Employee shall have the same rights as set forth under
Section 5.2.3 regarding all stock options.
5.4 Employee's Termination for Cause. Employee may terminate this
Agreement at any time if:
5.4.1 The Company is in material breach of its
obligations hereunder; and
5.4.2 Either such breach is incurable or, if
curable, has not been cured within fifteen (15) days following receipt of
written notice of such breach by the Company.
In no event, however, may the Employee terminate this Agreement
without providing the Company with at least ten (10) days written notice of its
intent to terminate this Agreement. In the event Employee terminates this
Contract pursuant to this Section, Employee shall have the same rights and
remedies against the Company as he would have had the company terminated his
employment without cause pursuant to Section 5.1 hereof (including all rights
under Section 5.2).
5.5 Employee's Voluntary Termination. Employee may, at any time,
terminate this Contract without cause upon written notice delivered to the
Company at least ninety (90) days prior to the effective date of termination.
In the event of such voluntary termination:
5.5.1 Employee shall have the right to monetary
compensation as provided in paragraph 3.1 above through the effective date of
termination, but shall have no further right to compensation thereafter; and
5.5.2 Employee's stock options shall be null and
void as of the date of termination except as provided in Section 5.6 below.
The Company and Employee shall not have any further right or remedy
against one another in the event Employee terminates this Contract pursuant to
this Section except as provided in Articles 6, 7, 8 and 9 hereof which shall
remain in full force and effect.
<PAGE> 8
5.6 Employee's Retention of Securities. In the event the Company
terminates Employee, without cause, Employee shall retain all options and other
securities he then owns, of record or otherwise, of the Company and/or its
subsidiaries and/or affiliates, and shall have the right to exercise said
options at any time during the remaining term of said option. In the event the
Company terminates this Contract for cause pursuant to Section 5.3, or Employee
voluntarily terminates this contract pursuant to Section 5.5 above, any Options
issued to Employee which may not then have been exercised on the date of said
Termination shall be exercised within three (3) months of the date of
Termination or shall be null and void as of the date three (3) months after
Termination.
5.7 Change of Control. The Employee may terminate his employment
under this Agreement any time within two (2) years after a "change in control"
of the Company. For purposes of this Agreement, a "change in control" shall be
deemed to have occurred upon (a) the acquisition by any person of twenty
percent (20%) of the issued and outstanding stock of the Company, (b) a change
in majority of the members of the Board in connection with a tender offer,
merger, sale of assets, etc., (c) the sale of all or substantially all of the
Company's assets or (d) a dissolution or liquidation of the Company. In the
event Employee terminates his employment within two (2) years after a change in
control, Employee shall continue to render services pursuant hereto until the
date of termination and shall continue to receive compensation, as provided
hereunder, through the termination date. In addition to other compensation
payable to Employee for services through the termination date, the Employee
shall have the same rights and remedies against the Company as he would have
had had the Company terminated his employment without cause pursuant to Section
5.1 hereof (including the right to payments under Section 5.2).
6. UNFAIR COMPETITION
6.1 Trade Secrets. During the term of employment under this
Contract, Employee will have access to and become acquainted with various
information not generally available to the public consisting of records,
documents, drawings, specifications, customer lists, procedural and operational
manuals and information, and financial records and accounts, projections and
budgets, and similar information, all of which are owned by the Company and
regularly used in the operation of the Company's business. Such assets of the
Company are secret, not generally available to the public and give the Company
an advantage over competitors who do not know of or use such information.
Employee agrees such information and documents relating to the business of the
Company, whether they are prepared by Employee or come into Employee's
possession in any other way, are owned by the Company, shall remain the
exclusive property of the Company and shall not be removed from the premises of
the Company under any circumstances whatsoever, without prior written consent
of the Company.
6.2 Misuse of Trade Secrets. Employee covenants that he shall not
misuse, misappropriate or disclose any of the trade secrets described above,
directly or indirectly, or use them in any way, either during the term of this
Contract or at any time thereafter, except as required in the course of his
employment with the Company, unless such action is either previously agreed to
in writing by the Company or required by law.
6.3 Non-Disclosure of Trade Secrets. Employee acknowledges and
agrees that the sale or unauthorized use or disclosure of any of the Company's
trade secrets, as above described, including information concerning the
Company's current, future and/or proposed work, services or investments, the
fact that any such work, services or investments are planned, under
consideration or under negotiation, as well as any descriptions thereof,
constitute "unfair competition". Employee promises and agrees not to engage in
any unfair competition with the Company, either during the term of this
Contract or at any time thereafter.
<PAGE> 9
7. NON-COMPETITION DURING EMPLOYMENT
7.1 Competitive Activities. During the term of this Contract,
Employee shall not, without the Company's prior written consent, directly or
indirectly, whether or not for compensation, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director
or in any other individual or representative capacity, engage or participate
in, or render, directly or indirectly, any services in connection with any
business that is in competition, in any manner whatsoever, with the business of
the Company. In addition, Employee shall not directly or indirectly acquire,
hold or retain any material interest in any business competing with or of
similar nature to the business of the Company except as provided in Section 4.3
above.
7.2 Exceptions. The foregoing shall exclude, however, the
expenditure of a reasonable amount of time for educational, charitable and/or
professional activities, which shall not be deemed a breach of this Contract,
provided such activities do not materially interfere with the services required
under this Contract.
7.3 Passive Investments. Employee shall not engage in any passive
or active investment in or reasonably relating to the acquisition, development,
construction or management of multifamily apartment properties, with the
exception of ownership of up to one (1) percent of the securities of any
publicly-traded companies involved in such activities.
8. SOLICITATION OF EMPLOYEES
8.1 Use of Information. Employee acknowledges and agrees that the
names, addresses and relationships of persons who perform services or provide
goods or materials to or for the Company are unique, and that the nature and
substance of the Company's relationship with such persons constitute the
Company's "trade secrets". Employee acknowledges that the sale or unauthorized
use or disclosure of any of such relationships which Employee learned of during
his employment with the Company would constitute unfair competition. Employee
promises and agrees not to engage in any unfair competition with the Company.
8.2 Non-Disclosure. During the term of his employment with the
Company, and for a period of two (2) years thereafter, Employee shall not,
directly or indirectly, make known to any person, firm or company the substance
or content of any relationship of the Company with any employee, independent
contractor or provider of goods or materials to the Company. Employee agrees
that he shall not solicit, take away or induce any such person to end their
relationship with the Company, or to attempt to do any of the foregoing, or
recruit, hire or otherwise induce any such person to perform services for
Employee, or any other person, firm or company.
<PAGE> 10
9. NON-COMPETITION AFTER TERMINATION
Employee shall not, for a period of one (1) year following the date of
termination, engage in the development, acquisition, construction or management
of any multifamily apartment properties outside of the Company within the
States of Arizona, California, Colorado, Nevada, New Mexico and/or Utah. In
addition, Employee shall not engage in any active or passive investment in or
reasonably relating to the acquisition, development, construction or management
of multifamily apartment properties within the States of Arizona, California,
Colorado, Nevada, New Mexico and/or Utah for a period of one (1) year following
the date of termination, with the exception of the ownership of up to one (1)
percent of the securities of any publicly-traded companies involved in such
activities. Nothing herein shall relieve or limit Employee's obligation to
comply with Sections 6, 7 and 8 above. The restrictions set forth in this
Section shall not apply if Employee is terminated pursuant to Section 5.1
above. If any provision hereof is determined by any court of competent
jurisdiction to be invalid or unenforceable by reason of such provision
extending the covenants and agreements contained herein for too great a period
of time or over too great a geographical area, or being too extensive in any
other respect, such provision shall be interpreted to extend only over the
maximum period of time and geographical area, and to the maximum extent in all
other respects, as to which it is valid and enforceable, all as determined by
such court in such action.
10. INDEMNIFICATION
The Company shall indemnify Employee for all losses sustained by
Employee as a direct or indirect consequence of the discharge of his duties on
behalf of the Company to the fullest extent permitted under applicable law so
long as Employee acted in good faith and in a manner which he believed to be in
the best interests of the Company with respect to the matter giving rise to the
claim or loss for which Employee seeks indemnification.
<PAGE> 11
11. BUSINESS EXPENSES
The Company shall promptly, but in no event later than ten (10) days
after submission of a claim of expenditure, reimburse Employee for all
reasonable business expenses incurred by him in connection with the business of
the Company and/or its subsidiaries and/or affiliates, upon presentation to the
Company of written receipts for such expenses.
12. MISCELLANEOUS PROVISIONS
12.1 Binding Effect. This Contract shall be binding upon and inure
to the benefit of any successor or successors of the Company and the personal
representatives of Employee.
12.2 Attorney's Fees. If any legal action, arbitration or other
proceedings is brought for the enforcement of this Contract, or because of an
alleged dispute, breach or default in connection with any of the provisions of
this Contract, the prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief to which that party would be entitled.
12.3 Entire Contract. This Contract constitutes the entire
agreement of the parties, and supersedes all prior agreements, understandings
and negotiations, whether written or oral, between the Company and Employee
with respect to the employment of Employee by the Company, its subsidiaries
and/or affiliates. This Contract may not be changed orally, but only by
agreement in writing, signed by all parties.
12.4 Provisions Severable. In case any one or more provisions of
this Contract shall be invalid, illegal or unenforceable, in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not, in any way, be affected or impaired thereby.
12.5 Governing Law. This Contract shall be governed by and
construed under the laws of the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this
Contract in Clark County, Nevada.
THE COMPANY EMPLOYEE
OASIS RESIDENTIAL, INC.
By: /s/ Scott S. Ingraham /s/ Robert V. Jones
------------------------------- ------------------------------
Scott S. Ingraham ROBERT V. JONES
President
By: /s/ Allan O. Hunter, Jr.
-------------------------------
Allan O. Hunter, Jr.
Secretary
<PAGE> 1
EXHIBIT 10.16.2
AMENDED AND RESTATED EMPLOYMENT CONTRACT
OASIS RESIDENTIAL, INC.
A Nevada Corporation
THIS EMPLOYMENT CONTRACT is executed as of October 28, 1996, by and
between OASIS RESIDENTIAL, INC., a Nevada corporation ("Company") and SCOTT S.
INGRAHAM ("Employee").
1. EMPLOYMENT
The Company hereby employs Employee and Employee hereby accepts
employment upon the terms and conditions set forth below.
2. TERM AND RENEWAL
2.1 Term. The term of this Contract shall be deemed to have
commenced on the date of this Contract (the "Effective Date"), and shall
continue for three (3) years from the Effective Date (the "Term") on the terms
and conditions set forth below, unless sooner terminated as provided in Article
5 below.
2.2 Extension. Following the expiration of each year of the Term
and provided that this Contract has not been terminated pursuant to Article 5
below, and every year thereafter, the Contract shall be automatically renewed
for an additional 12 month period, effective on each anniversary date of the
Effective Date.
3. COMPENSATION
3.1 Base Compensation. For the services to be rendered by
Employee under this Contract, Employee shall be entitled to receive, commencing
as of the Effective Date, an initial annual base compensation ("Base
Compensation") of $220,000 payable in twelve (12) equal monthly payments. This
Base Compensation shall be reviewed and adjusted annually as determined by the
Compensation Committee of the Board of Directors (the "Board"), but in no event
will the annual Base Compensation be less than the initial amount set forth
above.
3.2 Options. The Compensation Committee may, at its discretion
and pursuant to the provisions of the Company's Stock Option Plan, issue to
Employee additional Options to purchase shares of the Company's stock to
compensate Employee for services rendered to the Company and/or as an incentive
for services to be performed in the future.
1
<PAGE> 2
3.3 Insurance Benefits.
(a) The Company shall provide to Employee, his spouse and
dependent children, at its sole cost, such health, dental and optical insurance
as the Company may from time to time make available to its other executive
employees.
(b) The Company shall provide Employee such disability
and/or life insurance as the Company in its sole discretion may from time to
time make available to its other executive employees.
3.4 Bonus Compensation. At least annually, the Compensation
Committee of the Board shall review Employee's performance and may award
Employee a cash bonus which the Board shall reasonably determine as fairly
compensating and awarding Employee for service to the Company and/or as an
incentive for continued service to the Company. The amount of such cash bonus
is dependent on, among other things, the achievement of certain performance
levels by the Company, including growth in funds from operations, and
Employee's performance and contribution to increasing the Company's funds from
operations. The amount of such bonus shall be limited to 100% of Employee's
Base Compensation for the year awarded.
3.5 Method of Payment. The monetary compensation payable to
Employee hereunder may be paid in whole or in part, from time to time, by the
Company, its subsidiaries and/or its affiliates, but shall at all times remain
the responsibility of the Company.
4. DUTIES
4.1 Service. Employee shall serve as President, Chief Operating
Officer and Director of the Board of the Company, which office shall at all
times hereunder have the status and duties currently set forth in the Company's
Bylaws. At the request of the Board, subject to shareholder approval when
required, Employee shall serve as a director and/or officer of such of the
Company's subsidiaries and/or affiliates as the board may request. Employee
may, at his discretion, serve the Company in other offices and capacities in
addition to the foregoing, but shall not be required to do so. In the event
the Company and the Employee voluntarily agree that Employee shall terminate
his service in any one or more of the aforementioned-capacities, or Employee's
service in one or more of the aforementioned capacities is terminated,
Employee's compensation as specified in this Contract, shall not be diminished
or reduced in any manner.
2
<PAGE> 3
Any change of Employee's status as an officer of the Company as herein
provided or any material decease in Employee's authority or responsibilities
hereunder, without Employee's written consent shall, at Employee's election,
constitute a material breach of this Contract and immediate termination without
cause of Employee's employment hereunder.
4.2 Devotion of Time and Effort. Employee shall use his good
faith best efforts and judgment in performing his duties as required hereunder
and to act in the best interests of the Company. Employee shall devote such
time, attention and energies to the business of the Company as are reasonably
necessary to satisfy Employee's required responsibilities and duties hereunder.
4.3 Other Activities. Employee may engage in other activities for
his own account during the term of this Contract including charitable
activities, community activities and/or other business activities, subject to
Article 7 below.
4.4 Vacation. It is understood and agreed that Employee shall be
entitled to four (4) weeks vacation per year. During such vacation periods,
Employee shall not be relieved of his duties under this Contract and there will
be no abatement or reduction of Employee's compensation hereunder.
4.5 The Company's Obligations. The Company shall provide Employee
with any and all necessary or appropriate current financial information and
access to current information and records regarding all material transactions
involving the Company and/or its subsidiaries and/or affiliates, including but
not limited to acquisition of assets, personnel contracts, dispositions of
assets, service agreements and registration statements or other state or
federal filings or disclosures to carry out his duties and responsibilities
hereunder. In addition, the Company agrees to provide Employee, as a condition
to his services hereunder, such staff, equipment and office space as is
reasonably necessary for Employee to perform his duties hereunder.
5. TERMINATION.
5.1 By Company Without Cause. The Company may terminate this
Contract without "cause" (as that term is hereinafter defined), provided that
the Company first delivers to Employee the Company's written election to
terminate this Contract at least ninety (90) days prior to the effective date
of termination.
5.2 Severance Payment.
5.2.1 Amount. In the event the Company terminates Employee's
services hereunder pursuant to Section 5.1, Employee shall continue to render
services pursuant hereto until the date of termination and shall continue to
receive compensation, as provided hereunder, through the termination date. In
addition to other compensation payable to Employee for services through the
termination date, the Company shall pay Employee, as a single severance
payment, an amount equal to three times the sum of Employee's current annual
Base Compensation and the bonus paid to Employee on account of service during
the most recently completed twelve month fiscal period (or, if Employee has
been employed less than twelve months, the average annual base compensation and
bonus for the period employed) (the "Severance Amount").
3
<PAGE> 4
5.2.2 Excise Tax Gross-Up.
(a) Notwithstanding anything contained in this
Agreement to the contrary, in the event it shall be determined
(pursuant to (b) below) or finally determined (as defined in
(c) below) that any payment, distribution or benefit by the
Company or its predecessors, or the subsidiaries or affiliates
of the Company or its predecessors, to or for the benefit of
Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional
payments required under this Section 5.2.2) (a "PAYMENT") is
or was subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended, or any interest
or penalties are or were incurred by Employee with respect to
such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred
to as the "EXCISE TAX"), then, within 10 days after such
determination or final determination, as the case may be, the
Company shall pay to Employee an additional cash payment or
additional cash payments (hereinafter referred to in the
aggregate as the "GROSS-UP PAYMENT") in an aggregate amount
such that after payment by Employee of all taxes, interest and
penalties imposed with respect to the Gross-Up Payment
(including, without limitation, any excise taxes imposed upon
the Gross-Up Payment), Employee retains an amount of the
Gross-Up Payment equal to the Excise tax imposed upon the
payments.
(b) Except as provided in subsection (c) below,
the determination that a Payment is subject to an Excise Tax
shall be made by a certified public accounting firm engaged by
Employee ("Employee's Accountant"). Such determination shall
include the amount of the Gross-Up Payment, including when a
Gross-Up Payment is to be paid and the assumptions to be
utilized in arriving at such determination, which
determination shall provide detailed supporting calculations
both to the Company and to the Employee within 15 business
days of the receipt of notice from the Employee that there has
been a Payment. The calculations prepared by Employee's
Accountant shall be reviewed on behalf of the Company by a
certified public accounting firm engaged by the Company. The
Company shall notify Employee within 10 business days of any
disagreement or dispute with the findings of Employee's
Accountant, and failure to so notify shall be considered a
determination in favor of the findings of Employee's
Accountant, obligating the Company to make payment as provided
in subsection (a) above. In the event of a dispute between
the Company's accounting firm and Employee's Accountant, such
firms shall jointly select a third nationally recognized
certified public accounting firm to resolve the dispute and
the decision of such third firm shall be final, binding and
conclusive upon the Employee and the Company. In such a case,
the third accounting firm's findings (rather than those of the
Employee's Accountant) shall be deemed the binding
determination, obligating the Company to make payment as
provided in subsection (a) above. All fees and expenses of
each of the accounting firms shall be borne solely by the
Company.
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<PAGE> 5
(c) (i) Employee shall notify the Company in
writing of any claim by the Internal Revenue Service (or any
successor thereof) that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no
later than 30 days after Employee receives written notice of
such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be
paid. Employee shall not pay such claim prior to the
expiration of the 30-day period following the date on which
Employee gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes, interest
or penalties with respect to such claim is due). If the
Company notifies Employee in writing prior to the expiration
of such period that it desires to contest such claim (and
demonstrates to the reasonable satisfaction of Employee its
ability to make the payments to Employee which may ultimately
be required under this section before assuming responsibility
for the claim), Employee shall:
(A) give the Company any information
reasonably requested by the Company relating to such
claim,
(B) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including,
without limitation, accepting legal representation
with respect to such claim by an attorney selected by
the Company that is reasonably acceptable to
Employee,
(C) cooperate with the Company in good
faith in order effectively to contest such claim, and
(D) permit the Company to participate in
any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly
all attorneys fees, costs and expenses (including
additional interest and penalties) incurred in
connection with such contest and shall indemnify and
hold Employee harmless, on an after-tax basis, for
all taxes, interest and penalties imposed as a result
of such representation, payment of costs and expenses
or indemnification. Without limitation on the
foregoing provisions of this Section 5.2.2, the
Company shall control all proceedings taken in
connection with such contest and, at its sole option,
may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and
may, at its sole option, either direct Employee to
pay the tax, interest or penalties claimed and sue
for a refund or contest the claim in any permissible
manner, and Employee agrees to prosecute such contest
to a determination before any administrative
tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall
determine; provided, however, that if the Company
directs Employee to pay such claim and sue for a
refund, the Company shall advance an amount equal to
such payment to Employee, on an interest-free basis,
and shall indemnify and hold Employee harmless, on an
after-tax basis, from all taxes, interest or
penalties imposed with respect to such advance or
with respect to any imputed income with respect to
such advance; and, further, provided, that any
extension of the statute of limitations relating to
payment of taxes, interest or penalties for the
taxable year of Employee with respect to which such
contested amount is claimed to be due is limited
solely to such contested amount; and, provided,
further, that any settlement of any claim shall be
reasonably acceptable to Employee and the Company's
control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be
payable hereunder, and Employee shall be entitled to
settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any
other taxing authority.
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<PAGE> 6
(ii) If, after receipt by Employee of an amount
advanced by the Company pursuant to Section 5.2.2(c)(i),
Employee receives any refund with respect to such claim,
Employee shall (subject to the Company's complying with the
requirements of Section 5.2.2) promptly pay to the Company an
amount equal to such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If,
after the receipt by Employee of an amount advanced by the
Company pursuant to Section 5.2.2(c)(i), it is finally
determined that Employee is not entitled to any refund with
respect to such claim, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
(iii) For purposes of this Section 5.2.2, whether
the Excise Tax is applicable to a Payment shall be deemed to
be "finally determined" upon the earliest of (A) the
expiration of 30 days following the rendering of a decision by
the Internal Revenue Service (or any successor thereto) or a
court of competent jurisdiction unless, within such 30-day
period, the Company notifies Employee in writing of its intent
to contest such decision, (B) the rendering of a decision by
the Internal Revenue Service (or any successor thereto) or a
court of competent jurisdiction, from which decision no
further right of appeal exists, or (C) the expiration of the
statutory period (including any extensions thereto) for the
assessment and collection of the Excise Tax.
5.2.3 The Employee acknowledges that, if he or she
should exercise any portion of the Options more than three (3) months
following the date of Employee's Termination of Employment for any reason other
than death or disability (within the meaning of Section 22(e)(3) of the Code,
he or she will be taxed as to such portion of the Option so exercised, as if
such portion of the Option did not qualify as an "incentive stock option"
(within the meaning of Section 422 of the Code) but rather as if such portion
was a non-qualified option. Employee shall be required to pay any and all
withholding taxes payable at the time of the exercise of the option or the
Company shall have the right to withhold stock in an amount equal to the amount
of the withholding tax for payment on Employee's behalf.
5.2.4 All vested stock options shall immediately
vest upon termination under Section 5.1, and Employee shall have the right to
exercise any vested option during the balance of their ten year term. All
unvested stock options which vest shall be exercisable within ten years from
issuance.
5.3 By the Company for Cause. The Company may terminate Employee
for cause at any time, upon written notice. For the purposes hereof, "cause"
shall mean:
5.3.1 Employee's conviction for a felony; or
5.3.2 Employee's conviction for the crime of theft,
embezzlement or misappropriation against the Company; or
5.3.3 The final determination by a court of
competent jurisdiction or by the Board that Employee has materially breached
Sections 4, 6 or 7 of this Contract, if such breach is incurable; or, if
curable, a determination that Employee had been given reasonable opportunity to
cure and had not done so; or
5.3.4 Employee's death or permanent disability.
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<PAGE> 7
In the event Employee is terminated for cause pursuant to this
Section, Employee shall have the right to receive his compensation as otherwise
provided under this Contract through the effective date of termination.
Employee shall have no further right to receive compensation or other
consideration from the Company, or have any other remedy whatsoever against the
Company, as a result of this Contract or the termination thereof.
The foregoing notwithstanding, in the event Employee is terminated by
reason of his permanent disability or death, the Company shall immediately pay
Employee or his representative a single severance payment as set forth under
Section 5.2, and the Employee shall have the same rights as set forth under
Section 5.2.3 regarding all stock options.
5.4 Employee's Termination for Cause. Employee may terminate this
Agreement at any time if:
5.4.1 The Company is in material breach of its
obligations hereunder; and
5.4.2 Either such breach is incurable or, if
curable, has not been cured within fifteen (15) days following receipt of
written notice of such breach by the Company.
In no event, however, may the Employee terminate this Agreement
without providing the Company with at least ten (10) days written notice of its
intent to terminate this Agreement. In the event Employee terminates this
Contract pursuant to this Section, Employee shall have the same rights and
remedies against the Company as he would have had the company terminated his
employment without cause pursuant to Section 5.1 hereof (including all rights
under Section 5.2).
5.5 Employee's Voluntary Termination. Employee may, at any time,
terminate this Contract without cause upon written notice delivered to the
Company at least ninety (90) days prior to the effective date of termination.
In the event of such voluntary termination:
5.5.1 Employee shall have the right to monetary
compensation as provided in paragraph 3.1 above through the effective date of
termination, but shall have no further right to compensation thereafter; and
5.5.2 Employee's stock options shall be null and
void as of the date of termination except as provided in Section 5.6 below.
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<PAGE> 8
The Company and Employee shall not have any further right or remedy
against one another in the event Employee terminates this Contract pursuant to
this Section except as provided in Articles 6, 7, 8 and 9 hereof which shall
remain in full force and effect.
5.6 Employee's Retention of Securities. In the event the Company
terminates Employee, without cause, Employee shall retain all options and other
securities he then owns, of record or otherwise, of the Company and/or its
subsidiaries and/or affiliates, and shall have the right to exercise said
options at any time during the remaining term of said option. In the event the
Company terminates this Contract for cause pursuant to Section 5.3, or Employee
voluntarily terminates this contract pursuant to Section 5.5 above, any Options
issued to Employee which may not then have been exercised on the date of said
Termination shall be exercised within three (3) months of the date of
Termination or shall be null and void as of the date three (3) months after
Termination.
5.7 Change of Control. The Employee may terminate his employment
under this Agreement any time within six (6) months after a "change in control"
of the Company. For purposes of this Agreement, a "change in control" shall be
deemed to have occurred upon (a) the acquisition by any person of twenty
percent (20%) of the issued and outstanding stock of the Company, (b) a change
in majority of the members of the Board in connection with a tender offer,
merger, sale of assets, etc., (c) the sale of all or substantially all of the
Company's assets or (d) a dissolution or liquidation of the Company. In the
event Employee terminates his employment within two (2) years after a change in
control, Employee shall continue to render services pursuant hereto until the
date of termination and shall continue to receive compensation, as provided
hereunder, through the termination date. In addition to other compensation
payable to Employee for services through the termination date, the Employee
shall have the same rights and remedies against the Company as he would have
had had the Company terminated his employment without cause pursuant to Section
5.1 hereof (including the right to payments under Section 5.2).
6. UNFAIR COMPETITION
6.1 Trade Secrets. During the term of employment under this
Contract, Employee will have access to and become acquainted with various
information not generally available to the public consisting of records,
documents, drawings, specifications, customer lists, procedural and operational
manuals and information, and financial records and accounts, projections and
budgets, and similar information, all of which are owned by the Company and
regularly used in the operation of the Company's business. Such assets of the
Company are secret, not generally available to the public and give the Company
an advantage over competitors who do not know of or use such information.
Employee agrees such information and documents relating to the business of the
Company, whether they are prepared by Employee or come into Employee's
possession in any other way, are owned by the Company, shall remain the
exclusive property of the Company and shall not be removed from the premises of
the Company under any circumstances whatsoever, without prior written consent
of the Company.
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<PAGE> 9
6.2 Misuse of Trade Secrets. Employee covenants that he shall not
misuse, misappropriate or disclose any of the trade secrets described above,
directly or indirectly, or use them in any way, either during the term of this
Contract or at any time thereafter, except as required in the course of his
employment with the Company, unless such action is either previously agreed to
in writing by the Company or required by law.
6.3 Non-Disclosure of Trade Secrets. Employee acknowledges and
agrees that the sale or unauthorized use or disclosure of any of the Company's
trade secrets, as above described, including information concerning the
Company's current, future and/or proposed work, services or investments, the
fact that any such work, services or investments are planned, under
consideration or under negotiation, as well as any descriptions thereof,
constitute "unfair competition". Employee promises and agrees not to engage in
any unfair competition with the Company, either during the term of this
Contract or at any time thereafter.
7. NON-COMPETITION DURING EMPLOYMENT
7.1 Competitive Activities. During the term of this Contract,
Employee shall not, without the Company's prior written consent, directly or
indirectly, whether or not for compensation, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director
or in any other individual or representative capacity, engage or participate
in, or render, directly or indirectly, any services in connection with any
business that is in competition, in any manner whatsoever, with the business of
the Company. In addition, Employee shall not directly or indirectly acquire,
hold or retain any material interest in any business competing with or of
similar nature to the business of the Company except as provided in Section 4.3
above.
7.2 Exceptions. The foregoing shall exclude, however, the
expenditure of a reasonable amount of time for educational, charitable and/or
professional activities, which shall not be deemed a breach of this Contract,
provided such activities do not materially interfere with the services required
under this Contract.
7.3 Passive Investments. Employee shall not engage in any passive
or active investment in or reasonably relating to the acquisition, development,
construction or management of multifamily apartment properties, with the
exception of ownership of up to one (1) percent of the securities of any
publicly-traded companies involved in such activities.
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<PAGE> 10
8. SOLICITATION OF EMPLOYEES
8.1 Use of Information. Employee acknowledges and agrees that the
names, addresses and relationships of persons who perform services or provide
goods or materials to or for the Company are unique, and that the nature and
substance of the Company's relationship with such persons constitute the
Company's "trade secrets". Employee acknowledges that the sale or unauthorized
use or disclosure of any of such relationships which Employee learned of during
his employment with the Company would constitute unfair competition. Employee
promises and agrees not to engage in any unfair competition with the Company.
8.2 Non-Disclosure. During the term of his employment with the
Company, and for a period of two (2) years thereafter, Employee shall not,
directly or indirectly, make known to any person, firm or company the substance
or content of any relationship of the Company with any employee, independent
contractor or provider of goods or materials to the Company. Employee agrees
that he shall not solicit, take away or induce any such person to end their
relationship with the Company, or to attempt to do any of the foregoing, or
recruit, hire or otherwise induce any such person to perform services for
Employee, or any other person, firm or company.
9. NON-COMPETITION AFTER TERMINATION
Employee shall not, for a period of one (1) year following the date of
termination, engage in the development, acquisition, construction or management
of any multifamily apartment properties outside of the Company within the
States of Arizona, California, Colorado, Nevada, New Mexico and/or Utah. In
addition, Employee shall not engage in any active or passive investment in or
reasonably relating to the acquisition, development, construction or management
of multifamily apartment properties within the States of Arizona, California,
Colorado, Nevada, New Mexico and/or Utah for a period of one (1) year following
the date of termination, with the exception of the ownership of up to one (1)
percent of the securities of any publicly-traded companies involved in such
activities. Nothing herein shall relieve or limit Employee's obligation to
comply with Sections 6, 7 and 8 above. The restrictions set forth in this
Section shall not apply if Employee is terminated pursuant to Section 5.1
above. If any provision hereof is determined by any court of competent
jurisdiction to be invalid or unenforceable by reason of such provision
extending the covenants and agreements contained herein for too great a period
of time or over too great a geographical area, or being too extensive in any
other respect, such provision shall be interpreted to extend only over the
maximum period of time and geographical area, and to the maximum extent in all
other respects, as to which it is valid and enforceable, all as determined by
such court in such action.
10. INDEMNIFICATION
The Company shall indemnify Employee for all losses sustained by
Employee as a direct or indirect consequence of the discharge of his duties on
behalf of the Company to the fullest extent permitted under applicable law so
long as Employee acted in good faith and in a manner which he believed to be in
the best interests of the Company with respect to the matter giving rise to the
claim or loss for which Employee seeks indemnification.
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<PAGE> 11
11. BUSINESS EXPENSES
The Company shall promptly, but in no event later than ten (10) days
after submission of a claim of expenditure, reimburse Employee for all
reasonable business expenses incurred by him in connection with the business of
the Company and/or its subsidiaries and/or affiliates, upon presentation to the
Company of written receipts for such expenses.
12. MISCELLANEOUS PROVISIONS
12.1 Binding Effect. This Contract shall be binding upon and inure
to the benefit of any successor or successors of the Company and the personal
representatives of Employee.
12.2 Attorney's Fees. If any legal action, arbitration or other
proceedings is brought for the enforcement of this Contract, or because of an
alleged dispute, breach or default in connection with any of the provisions of
this Contract, the prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief to which that party would be entitled.
12.3 Entire Contract. This Contract constitutes the entire
agreement of the parties, and supersedes all prior agreements, understandings
and negotiations, whether written or oral, between the Company and Employee
with respect to the employment of Employee by the Company, its subsidiaries
and/or affiliates. This Contract may not be changed orally, but only by
agreement in writing, signed by all parties.
12.4 Provisions Severable. In case any one or more provisions of
this Contract shall be invalid, illegal or unenforceable, in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not, in any way, be affected or impaired thereby.
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<PAGE> 12
12.5 Governing Law. This Contract shall be governed by and
construed under the laws of the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this
Contract in Clark County, Nevada.
THE COMPANY EMPLOYEE
OASIS RESIDENTIAL, INC.
By: /s/ Scott S. Ingraham /s/ Scott S. Ingraham
---------------------------- ------------------------------
Scott S. Ingraham SCOTT S. INGRAHAM
President
By: /s/ Allan O. Hunter, Jr.
----------------------------
Allan O. Hunter, Jr.
Secretary
12
<PAGE> 1
EXHIBIT 10.16.3
AMENDED AND RESTATED EMPLOYMENT CONTRACT
OASIS RESIDENTIAL, INC.
A Nevada Corporation
THIS EMPLOYMENT CONTRACT is executed as of October 28, 1996, by and
between OASIS RESIDENTIAL, INC., a Nevada corporation ("Company") and ALLAN O.
HUNTER, JR. ("Employee").
1. EMPLOYMENT
The Company hereby employs Employee and Employee hereby accepts
employment upon the terms and conditions set forth below.
2. TERM AND RENEWAL
2.1 Term. The term of this Contract shall be deemed to have
commenced on the date of this Contract (the "Effective Date"), and shall
continue for three (3) years from the Effective Date (the "Term") on the terms
and conditions set forth below, unless sooner terminated as provided in Article
5 below.
2.2 Extension. Following the expiration of each year of the Term
and provided that this Contract has not been terminated pursuant to Article 5
below, and every year thereafter, the Contract shall be automatically renewed
for an additional 12 month period, effective on each anniversary date of the
Effective Date.
3. COMPENSATION
3.1 Base Compensation. For the services to be rendered by
Employee under this Contract, Employee shall be entitled to receive, commencing
as of the Effective Date, an initial annual base compensation ("Base
Compensation") of $170,000 payable in twelve (12) equal monthly payments. This
Base Compensation shall be reviewed and adjusted annually as determined by the
Compensation Committee of the Board of Directors (the "Board"), but in no event
will the annual Base Compensation be less than the initial amount set forth
above.
3.2 Options. The Compensation Committee may, at its discretion
and pursuant to the provisions of the Company's Stock Option Plan, issue to
Employee additional Options to purchase shares of the Company's stock to
compensate Employee for services rendered to the Company and/or as an incentive
for services to be performed in the future.
<PAGE> 2
3.3 Insurance Benefits.
(a) The Company shall provide to Employee, his spouse and
dependent children, at its sole cost, such health, dental and optical insurance
as the Company may from time to time make available to its other executive
employees.
(b) The Company shall provide Employee such disability
and/or life insurance as the Company in its sole discretion may from time to
time make available to its other executive employees.
3.4 Bonus Compensation. At least annually, the Compensation
Committee of the Board shall review Employee's performance and may award
Employee a cash bonus which the Board shall reasonably determine as fairly
compensating and awarding Employee for service to the Company and/or as an
incentive for continued service to the Company. The amount of such cash bonus
is dependent on, among other things, the achievement of certain performance
levels by the Company, including growth in funds from operations, and
Employee's performance and contribution to increasing the Company's funds from
operations. The amount of such bonus shall be limited to 100% of Employee's
Base Compensation for the year awarded.
3.5 Method of Payment. The monetary compensation payable to
Employee hereunder may be paid in whole or in part, from time to time, by the
Company, its subsidiaries and/or its affiliates, but shall at all times remain
the responsibility of the Company.
4. DUTIES
4.1 Service. Employee shall serve as Executive Vice
President/Operations, Secretary and Director of the Board of the Company, which
office shall at all times hereunder have the status and duties currently set
forth in the Company's Bylaws. At the request of the Board, subject to
shareholder approval when required, Employee shall serve as a director and/or
officer of such of the Company's subsidiaries and/or affiliates as the board
may request. Employee may, at his discretion, serve the Company in other
offices and capacities in addition to the foregoing, but shall not be required
to do so. In the event the Company and the Employee voluntarily agree that
Employee shall terminate his service in any one or more of the
aforementioned-capacities, or Employee's service in one or more of the
aforementioned capacities is terminated, Employee's compensation as specified
in this Contract, shall not be diminished or reduced in any manner.
Any change of Employee's status as an officer of the Company as herein
provided or any material decease in Employee's authority or responsibilities
hereunder, without Employee's written consent shall, at Employee's election,
constitute a material breach of this Contract and immediate termination without
cause of Employee's employment hereunder.
<PAGE> 3
4.2 Devotion of Time and Effort. Employee shall use his good
faith best efforts and judgment in performing his duties as required hereunder
and to act in the best interests of the Company. Employee shall devote such
time, attention and energies to the business of the Company as are reasonably
necessary to satisfy Employee's required responsibilities and duties hereunder.
4.3 Other Activities. Employee may engage in other activities for
his own account during the term of this Contract including charitable
activities, community activities and/or other business activities, subject to
Article 7 below.
4.4 Vacation. It is understood and agreed that Employee shall be
entitled to four (4) weeks vacation per year. During such vacation periods,
Employee shall not be relieved of his duties under this Contract and there will
be no abatement or reduction of Employee's compensation hereunder.
4.5 The Company's Obligations. The Company shall provide Employee
with any and all necessary or appropriate current financial information and
access to current information and records regarding all material transactions
involving the Company and/or its subsidiaries and/or affiliates, including but
not limited to acquisition of assets, personnel contracts, dispositions of
assets, service agreements and registration statements or other state or
federal filings or disclosures to carry out his duties and responsibilities
hereunder. In addition, the Company agrees to provide Employee, as a condition
to his services hereunder, such staff, equipment and office space as is
reasonably necessary for Employee to perform his duties hereunder.
5. TERMINATION.
5.1 By Company Without Cause. The Company may terminate this
Contract without "cause" (as that term is hereinafter defined), provided that
the Company first delivers to Employee the Company's written election to
terminate this Contract at least ninety (90) days prior to the effective date
of termination.
5.2 Severance Payment.
5.2.1 Amount. In the event the Company terminates Employee's
services hereunder pursuant to Section 5.1, Employee shall continue to render
services pursuant hereto until the date of termination and shall continue to
receive compensation, as provided hereunder, through the termination date. In
addition to other compensation payable to Employee for services through the
termination date, the Company shall pay Employee, as a single severance
payment, an amount equal to three times the sum of Employee's current annual
Base Compensation and the bonus paid to Employee on account of service during
the most recently completed twelve month fiscal period (or, if Employee has
been employed less than twelve months, the average annual base compensation and
bonus for the period employed) (the "Severance Amount").
<PAGE> 4
5.2.2 Excise Tax Gross-Up.
(a) Notwithstanding anything contained in this
Agreement to the contrary, in the event it shall be determined
(pursuant to (b) below) or finally determined (as defined in
(c) below) that any payment, distribution or benefit by the
Company or its predecessors, or the subsidiaries or affiliates
of the Company or its predecessors, to or for the benefit of
Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional
payments required under this Section 5.2.2) (a "PAYMENT") is
or was subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended, or any interest
or penalties are or were incurred by Employee with respect to
such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred
to as the "EXCISE TAX"), then, within 10 days after such
determination or final determination, as the case may be, the
Company shall pay to Employee an additional cash payment or
additional cash payments (hereinafter referred to in the
aggregate as the "GROSS-UP PAYMENT") in an aggregate amount
such that after payment by Employee of all taxes, interest and
penalties imposed with respect to the Gross-Up Payment
(including, without limitation, any excise taxes imposed upon
the Gross-Up Payment), Employee retains an amount of the
Gross-Up Payment equal to the Excise tax imposed upon the
payments.
(b) Except as provided in subsection (c) below,
the determination that a Payment is subject to an Excise Tax
shall be made by a certified public accounting firm engaged by
Employee ("Employee's Accountant"). Such determination shall
include the amount of the Gross-Up Payment, including when a
Gross-Up Payment is to be paid and the assumptions to be
utilized in arriving at such determination, which
determination shall provide detailed supporting calculations
both to the Company and to the Employee within 15 business
days of the receipt of notice from the Employee that there has
been a Payment. The calculations prepared by Employee's
Accountant shall be reviewed on behalf of the Company by a
certified public accounting firm engaged by the Company. The
Company shall notify Employee within 10 business days of any
disagreement or dispute with the findings of Employee's
Accountant, and failure to so notify shall be considered a
determination in favor of the findings of Employee's
Accountant, obligating the Company to make payment as provided
in subsection (a) above. In the event of a dispute between
the Company's accounting firm and Employee's Accountant, such
firms shall jointly select a third nationally recognized
certified public accounting firm to resolve the dispute and
the decision of such third firm shall be final, binding and
conclusive upon the Employee and the Company. In such a case,
the third accounting firm's findings (rather than those of the
Employee's Accountant) shall be deemed the binding
determination, obligating the Company to make payment as
provided in subsection (a) above. All fees and expenses of
each of the accounting firms shall be borne solely by the
Company.
(c) (i) Employee shall notify the Company in
writing of any claim by the Internal Revenue Service (or any
successor thereof) that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no
later than 30 days after Employee receives written notice of
such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be
paid. Employee shall not pay such claim prior to the
expiration of the 30-day period following the date on which
Employee gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes, interest
or penalties with respect to such claim is due). If the
Company notifies Employee in writing prior to the expiration
of such period that it desires to contest such claim (and
demonstrates to the reasonable satisfaction of Employee its
ability to make the payments to Employee which may ultimately
be required under this section before assuming responsibility
for the claim), Employee shall:
(A) give the Company any information
reasonably requested by the Company relating to such
claim,
<PAGE> 5
(B) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including,
without limitation, accepting legal representation
with respect to such claim by an attorney selected by
the Company that is reasonably acceptable to
Employee,
(C) cooperate with the Company in good
faith in order effectively to contest such claim, and
(D) permit the Company to participate in
any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly
all attorneys fees, costs and expenses (including
additional interest and penalties) incurred in
connection with such contest and shall indemnify and
hold Employee harmless, on an after-tax basis, for
all taxes, interest and penalties imposed as a result
of such representation, payment of costs and expenses
or indemnification. Without limitation on the
foregoing provisions of this Section 5.2.2, the
Company shall control all proceedings taken in
connection with such contest and, at its sole option,
may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and
may, at its sole option, either direct Employee to
pay the tax, interest or penalties claimed and sue
for a refund or contest the claim in any permissible
manner, and Employee agrees to prosecute such contest
to a determination before any administrative
tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall
determine; provided, however, that if the Company
directs Employee to pay such claim and sue for a
refund, the Company shall advance an amount equal to
such payment to Employee, on an interest-free basis,
and shall indemnify and hold Employee harmless, on an
after-tax basis, from all taxes, interest or
penalties imposed with respect to such advance or
with respect to any imputed income with respect to
such advance; and, further, provided, that any
extension of the statute of limitations relating to
payment of taxes, interest or penalties for the
taxable year of Employee with respect to which such
contested amount is claimed to be due is limited
solely to such contested amount; and, provided,
further, that any settlement of any claim shall be
reasonably acceptable to Employee and the Company's
control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be
payable hereunder, and Employee shall be entitled to
settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any
other taxing authority.
<PAGE> 6
(ii) If, after receipt by Employee of an amount
advanced by the Company pursuant to Section 5.2.2(c)(i),
Employee receives any refund with respect to such claim,
Employee shall (subject to the Company's complying with the
requirements of Section 5.2.2) promptly pay to the Company an
amount equal to such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If,
after the receipt by Employee of an amount advanced by the
Company pursuant to Section 5.2.2(c)(i), it is finally
determined that Employee is not entitled to any refund with
respect to such claim, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
(iii) For purposes of this Section 5.2.2, whether
the Excise Tax is applicable to a Payment shall be deemed to
be "finally determined" upon the earliest of (A) the
expiration of 30 days following the rendering of a decision by
the Internal Revenue Service (or any successor thereto) or a
court of competent jurisdiction unless, within such 30-day
period, the Company notifies Employee in writing of its intent
to contest such decision, (B) the rendering of a decision by
the Internal Revenue Service (or any successor thereto) or a
court of competent jurisdiction, from which decision no
further right of appeal exists, or (C) the expiration of the
statutory period (including any extensions thereto) for the
assessment and collection of the Excise Tax.
5.2.3 The Employee acknowledges that, if he or she
should exercise any portion of the Options more than three (3) months
following the date of Employee's Termination of Employment for any reason other
than death or disability (within the meaning of Section 22(e)(3) of the Code,
he or she will be taxed as to such portion of the Option so exercised, as if
such portion of the Option did not qualify as an "incentive stock option"
(within the meaning of Section 422 of the Code) but rather as if such portion
was a non-qualified option. Employee shall be required to pay any and all
withholding taxes payable at the time of the exercise of the option or the
Company shall have the right to withhold stock in an amount equal to the amount
of the withholding tax for payment on Employee's behalf.
5.2.4 All vested stock options shall immediately
vest upon termination under Section 5.1, and Employee shall have the right to
exercise any vested option during the balance of their ten year term. All
unvested stock options which vest shall be exercisable within ten years from
issuance.
<PAGE> 7
5.3 By the Company for Cause. The Company may terminate Employee
for cause at any time, upon written notice. For the purposes hereof, "cause"
shall mean:
5.3.1 Employee's conviction for a felony; or
5.3.2 Employee's conviction for the crime of theft,
embezzlement or misappropriation against the Company; or
5.3.3 The final determination by a court of
competent jurisdiction or by the Board that Employee has materially breached
Sections 4, 6 or 7 of this Contract, if such breach is incurable; or, if
curable, a determination that Employee had been given reasonable opportunity to
cure and had not done so; or
5.3.4 Employee's death or permanent disability.
In the event Employee is terminated for cause pursuant to this
Section, Employee shall have the right to receive his compensation as otherwise
provided under this Contract through the effective date of termination.
Employee shall have no further right to receive compensation or other
consideration from the Company, or have any other remedy whatsoever against the
Company, as a result of this Contract or the termination thereof.
The foregoing notwithstanding, in the event Employee is terminated by
reason of his permanent disability or death, the Company shall immediately pay
Employee or his representative a single severance payment as set forth under
Section 5.2, and the Employee shall have the same rights as set forth under
Section 5.2.3 regarding all stock options.
5.4 Employee's Termination for Cause. Employee may terminate this
Agreement at any time if:
5.4.1 The Company is in material breach of its
obligations hereunder; and
5.4.2 Either such breach is incurable or, if
curable, has not been cured within fifteen (15) days following receipt of
written notice of such breach by the Company.
In no event, however, may the Employee terminate this Agreement
without providing the Company with at least ten (10) days written notice of its
intent to terminate this Agreement. In the event Employee terminates this
Contract pursuant to this Section, Employee shall have the same rights and
remedies against the Company as he would have had the company terminated his
employment without cause pursuant to Section 5.1 hereof (including all rights
under Section 5.2).
5.5 Employee's Voluntary Termination. Employee may, at any time,
terminate this Contract without cause upon written notice delivered to the
Company at least ninety (90) days prior to the effective date of termination.
In the event of such voluntary termination:
5.5.1 Employee shall have the right to monetary
compensation as provided in paragraph 3.1 above through the effective date of
termination, but shall have no further right to compensation thereafter; and
5.5.2 Employee's stock options shall be null and
void as of the date of termination except as provided in Section 5.6 below.
The Company and Employee shall not have any further right or remedy
against one another in the event Employee terminates this Contract pursuant to
this Section except as provided in Articles 6, 7, 8 and 9 hereof which shall
remain in full force and effect.
<PAGE> 8
5.6 Employee's Retention of Securities. In the event the Company
terminates Employee, without cause, Employee shall retain all options and other
securities he then owns, of record or otherwise, of the Company and/or its
subsidiaries and/or affiliates, and shall have the right to exercise said
options at any time during the remaining term of said option. In the event the
Company terminates this Contract for cause pursuant to Section 5.3, or Employee
voluntarily terminates this contract pursuant to Section 5.5 above, any Options
issued to Employee which may not then have been exercised on the date of said
Termination shall be exercised within three (3) months of the date of
Termination or shall be null and void as of the date three (3) months after
Termination.
5.7 Change of Control. The Employee may terminate his employment
under this Agreement any time within six (6) months after a "change in control"
of the Company. For purposes of this Agreement, a "change in control" shall be
deemed to have occurred upon (a) the acquisition by any person of twenty
percent (20%) of the issued and outstanding stock of the Company, (b) a change
in majority of the members of the Board in connection with a tender offer,
merger, sale of assets, etc., (c) the sale of all or substantially all of the
Company's assets or (d) a dissolution or liquidation of the Company. In the
event Employee terminates his employment within two (2) years after a change in
control, Employee shall continue to render services pursuant hereto until the
date of termination and shall continue to receive compensation, as provided
hereunder, through the termination date. In addition to other compensation
payable to Employee for services through the termination date, the Employee
shall have the same rights and remedies against the Company as he would have
had had the Company terminated his employment without cause pursuant to Section
5.1 hereof (including the right to payments under Section 5.2).
6. UNFAIR COMPETITION
6.1 Trade Secrets. During the term of employment under this
Contract, Employee will have access to and become acquainted with various
information not generally available to the public consisting of records,
documents, drawings, specifications, customer lists, procedural and operational
manuals and information, and financial records and accounts, projections and
budgets, and similar information, all of which are owned by the Company and
regularly used in the operation of the Company's business. Such assets of the
Company are secret, not generally available to the public and give the Company
an advantage over competitors who do not know of or use such information.
Employee agrees such information and documents relating to the business of the
Company, whether they are prepared by Employee or come into Employee's
possession in any other way, are owned by the Company, shall remain the
exclusive property of the Company and shall not be removed from the premises of
the Company under any circumstances whatsoever, without prior written consent
of the Company.
6.2 Misuse of Trade Secrets. Employee covenants that he shall not
misuse, misappropriate or disclose any of the trade secrets described above,
directly or indirectly, or use them in any way, either during the term of this
Contract or at any time thereafter, except as required in the course of his
employment with the Company, unless such action is either previously agreed to
in writing by the Company or required by law.
6.3 Non-Disclosure of Trade Secrets. Employee acknowledges and
agrees that the sale or unauthorized use or disclosure of any of the Company's
trade secrets, as above described, including information concerning the
Company's current, future and/or proposed work, services or investments, the
fact that any such work, services or investments are planned, under
consideration or under negotiation, as well as any descriptions thereof,
constitute "unfair competition". Employee promises and agrees not to engage in
any unfair competition with the Company, either during the term of this
Contract or at any time thereafter.
<PAGE> 9
7. NON-COMPETITION DURING EMPLOYMENT
7.1 Competitive Activities. During the term of this Contract,
Employee shall not, without the Company's prior written consent, directly or
indirectly, whether or not for compensation, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director
or in any other individual or representative capacity, engage or participate
in, or render, directly or indirectly, any services in connection with any
business that is in competition, in any manner whatsoever, with the business of
the Company. In addition, Employee shall not directly or indirectly acquire,
hold or retain any material interest in any business competing with or of
similar nature to the business of the Company except as provided in Section 4.3
above.
7.2 Exceptions. The foregoing shall exclude, however, the
expenditure of a reasonable amount of time for educational, charitable and/or
professional activities, which shall not be deemed a breach of this Contract,
provided such activities do not materially interfere with the services required
under this Contract.
7.3 Passive Investments. Employee shall not engage in any passive
or active investment in or reasonably relating to the acquisition, development,
construction or management of multifamily apartment properties, with the
exception of ownership of up to one (1) percent of the securities of any
publicly-traded companies involved in such activities.
8. SOLICITATION OF EMPLOYEES
8.1 Use of Information. Employee acknowledges and agrees that the
names, addresses and relationships of persons who perform services or provide
goods or materials to or for the Company are unique, and that the nature and
substance of the Company's relationship with such persons constitute the
Company's "trade secrets". Employee acknowledges that the sale or unauthorized
use or disclosure of any of such relationships which Employee learned of during
his employment with the Company would constitute unfair competition. Employee
promises and agrees not to engage in any unfair competition with the Company.
8.2 Non-Disclosure. During the term of his employment with the
Company, and for a period of two (2) years thereafter, Employee shall not,
directly or indirectly, make known to any person, firm or company the substance
or content of any relationship of the Company with any employee, independent
contractor or provider of goods or materials to the Company. Employee agrees
that he shall not solicit, take away or induce any such person to end their
relationship with the Company, or to attempt to do any of the foregoing, or
recruit, hire or otherwise induce any such person to perform services for
Employee, or any other person, firm or company.
<PAGE> 10
9. NON-COMPETITION AFTER TERMINATION
Employee shall not, for a period of one (1) year following the date of
termination, engage in the development, acquisition, construction or management
of any multifamily apartment properties outside of the Company within the
States of Arizona, California, Colorado, Nevada, New Mexico and/or Utah. In
addition, Employee shall not engage in any active or passive investment in or
reasonably relating to the acquisition, development, construction or management
of multifamily apartment properties within the States of Arizona, California,
Colorado, Nevada, New Mexico and/or Utah for a period of one (1) year following
the date of termination, with the exception of the ownership of up to one (1)
percent of the securities of any publicly-traded companies involved in such
activities. Nothing herein shall relieve or limit Employee's obligation to
comply with Sections 6, 7 and 8 above. The restrictions set forth in this
Section shall not apply if Employee is terminated pursuant to Section 5.1
above. If any provision hereof is determined by any court of competent
jurisdiction to be invalid or unenforceable by reason of such provision
extending the covenants and agreements contained herein for too great a period
of time or over too great a geographical area, or being too extensive in any
other respect, such provision shall be interpreted to extend only over the
maximum period of time and geographical area, and to the maximum extent in all
other respects, as to which it is valid and enforceable, all as determined by
such court in such action.
10. INDEMNIFICATION
The Company shall indemnify Employee for all losses sustained by
Employee as a direct or indirect consequence of the discharge of his duties on
behalf of the Company to the fullest extent permitted under applicable law so
long as Employee acted in good faith and in a manner which he believed to be in
the best interests of the Company with respect to the matter giving rise to the
claim or loss for which Employee seeks indemnification.
<PAGE> 11
11. BUSINESS EXPENSES
The Company shall promptly, but in no event later than ten (10) days
after submission of a claim of expenditure, reimburse Employee for all
reasonable business expenses incurred by him in connection with the business of
the Company and/or its subsidiaries and/or affiliates, upon presentation to the
Company of written receipts for such expenses.
12. MISCELLANEOUS PROVISIONS
12.1 Binding Effect. This Contract shall be binding upon and inure
to the benefit of any successor or successors of the Company and the personal
representatives of Employee.
12.2 Attorney's Fees. If any legal action, arbitration or other
proceedings is brought for the enforcement of this Contract, or because of an
alleged dispute, breach or default in connection with any of the provisions of
this Contract, the prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief to which that party would be entitled.
12.3 Entire Contract. This Contract constitutes the entire
agreement of the parties, and supersedes all prior agreements, understandings
and negotiations, whether written or oral, between the Company and Employee
with respect to the employment of Employee by the Company, its subsidiaries
and/or affiliates. This Contract may not be changed orally, but only by
agreement in writing, signed by all parties.
12.4 Provisions Severable. In case any one or more provisions of
this Contract shall be invalid, illegal or unenforceable, in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not, in any way, be affected or impaired thereby.
12.5 Governing Law. This Contract shall be governed by and
construed under the laws of the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this
Contract in Clark County, Nevada.
THE COMPANY EMPLOYEE
OASIS RESIDENTIAL, INC.
By: /s/ Scott S. Ingraham /s/ Allan O. Hunter, Jr.
----------------------------- -----------------------------
Scott S. Ingraham ALLAN O. HUNTER, JR.
President
By: /s/ Robert V. Jones
-----------------------------
Robert V. Jones
Chief Executive Officer
<PAGE> 1
EXHIBIT 10.16.4
AMENDED AND RESTATED EMPLOYMENT CONTRACT
OASIS RESIDENTIAL, INC.
A Nevada Corporation
THIS EMPLOYMENT CONTRACT is executed as of January 27, 1997, by and
between OASIS RESIDENTIAL, INC., a Nevada corporation ("Company") and WALTER B.
EEDS ("Employee").
1. EMPLOYMENT
The Company hereby employs Employee and Employee hereby accepts
employment upon the terms and conditions set forth below.
2. TERM AND RENEWAL
2.1 Term. The term of this Contract shall be deemed to have
commenced on the date of this Contract (the "Effective Date"), and shall
continue for three (3) years from the Effective Date (the "Term") on the terms
and conditions set forth below, unless sooner terminated as provided in Article
5 below.
2.2 Extension. Following the expiration of each year of the Term
and provided that this Contract has not been terminated pursuant to Article 5
below, and every year thereafter, the Contract shall be automatically renewed
for an additional 12 month period, effective on each anniversary date of the
Effective Date.
3. COMPENSATION
3.1 Base Compensation. For the services to be rendered by
Employee under this Contract, Employee shall be entitled to receive, commencing
as of the Effective Date, an initial annual base compensation ("Base
Compensation") of $165,000 payable in twelve (12) equal monthly payments. This
Base Compensation shall be reviewed and adjusted annually as determined by the
Compensation Committee of the Board of Directors (the "Board"), but in no event
will the annual Base Compensation be less than the initial amount set forth
above.
3.2 Options. The Compensation Committee may, at its discretion
and pursuant to the provisions of the Company's Stock Option Plan, issue to
Employee additional Options to purchase shares of the Company's stock to
compensate Employee for services rendered to the Company and/or as an incentive
for services to be performed in the future.
<PAGE> 2
3.3 Insurance Benefits.
(a) The Company shall provide to Employee, his spouse and
dependent children, at its sole cost, such health, dental and optical insurance
as the Company may from time to time make available to its other executive
employees.
(b) The Company shall provide Employee such disability
and/or life insurance as the Company in its sole discretion may from time to
time make available to its other executive employees.
3.4 Bonus Compensation. At least annually, the Compensation
Committee of the Board shall review Employee's performance and may award
Employee a cash bonus which the Board shall reasonably determine as fairly
compensating and awarding Employee for service to the Company and/or as an
incentive for continued service to the Company. The amount of such cash bonus
is dependent on, among other things, the achievement of certain performance
levels by the Company, including growth in funds from operations, and
Employee's performance and contribution to increasing the Company's funds from
operations. The amount of such bonus shall be limited to 100% of Employee's
Base Compensation for the year awarded.
3.5 Method of Payment. The monetary compensation payable to
Employee hereunder may be paid in whole or in part, from time to time, by the
Company, its subsidiaries and/or its affiliates, but shall at all times remain
the responsibility of the Company.
4. DUTIES
4.1 Service. Employee shall serve as Executive Vice President and
Director of the Board of the Company, which office shall at all times hereunder
have the status and duties currently set forth in the Company's Bylaws. At the
request of the Board, subject to shareholder approval when required, Employee
shall serve as a director and/or officer of such of the Company's subsidiaries
and/or affiliates as the board may request. Employee may, at his discretion,
serve the Company in other offices and capacities in addition to the foregoing,
but shall not be required to do so. In the event the Company and the Employee
voluntarily agree that Employee shall terminate his service in any one or more
of the aforementioned-capacities, or Employee's service in one or more of the
aforementioned capacities is terminated, Employee's compensation as specified
in this Contract, shall not be diminished or reduced in any manner.
<PAGE> 3
Any change of Employee's status as an officer of the Company as herein
provided or any material decease in Employee's authority or responsibilities
hereunder, without Employee's written consent shall, at Employee's election,
constitute a material breach of this Contract and immediate termination without
cause of Employee's employment hereunder.
4.2 Devotion of Time and Effort. Employee shall use his good
faith best efforts and judgment in performing his duties as required hereunder
and to act in the best interests of the Company. Employee shall devote such
time, attention and energies to the business of the Company as are reasonably
necessary to satisfy Employee's required responsibilities and duties hereunder.
4.3 Other Activities. Employee may engage in other activities for
his own account during the term of this Contract including charitable
activities, community activities and/or other business activities, subject to
Article 7 below.
4.4 Vacation. It is understood and agreed that Employee shall be
entitled to four (4) weeks vacation per year. During such vacation periods,
Employee shall not be relieved of his duties under this Contract and there will
be no abatement or reduction of Employee's compensation hereunder.
4.5 The Company's Obligations. The Company shall provide Employee
with any and all necessary or appropriate current financial information and
access to current information and records regarding all material transactions
involving the Company and/or its subsidiaries and/or affiliates, including but
not limited to acquisition of assets, personnel contracts, dispositions of
assets, service agreements and registration statements or other state or
federal filings or disclosures to carry out his duties and responsibilities
hereunder. In addition, the Company agrees to provide Employee, as a condition
to his services hereunder, such staff, equipment and office space as is
reasonably necessary for Employee to perform his duties hereunder.
5. TERMINATION.
5.1 By Company Without Cause. The Company may terminate this
Contract without "cause" (as that term is hereinafter defined), provided that
the Company first delivers to Employee the Company's written election to
terminate this Contract at least ninety (90) days prior to the effective date
of termination.
5.2 Severance Payment.
5.2.1 Amount. In the event the Company terminates Employee's
services hereunder pursuant to Section 5.1, Employee shall continue to render
services pursuant hereto until the date of termination and shall continue to
receive compensation, as provided hereunder, through the termination date. In
addition to other compensation payable to Employee for services through the
termination date, the Company shall pay Employee, as a single severance
payment, an amount equal to three times the sum of Employee's current annual
Base Compensation and the bonus paid to Employee on account of service during
the most recently completed twelve month fiscal period (or, if Employee has
been employed less than twelve months, the average annual base compensation and
bonus for the period employed) (the "Severance Amount").
<PAGE> 4
5.2.2 Excise Tax Gross-Up.
(a) Notwithstanding anything contained in this
Agreement to the contrary, in the event it shall be determined
(pursuant to (b) below) or finally determined (as defined in
(c) below) that any payment, distribution or benefit by the
Company or its predecessors, or the subsidiaries or affiliates
of the Company or its predecessors, to or for the benefit of
Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional
payments required under this Section 5.2.2) (a "PAYMENT") is
or was subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended, or any interest
or penalties are or were incurred by Employee with respect to
such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred
to as the "EXCISE TAX"), then, within 10 days after such
determination or final determination, as the case may be, the
Company shall pay to Employee an additional cash payment or
additional cash payments (hereinafter referred to in the
aggregate as the "GROSS-UP PAYMENT") in an aggregate amount
such that after payment by Employee of all taxes, interest and
penalties imposed with respect to the Gross-Up Payment
(including, without limitation, any excise taxes imposed upon
the Gross-Up Payment), Employee retains an amount of the
Gross-Up Payment equal to the Excise tax imposed upon the
payments.
(b) Except as provided in subsection (c) below,
the determination that a Payment is subject to an Excise Tax
shall be made by a certified public accounting firm engaged by
Employee ("Employee's Accountant"). Such determination shall
include the amount of the Gross-Up Payment, including when a
Gross-Up Payment is to be paid and the assumptions to be
utilized in arriving at such determination, which
determination shall provide detailed supporting calculations
both to the Company and to the Employee within 15 business
days of the receipt of notice from the Employee that there has
been a Payment. The calculations prepared by Employee's
Accountant shall be reviewed on behalf of the Company by a
certified public accounting firm engaged by the Company. The
Company shall notify Employee within 10 business days of any
disagreement or dispute with the findings of Employee's
Accountant, and failure to so notify shall be considered a
determination in favor of the findings of Employee's
Accountant, obligating the Company to make payment as provided
in subsection (a) above. In the event of a dispute between
the Company's accounting firm and Employee's Accountant, such
firms shall jointly select a third nationally recognized
certified public accounting firm to resolve the dispute and
the decision of such third firm shall be final, binding and
conclusive upon the Employee and the Company. In such a case,
the third accounting firm's findings (rather than those of the
Employee's Accountant) shall be deemed the binding
determination, obligating the Company to make payment as
provided in subsection (a) above. All fees and expenses of
each of the accounting firms shall be borne solely by the
Company.
(c) (i) Employee shall notify the Company in
writing of any claim by the Internal Revenue Service (or any
successor thereof) that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no
later than 30 days after Employee receives written notice of
such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be
paid. Employee shall not pay such claim prior to the
expiration of the 30-day period following the date on which
Employee gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes, interest
or penalties with respect to such claim is due). If the
Company notifies Employee in writing prior to the expiration
of such period that it desires to contest such claim (and
demonstrates to the reasonable satisfaction of Employee its
ability to make the payments to Employee which may ultimately
be required under this section before assuming responsibility
for the claim), Employee shall:
<PAGE> 5
(A) give the Company any information
reasonably requested by the Company relating to such
claim,
(B) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including,
without limitation, accepting legal representation
with respect to such claim by an attorney selected by
the Company that is reasonably acceptable to
Employee,
(C) cooperate with the Company in good
faith in order effectively to contest such claim, and
(D) permit the Company to participate in
any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly
all attorneys fees, costs and expenses (including
additional interest and penalties) incurred in
connection with such contest and shall indemnify and
hold Employee harmless, on an after-tax basis, for
all taxes, interest and penalties imposed as a result
of such representation, payment of costs and expenses
or indemnification. Without limitation on the
foregoing provisions of this Section 5.2.2, the
Company shall control all proceedings taken in
connection with such contest and, at its sole option,
may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and
may, at its sole option, either direct Employee to
pay the tax, interest or penalties claimed and sue
for a refund or contest the claim in any permissible
manner, and Employee agrees to prosecute such contest
to a determination before any administrative
tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall
determine; provided, however, that if the Company
directs Employee to pay such claim and sue for a
refund, the Company shall advance an amount equal to
such payment to Employee, on an interest-free basis,
and shall indemnify and hold Employee harmless, on an
after-tax basis, from all taxes, interest or
penalties imposed with respect to such advance or
with respect to any imputed income with respect to
such advance; and, further, provided, that any
extension of the statute of limitations relating to
payment of taxes, interest or penalties for the
taxable year of Employee with respect to which such
contested amount is claimed to be due is limited
solely to such contested amount; and, provided,
further, that any settlement of any claim shall be
reasonably acceptable to Employee and the Company's
control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be
payable hereunder, and Employee shall be entitled to
settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any
other taxing authority.
<PAGE> 6
(ii) If, after receipt by Employee of an amount
advanced by the Company pursuant to Section 5.2.2(c)(i),
Employee receives any refund with respect to such claim,
Employee shall (subject to the Company's complying with the
requirements of Section 5.2.2) promptly pay to the Company an
amount equal to such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If,
after the receipt by Employee of an amount advanced by the
Company pursuant to Section 5.2.2(c)(i), it is finally
determined that Employee is not entitled to any refund with
respect to such claim, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
(iii) For purposes of this Section 5.2.2, whether
the Excise Tax is applicable to a Payment shall be deemed to
be "finally determined" upon the earliest of (A) the
expiration of 30 days following the rendering of a decision by
the Internal Revenue Service (or any successor thereto) or a
court of competent jurisdiction unless, within such 30-day
period, the Company notifies Employee in writing of its intent
to contest such decision, (B) the rendering of a decision by
the Internal Revenue Service (or any successor thereto) or a
court of competent jurisdiction, from which decision no
further right of appeal exists, or (C) the expiration of the
statutory period (including any extensions thereto) for the
assessment and collection of the Excise Tax.
5.2.3 The Employee acknowledges that, if he or she
should exercise any portion of the Options more than three (3) months
following the date of Employee's Termination of Employment for any reason other
than death or disability (within the meaning of Section 22(e)(3) of the Code,
he or she will be taxed as to such portion of the Option so exercised, as if
such portion of the Option did not qualify as an "incentive stock option"
(within the meaning of Section 422 of the Code) but rather as if such portion
was a non-qualified option. Employee shall be required to pay any and all
withholding taxes payable at the time of the exercise of the option or the
Company shall have the right to withhold stock in an amount equal to the amount
of the withholding tax for payment on Employee's behalf.
5.2.4 All vested stock options shall immediately
vest upon termination under Section 5.1, and Employee shall have the right to
exercise any vested option during the balance of their ten year term. All
unvested stock options which vest shall be exercisable within ten years from
issuance.
<PAGE> 7
5.3 By the Company for Cause. The Company may terminate Employee
for cause at any time, upon written notice. For the purposes hereof, "cause"
shall mean:
5.3.1 Employee's conviction for a felony; or
5.3.2 Employee's conviction for the crime of theft,
embezzlement or misappropriation against the Company; or
5.3.3 The final determination by a court of
competent jurisdiction or by the Board that Employee has materially breached
Sections 4, 6 or 7 of this Contract, if such breach is incurable; or, if
curable, a determination that Employee had been given reasonable opportunity to
cure and had not done so; or
5.3.4 Employee's death or permanent disability.
In the event Employee is terminated for cause pursuant to this
Section, Employee shall have the right to receive his compensation as otherwise
provided under this Contract through the effective date of termination.
Employee shall have no further right to receive compensation or other
consideration from the Company, or have any other remedy whatsoever against the
Company, as a result of this Contract or the termination thereof.
The foregoing notwithstanding, in the event Employee is terminated by
reason of his permanent disability or death, the Company shall immediately pay
Employee or his representative a single severance payment as set forth under
Section 5.2, and the Employee shall have the same rights as set forth under
Section 5.2.3 regarding all stock options.
5.4 Employee's Termination for Cause. Employee may terminate this
Agreement at any time if:
5.4.1 The Company is in material breach of its
obligations hereunder; and
5.4.2 Either such breach is incurable or, if
curable, has not been cured within fifteen (15) days following receipt of
written notice of such breach by the Company.
In no event, however, may the Employee terminate this Agreement
without providing the Company with at least ten (10) days written notice of its
intent to terminate this Agreement. In the event Employee terminates this
Contract pursuant to this Section, Employee shall have the same rights and
remedies against the Company as he would have had the company terminated his
employment without cause pursuant to Section 5.1 hereof (including all rights
under Section 5.2).
5.5 Employee's Voluntary Termination. Employee may, at any time,
terminate this Contract without cause upon written notice delivered to the
Company at least ninety (90) days prior to the effective date of termination.
In the event of such voluntary termination:
5.5.1 Employee shall have the right to monetary
compensation as provided in paragraph 3.1 above through the effective date of
termination, but shall have no further right to compensation thereafter; and
5.5.2 Employee's stock options shall be null and
void as of the date of termination except as provided in Section 5.6 below.
The Company and Employee shall not have any further right or remedy
against one another in the event Employee terminates this Contract pursuant to
this Section except as provided in Articles 6, 7, 8 and 9 hereof which shall
remain in full force and effect.
<PAGE> 8
5.6 Employee's Retention of Securities. In the event the Company
terminates Employee, without cause, Employee shall retain all options and other
securities he then owns, of record or otherwise, of the Company and/or its
subsidiaries and/or affiliates, and shall have the right to exercise said
options at any time during the remaining term of said option. In the event the
Company terminates this Contract for cause pursuant to Section 5.3, or Employee
voluntarily terminates this contract pursuant to Section 5.5 above, any Options
issued to Employee which may not then have been exercised on the date of said
Termination shall be exercised within three (3) months of the date of
Termination or shall be null and void as of the date three (3) months after
Termination.
5.7 Change of Control. The Employee may terminate his employment
under this Agreement any time within six (6) months after a "change in control"
of the Company. For purposes of this Agreement, a "change in control" shall be
deemed to have occurred upon (a) the acquisition by any person of twenty
percent (20%) of the issued and outstanding stock of the Company, (b) a change
in majority of the members of the Board in connection with a tender offer,
merger, sale of assets, etc., (c) the sale of all or substantially all of the
Company's assets or (d) a dissolution or liquidation of the Company. In the
event Employee terminates his employment within two (2) years after a change in
control, Employee shall continue to render services pursuant hereto until the
date of termination and shall continue to receive compensation, as provided
hereunder, through the termination date. In addition to other compensation
payable to Employee for services through the termination date, the Employee
shall have the same rights and remedies against the Company as he would have
had had the Company terminated his employment without cause pursuant to Section
5.1 hereof (including the right to payments under Section 5.2).
6. UNFAIR COMPETITION
6.1 Trade Secrets. During the term of employment under this
Contract, Employee will have access to and become acquainted with various
information not generally available to the public consisting of records,
documents, drawings, specifications, customer lists, procedural and operational
manuals and information, and financial records and accounts, projections and
budgets, and similar information, all of which are owned by the Company and
regularly used in the operation of the Company's business. Such assets of the
Company are secret, not generally available to the public and give the Company
an advantage over competitors who do not know of or use such information.
Employee agrees such information and documents relating to the business of the
Company, whether they are prepared by Employee or come into Employee's
possession in any other way, are owned by the Company, shall remain the
exclusive property of the Company and shall not be removed from the premises of
the Company under any circumstances whatsoever, without prior written consent
of the Company.
<PAGE> 9
6.2 Misuse of Trade Secrets. Employee covenants that he shall not
misuse, misappropriate or disclose any of the trade secrets described above,
directly or indirectly, or use them in any way, either during the term of this
Contract or at any time thereafter, except as required in the course of his
employment with the Company, unless such action is either previously agreed to
in writing by the Company or required by law.
6.3 Non-Disclosure of Trade Secrets. Employee acknowledges and
agrees that the sale or unauthorized use or disclosure of any of the Company's
trade secrets, as above described, including information concerning the
Company's current, future and/or proposed work, services or investments, the
fact that any such work, services or investments are planned, under
consideration or under negotiation, as well as any descriptions thereof,
constitute "unfair competition". Employee promises and agrees not to engage in
any unfair competition with the Company, either during the term of this
Contract or at any time thereafter.
7. NON-COMPETITION DURING EMPLOYMENT
7.1 Competitive Activities. During the term of this Contract,
Employee shall not, without the Company's prior written consent, directly or
indirectly, whether or not for compensation, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director
or in any other individual or representative capacity, engage or participate
in, or render, directly or indirectly, any services in connection with any
business that is in competition, in any manner whatsoever, with the business of
the Company. In addition, Employee shall not directly or indirectly acquire,
hold or retain any material interest in any business competing with or of
similar nature to the business of the Company except as provided in Section 4.3
above.
7.2 Exceptions. The foregoing shall exclude, however, the
expenditure of a reasonable amount of time for educational, charitable and/or
professional activities, which shall not be deemed a breach of this Contract,
provided such activities do not materially interfere with the services required
under this Contract.
7.3 Passive Investments. Employee shall not engage in any passive
or active investment in or reasonably relating to the acquisition, development,
construction or management of multifamily apartment properties, with the
exception of ownership of up to one (1) percent of the securities of any
publicly-traded companies involved in such activities.
8. SOLICITATION OF EMPLOYEES
8.1 Use of Information. Employee acknowledges and agrees that the
names, addresses and relationships of persons who perform services or provide
goods or materials to or for the Company are unique, and that the nature and
substance of the Company's relationship with such persons constitute the
Company's "trade secrets". Employee acknowledges that the sale or unauthorized
use or disclosure of any of such relationships which Employee learned of during
his employment with the Company would constitute unfair competition. Employee
promises and agrees not to engage in any unfair competition with the Company.
<PAGE> 10
8.2 Non-Disclosure. During the term of his employment with the
Company, and for a period of two (2) years thereafter, Employee shall not,
directly or indirectly, make known to any person, firm or company the substance
or content of any relationship of the Company with any employee, independent
contractor or provider of goods or materials to the Company. Employee agrees
that he shall not solicit, take away or induce any such person to end their
relationship with the Company, or to attempt to do any of the foregoing, or
recruit, hire or otherwise induce any such person to perform services for
Employee, or any other person, firm or company.
9. NON-COMPETITION AFTER TERMINATION
Employee shall not, for a period of one (1) year following the date of
termination, engage in the development, acquisition, construction or management
of any multifamily apartment properties outside of the Company within the
States of Arizona, California, Colorado, Nevada, New Mexico and/or Utah. In
addition, Employee shall not engage in any active or passive investment in or
reasonably relating to the acquisition, development, construction or management
of multifamily apartment properties within the States of Arizona, California,
Colorado, Nevada, New Mexico and/or Utah for a period of one (1) year following
the date of termination, with the exception of the ownership of up to one (1)
percent of the securities of any publicly-traded companies involved in such
activities. Nothing herein shall relieve or limit Employee's obligation to
comply with Sections 6, 7 and 8 above. The restrictions set forth in this
Section shall not apply if Employee is terminated pursuant to Section 5.1
above. If any provision hereof is determined by any court of competent
jurisdiction to be invalid or unenforceable by reason of such provision
extending the covenants and agreements contained herein for too great a period
of time or over too great a geographical area, or being too extensive in any
other respect, such provision shall be interpreted to extend only over the
maximum period of time and geographical area, and to the maximum extent in all
other respects, as to which it is valid and enforceable, all as determined by
such court in such action.
10. INDEMNIFICATION
The Company shall indemnify Employee for all losses sustained by
Employee as a direct or indirect consequence of the discharge of his duties on
behalf of the Company to the fullest extent permitted under applicable law so
long as Employee acted in good faith and in a manner which he believed to be in
the best interests of the Company with respect to the matter giving rise to the
claim or loss for which Employee seeks indemnification.
11. BUSINESS EXPENSES
The Company shall promptly, but in no event later than ten (10) days
after submission of a claim of expenditure, reimburse Employee for all
reasonable business expenses incurred by him in connection with the business of
the Company and/or its subsidiaries and/or affiliates, upon presentation to the
Company of written receipts for such expenses.
<PAGE> 11
12. MISCELLANEOUS PROVISIONS
12.1 Binding Effect. This Contract shall be binding upon and inure
to the benefit of any successor or successors of the Company and the personal
representatives of Employee.
12.2 Attorney's Fees. If any legal action, arbitration or other
proceedings is brought for the enforcement of this Contract, or because of an
alleged dispute, breach or default in connection with any of the provisions of
this Contract, the prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief to which that party would be entitled.
12.3 Entire Contract. This Contract constitutes the entire
agreement of the parties, and supersedes all prior agreements, understandings
and negotiations, whether written or oral, between the Company and Employee
with respect to the employment of Employee by the Company, its subsidiaries
and/or affiliates. This Contract may not be changed orally, but only by
agreement in writing, signed by all parties.
12.4 Provisions Severable. In case any one or more provisions of
this Contract shall be invalid, illegal or unenforceable, in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not, in any way, be affected or impaired thereby.
12.5 Governing Law. This Contract shall be governed by and
construed under the laws of the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this
Contract in Clark County, Nevada.
THE COMPANY EMPLOYEE
OASIS RESIDENTIAL, INC.
By: /s/ Scott S. Ingraham /s/ Walter B. Eeds
-------------------------------- --------------------------------
Scott S. Ingraham WALTER B. EEDS
President
By: /s/ Allan O. Hunter, Jr.
--------------------------------
Allan O. Hunter, Jr.
Secretary
<PAGE> 1
EXHIBIT 10.16.5
FIRST AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT CONTRACT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT
CONTRACT is entered as of the 24th day of March 1997 by and between OASIS
RESIDENTIAL, INC., a Nevada corporation (the "Company") and ROBERT V. JONES
(the "Employee").
WHEREAS, the Company and the Employee have entered into an
Amended and Restated Employment Contract dated as of October 28, 1996 (the
"Employment Contract"); and
WHEREAS, the Company and the Employee desire to amend the
Employment Contract in the manner set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Company and the Employee agree as follows:
SECTION 1. AMENDMENT OF SECTION 4.1 OF THE EMPLOYMENT
CONTRACT.
The first sentence of Section 4.1 of the Employment Contract
is hereby amended to read in full as follows:
"Employee shall serve as the Chief Executive Officer of
the Company and shall serve as a member of the Board of Directors of
the Company (subject to stockholder approval) and shall be the
Chairman of the Board of Directors of the Company."
SECTION 2. AMENDMENT OF SECTION 5.2.1 OF THE EMPLOYMENT
CONTRACT.
Section 5.2.1 of the Employment Contract is hereby amended to
read in full as follows:
"5.2.1 Amount. In the event the Company terminates
Employee's services hereunder pursuant to Section 5.1, Employee
shall continue to render services pursuant hereto until the date of
termination of employment and shall continue to receive
compensation, as provided hereunder, through the termination date.
In addition to other compensation payable to Employee for services
rendered through the termination date, the Company shall pay
Employee on the termination date, as a single severance payment, an
amount (the "Severance Amount") equal to three times the sum of (i)
Employee's current annual Base Compensation and (ii) the highest
annual bonus paid or payable to Employee with respect to the three
preceding fiscal years."
<PAGE> 2
SECTION 3. AMENDMENT OF SECTION 5.2.4 OF THE EMPLOYMENT
CONTRACT.
Section 5.2.4 of the Employment Contract is hereby amended to
read in full as follows:
"5.2.4 Notwithstanding anything contained in any stock
option agreement pursuant to which stock options may have been
granted or may in the future be granted to Employee, all stock
options held by Employee and not otherwise exercisable at the time
of termination of the employment of Employee under Section 5.1
shall, immediately upon such termination, become exercisable in full
and Employee shall have the right to exercise such stock options, as
well as all other stock options held by Employee at the time of such
termination, at any time during the period ending on the 10th
anniversary of the respective date of grant of the option."
SECTION 4. AMENDMENT OF SECTION 5.6 OF THE EMPLOYMENT
CONTRACT.
Section 5.6 of the Employment Contract is hereby amended to
read in full as follows:
"5.6 Exercise of Options. In the event the Company
terminates this Contract for cause pursuant to Section 5.3, or
Employee voluntarily terminates this Contract pursuant to Section
5.5, then, subject to the provisions of Section 5.7 of this
Contract, Employee shall be entitled to exercise those stock options
held by Employee on the date of termination, but only during the
90-day period following the date of termination and only if and to
the extent the options are exercisable by their express terms on the
date of termination. Any options so exercisable which are not
exercised during the foregoing 90-day period shall be canceled
automatically upon expiration of the 90-day period."
SECTION 5. AMENDMENT OF SECTION 5.7 OF THE EMPLOYMENT
CONTRACT.
Section 5.7 of the Employment Contract is hereby amended to
read in full as follows:
"5.7 Change Control. In the event the Employee
terminates his employment under this Contract within two years
following a Change in Control of the Company (as defined below), or
in the event Employee's employment is terminated by the Company
within one year after a Change in Control of the Company, (i) the
Employee shall continue to render services under this Contract until
the date of termination and shall continue to receive compensation,
as provided in this Agreement, through the termination date, and
(ii) in addition to any other compensation payable to Employee for
services through the termination date, Employee shall have the same
rights, including, without limitation, the right to receive the
Severance Amount, as Employee would have had if the Company had
terminated his employment pursuant to Section 5.1
2
<PAGE> 3
hereof. For purposes of this Contract, a "Change in Control of the
Company" shall mean the occurrence of any of the following:
"(i) a report on Schedule 13D shall be filed
with the Securities and Exchange Commission pursuant to
Section 13(d) of the Securities Exchange Act of 1934 (the
"Act") disclosing that any Person (within the meaning of
Section 13(d) of the Act) ("Person"), other than the Company
or a subsidiary of the Company or any employee benefit plan
sponsored by the Company or a subsidiary of the Company, is
the beneficial owner (within the meaning of Rule 13d-3 under
the Act) ("Beneficial Owner") directly or indirectly of twenty
percent or more of any voting securities of the Company
("Voting Securities");
"(ii) any Person, other than the Company or a
subsidiary of the Company or any employee benefit plan
sponsored by the Company or a subsidiary of the Company, shall
purchase Voting Securities of the Company pursuant to a tender
offer or exchange offer to acquire any Voting Securities of
the Company (or securities convertible into Voting Securities)
for cash, securities or any other consideration, provided that
after consummation of the offer, the Person in question is the
Beneficial Owner, directly or indirectly, or fifteen percent
or more of the outstanding Voting Securities of the Company
(calculated as provided in paragraph (d) of Rule 13d-3 under
the Act in the case of rights to acquire Voting Securities);
"(iii) the stockholders of the Company shall
approve any merger, consolidation or reorganization involving
the Company, unless the merger, consolidation or
reorganization is a "Non-Control Transaction" as defined
below; or
"(iv) the individuals who, as of the date of
this Contract, are members of the Board of Directors of the
Company (the "Incumbent Board") cease for any reason to
constitute at least two-thirds of the members of the Board,
provided, however, that if the election, or the nomination for
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Contract,
be considered to be a member of the Incumbent Board, provided
further, that no individual shall be considered a member of
the Incumbent Board if the individual initially assumed office
as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 under the Act) or other
actual or threatened solicitation of proxies or consents by or
on behalf of a person other than the Board of Directors of the
Company (a "Proxy Contest") including by reason of any
agreement intended to avoid or settle any Election Contest or
Proxy Contest.
3
<PAGE> 4
"(v) a complete liquidation of dissolution of
the Company; or
"(vi) the Company shall enter into an
agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person
(other than a transfer to any subsidiary of the Company). For
purposes of this Contract, the term "Non-Control Transaction"
shall mean a merger, consolidation or reorganization of the
Company where:
"(A) the stockholders of the Company,
immediately before the merger, consolidation or
reorganization, own directly or indirectly immediately
following the merger, consolidation or reorganization, at
least seventy percent of the combined voting power of the
outstanding voting securities of the corporation resulting
from the merger, consolidation or reorganization (the
"Surviving Corporation") in substantially the same proportion
as their ownership of the Voting Securities immediately before
the merger, consolidation or reorganization, and
"(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for the merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation , or a
corporation Beneficially Owning, directly or indirectly, a
majority of the Voting Securities of the Surviving
Corporation, and
"(C) no Person other than (1) the Company,
(2) any subsidiary of the Company, (3) any employee benefit
plan of the Company (or trust forming a part of such a plan)
maintained by the Company, the surviving Corporation or any
subsidiary of the Company, or (4) any Person who, immediately
prior to the merger, consolidation or reorganization had
Beneficial Ownership of thirty percent or more of the then
outstanding Voting Securities, has Beneficial Ownership of
thirty percent or more of the Surviving Corporation's
outstanding voting securities.
"Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur solely because any Person
(the "Subject Person") acquired Beneficial Ownership of more
than the permitted amount of the then outstanding Voting
Securities as a result of the acquisition of Voting Securities
by the Company which, by reducing the number of Voting
Securities then outstanding, increases the proportional number
of shares beneficially owned by the Subject Person, provided
that if a Change in Control would occur (but for the operation
of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such share acquisition by
the Company, the Subject Person becomes the Beneficial Owner
of any additional Voting Securities which increases the
percentage
4
<PAGE> 5
of the then outstanding Voting Securities Beneficially Owned
by the Subject Person, then a Change in Control shall occur."
SECTION 6. AMENDMENT OF SECTION 9 OF THE EMPLOYMENT CONTRACT.
Section 9 of the Employment Contract is hereby amended by
deleting the phrase "outside the Company" which appears in the first sentence
of Section 9. Section 9 of the Employment Contract is hereby further amended
by adding the following immediately prior to the sentence in Section 9 that
reads "Nothing herein shall relieve or limit Employee's obligation to comply
with Sections 6, 7 and 8 above":
"In furtherance of the foregoing and during the one year
period following the date of termination, Employee shall not
solicit or attempt to divert, take away or call on, directly
or indirectly, for himself or for any other person or entity,
any customers or potential customers of the Company or,
directly or indirectly or by action in concert with others,
influence or induce or seek to influence or induce, any
employee, agent, independent contractor or other business
affiliate of the Company to terminate its, his or her
relationship with the Company; for purposes of the foregoing,
potential customers shall include those persons or entities
which the Company or management of the Company has or may have
any reasonable basis to believe may in the future become
customers of the Company."
Section 9 of the Employment Contract is hereby further amended
by amending the sentence that reads "The restrictions set forth in this Section
shall not apply if Employee is terminated pursuant to Section 5.1 above" to
read in full as follows:
"The restrictions set forth in this Section shall not apply if
the employment of Employee is terminated by the Company
pursuant to Section 5.1 above or within two years following a
Change in Control of the Company or Employee terminates his
employment within two years following a Change in Control of
the Company."
(continued on following page)
5
<PAGE> 6
SECTION 7. CONTINUED EFFECTIVENESS OF THE EMPLOYMENT
CONTRACT.
Except as amended herein, the Employment Contract is hereby
ratified and confirmed and shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have executed this First
Amendment to Amended and Restated Employment Contract as of the day and year
first above written.
OASIS RESIDENTIAL, INC.
By:
---------------------------------
Scott S. Ingraham
President
By:
---------------------------------
ROBERT V. JONES
6
<PAGE> 1
EXHIBIT 10.16.6
FIRST AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT CONTRACT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT
CONTRACT is entered as of the 24th day of March 1997 by and between OASIS
RESIDENTIAL, INC., a Nevada corporation (the "Company") and SCOTT S. INGRAHAM
(the "Employee").
WHEREAS, the Company and the Employee have entered into an
Amended and Restated Employment Contract dated as of October 28, 1996 (the
"Employment Contract"); and
WHEREAS, the Company and the Employee desire to amend the
Employment Contract in the manner set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Company and the Employee agree as follows:
SECTION 1. AMENDMENT OF SECTION 4.1 OF THE EMPLOYMENT
CONTRACT.
The first sentence of Section 4.1 of the Employment Contract
is hereby amended to read in full as follows:
"Employee shall serve as the President and Chief Operating
Officer of the Company and, subject to stockholder approval, shall
serve as a member of the Board of Directors of the Company."
SECTION 2. AMENDMENT OF SECTION 5.2.1 OF THE EMPLOYMENT
CONTRACT.
Section 5.2.1 of the Employment Contract is hereby amended to
read in full as follows:
"5.2.1 Amount. In the event the Company terminates
Employee's services hereunder pursuant to Section 5.1, Employee
shall continue to render services pursuant hereto until the date of
termination of employment and shall continue to receive
compensation, as provided hereunder, through the termination date.
In addition to other compensation payable to Employee for services
rendered through the termination date, the Company shall pay
Employee on the termination date, as a single severance payment, an
amount (the "Severance Amount") equal to three times the sum of (i)
Employee's current annual Base Compensation and (ii) the highest
annual bonus paid or payable to Employee with respect to the three
preceding fiscal years."
<PAGE> 2
SECTION 3. AMENDMENT OF SECTION 5.2.4 OF THE EMPLOYMENT
CONTRACT.
Section 5.2.4 of the Employment Contract is hereby amended to
read in full as follows:
"5.2.4 Notwithstanding anything contained in any stock
option agreement pursuant to which stock options may have been
granted or may in the future be granted to Employee, all stock
options held by Employee and not otherwise exercisable at the time
of termination of the employment of Employee under Section 5.1
shall, immediately upon such termination, become exercisable in full
and Employee shall have the right to exercise such stock options, as
well as all other stock options held by Employee at the time of such
termination, at any time during the period ending on the 10th
anniversary of the respective date of grant of the option."
SECTION 4. AMENDMENT OF SECTION 5.6 OF THE EMPLOYMENT
CONTRACT.
Section 5.6 of the Employment Contract is hereby amended to
read in full as follows:
"5.6 Exercise of Options. In the event the Company
terminates this Contract for cause pursuant to Section 5.3, or
Employee voluntarily terminates this Contract pursuant to Section
5.5, then, subject to the provisions of Section 5.7 of this
Contract, Employee shall be entitled to exercise those stock options
held by Employee on the date of termination, but only during the
90-day period following the date of termination and only if and to
the extent the options are exercisable by their express terms on the
date of termination. Any options so exercisable which are not
exercised during the foregoing 90-day period shall be canceled
automatically upon expiration of the 90-day period."
SECTION 5. AMENDMENT OF SECTION 5.7 OF THE EMPLOYMENT
CONTRACT.
Section 5.7 of the Employment Contract is hereby amended to
read in full as follows:
"5.7 Change Control. In the event the Employee
terminates his employment under this Contract within one year
following a Change in Control of the Company (as defined below), or
in the event Employee's employment is terminated by the Company
within one year after a Change in Control of the Company, (i) the
Employee shall continue to render services under this Contract until
the date of termination and shall continue to receive compensation,
as provided in this Agreement, through the termination date, and
(ii) in addition to any other compensation payable to Employee for
services through the termination date, Employee shall have the same
rights, including, without limitation, the right to receive the
Severance Amount, as Employee would have had if the Company had
terminated his employment pursuant to Section 5.1
2
<PAGE> 3
hereof. For purposes of this Contract, a "Change in Control of the
Company" shall mean the occurrence of any of the following:
"(i) a report on Schedule 13D shall be filed
with the Securities and Exchange Commission pursuant to
Section 13(d) of the Securities Exchange Act of 1934 (the
"Act") disclosing that any Person (within the meaning of
Section 13(d) of the Act) ("Person"), other than the Company
or a subsidiary of the Company or any employee benefit plan
sponsored by the Company or a subsidiary of the Company, is
the beneficial owner (within the meaning of Rule 13d-3 under
the Act) ("Beneficial Owner") directly or indirectly of twenty
percent or more of any voting securities of the Company
("Voting Securities");
"(ii) any Person, other than the Company or a
subsidiary of the Company or any employee benefit plan
sponsored by the Company or a subsidiary of the Company, shall
purchase Voting Securities of the Company pursuant to a tender
offer or exchange offer to acquire any Voting Securities of
the Company (or securities convertible into Voting Securities)
for cash, securities or any other consideration, provided that
after consummation of the offer, the Person in question is the
Beneficial Owner, directly or indirectly, or fifteen percent
or more of the outstanding Voting Securities of the Company
(calculated as provided in paragraph (d) of Rule 13d-3 under
the Act in the case of rights to acquire Voting Securities);
"(iii) the stockholders of the Company shall
approve any merger, consolidation or reorganization involving
the Company, unless the merger, consolidation or
reorganization is a "Non-Control Transaction" as defined
below; or
"(iv) the individuals who, as of the date of
this Contract, are members of the Board of Directors of the
Company (the "Incumbent Board") cease for any reason to
constitute at least two-thirds of the members of the Board,
provided, however, that if the election, or the nomination for
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Contract,
be considered to be a member of the Incumbent Board, provided
further, that no individual shall be considered a member of
the Incumbent Board if the individual initially assumed office
as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 under the Act) or other
actual or threatened solicitation of proxies or consents by or
on behalf of a person other than the Board of Directors of the
Company (a "Proxy Contest") including by reason of any
agreement intended to avoid or settle any Election Contest or
Proxy Contest.
3
<PAGE> 4
"(v) a complete liquidation of dissolution of
the Company; or
"(vi) the Company shall enter into an
agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person
(other than a transfer to any subsidiary of the Company). For
purposes of this Contract, the term "Non-Control Transaction"
shall mean a merger, consolidation or reorganization of the
Company where:
"(A) the stockholders of the Company,
immediately before the merger, consolidation or
reorganization, own directly or indirectly immediately
following the merger, consolidation or reorganization, at
least seventy percent of the combined voting power of the
outstanding voting securities of the corporation resulting
from the merger, consolidation or reorganization (the
"Surviving Corporation") in substantially the same proportion
as their ownership of the Voting Securities immediately before
the merger, consolidation or reorganization, and
"(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for the merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation , or a
corporation Beneficially Owning, directly or indirectly, a
majority of the Voting Securities of the Surviving
Corporation, and
"(C) no Person other than (1) the Company,
(2) any subsidiary of the Company, (3) any employee benefit
plan of the Company (or trust forming a part of such a plan)
maintained by the Company, the surviving Corporation or any
subsidiary of the Company, or (4) any Person who, immediately
prior to the merger, consolidation or reorganization had
Beneficial Ownership of thirty percent or more of the then
outstanding Voting Securities, has Beneficial Ownership of
thirty percent or more of the Surviving Corporation's
outstanding voting securities.
"Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur solely because any Person
(the "Subject Person") acquired Beneficial Ownership of more
than the permitted amount of the then outstanding Voting
Securities as a result of the acquisition of Voting Securities
by the Company which, by reducing the number of Voting
Securities then outstanding, increases the proportional number
of shares beneficially owned by the Subject Person, provided
that if a Change in Control would occur (but for the operation
of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such share acquisition by
the Company, the Subject Person becomes the Beneficial Owner
of any additional Voting Securities which increases the
percentage
4
<PAGE> 5
of the then outstanding Voting Securities Beneficially Owned
by the Subject Person, then a Change in Control shall occur."
SECTION 6. AMENDMENT OF SECTION 9 OF THE EMPLOYMENT CONTRACT.
Section 9 of the Employment Contract is hereby amended by
deleting the phrase "outside the Company" which appears in the first sentence
of Section 9. Section 9 of the Employment Contract is hereby further amended
by adding the following immediately prior to the sentence in Section 9 that
reads "Nothing herein shall relieve or limit Employee's obligation to comply
with Sections 6, 7 and 8 above":
"In furtherance of the foregoing and during the one year
period following the date of termination, Employee shall not
solicit or attempt to divert, take away or call on, directly
or indirectly, for himself or for any other person or entity,
any customers or potential customers of the Company or,
directly or indirectly or by action in concert with others,
influence or induce or seek to influence or induce, any
employee, agent, independent contractor or other business
affiliate of the Company to terminate its, his or her
relationship with the Company; for purposes of the foregoing,
potential customers shall include those persons or entities
which the Company or management of the Company has or may have
any reasonable basis to believe may in the future become
customers of the Company."
Section 9 of the Employment Contract is hereby further amended
by amending the sentence that reads "The restrictions set forth in this Section
shall not apply if Employee is terminated pursuant to Section 5.1 above" to
read in full as follows:
"The restrictions set forth in this Section shall not apply if
the employment of Employee is terminated by the Company
pursuant to Section 5.1 above or within one year following a
Change in Control of the Company or Employee terminates his
employment within one year following a Change in Control of
the Company."
(continued on following page)
5
<PAGE> 6
SECTION 7. CONTINUED EFFECTIVENESS OF THE EMPLOYMENT
CONTRACT.
Except as amended herein, the Employment Contract is hereby
ratified and confirmed and shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have executed this First
Amendment to Amended and Restated Employment Contract as of the day and year
first above written.
OASIS RESIDENTIAL, INC.
By:
--------------------------------
Robert V. Jones
Chairman of the Board
and Chief Executive Officer
--------------------------------
SCOTT S. INGRAHAM
6
<PAGE> 1
EXHIBIT 10.16.7
FIRST AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT CONTRACT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT
CONTRACT is entered as of the 24th day of March 1997 by and between OASIS
RESIDENTIAL, INC., a Nevada corporation (the "Company") and ALLAN O. HUNTER,
JR. (the "Employee").
WHEREAS, the Company and the Employee have entered into an
Amended and Restated Employment Contract dated as of October 28, 1996 (the
"Employment Contract"); and
WHEREAS, the Company and the Employee desire to amend the
Employment Contract in the manner set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Company and the Employee agree as follows:
SECTION 1. AMENDMENT OF SECTION 4.1 OF THE EMPLOYMENT
CONTRACT.
The first sentence of Section 4.1 of the Employment Contract
is hereby amended to read in full as follows:
"Employee shall serve as the Executive Vice President,
Operations and Secretary of the Company and, subject to stockholder
approval, shall serve as a member of the Board of Directors of the
Company."
SECTION 2. AMENDMENT OF SECTION 5.2.1 OF THE EMPLOYMENT
CONTRACT.
Section 5.2.1 of the Employment Contract is hereby amended to
read in full as follows:
"5.2.1 Amount. In the event the Company terminates
Employee's services hereunder pursuant to Section 5.1, Employee
shall continue to render services pursuant hereto until the date of
termination of employment and shall continue to receive
compensation, as provided hereunder, through the termination date.
In addition to other compensation payable to Employee for services
rendered through the termination date, the Company shall pay
Employee on the termination date, as a single severance payment, an
amount (the "Severance Amount") equal to three times the sum of (i)
Employee's current annual Base Compensation and (ii) the highest
annual bonus paid or payable to Employee with respect to the three
preceding fiscal years."
<PAGE> 2
SECTION 3. AMENDMENT OF SECTION 5.2.4 OF THE EMPLOYMENT
CONTRACT.
Section 5.2.4 of the Employment Contract is hereby amended to
read in full as follows:
"5.2.4 Notwithstanding anything contained in any stock
option agreement pursuant to which stock options may have been
granted or may in the future be granted to Employee, all stock
options held by Employee and not otherwise exercisable at the time
of termination of the employment of Employee under Section 5.1
shall, immediately upon such termination, become exercisable in full
and Employee shall have the right to exercise such stock options, as
well as all other stock options held by Employee at the time of such
termination, at any time during the period ending on the 10th
anniversary of the respective date of grant of the option."
SECTION 4. AMENDMENT OF SECTION 5.6 OF THE EMPLOYMENT
CONTRACT.
Section 5.6 of the Employment Contract is hereby amended to
read in full as follows:
"5.6 Exercise of Options. In the event the Company
terminates this Contract for cause pursuant to Section 5.3, or
Employee voluntarily terminates this Contract pursuant to Section
5.5, then, subject to the provisions of Section 5.7 of this
Contract, Employee shall be entitled to exercise those stock options
held by Employee on the date of termination, but only during the
90-day period following the date of termination and only if and to
the extent the options are exercisable by their express terms on the
date of termination. Any options so exercisable which are not
exercised during the foregoing 90-day period shall be canceled
automatically upon expiration of the 90-day period."
SECTION 5. AMENDMENT OF SECTION 5.7 OF THE EMPLOYMENT
CONTRACT.
Section 5.7 of the Employment Contract is hereby amended to
read in full as follows:
"5.7 Change Control. In the event the Employee
terminates his employment under this Contract within one year
following a Change in Control of the Company (as defined below), or
in the event Employee's employment is terminated by the Company
within one year after a Change in Control of the Company, (i) the
Employee shall continue to render services under this Contract until
the date of termination and shall continue to receive compensation,
as provided in this Agreement, through the termination date, and
(ii) in addition to any other compensation payable to Employee for
services through the termination date, Employee shall have the same
rights, including, without limitation, the right to receive the
Severance Amount, as Employee would have had if the Company had
terminated his employment pursuant to Section 5.1
2
<PAGE> 3
hereof. For purposes of this Contract, a "Change in Control of the
Company" shall mean the occurrence of any of the following:
"(i) a report on Schedule 13D shall be filed
with the Securities and Exchange Commission pursuant to
Section 13(d) of the Securities Exchange Act of 1934 (the
"Act") disclosing that any Person (within the meaning of
Section 13(d) of the Act) ("Person"), other than the Company
or a subsidiary of the Company or any employee benefit plan
sponsored by the Company or a subsidiary of the Company, is
the beneficial owner (within the meaning of Rule 13d-3 under
the Act) ("Beneficial Owner") directly or indirectly of twenty
percent or more of any voting securities of the Company
("Voting Securities");
"(ii) any Person, other than the Company or a
subsidiary of the Company or any employee benefit plan
sponsored by the Company or a subsidiary of the Company, shall
purchase Voting Securities of the Company pursuant to a tender
offer or exchange offer to acquire any Voting Securities of
the Company (or securities convertible into Voting Securities)
for cash, securities or any other consideration, provided that
after consummation of the offer, the Person in question is the
Beneficial Owner, directly or indirectly, or fifteen percent
or more of the outstanding Voting Securities of the Company
(calculated as provided in paragraph (d) of Rule 13d-3 under
the Act in the case of rights to acquire Voting Securities);
"(iii) the stockholders of the Company shall
approve any merger, consolidation or reorganization involving
the Company, unless the merger, consolidation or
reorganization is a "Non-Control Transaction" as defined
below; or
"(iv) the individuals who, as of the date of
this Contract, are members of the Board of Directors of the
Company (the "Incumbent Board") cease for any reason to
constitute at least two-thirds of the members of the Board,
provided, however, that if the election, or the nomination for
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Contract,
be considered to be a member of the Incumbent Board, provided
further, that no individual shall be considered a member of
the Incumbent Board if the individual initially assumed office
as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 under the Act) or other
actual or threatened solicitation of proxies or consents by or
on behalf of a person other than the Board of Directors of the
Company (a "Proxy Contest") including by reason of any
agreement intended to avoid or settle any Election Contest or
Proxy Contest.
3
<PAGE> 4
"(v) a complete liquidation of dissolution of
the Company; or
"(vi) the Company shall enter into an
agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person
(other than a transfer to any subsidiary of the Company). For
purposes of this Contract, the term "Non-Control Transaction"
shall mean a merger, consolidation or reorganization of the
Company where:
"(A) the stockholders of the Company,
immediately before the merger, consolidation or
reorganization, own directly or indirectly immediately
following the merger, consolidation or reorganization, at
least seventy percent of the combined voting power of the
outstanding voting securities of the corporation resulting
from the merger, consolidation or reorganization (the
"Surviving Corporation") in substantially the same proportion
as their ownership of the Voting Securities immediately before
the merger, consolidation or reorganization, and
"(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for the merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation , or a
corporation Beneficially Owning, directly or indirectly, a
majority of the Voting Securities of the Surviving
Corporation, and
"(C) no Person other than (1) the Company,
(2) any subsidiary of the Company, (3) any employee benefit
plan of the Company (or trust forming a part of such a plan)
maintained by the Company, the surviving Corporation or any
subsidiary of the Company, or (4) any Person who, immediately
prior to the merger, consolidation or reorganization had
Beneficial Ownership of thirty percent or more of the then
outstanding Voting Securities, has Beneficial Ownership of
thirty percent or more of the Surviving Corporation's
outstanding voting securities.
"Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur solely because any Person
(the "Subject Person") acquired Beneficial Ownership of more
than the permitted amount of the then outstanding Voting
Securities as a result of the acquisition of Voting Securities
by the Company which, by reducing the number of Voting
Securities then outstanding, increases the proportional number
of shares beneficially owned by the Subject Person, provided
that if a Change in Control would occur (but for the operation
of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such share acquisition by
the Company, the Subject Person becomes the Beneficial Owner
of any additional Voting Securities which increases the
percentage
4
<PAGE> 5
of the then outstanding Voting Securities Beneficially Owned
by the Subject Person, then a Change in Control shall occur."
SECTION 6. AMENDMENT OF SECTION 9 OF THE EMPLOYMENT CONTRACT.
Section 9 of the Employment Contract is hereby amended by
deleting the phrase "outside the Company" which appears in the first sentence
of Section 9. Section 9 of the Employment Contract is hereby further amended
by adding the following immediately prior to the sentence in Section 9 that
reads "Nothing herein shall relieve or limit Employee's obligation to comply
with Sections 6, 7 and 8 above":
"In furtherance of the foregoing and during the one year
period following the date of termination, Employee shall not
solicit or attempt to divert, take away or call on, directly
or indirectly, for himself or for any other person or entity,
any customers or potential customers of the Company or,
directly or indirectly or by action in concert with others,
influence or induce or seek to influence or induce, any
employee, agent, independent contractor or other business
affiliate of the Company to terminate its, his or her
relationship with the Company; for purposes of the foregoing,
potential customers shall include those persons or entities
which the Company or management of the Company has or may have
any reasonable basis to believe may in the future become
customers of the Company."
Section 9 of the Employment Contract is hereby further amended
by amending the sentence that reads "The restrictions set forth in this Section
shall not apply if Employee is terminated pursuant to Section 5.1 above" to
read in full as follows:
"The restrictions set forth in this Section shall not apply if
the employment of Employee is terminated by the Company
pursuant to Section 5.1 above or within one year following a
Change in Control of the Company or Employee terminates his
employment within one year following a Change in Control of
the Company."
(continued on following page)
5
<PAGE> 6
SECTION 7. CONTINUED EFFECTIVENESS OF THE EMPLOYMENT
CONTRACT.
Except as amended herein, the Employment Contract is hereby
ratified and confirmed and shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have executed this First
Amendment to Amended and Restated Employment Contract as of the day and year
first above written.
OASIS RESIDENTIAL, INC.
By:
--------------------------------
Scott S. Ingraham
President
--------------------------------
ALLAN O. HUNTER, JR.
6
<PAGE> 1
EXHIBIT 10.16.8
FIRST AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT CONTRACT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT
CONTRACT is entered as of the 24th day of March 1997 by and between OASIS
RESIDENTIAL, INC., a Nevada corporation (the "Company") and WALTER B. EEDS (the
"Employee").
WHEREAS, the Company and the Employee have entered into an
Amended and Restated Employment Contract dated as of January 27, 1997 (the
"Employment Contract"); and
WHEREAS, the Company and the Employee desire to amend the
Employment Contract in the manner set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Company and the Employee agree as follows:
SECTION 1. AMENDMENT OF SECTION 4.1 OF THE EMPLOYMENT
CONTRACT.
The first sentence of Section 4.1 of the Employment Contract
is hereby amended to read in full as follows:
"Employee shall serve as the Executive Vice President,
Development and Investment of the Company and, subject to
stockholder approval, shall serve as a member of the Board of
Directors of the Company."
SECTION 2. AMENDMENT OF SECTION 5.2.1 OF THE EMPLOYMENT
CONTRACT.
Section 5.2.1 of the Employment Contract is hereby amended to
read in full as follows:
"5.2.1 Amount. In the event the Company terminates
Employee's services hereunder pursuant to Section 5.1, Employee
shall continue to render services pursuant hereto until the date of
termination of employment and shall continue to receive
compensation, as provided hereunder, through the termination date.
In addition to other compensation payable to Employee for services
rendered through the termination date, the Company shall pay
Employee on the termination date, as a single severance payment, an
amount (the "Severance Amount") equal to three times the sum of (i)
Employee's current annual Base Compensation and (ii) the highest
annual bonus paid or payable to Employee with respect to the three
preceding fiscal years."
<PAGE> 2
SECTION 3. AMENDMENT OF SECTION 5.2.4 OF THE EMPLOYMENT
CONTRACT.
Section 5.2.4 of the Employment Contract is hereby amended to
read in full as follows:
"5.2.4 Notwithstanding anything contained in any stock
option agreement pursuant to which stock options may have been
granted or may in the future be granted to Employee, all stock
options held by Employee and not otherwise exercisable at the time
of termination of the employment of Employee under Section 5.1
shall, immediately upon such termination, become exercisable in full
and Employee shall have the right to exercise such stock options, as
well as all other stock options held by Employee at the time of such
termination, at any time during the period ending on the 10th
anniversary of the respective date of grant of the option."
SECTION 4. AMENDMENT OF SECTION 5.6 OF THE EMPLOYMENT
CONTRACT.
Section 5.6 of the Employment Contract is hereby amended to
read in full as follows:
"5.6 Exercise of Options. In the event the Company
terminates this Contract for cause pursuant to Section 5.3, or
Employee voluntarily terminates this Contract pursuant to Section
5.5, then, subject to the provisions of Section 5.7 of this
Contract, Employee shall be entitled to exercise those stock options
held by Employee on the date of termination, but only during the
90-day period following the date of termination and only if and to
the extent the options are exercisable by their express terms on the
date of termination. Any options so exercisable which are not
exercised during the foregoing 90-day period shall be canceled
automatically upon expiration of the 90-day period."
SECTION 5. AMENDMENT OF SECTION 5.7 OF THE EMPLOYMENT
CONTRACT.
Section 5.7 of the Employment Contract is hereby amended to
read in full as follows:
"5.7 Change Control. In the event the Employee
terminates his employment under this Contract within one year
following a Change in Control of the Company (as defined below), or
in the event Employee's employment is terminated by the Company
within one year after a Change in Control of the Company, (i) the
Employee shall continue to render services under this Contract until
the date of termination and shall continue to receive compensation,
as provided in this Agreement, through the termination date, and
(ii) in addition to any other compensation payable to Employee for
services through the termination date, Employee shall have the same
rights, including, without limitation, the right to receive the
Severance Amount, as Employee would have had if the Company had
terminated his employment pursuant to Section 5.1
<PAGE> 3
hereof. For purposes of this Contract, a "Change in Control of the
Company" shall mean the occurrence of any of the following:
"(i) a report on Schedule 13D shall be filed
with the Securities and Exchange Commission pursuant to
Section 13(d) of the Securities Exchange Act of 1934 (the
"Act") disclosing that any Person (within the meaning of
Section 13(d) of the Act) ("Person"), other than the Company
or a subsidiary of the Company or any employee benefit plan
sponsored by the Company or a subsidiary of the Company, is
the beneficial owner (within the meaning of Rule 13d-3 under
the Act) ("Beneficial Owner") directly or indirectly of twenty
percent or more of any voting securities of the Company
("Voting Securities");
"(ii) any Person, other than the Company or a
subsidiary of the Company or any employee benefit plan
sponsored by the Company or a subsidiary of the Company, shall
purchase Voting Securities of the Company pursuant to a tender
offer or exchange offer to acquire any Voting Securities of
the Company (or securities convertible into Voting Securities)
for cash, securities or any other consideration, provided that
after consummation of the offer, the Person in question is the
Beneficial Owner, directly or indirectly, or fifteen percent
or more of the outstanding Voting Securities of the Company
(calculated as provided in paragraph (d) of Rule 13d-3 under
the Act in the case of rights to acquire Voting Securities);
"(iii) the stockholders of the Company shall
approve any merger, consolidation or reorganization involving
the Company, unless the merger, consolidation or
reorganization is a "Non-Control Transaction" as defined
below; or
"(iv) the individuals who, as of the date of
this Contract, are members of the Board of Directors of the
Company (the "Incumbent Board") cease for any reason to
constitute at least two-thirds of the members of the Board,
provided, however, that if the election, or the nomination for
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Contract,
be considered to be a member of the Incumbent Board, provided
further, that no individual shall be considered a member of
the Incumbent Board if the individual initially assumed office
as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 under the Act) or other
actual or threatened solicitation of proxies or consents by or
on behalf of a person other than the Board of Directors of the
Company (a "Proxy Contest") including by reason of any
agreement intended to avoid or settle any Election Contest or
Proxy Contest.
3
<PAGE> 4
"(v) a complete liquidation of dissolution of
the Company; or
"(vi) the Company shall enter into an
agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person
(other than a transfer to any subsidiary of the Company).
For purposes of this Contract, the term "Non-Control
Transaction" shall mean a merger, consolidation or
reorganization of the Company where:
"(A) the stockholders of the Company,
immediately before the merger, consolidation or
reorganization, own directly or indirectly immediately
following the merger, consolidation or reorganization, at
least seventy percent of the combined voting power of the
outstanding voting securities of the corporation resulting
from the merger, consolidation or reorganization (the
"Surviving Corporation") in substantially the same proportion
as their ownership of the Voting Securities immediately before
the merger, consolidation or reorganization, and
"(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for the merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation , or a
corporation Beneficially Owning, directly or indirectly, a
majority of the Voting Securities of the Surviving
Corporation, and
"(C) no Person other than (1) the Company,
(2) any subsidiary of the Company, (3) any employee benefit
plan of the Company (or trust forming a part of such a plan)
maintained by the Company, the surviving Corporation or any
subsidiary of the Company, or (4) any Person who, immediately
prior to the merger, consolidation or reorganization had
Beneficial Ownership of thirty percent or more of the then
outstanding Voting Securities, has Beneficial Ownership of
thirty percent or more of the Surviving Corporation's
outstanding voting securities.
"Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur solely because any Person
(the "Subject Person") acquired Beneficial Ownership of more
than the permitted amount of the then outstanding Voting
Securities as a result of the acquisition of Voting Securities
by the Company which, by reducing the number of Voting
Securities then outstanding, increases the proportional number
of shares beneficially owned by the Subject Person, provided
that if a Change in Control would occur (but for the operation
of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such share acquisition by
the Company, the Subject Person becomes the Beneficial Owner
of any additional Voting Securities which increases the
percentage
4
<PAGE> 5
of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur."
SECTION 6. AMENDMENT OF SECTION 9 OF THE EMPLOYMENT CONTRACT.
Section 9 of the Employment Contract is hereby amended by
deleting the phrase "outside the Company" which appears in the first sentence
of Section 9. Section 9 of the Employment Contract is hereby further amended
by adding the following immediately prior to the sentence in Section 9 that
reads "Nothing herein shall relieve or limit Employee's obligation to comply
with Sections 6, 7 and 8 above":
"In furtherance of the foregoing and during the one year
period following the date of termination, Employee shall not
solicit or attempt to divert, take away or call on, directly
or indirectly, for himself or for any other person or entity,
any customers or potential customers of the Company or,
directly or indirectly or by action in concert with others,
influence or induce or seek to influence or induce, any
employee, agent, independent contractor or other business
affiliate of the Company to terminate its, his or her
relationship with the Company; for purposes of the foregoing,
potential customers shall include those persons or entities
which the Company or management of the Company has or may have
any reasonable basis to believe may in the future become
customers of the Company."
Section 9 of the Employment Contract is hereby further amended
by amending the sentence that reads "The restrictions set forth in this Section
shall not apply if Employee is terminated pursuant to Section 5.1 above" to
read in full as follows:
"The restrictions set forth in this Section shall not apply if
the employment of Employee is terminated by the Company
pursuant to Section 5.1 above or within one year following a
Change in Control of the Company or Employee terminates his
employment within one year following a Change in Control of
the Company."
(continued on following page)
4
<PAGE> 6
SECTION 7. CONTINUED EFFECTIVENESS OF THE EMPLOYMENT
CONTRACT.
Except as amended herein, the Employment Contract is hereby
ratified and confirmed and shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have executed this First
Amendment to Amended and Restated Employment Contract as of the day and year
first above written.
OASIS RESIDENTIAL, INC.
By:
----------------------------------
Scott S. Ingraham
President
----------------------------------
WALTER B. EEDS
5
<PAGE> 1
EXHIBIT 10.82
AMENDED AND RESTATED
ACQUISITION AGREEMENT
This AMENDED AND RESTATED ACQUISITION AGREEMENT (the
"Agreement"), amending and restating that certain ACQUISITION AGREEMENT dated
the 3rd day of October, 1994, is made and entered into this 14th day of May,
1996, by and between OASIS RESIDENTIAL, INC., a Nevada corporation, hereinafter
referred to as "Oasis"; WALTER B. EEDS, an individual, hereinafter referred to
as "W.E.B."; and Greystone Group, Inc., a California corporation, hereinafter
referred to as "Greystone". W.E.B. and Greystone are collectively hereinafter
referred to as "Eeds".
WITNESSES:
WHEREAS W.E.B. has acquired or is in the process of
acquiring certain contractual rights and agreements for a joint venture to
develop approximately three hundred eighteen (318) apartment units at Denver
West, to be known as Westar ("Westar"); and
WHEREAS Greystone has entered into a purchase and sale
agreement with Mission Viejo Company, a California corporation, for the
acquisition of approximately 1,014,948 sq. ft. of real property located at
Highland Ranch for the development of a three hundred fifty (350) unit
apartment complex to be known as Deerwood at Highland Ranch ("Deerwood"); and
WHEREAS it is the desire of Eeds to sell, transfer,
convey, set over and assign all of the rights that Eeds now has or shall
acquire in the future to the purchase and sale agreement and other rights for
the development of Deerwood and Westar (collectively, the "Properties"); and
WHEREAS the parties are entering into an Employment
Contract (the "Employment Contract") contemporaneously with this Agreement, a
copy of which is attached hereto as Exhibit A.
NOW, THEREFORE, it is hereby agreed as follows:
1. Oasis does hereby represent and warrant to Eeds that it is a
corporation lawfully formed under and pursuant to and validly existing and in
good standing under the laws of the State of Nevada. That it is a qualified
Real Estate Investment Trust whose corporate offices are located at 4041 East
Sunset Road, Henderson, Nevada. That its common stock, par value $.01 per
share (the "Common Stock") is registered under the Securities Exchange Act of
1934, and has been traded on the New York Stock Exchange ("NYSE") since October
22, 1993. That Oasis has the authorization and authority to enter into and
execute this Agreement, save and except for such amounts of stock as are
provided for under the Stock Option Plan pursuant to which the Stock Option
Agreement (defined below) will be entered into which have not at this time been
authorized and approved by the shareholders of Oasis, but which shall be
submitted for shareholder approval with the recommendation of Oasis' Board of
Directors at the annual meeting of shareholders in 1995.
<PAGE> 2
2. Eeds does hereby covenant and warrant that Greystone is a
California corporation, duly and properly organized in the State of California
and is in good standing. That Greystone has all requisite and necessary powers
to enter into and execute the purchase and sale agreement for Deerwood (the
"Purchase Agreement"), a copy of which is attached hereto as Exhibit B, and
that Greystone's Board of Directors has authorized Greystone to enter into this
Agreement, and to assign, sell, set over, transfer and convey all right, title
and interest that Greystone has or will have, presently or in the future, in
and to the Purchase Agreement and any amendment, alteration or addendum
thereto.
3. W.E.B. does hereby represent and warrant to Oasis that he, as an
individual, has acquired certain rights for and on his own behalf from the
Stevinson family for the development of Westar and does, by this Agreement,
agree to execute any and all additional or other documentation as may be
necessary to cause any and all of such rights of W.E.B. to be assigned, sold
and set over to Oasis, and that any and all written contracts or documents
which will exist for the development of Westar on the Stevinsons' property as a
joint venture shall be entered into by and between Oasis (or a wholly owned
subsidiary of Oasis) and Stevinson, and that W.E.B. will not now or at any time
in the future take or hold any rights to any joint venture with Stevinson in
his sole and absolute name.
4. For and in consideration of the transfer and conveyance of the
rights of Eeds and W.E.B. as set forth in paragraphs 2 and 3 above, and subject
to the conditions set forth herein requiring Eeds to acquire all rights in
writing and assign all such rights to Oasis, Oasis does hereby agree to the
following:
a. Oasis shall enter into the Employment
Contract with W.E.B.
b. Oasis shall employ a secretary to W.E.B. at
an annual salary of Fifty Five Thousand Dollars ($55,000) per year, which
secretary shall not be under an employment contract and shall be subject to an
"at will" termination by Oasis or its wholly owned subsidiary. Such employment
shall first be offered to Jenny Cunningham.
c. Oasis shall enter into an employment contract
with Buck Munuez for the position of Construction Manager for Oasis or Oasis'
wholly owned subsidiary doing business in the State of Colorado, which contract
shall be for a period of one (1) year at a salary of One Hundred Thousand
Dollars ($100,000) per year, commencing the first day of September, 1994, and
terminating on the 31st day of August, 1995.
d. Oasis shall employ a secretary to the
Construction Manager at an annual salary of Forty Thousand Dollars ($40,000)
per year, which secretary shall not be under an employment contract and shall
be subject to an "at will" termination by Oasis or its wholly owned subsidiary.
e. Oasis shall assume the lease for office space
in the Denver metropolitan area currently being leased by Eeds, and reimburse
Eeds for any and all office rent, office overhead and office expenses that Eeds
has incurred from September 1, 1994, until the date of the execution of this
Agreement, and hereby assumes and shall be liable to the exclusion of Eeds for
all office rent, office overhead expense of Eeds, his assistant/secretary,
Construction Manager and the Construction Manager's secretary from the date of
the execution of this Agreement forward.
f. Oasis shall execute a Stock Option Agreement
(the "Stock Option Agreement") granting to Eeds stock options for the purchase
of 50,000 shares of Common Stock of Oasis at $25.625 per share, being the NYSE
closing price of the Common Stock on September 15, 1994. The Stock Option
Agreement shall be in a form as attached hereto
<PAGE> 3
as Exhibit C.
g. Upon Oasis acquiring all of the rights of
Eeds in a binding, written contractual form which shall grant to Oasis or its
wholly owned subsidiary all of the rights and establish binding agreements
between Oasis and each of Mission Viejo and Stevinson as above referred to in
the first two WHEREAS clauses and in paragraphs 2 and 3, Oasis shall assume and
shall be liable to the exclusion of Eeds for, and shall indemnify and hold Eeds
harmless from and against, any and all liabilities and obligations of Eeds
and/or his affiliates regarding said Properties.
h. Oasis shall reimburse Eeds for all of his
actual direct cash costs invested to date for any and all negotiations of
contracts for the purchase of the Properties, to include architectural and
engineering expenses. Should Oasis not acquire binding contractual rights to
Deerwood and/or Westar, then in that event all costs reimbursed to Eeds under
this paragraph for the project or projects not acquired shall be repaid by Eeds
to Oasis.
i. Upon the execution of this Agreement, the
Stock Option Agreement, the Employment Contract and the acquisition by Oasis of
binding contractual rights with Mission Viejo Company for the development of
Deerwood and the execution of a written joint venture agreement between Oasis
and the Stevinson family for the development of Westar, together with the
verification of estimated total project costs as prepared by Eeds and supplied
to Oasis for the development of the Deerwood and Westar apartment projects
(Oasis must be satisfied in its sole and absolute discretion with such
verification), Oasis shall issue to Eeds 19,512 shares of Oasis Common Stock,
being Common Stock of Oasis with a value equal to Five Hundred Thousand Dollars
($500,000.00) determined by reference to the NYSE closing price of Oasis Common
Stock on September 15, 1994 of $25.625. Said stock shall contain an
endorsement that the stock has not been registered under the Securities Act of
1933 (the "Act"), that the stock has been acquired for investment and may not
be transferred, sold or assigned in the absence of (1) an effective
registration statement for the shares under the Act or (2) an opinion of Oasis'
counsel or counsel reasonably satisfactory to Oasis that registration is not
required under the Act. Unless registered under the Act, the Common Stock
issued to Eeds under this paragraph and under paragraph 5 below will be subject
to the two-year holding period and other requirements of Rule 144 under the
Act.
5. In recognition of the expected value of the Properties as
developed, and as a mechanism to determine such value, this paragraph provides
for contingent payments to Eeds in connection with the development of an
apartment project on each of the properties, one said property being referred
to as the Deerwood at Highland Ranch property ("Deerwood") and the other said
property being referred to as Westar at Denver West property ("Westar").
Subject to the terms and conditions of this paragraph, Oasis shall issue to
Eeds (i) up to $750,000 in stock in respect of the development of Deerwood, and
(ii) up to $250,000 in stock in respect of the development of Westar. The
aggregate maximum value of stock which may become issuable to Eeds under this
paragraph is $1,000,000. The determinations of whether and how much stock is
issuable in respect of one Property shall be completely independent of whether
and how much stock is issuable in respect of the other Property. For purposes
of this paragraph, the following terms have the indicated meaning:
<PAGE> 4
"Net Operating Income" or "NOI" means the difference between (i)
the sum of all rent paid under Qualified Leases (as hereinafter
defined) to Oasis for the Relevant Period (as hereinafter
defined) for up to and including 95% of all units, plus all
other revenues (excluding rent) received by Oasis for the
Relevant Period from Property operations, minus (ii) the product
of (a) $675, multiplied by (b) the number of rental units in the
apartment project.
"Annualized NOI" means the product of (i) four, multiplied by
(ii) NOI for the Relevant Period.
"Capitalized Costs" means the sum of (i) costs and expenses for
constructing the apartment project on the Property, plus (ii)
$1,000,000, being the aggregate value of the Common stock
issuable to Eeds under Paragraph 4 above and this paragraph 5,
being $750,000 with respect to Deerwood and $250,000 with
respect to Westar.
"NOI Yield" means a percent equal to the product of (i) 100,
multiplied by (ii) the quotient of (a) Annualized NOI for the
Property, divided by (b) Capitalized Costs in respect of the
Property.
"Outside Period" means the period beginning on the date hereof
and ending 18 months after the first day of the month following
the month during which development of a given Property is
completed, which shall be evidenced by (i) a written statement
of substantial completion issued by the project architect or
(ii) final certificate(s) of occupancy in respect of the project
issued by appropriate governmental authorities, but in no event
shall said period extend to more than thirty-six months after
the date on which the first building permit shall be obtained.
"Completion Period" means the period beginning on the date
hereof and ending upon the first to occur of (i) the issuance of
all stock to which Eeds may be entitled under this paragraph in
respect of a given Property, or (ii) the last day of the Outside
Period for that Property.
"Relevant Period" means any consecutive three-month period which
is selected as hereinafter set forth and which (i) occurs after
the apartment project on the Property achieves an occupancy rate
of at least 90%, (ii) occurs within the 12-month period
beginning on the first day of the month following the month
during which the project on the Property achieves an occupancy
rate of at least 90%, and (iii) ends on or before the last day
of the Outside Period. Eeds shall have the right to designate
the Relevant Period, provided that he notifies Oasis of the
Relevant Period in writing no later than 30 calendar days after
the end of the Outside Period. If Eeds fails to timely notify
Oasis of the Relevant Period, then Oasis shall have discretion
to either permit Eeds to designate the Relevant Period or
designate the Relevant Period itself, and in either event, the
Relevant Period shall be designated in writing within 45
calendar days after the end of the Outside Period.
"Qualified Leases" means all leases which are in accordance with
normal lease practices utilized at the Property at the time of
the execution of the lease and which do not deviate from
customary leasing practices in the local marketplace for
comparable apartment projects.
All references to "month" are to a calendar month.
<PAGE> 5
Promptly after designation of the Relevant Period for the Property, Oasis shall
in good faith determine the NOI, Annualized NOI and NOI Yield for that
Property. If the NOI Yield is equal to or greater than 11%, then Oasis shall
issue to Eeds Common stock with a value equal to $750,000 with respect to
Deerwood and $250,000 with respect to Westar, determined by reference to the
NYSE closing price of the Common stock on the trading day before the date of
issuance or, if not then authorized for trading on the NYSE, the fair market
value of the Common Stock as determined in good faith by Oasis' Board of
Directors (the "stock"). For each one tenth of one percent the NOI Yield is
below 11%, the value of Stock which shall be issued to Eeds shall be reduced by
$50,000 with respect to Deerwood and $16,666.66 with respect to Westar;
provided, however, that if the NOI Yield is less than 10%, Eeds shall not be
entitled to any Stock. For instance, if the NOI Yield was 10.6%, the value of
Stock issuable to Eeds with respect to Deerwood would be $550,000 and the value
of Stock issuable to Eeds with respect to Westar would be $183,333.36; if the
NOI Yield was below 10%, Eeds would not be entitled to any Stock.
Notwithstanding any contrary provision of this Agreement, or any employment or
stock option agreement between Oasis or its affiliates and Eeds, if before the
end of the Completion Period (i) Oasis either (a) terminates Eeds' employment
for any reason (except for "cause" as defined in Section 5.3 of the Employment
Contract) or for no reason or (b) sells its interest in the subject Property,
or (ii) Eeds terminates his employment for "cause" as provided in Section 5.4
of the Employment Contract, then Oasis shall pay to Eeds the sum of $375,000 in
cash with regards to Deerwood and $125,000 in cash with regards to Westar in
lieu all stock and in total, full and complete satisfaction of any and all
rights, claims, demands which Eeds may have against Oasis or any subsidiary of
Oasis, its officers, directors, employees, agents, servants or shareholders.
If Oasis' duty to pay such cash amounts arises as a result of any such
termination of Eeds' employment, Eeds shall, for and in consideration of the
sum of $375,000 with respect to Deerwood and $125,000 with respect to Westar,
execute a full, complete and absolute release of Oasis, its subsidiaries,
officers, directors, employees, agents, servants and shareholders of any claims
he may have against them. Said sum of $375,000 with respect to Deerwood and
$125,000 with respect to Westar and all other sums paid hereunder or provided
for payment hereunder shall only be paid and are subject to Oasis acquiring the
rights from Mission Viejo and the Stevinson family as set forth in this
Agreement. If Eeds does not acquire said rights and transfer said rights to
Oasis, Eeds shall have no rights under this paragraph to any compensation upon
termination. If Eeds dies before the issuance of any stock as provided above
and at that time is employed by Oasis, the provisions of this paragraph shall
bind, be enforceable by, and inure to the benefit of Eeds' heirs, legatees,
devisees and personal and legal representatives.
6. Oasis represents that it has reserved, or covenants that
promptly upon execution of this Agreement by all parties hereto it shall
reserve, for issuance a sufficient number of shares of Common Stock to enable
it to perform its obligations hereunder to issue Common stock to Eeds.
<PAGE> 6
7. Oasis represents that it has the right, power and authority from
its Board of Directors to enter into and perform the obligations under this
Agreement. Eeds has been advised and understands that at the present time,
Oasis has only 30,000 shares of stock available for granting options under the
Oasis Stock Option Plan pursuant to which the Stock Option Agreement is being
entered into. That the Board of Directors of Oasis shall adopt the necessary
resolutions to increase its stock available for options to its officers,
directors and other parties, said resolution being subject to approval by the
shareholders of Oasis at its annual meeting of 1995 and that, upon said
approval by the shareholders, said option shall become fully and completely
available to Eeds under and pursuant to the terms and conditions of the Stock
Option Agreement attached hereto.
OASIS RESIDENTIAL, INC.
By:
--------------------------- ----------------------------
Scott S. Ingraham Walter B. Eeds
President
GREYSTONE GROUP, INC.
By:
---------------------------
Walter B. Eeds, President
<PAGE> 1
EXHIBIT 10.83
Allstate Life Insurance Company
Loan No. 121123
AMENDED AND RESTATED
MORTGAGE NOTE
$16,000,000.00 Las Vegas, Nevada
March 14 , 1996
1. Payment of Principal and Interest. FOR VALUE RECEIVED, OASIS
RESIDENTIAL, INC., a Nevada corporation ("Maker"), hereby promises to pay to
the order of ALLSTATE LIFE INSURANCE COMPANY, and any subsequent holder of this
Note ("Holder" or "Holders") in the manner hereinafter provided, the principal
amount of SIXTEEN MILLION AND NO/100THS DOLLARS ($16,000,000.00) together with
interest on the outstanding principal balance from the date of the initial
disbursement (for purposes of this Note, "disbursement" means the date funds
are wire transferred from Holder's account) of all or a part of the principal
of this Note ("Disbursement Date") until maturity at the rate of seven and
one-tenth percent (7.10%) per annum ("Contract Rate") as follows:
(a) on the Disbursement Date, interest only, in advance, accruing
from the Disbursement Date to the last day of March, 1996 both
inclusive; and
(b) in arrears, on the first day of May, 1996 and on the first day
of each month thereafter until this Note matures, principal and
interest in consecutive equal installments of ONE HUNDRED
FOURTEEN THOUSAND ONE HUNDRED SEVEN AND 40/100THS DOLLARS
($114,107.40) (the initial payment and each subsequent payment
shall each hereinafter be referred to as a "Monthly Payment"),
which amount is calculated using an amortization period of
twenty-five (25) years; and
(c) on April 1, 2008, the entire unpaid principal amount and any
interest accrued but remaining unpaid and all other sums due
under this Note.
Except for the interest payable under paragraph (a) above, interest shall be
payable in arrears and calculated on the basis of a 360 day year containing
twelve 30 day months. All such payments on account of the indebtedness
evidenced by this Note shall be first applied to interest accrued on the unpaid
principal amount and the remainder toward reduction of the unpaid principal
amount.
2. Payment Information. All payments required to be made hereunder
shall be made during regular business hours to Holder at its office at
Commercial Mortgage Loan Servicing Manager, 3075 Sanders Road, Suite G5C,
Northbrook, Illinois 60062, with sufficient information to identify the source
and application of such payment to Holder's Loan #121123 or at such other place
as Holder may from time to time designate in writing. All payments shall be
made in currency of United States of America without presentment or surrender
of this Note. Payments to Holder shall be made by transferring immediately
available federal funds by bank wire or interbank transfer for the account of
Holder provided, however, that any payment of principal or interest received
after 1:00 p.m. Chicago time shall be deemed to have been received by Holder on
the next business day and shall bear interest accordingly. If and so long as
Holder directs Maker to make payments to a servicing agent, then payments may
be made by check. Payments made by check will not be deemed made until good
funds for such check are received by Holder or the servicing agent.
<PAGE> 2
3. Security For Note. The payment of this Note and all other sums
due Holder is secured by (a) an Amended and Restated Deed of Trust, Assignment
of Leases, Rents and Contracts, Security Agreement and Fixture Filing
("Mortgage"), of even date herewith, granted by Maker to Holder, as
beneficiary, covering certain real property, the improvements thereon and
certain personal property situated in the County of Clark, State of Nevada and
described in the Mortgage ("Property"), and (b) those certain instruments of
indebtedness and security described as "Related Agreements" in the Mortgage.
Except as otherwise defined herein, all of the defined terms and provisions
contained in the Mortgage and the Related Agreements are hereby incorporated
herein by express reference.
4. Late Charges. Should any Monthly Payment required under this Note
not be paid in full within 5 days from the date such payment is due, Maker
acknowledges that the Holder will incur extra expenses for the handling of the
delinquent payment and servicing the indebtedness evidenced hereby, and that
the exact amount of these extra expenses is extremely difficult and impractical
to ascertain, but that a charge of five percent (5%) of the amount of the
delinquent payment ("Late Charge") would be a fair approximation of the expense
so incurred by Holder. If applicable law requires a lesser charge, however,
then the maximum charge permitted by such law may be charged by Holder for said
purpose. Therefore, Maker shall, in such event, without further notice, and
without prejudice to the right of Holder to collect any other amounts provided
to be paid hereunder or under the Mortgage, the Related Agreements or any other
instrument executed for purposes of further securing payment of the obligations
evidenced by this Note, or to declare an Event of Default as defined below, pay
to Holder immediately upon demand the Late Charge to compensate Holder for
expenses incurred in handling delinquent payments.
5. Interest Payable Upon Default. If there occurs an Event of
Default, under this Note or the Mortgage or under any Related Agreement, then
the unpaid principal amount of this Note, and all accrued and unpaid interest
thereon shall bear interest at the Contract Rate plus five percent (5%) per
annum compounded monthly ("Default Rate") from the date of expiration of any
applicable cure or grace period until such time, if any, as the Event of
Default is cured and the Mortgage and this Note are reinstated as permitted by
applicable law, or otherwise until such time as the unpaid principal amount of
this Note and all other indebtedness evidenced by this Note are fully repaid,
whichever is earlier.
6. Events of Default. An "Event of Default" shall exist under this
Note (a) in the event Maker shall fail to make any payment due under this Note,
other than the final payment and Prepayment Premium, within five (5) days from
the date when such payment is due; (b) in the event Maker shall fail to make
the final payment or the Prepayment Premium when such payment is due or (c) if
there shall exist an Event of Default as that term is defined in the Mortgage
or in any of the Related Agreements.
7. Additional Payments. The additional payments called for under
paragraphs 4 and 5 shall be in addition to, and shall in no way limit, any
other rights and remedies provided for in this Note, the Mortgage or in any
Related Agreements, as well as all other remedies provided by law.
<PAGE> 3
8. Payment of Taxes and Expenses.
(a) Maker further promises to pay to Holder, immediately upon
written notice from Holder: (i) all recordation, transfer, stamp, documentary
or other fees or taxes levied on Holder (exclusive of Holder's income taxes) by
reason of the making or recording of this Note, the Mortgage or any of the
Related Agreements, and (ii) all intangible property taxes levied upon any
Holder of this Note or mortgagee under the Mortgage or secured party under the
Related Agreements.
(b) Maker further promises to pay to Holder, immediately upon
written notice from Holder, all actual costs, expenses, disbursements, escrow
fees, title charges and reasonable legal fees and expenses actually incurred by
Holder and its counsel in (i) the collection, attempted collection, or
negotiation and documentation of any settlement or workout of the principal
amount of this Note, the interest thereon or any installment of other payment
due hereunder, and (ii) any suit or proceeding whatsoever in regard to this
Note or to protect, sustain or enforce the lien of any instrument securing this
Note, including, without limitation, in any bankruptcy proceeding or judicial
or nonjudicial foreclosure proceeding. It is the intent of the parties that
Maker pay all expenses and reasonable attorneys' fees incurred by Holder as a
result of Holder's entering into the loan transaction evidenced by this Note.
9. Prepayment. Maker is prohibited from prepaying this Note until
April 1, 1999 (the "No-Prepayment Period"). Subsequent to the No-Prepayment
Period, at any time with thirty (30) days prior written notice to Holder,
specifying the date of prepayment, Maker will have the privilege of prepaying
the outstanding principal amount together with any accrued but unpaid interest,
any other sums secured by the Mortgage and the Related Agreements and, if at
the time of such prepayment the Prevailing Interest Rate (as hereinafter
defined) is less than the Contract Rate, a Prepayment Premium, as liquidated
damages and not as a penalty. As used herein, the term "Prevailing Interest
Rate" shall mean (a) the yield to maturity on a United States Treasury Bond or
Treasury Note selected by Holder having a maturity date as near as possible to
the original maturity date of this Note and an "ask" price, as close as
possible to par (as published two weeks prior to the specified date of
prepayment in The Wall Street Journal or similar publication or available from
the Federal Reserve Bank of New York) less (b) the Basis Point Adjustment as
computed in accordance with Exhibit A attached hereto. If the Prevailing
Interest Rate is less than the Contract Rate, the Prepayment Premium shall be
the remainder of (x) minus (y) where "(x)" is the present value of all unpaid
installments of principal and interest due under this Note from the date of
prepayment to and including the original maturity date of this Note, discounted
at the Prevailing Interest Rate, and "(y)" is the outstanding principal balance
of this Note as of the prepayment date. If the foregoing calculations result
in a negative number, no Prepayment Premium shall be due, but no credit shall
be due to Maker.
Written notice of Maker's election to make a prepayment in full of
this Note shall be given in the manner provided for notices under the Mortgage.
Partial prepayment of the outstanding principal amount of this Note shall not
be permitted except in accordance with the terms of the Mortgage. In the event
of such a permitted partial prepayment, the Prepayment Premium calculated in
this paragraph 9 shall be prorated based on the amount of the partial
prepayment relative to the then current outstanding principal balance of this
Note.
<PAGE> 4
Maker acknowledges that Holder (a) has advanced the amounts evidenced
by this Note with the expectation that such amounts would be outstanding for a
period at least equal to the No-Prepayment Period, (b) would not have been
willing to advance such amounts on these terms for a shorter period of time,
(c) in making the loan evidenced by this Note, is relying on Maker's
creditworthiness and its agreement to pay in strict accordance with the terms
set forth in the Note and (d) would not make the loan without full and complete
assurance by Maker of its agreement not to prepay all or a part of the
principal of this Note except as expressly permitted herein and in the
Mortgage. Maker has been advised and acknowledges that Holder is relying on
the receipt of payments under this Note to, among other things, match and
support its obligations under contracts entered into by Holder with third
parties and that in the event of a prepayment, Holder could suffer loss and
additional expenses which are extremely difficult and impractical to ascertain.
Accordingly, should this Note be paid for any reason, whether voluntary or
involuntary, prior to the end of the No-Prepayment Period then Maker shall pay
to Holder a Prepayment Premium calculated in accordance with this paragraph 9.
BY INITIALING BELOW, MAKER EXPRESSLY ACKNOWLEDGES THAT, PURSUANT TO
THE PROVISIONS OF THIS NOTE AND EXCEPT AS OTHERWISE PROVIDED IN THE MORTGAGE,
MAKER HAS NO RIGHT TO PREPAY THIS NOTE IN WHOLE OR IN PART WITHOUT PAYMENT OF
THE PREPAYMENT PREMIUM AND MAKER SHALL BE LIABLE FOR THE PAYMENT OF THE
PREPAYMENT PREMIUM UPON ANY PAYMENT OF THE OUTSTANDING PRINCIPAL OF THIS NOTE
BEFORE ITS DUE DATE, WHETHER VOLUNTARY OR INVOLUNTARY OR AFTER ACCELERATION OF
THE NOTE WHETHER THE ACCELERATION OF THE MATURITY HEREOF IS DUE TO MAKER'S
DEFAULT OR OTHERWISE. FURTHERMORE, BY INITIALING BELOW, MAKER WAIVES ANY
RIGHTS IT MAY HAVE UNDER ANY APPLICABLE STATE LAWS AS THEY RELATE TO ANY
PREPAYMENT RESTRICTIONS CONTAINED IN THIS PARAGRAPH 9 OR OTHERWISE CONTAINED IN
THIS NOTE AND EXPRESSLY ACKNOWLEDGES THAT HOLDER HAS MADE THE LOAN IN RELIANCE
UPON SUCH AGREEMENTS AND WAIVER OF MAKER AND THAT HOLDER WOULD NOT HAVE MADE
THE LOAN WITHOUT SUCH AGREEMENTS AND WAIVER OF MAKER. MAKER ACKNOWLEDGES THAT
SPECIFIC WEIGHT HAS BEEN GIVEN TO THE CONSIDERATION GIVEN FOR SUCH AGREEMENTS,
WHICH CONSIDERATION IS THE GRANTING OF THE LOAN.
Maker's Initials SSI
<PAGE> 5
10. Evasion of Prepayment Premium. Maker acknowledges that in the event
of an acceleration of payment of this Note following an Event of Default by
Maker, a tender of payment of an amount necessary to satisfy the entire
indebtedness evidenced hereby, but not including the Prepayment Premium, made
at any time prior to a foreclosure sale by Maker, its successors or assigns or
by anyone on behalf of Maker, or by a buyer upon foreclosure or trustee's sale,
shall be presumed to be and conclusively deemed to constitute a deliberate
evasion of the prepayment provisions hereof and shall constitute a prepayment
hereunder and shall therefore be subject to the Prepayment Premium as
calculated in accordance with this Note with the date of prepayment being
deemed the date of occurrence of the foreclosure sale or the tender of payment
of the amount necessary to pay the entire indebtedness evidenced hereby in
full, including the Prepayment Premium.
11. Maker's Covenants. Maker agrees that (a) this instrument and the
rights and obligations of all parties hereunder shall be governed by and
construed under the laws of the state in which the Property is located; (b) the
obligation evidenced by this Note is an exempted transaction under the
Truth-in-Lending Act, 15 U.S.C _ 1601, et seq. (1982); (c) said obligation
constitutes a business loan for the purpose of the application of any laws that
distinguish between consumer loans and business loans and that have as their
purpose the protection of consumers in the state in which the Property is
located; (d) at the option of the Holder, the United States District Court for
the district in which the Property is located and any court of competent
jurisdiction of the state in which the Property is located shall have
jurisdiction in any action, suit or other proceeding arising out of or relating
to any act taken or omitted hereunder or the enforcement of this Note, the
Mortgage and the Related Agreements and Maker shall not assert in any such
action, suit or other proceeding that it is not personally subject to the
jurisdiction of the courts described above, that the action, suit or other
proceeding is brought in an inconvenient forum or that the venue of the action,
suit or other proceeding is improper; (e) it hereby waives any objections to
venue; and (f) it hereby waives its right to a trial by jury.
12. Severability. The parties hereto intend and believe that each
provision of this Note comports with all applicable local, state and federal
laws and judicial decisions. However, if any provision or any portion of any
provision contained in this Note is held by a court of law to be invalid,
illegal, unlawful, void or unenforceable as written in any respect, then it is
the intent of all parties hereto that such portion or provision shall be given
force to the fullest possible extent that it is legal, valid and enforceable,
that the remainder of the Note shall be construed as if such illegal, invalid,
unlawful, void or unenforceable portion or provision was not contained therein,
and the rights, obligations and interests of Maker and Holder under the
remainder of this Note shall continue in full force and effect.
13. Usury Laws. It is the intention of Maker and Holder to conform
strictly to the usury laws now or hereafter in force in the state or
commonwealth in which the Property is located, and any interest payable under
this Note, the Mortgage, or any Related Agreement shall be subject to reduction
to an amount not to exceed the maximum non-usurious amount for commercial loans
allowed under the usury laws of the state or commonwealth in which the Property
is located as now or hereafter construed by the courts having jurisdiction over
such matters. In the event such interest (whether designated as interest,
service charges, points, or otherwise) does exceed the maximum legal rate, it
shall be (a) canceled automatically to the extent that such interest exceeds
the maximum legal rate; (b) if already paid, at the option of the Holder,
either be rebated to Maker or credited on the principal amount of the Note or
(c) if the Note has been prepaid in full, then such excess shall be rebated to
Maker.
14. Acceleration. Upon an Event of Default, Holder shall have the
right, without demand or notice, to declare the entire principal amount of this
Note and/or any Future Advance (as defined in the Mortgage) then outstanding,
all accrued and unpaid interest thereon and all other sums, including without
limitation the Prepayment Premium, required under this Note, the Mortgage or
any note evidencing any Future Advance, to be immediately due and payable and,
notwithstanding the stated maturity in this Note or any note evidencing any
Future Advance, all such sums declared due and payable shall thereupon become
immediately due and payable. During the existence of such Event of Default,
Holder may apply payments received on any amounts due under the Note, the
Mortgage, any Related Agreement or any note evidencing any Future Advance as
Holder may determine in its sole discretion.
<PAGE> 6
15. Waivers by Maker. As to this Note, the Mortgage, the Related
Agreements and any other instruments securing the indebtedness, Maker and all
guarantors, sureties and endorsers, severally waive all applicable exemption
rights, whether under any state constitution, homestead laws or otherwise, and
also severally waive diligence, valuation and appraisement, presentment for
payment, protest and demand, notice of protest, demand and dishonor and
diligence in collection and nonpayment of this Note and all other notices in
connection with the delivery, acceptance, performance, default, or enforcement
of the payment of this Note (except notice of default specifically provided for
in the Mortgage and the Related Agreements). To the extent permitted by law,
Maker further waives all benefit that might accrue to Maker by virtue of any
present or future laws exempting the Property, or any other property, real or
personal, or the proceeds arising from any sale of any such property, from
attachment, levy, or sale under execution, or providing for any stay of
execution to be issued on any judgment recovered on this Note or in any action
to foreclose the Mortgage, injunction against sale pursuant to power of sale,
exemption from civil process or extension of time for payment. Maker agrees
that any real estate that may be levied upon pursuant to a judgment obtained by
virtue of this Note, or any writ of execution issued thereon, may be sold upon
any such writ in whole or in part in any order desired by Holder.
16. Maker Not Released. No delay or omission of Holder to exercise
any of its rights and remedies under this Note, the Mortgage or any Related
Agreements at any time following the happening of an Event of Default shall
constitute a waiver of the right of Holder to exercise such rights and remedies
at a later time by reason of such Event of Default or by reason of any
subsequently occurring Event of Default. This Note, or any payment hereunder,
may be extended from time to time by agreement in writing between Maker and
Holder without in any other way affecting the liability and obligations of
Maker and endorsers, if any.
17. Nonrecourse. Except as otherwise set forth in this paragraph,
the liability of Maker and the general partners of Maker, if any, under this
Note, the Mortgage and the Related Agreements shall be limited to and satisfied
from the Property and the proceeds thereof, the rents and all other income
arising therefrom, the other assets of Maker arising out of the Property which
are given as collateral for the loan evidenced by this Note, and any other
collateral given in writing to Holder as security for repayment of this Note
(all of the foregoing are collectively referred to as the "Loan Collateral");
provided, however, that nothing contained in this paragraph shall (a) preclude
Holder from foreclosing the lien of the Mortgage or from enforcing any of its
rights or remedies in law or in equity against Maker except as stated in this
paragraph, (b) constitute a waiver of any obligation evidenced by this Note or
secured by the Mortgage or any Related Agreements, (c) limit the right of
Holder to name Maker as a party defendant in any action brought under this
Note, the Mortgage or any Related Agreements, so long as execution on any
judgment is limited to the Loan Collateral, (d) prohibit Holder from pursuing
all of its rights and remedies against any guarantor or surety, whether or not
such guarantor or surety is a partner of Maker, (e) limit the personal
liability of Maker or any shareholder of Maker, or any general partner of Maker
to Holder for misappropriation or misapplication of funds, fraud, waste,
willful misrepresentation or willful damage to the Property or (f) preclude
Holder from recovering from Maker and the Indemnitors under that certain
Environmental Indemnity Agreement of even date herewith.
18. Successors and Assigns. The provisions of this Note shall be
binding upon Maker and its legal representatives, successors and assigns and
shall inure to the benefit of any Holder and its successors and assigns. In
the event Maker is composed of more than one party, obligations arising from
this Note are and shall be joint and several as to each such party.
<PAGE> 7
19. Remedies Cumulative. The remedies of Holder as provided in this
Note, or in the Mortgage or the Related Agreements, and the warranties
contained herein or therein shall be cumulative and concurrent, may be pursued
singly, successively or together at the sole discretion of Holder, may be
exercised as often as occasion for their exercise shall occur and in no event
shall the failure to exercise any such right or remedy be construed as a waiver
or release of such right or remedy. No remedy under this Note, conferred upon
or reserved to Holder is intended to be exclusive of any other remedy provided
in this Note, the Mortgage or any of the Related Agreements or provided by law,
but each shall be cumulative and shall be in addition to every other remedy
given under the Mortgage or any of the Related Agreements or hereunder or now
or hereafter existing at law or in equity or by statute.
20. Notices. All notices, written confirmation of wire transfers and
all other communications with respect to this Note shall be directed as
follows: if to Holder, c/o Commercial Mortgage Loan Servicing Manager, 3075
Sanders Road, Suite G5C, Northbrook, Illinois 60062, Attention: Servicing
Manager, with a copy to Investment Law Division, 3075 Sanders Road, Suite G5A,
Northbrook, Illinois 60062; if to Maker, Oasis Residential, Inc., 4041 E.
Sunset Road, Henderson, Nevada 89014, Attention: Scott S. Ingraham, with a copy
to: Herbert L. Waldman, Esq., Law Offices of Herbert L. Waldman, 4041 E.
Sunset Road, Henderson, Nevada 89014, or at such other place as Holder or Maker
may from time to time designate in writing. All notices expressly provided
hereunder to be given by Holder to Maker and all notices, demands and other
communications of any kind or nature whatever which Maker may be required or
may desire to give to or serve on Holder shall be in writing and shall be (1)
hand-delivered, effective upon receipt, (2) sent by United States Express Mail
or by private overnight courier, effective upon receipt, or (3) served by
certified mail, to the appropriate address set forth above, or at such other
place as the Maker or Holder, as the case may be, from time to time designate
in writing by ten (10) days prior written notice thereof. Any such notice or
demand served by certified mail, return receipt requested, shall be deposited
in the United States mail, with postage thereon fully prepaid and addressed to
the party so to be served at its address above stated or at such other address
of which said party shall have theretofore notified in writing, as provided
above, the party giving such notice. Service of any such notice or demand so
made shall be deemed effective on the day of actual delivery as shown by the
addressee's return receipt or the expiration of three (3) business days after
the date of mailing, whichever is the earlier in time. Any notice required to
be given by Holder shall be equally effective if given by Holder's agent, if
any.
21. No Oral Modification. This Note may not be modified or
discharged orally, but only by an agreement in writing signed by the party
against whom enforcement of any waiver, modification or discharge is sought.
22. Time. Time is of the essence with regard to the performance of
the obligations of Maker in this Note and each and every term, covenant and
condition herein by or applicable to Maker.
23. Captions. The captions and headings of the paragraphs of this
Note are for convenience only and are not to be used to interpret, define or
limit the provisions hereof.
24. Replacement Note. Upon receipt of evidence reasonably
satisfactory to Maker of the loss, theft, destruction or mutilation of this
Note, and in the case of any such loss, theft or destruction, upon delivery of
an indemnity agreement reasonably satisfactory to Maker or, in the case of any
such mutilation, upon surrender and cancellation of this Note, Maker will
execute and deliver to Holder in lieu thereof, a replacement note dated as of
the date of this Note, identical in form and substance to this Note and upon
such execution and delivery all references in the Mortgage to this Note shall
be deemed to refer to such replacement note.
<PAGE> 8
25. Amendment and Restatement. This Note amends and replaces that
certain Mortgage Note dated March 27, 1991 in the original principal amount of
$16,000,000.00 executed by Francis P. Torino, Trustee of The Torino Living
Trust under trust agreement dated May 4, 1984, and restated in full on August
23, 1990 ("Torino"), in favor of Holder, the obligations under which were
assumed by Maker pursuant to the terms of that certain Assignment and
Assumption Agreement dated March 1, 1994 executed by Torino, Maker and Holder,
and recorded on April 15, 1994, in Book 940415, as Instrument No. 02270,
Official Records, Clark County, Nevada.
IN WITNESS WHEREOF, Maker has caused this Note to be duly executed on
the date first above written.
MAKER:
OASIS RESIDENTIAL, INC., a
Nevada corporation,
By: /s/Scott S. Ingraham
----------------------------
Its: President
<PAGE> 9
Exhibit A
BASIS POINT ADJUSTMENT TABLE
<TABLE>
<CAPTION>
U.S Treasury Bond Basis Point U.S. Treasury Bond Basis Point
or Note Yield Adjustment or Note Yield Adjustment
<S> <C>
0 - 1.55 .0
1.56 - 2.69 .01
2.70 - 3.48 .02
3.49 - 4.12 .03
4.13 - 4.68 .04
4.69 - 5.17 .05
5.18 - 5.63 .06
5.64 - 6.05 .07
6.06 - 6.44 .08
6.45 - 6.82 .09
6.83 - 7.17 .10
7.18 - 7.51 .11
7.52 - 7.83 .12
7.84 - 8.14 .13
8.15 - 8.44 .14
8.45 - 8.73 .15
8.74 - 9.02 .16
9.03 - 9.29 .17
9.30 - 9.55 .18
9.56 - 9.81 .19
9.82 - 10.07 .20
10.08 - 10.31 .21
10.32 - 10.55 .22
10.56 - 10.79 .23
10.80 - 11.02 .24
11.03 - 11.25 .25
11.26 - 11.47 .26
11.48 - 11.69 .27
11.70 - 11.90 .28
11.91 - 12.11 .29
12.12 - 12.32 .30
12.33 - 12.52 .31
12.53 - 12.72 .32
12.73 - 12.92 .33
12.93 - 13.12 .34
13.13 - 13.31 .35
13.32 - 13.50 .36
13.51 - 13.69 .37
13.70 - 13.87 .38
13.88 - 14.06 .39
14.07 - 14.24 .40
14.25 - 14.41 .41
14.42 - 14.59 .42
14.60 - 14.77 .43
14.78 - 14.94 .44
14.95 - 15.11 .45
15.12 - 15.28 .46
15.29 - 15.44 .47
15.45 - 15.61 .48
15.62 - 15.77 .49
15.78 - 15.94 .50
15.95 - 16.10 .51
16.11 - 16.26 .52
16.27 - 16.41 .53
16.42 - 16.57 .54
16.58 - 16.73 .55
16.74 - 16.88 .56
16.89 - 17.03 .57
17.04 - 17.18 .58
17.19 - 17.33 .59
17.34 - 17.48 .60
17.49 - 17.63 .61
17.64 - 17.78 .62
17.79 - 17.92 .63
17.93 - 18.07 .64
18.08 - 18.21 .65
18.22 - 18.35 .66
18.36 - 18.49 .67
18.50 - 18.63 .68
18.64 - 18.77 .69
18.78 - 18.91 .70
18.92 - 19.05 .71
19.06 - 19.18 .72
19.19 - 19.32 .73
19.33 - 19.45 .74
19.46 - 19.59 .75
19.60 - 19.72 .76
19.73 - 19.85 .77
19.86 - 19.99 .78
20.00 - 20.12 .79
</TABLE>
<PAGE> 1
EXHIBIT 10.84
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement") is made and entered into this
______ day of December, 1996, by and between OASIS RESIDENTIAL, INC., a Nevada
corporation (hereinafter referred to as "Seller"), and SIEFERT INVESTMENTS, a
Nevada Limited Partnership (hereinafter referred to as "Buyer"):
1. SALE AND CLOSING.
1.1 Agreement. The Seller agrees to sell and Buyer agrees to
purchase the 60-unit apartment project located at 6500 West Lake Mead
Boulevard, in the County of Clark, State of Nevada, commonly known as OASIS
REEF APARTMENTS, Assessor's Parcel Nos. 138-23-201-001 through 138-23-214-060,
which shall include the "Land," the "Improvements," the "Personal Property,"
the "Intangible Property," and all of the Seller's interest, as landlord in and
to the "Tenant Occupancy Leases," all as hereinafter defined and as more
particularly described on Exhibits A and B attached hereto (the "Sale
Property").
"Land" shall mean the real property described in Exhibit A to this
Agreement, including all easements, riparian or other water rights, rights of
way and other interests appurtenant thereto, and all right, title and interest
of the Seller in and to any land lying in the bed of any street, road, highway
or avenue, open or proposed, in front of, adjacent to or adjoining such real
property and in all strips and gores, and which Land contains 3.14 acres more
or less.
"Improvements" shall mean all improvements and fixtures now or
hereafter located on the Land including, without limitation, the existing nine
(9) buildings, sixty (60) unit complex constructed on the Land which contains
in the aggregate approximately Sixty-Eight Thousand One Hundred Eighty (68,180)
square feet of gross rentable area, sixty (60) apartment units (of which
twenty-eight (28) are two (2) bedroom/two (2) bath units, thirty-two (32) are
three (3) bedroom/two (2) bath units, and surface level paved and striped
parking areas containing parking in compliance with Building Codes, together
with all appurtenances thereto and all apparatus, equipment and appliances
located on the Land and used in connection with the operation and occupancy
thereof such as systems or facilities for heating, ventilation, air
conditioning, climate control, utility services, parking services, garbage
disposal, irrigation and/or recreation, and all landscaping and residual
interests in leasehold improvements under the Tenant Occupancy Leases.
"Personal Property" shall mean those items of personal property listed
in Exhibit B attached to this Agreement (the "Personal Property Inventory") and
all other personal property now or hereafter owned or held by the Seller and
exclusively used in connection with the Land, the Improvements and/or the
Intangible Property or the ownership, operation or occupancy thereof including,
without limitation, all furniture, fixtures, machinery, appliances and
equipment located on the Sale Property, other than personal property owned by
tenants of the Sale Property.
<PAGE> 2
"Intangible Property" shall mean all property other than the Personal
Property, the Land, and the Improvements now or hereafter owned or held by the
Seller and used in connection with the ownership, operation or occupancy
thereof, excluding the name ("Oasis Reef Apartments" or the use of Oasis or
Reef with any other name), but including the name Lighthouse Cove, excluding
all copyrights, trademarks, trade names or service marks used in the operation
of the Land, the Improvements or the Personal Property, but including the
"Plans and Specifications" (as defined below) for use on the Land only in
connection with the present structures, the engineering, soils, pest control
and other studies or reports relating to the Land, the Improvements and/or the
Personal Property, all telephone exchange numbers identified with the Land or
Improvements, all awards or payments to be made for or with respect to any
taking in condemnation or eminent domain (including awards or payments for
damage resulting from change of grade or impairments of access) of any part of
the Land, the Improvements and/or the Personal Property on or after the date
hereof, all rents, issues and profits therefrom and to the extent, if any,
approved in writing by the Buyer pursuant to the terms of this Agreement, all
consents, licenses, franchises, permits, purchase or construction warranties or
guarantees and other rights owned by the Seller relating to the operation,
ownership or occupancy of the Land, the Improvements and/or the Personal
Property.
"Plans and Specifications" shall mean the final or plans and
specifications for construction of the Improvements as listed in Exhibit C to
this Agreement.
"Tenant Occupancy Leases" shall mean all leases, work letter
agreements, improvement agreements, and other rental agreements listed in
Exhibit D to this Agreement with respect to occupancy or use of the Sale
Property by tenants and all leases entered into in the normal course of
business during the term of this Agreement.
1.2 Closing. Consummation of the sale provided for herein (the
"Closing") shall take place at the office of Nevada Title Company (the "Title
Company"), through the escrow provided for in Paragraph 3 below (the "Escrow"),
on or before December 16, 1996 (the "Closing Date").
At or prior to the Closing, each of the parties shall execute and
deliver such documents and perform such acts as are provided for herein, or as
are necessary to consummate the sale contemplated hereunder.
2. PURCHASE PRICE AND PAYMENT TERMS.
2.1 Payment. The total purchase price (the "Purchase Price") to
be paid for the Sale Property shall be the sum of Three Million Nine Hundred
Thousand Dollars ($3,900,000), payable as follows:
2.1.1 Fifty Thousand Dollars ($50,000) as earnest money
("Earnest Money Deposit"), shall be deposited by the Buyer with the Escrow
Agent within three (3) working days
<PAGE> 3
after the date of the execution of this Agreement and shall be deposited by
said Escrow Agent into an interest-bearing account for the benefit of the Buyer
and shall be held by the Escrow Agent under and pursuant to the terms and
conditions of this Agreement and shall be subject to withdrawal by the Buyer
during the Contingency Period (as hereinafter defined) by Buyer notifying the
Escrow Agent in writing that Buyer cancels the Escrow Agreement. After the
Contingency Period, said sum shall be held by the Escrow Agent and shall be
payable to the Seller subject to the conditions hereinafter provided; provided,
however, that the Earnest Money Deposit shall be payable to the Buyer after the
Contingency Period in the event of the Buyer's termination of this Agreement
for failure of any condition or default or breach by the Seller. The
"Contingency Period" is defined as the period ending thirty (30) calendar days
after the receipt by the Buyer of the executed Agreement.
2.1.2 The balance of the Purchase Price shall be paid by
depositing into escrow of $2,750,000 cash and a promissory note in the amount
of $1,100,000 bearing interest at 9% per annum payable interest only for 3
years with balance all due and payable at the end of 3 years, which shall be
secured by a First Deed of Trust upon the Sale Property. All documents
required of Buyer in order to close the Escrow shall be deposited with the
Escrow Agent no later than 2:00 p.m. on the day before the Closing Date and
shall be available for immediate distribution to Seller upon recording of the
deed transferring ownership of the Sale Property to Buyer. The cash proceeds
of sale that are to be distributed to Seller shall be sent by wire transfer in
accordance with Seller's instructions, for which Buyer shall have no
responsibility after depositing said funds with Escrow Agent as provided above.
3. ESCROW. If required by the Escrow Agent, after the execution of this
Agreement, the parties shall execute escrow instructions to the Escrow Agent to
which shall be attached an executed copy of this Agreement, which shall
constitute instructions to the Escrow Agent. The opening of the Escrow
provided for in this Agreement shall be the date that a fully executed
Agreement is delivered to the Escrow Agent. If any of the provisions of this
Agreement conflict with the escrow instructions, this Agreement shall govern
and control. No cancellation or other provision of the escrow instructions
shall extend the Closing Date provided for herein or provide either party
hereto with any grace period not provided in this Agreement.
All of Escrow Agent's fees shall be borne equally by the parties. Any
cancellation fees of the Escrow Agent shall also be borne equally by the
parties, unless this Agreement is canceled as a result of a breach by one of
the parties hereto, in which case such party shall bear the entire cancellation
fee, except any rollback taxes and accrued, but unpaid, assessments, whether
due or to be paid in the future which rollback taxes and assessments shall all
be paid by the Seller at or prior to the Closing.
4. BUYER'S DUE DILIGENCE CONTINGENCIES. The obligation of Buyer to
purchase the Sale Property from Seller is contingent upon satisfaction, in the
Buyer's sole discretion, within the Contingency Period, of the following:
<PAGE> 4
4.1 Inspection and Review.
4.1.1 Buyer's review and approval, in writing, of a current
Preliminary Title Report to be provided within ten (10) days following
execution of this Agreement, together with copies of all documents referred to
as exceptions in the preliminary report;
4.1.2 Seller shall cure any title objections provided in
writing by Buyer within seven (7) business days of receipt of such objections.
If such objections are not cured to the satisfaction of the Buyer, it may
terminate this Agreement and the Earnest Money Deposit will be returned to it,
or at its election, Buyer may waive the cure process in writing and proceed
with Closing as provided for herein;
4.1.3 The Buyer itself or any of its agents, servants,
employees, or any entity to whom it may contract shall have the right to enter
upon the property for the purposes of making any studies of said property
including, but not limited to, soils, seismic, environmental, hydrology, or
other similar types of studies to determine the nature and the character and
fair market value of the property and the feasibility of the property for the
use for which Buyer desires to use said property, and Buyer agrees to indemnify
and hold the Seller harmless from any liability of any acts of any of the
Buyer's agents, servants, employees, or any person with whom Buyer should
contract to enter upon said property. Buyer agrees that the Buyer shall supply
to the Seller, should this sale not be consummated, copies of any and all such
reports and/or studies that are obtained by the Buyer;
4.1.4 The Buyer's inspection, testing, to the extent it deems
necessary, and approval of the physical condition of the Sale Property
including, without limitation, inspection and testing for the presence of
asbestos, polychlorinated biphenyls or other Hazardous Substances, and of the
structural, mechanical, seismic, electrical and other physical or environmental
conditions or characteristics of the Sale Property.
5. CONDITIONS PRECEDENT.
The following terms and conditions are conditions precedent to the
Buyer's closing under and pursuant to the terms and conditions of this
Agreement. If any condition (except for conditions contained in Paragraphs 5.1
and 5.3) has not been satisfied ten (10) days prior to the date of closing,
Buyer shall notify the Seller in writing and the Seller shall have the
opportunity to satisfy said condition. If Buyer fails to notify Seller in
writing of the failure to comply with any terms and conditions, said term or
condition shall be deemed to have been waived by Buyer:
5.1 The due and timely performance by the Seller and/or third
parties, prior to the Closing, of each and every covenant, undertaking and
agreement to be performed by the Seller and/or such third parties as provided
in this Agreement; and the truth, accuracy and completeness in all respects of
each representation and warranty made in this Agreement by the Seller,
including, without limitation, the information contained in the "Executive
Summary," attached hereto as Schedule 5.1 (save and except as to the amount
shown thereon under "Expense
<PAGE> 5
Analysis" of $2,500 per unit, which figure Buyer has been advised is much
higher), both at the time made and on the Closing Date.
5.2 As of the Closing Date, there shall have been no material adverse
change in the condition of the Sale Property, or any portion thereof, or in any
document, contractual relations, or other circumstances affecting the Sale
Property previously approved by Buyer, and all apartment units vacant for 5
days or longer within the Sale Property shall be rent ready and available for
immediate occupancy, and each apartment unit shall contain in working condition
a washer, dryer, refrigerator, microwave oven, gas oven and dishwasher.
5.3 In the event any of the foregoing conditions or other conditions
to this Agreement which are for the benefit of the Buyer are neither fulfilled,
nor waived as provided above, and Buyer has given notice of any said condition
to the extent required by Paragraph 5, the Buyer, at its election by written
notice to Seller, may terminate this Agreement and be released from all
obligations under this Agreement. In the event of such a termination by the
Buyer, the Earnest Money Deposit and all other funds deposited in escrow by the
Buyer or paid by the Buyer to the Seller outside of escrow and all interest
accrued on such funds shall be returned immediately to the Buyer, and all
documents deposited in escrow by the Buyer or the Seller shall be returned to
the depositing party.
6. TITLE CONVEYANCE, ETC.
6.1 Deed. The Seller shall convey title to the Sale Property,
including the Land and the Improvements upon the close of escrow by a deed in
the form attached hereto as Exhibit E (the "Grant, Bargain and Sale Deed")
subject to no exceptions other than the following (the "Conditions of Title"):
The lien for local real estate taxes and assessments not yet
due or payable;
(a) Interests of tenants pursuant to Tenant Occupancy
Leases approved by the Buyer.
(b) Those items shown on Schedule B of the Preliminary
Title Report to which the Buyer has no objection
referred to in Paragraph 4.1 hereof.
At the Closing, Seller shall deliver to the Escrow Agent the Grant, Bargain and
Sale Deed executed by Seller by which the Sale Property is transferred to
Buyer.
6.2 Title Insurance. The Buyer's obligation to purchase the Sale
Property shall be subject to the irrevocable commitment of the Title Company to
issue upon payment of its normal premium on the close of Escrow of the
transaction contemplated by this Agreement (Form B, Rev. 10/17/70), together
with such endorsements as the buyer may reasonably require (including, without
limitation, CLTA endorsements or their Nevada equivalent) number 100 (modified)
<PAGE> 6
100.6, 103.4, 103.7, 116, 116.1, 116.4, 116.7 and 123.2), insuring the Buyer in
the amount of $3,900,000 that fee simple title to the Land and Improvements is
vested in the Buyer subject only to the Conditions of Title, with reinsurance
(including direct access rights) in the current ALTA form, with companies and
in such amount as the buyer shall reasonably require, all as set forth in a pro
forma policy of title insurance to be delivered to and approved by the Buyer at
least three (3) business days before the Closing Date. The costs of a CLTA
policy shall be paid for by Seller. Buyer shall pay any additional costs for
an ALTA policy and the costs of any endorsements desired by the Buyer.
6.3 Deposits and Deliveries by Seller. The Seller shall deposit
or cause to be deposited into escrow with the Title Company, or deliver
directly to the Buyer outside of escrow, on or before the Closing Date, the
following documents duly executed and acknowledged as required:
(a) The Grant, Bargain and Sale Deed.
(b) A Bill of Sale in the form attached hereto as Exhibit
F transferring the Personal Property to the Buyer (the
"Bill of Sale").
(c) An Assignment of Leases in the form attached hereto
as Exhibit G transferring to the Buyer all of the
Seller's interest as landlord under the Tenant
Occupancy Leases (the "Assignment of Leases").
(d) An Assignment of Intangible Property and Contract
Obligations in the form attached hereto as Exhibit H
transferring all of the Intangible Property and
Contract Obligations to the Buyer (the "Assignment of
Intangible Property").
(e) A letter to each of the tenants under the Tenant
Occupancy Leases in form attached hereto as Exhibit I
(the "Notice To Tenants").
(f) An Affidavit of Non-Foreign Status in form attached
hereto as Exhibit J (the "Non-Foreign Affidavit).
(g) The Seller's written escrow instructions to close
escrow in accordance with the terms of this Agreement.
(h) Such other documents, resolutions, consents and
affidavits necessary or advisable to effect the valid
consummation of the transaction evidenced by this
Agreement.
6.4 Prorations. Rents and other income, current taxes, utilities,
and service expenses shall be prorated between the Seller and the Buyer as of
the Closing Date. All bonds, assessments, encumbrances and other charges
against the Sale Property levied and due and
<PAGE> 7
payable or accrued on or before the Closing Date shall be paid in full by the
Seller. Rent shall be prorated on the basis of actual days in a month on the
basis of the final Rent Roll, based on rent actually paid to the Seller. Other
income and expenses shall be prorated on the basis of the actual number of days
in a month. All rents and other sums received by the Buyer on or after the
Closing Date shall be applied first to rent and other obligations accrued or
due on or after the Closing Date, then to the Buyer's costs of collection, if
any, including attorneys' fees, and any excess paid by tenant for rent or other
obligations owed prior to the Closing Date shall be paid to the Seller,
provided that the Buyer shall have no obligation to collect delinquent rents
for the Seller's account. At closing, the Buyer shall be allowed a credit
against the Purchase Price for all rent and other credits and concessions due
to tenants of the Sale Property allocable to the period before the Closing
Date. All the deposits made by tenants of the Sale Property as security for
rent, cleaning, pets or any other purpose (identified as refundable) and
prepaid rents and all interest accrued or due on such sums (whether under
applicable law or by agreement) shall be allowed as a credit against the
Purchase Price. All items subject to proration pertaining to the period prior
to the Closing Date shall be credited to the Seller, and all such prorations
pertaining to the period on or following the Closing Date shall be credited to
the Buyer. No later than one (1) business day prior to the Closing Date, the
Seller and the Buyer shall mutually agree upon, and provide to the title
company providing the policy hereunder, a schedule of prorations to be made as
of the Closing Date as complete and accurate as reasonably possible. All
prorations which can be liquidated accurately or reasonably estimated as of the
Closing Date shall be made in escrow on the Closing Date. All other expenses
relating to the Sale Property, or its operation, through the end of the
calendar month in which the Closing Date shall occur shall be paid by the
Seller subject to adjustment as provided below. All other prorations, and
adjustments to initial estimated prorations or other non-prorated expenses,
shall be made by the Buyer and the Seller with due diligence and cooperation
within 30 days following the Closing Date, or such later time as may be
required to obtain necessary information for proration or adjustment, by cash
payment to the party yielding a net credit from such prorations or adjustments
from the other party. Such cash payment shall be made within ten (10) business
days of demand for payment by the party entitled to receive such payment and,
if not timely paid, such amount due shall bear interest at ten percent (10%)
per annum from the date due until the date of actual payment.
6.5 Closing Costs. The Seller shall pay the cost of all transfer,
sales and conveyance taxes imposed by any governmental authority upon this
transaction, title insurance premiums for the title insurance (to the extent so
provided in Paragraph 6.2 above), one-half (1/2) of the recording fees,
one-half (1/2) of escrow fees and the Seller's legal fees and costs incurred in
connection with the contemplated transaction. In addition, the Seller shall be
solely responsible for the cost (including payment of prepayment fees or other
charges) to pay off in full and have canceled and discharged of record, all
liens, encumbrances and other instruments of record other than the approved
Conditions of Title. The Buyer shall pay one-half (1/2) of the recording fees
and Buyer's legal fees and costs incurred in connection with the contemplated
transaction.
6.6 Possession. Right to possession of the Sale Property shall
transfer to the Buyer on the Closing Date, subject to the rights of the tenants
under the approved Tenant Occupancy Leases. The Seller shall transfer and
deliver to the Buyer on the Closing Date the originals of all approved Tenant
Occupancy Leases, all approved written Contract Obligations, all instruments
<PAGE> 8
and documents evidencing or relating to the Intangible Property and all other
documents transferred to the Buyer by this Agreement which have not yet been
delivered to the Buyer.
6.7 Cooperation. Without further consideration, the Seller shall
execute, acknowledge and deliver to the Buyer on or after the Closing Date any
and all other instruments or documents, and do and perform any other acts which
may be required or which the Buyer may reasonably request in order to fully
assign, transfer and/or convey to the Buyer, and vest in the Buyer, the Sale
Property, and each and every part and component thereof.
7. BUYER'S AND SELLER'S WARRANTIES.
7.1 Buyer's Representations and Warranties. Buyer hereby
represents and warrants to Seller, which representations and warranties shall
be true and correct as of the Closing and shall survive the Closing:
7.1.1 Buyer is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Nevada.
7.1.2 There are no actions, suits or proceedings pending or
threatened against Buyer in any court or before any administrative agency which
would prevent Buyer from completing the transactions provided for herein.
7.1.3 No consent, approval or authorization of any
governmental authority or private third party is required in connection with
the execution, delivery and performance of this Agreement by Buyer.
7.2 Seller's Representations and Warranties. Seller represents
and warrants to Buyer, that the following representations and warranties shall
be true and correct as of the Closing and shall survive the Closing:
7.2.1 To the best of Seller's knowledge, without inquiry,
Seller will convey to the Buyer, good, marketable, and insurable fee simple
absolute title to the Sale Property, free and clear of all liens, claims,
covenants, conditions, restrictions, rights of way, easements, options,
licenses, judgments and encumbrances of any kind, except as shown in the Policy
of Title Insurance.
7.2.2 To the best of Seller's knowledge, without inquiry,
the Sale Property, including its present use and operation, is in compliance
with and authorized by all applicable laws and legal restrictions, including,
without limitation, all applicable building codes (but not provisions of the
Fair Housing Act of 1968 and the Americans With Disabilities Act of 1990, and
all amendments thereto, as shown by documents entitled Sheffer v. Oasis
Residential, Inc. (Reef/Lighthouse Cove), H.U.D. Case No. 09-96-1001-8 filed
October 3, 1995), and the Seller has performed all conditions to, and paid all
fees or other sums due with respect to, any and all
<PAGE> 9
permits, licenses or other approvals relating to the Sale Property. No zoning
or land use variance, conditional use permit or other special permission has
been obtained or is required to be maintained for the present, intended and
continued use and operation of the Sale Property as a residential apartment
complex. The Sale Property is not located within any conservation or historic
district or any zone recognized as having special earthquake or flood hazards.
The Sale Property is not subject to any rent control or similar program
regulating rents or other tenant rights (including, without limitation, any
requirement to provide below market rate rentals to low or moderate income
tenants) and to the best of the Seller's knowledge, no such program or change
to any existing program is contemplated or proposed.
7.2.3 To the best of Seller's knowledge, without inquiry,
(i) there is not present, nor was there present at any time in the past, upon,
in or at the Sale Property any asbestos or polychlorinated biphenyls, or any
structures, fixtures, equipment or other objects or materials containing
asbestos or polychlorinated biphenyls, (ii) there is not present or suspected
to be present, nor was there present or suspected to be present at any time in
the past, upon, in, at, or about the Sale Property, or the soil or groundwater
thereof, and "Hazardous Substances" (as defined below), (iii) no portion of the
Sale Property is presently, nor was at any time in the past, used, operated or
occupied for the generation, manufacture, treatment, storage, transportation,
discharge or disposal (whether intentional or accidental) of any Hazardous
Substances and (iv) there has been no adverse development with respect to the
items listed above in this Paragraph 7.2.3 since the date of the Phase One
Environmental Report that the Seller has previously delivered to the Buyer.
"Hazardous Substances" shall mean and include any chemical, compound, material,
mixture, waste or substance that is now or hereafter defined or listed in, or
otherwise classified pursuant to, any applicable environmental laws as a
"hazardous substance," "hazardous material," "hazardous waste," "extremely
hazardous waste," "infectious waste," "toxic substance," "toxic pollutant" or
any other formulation intended to define, list, or classify substances by
reason of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, or toxicity including any petroleum, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixture of
natural gas and such synthetic gas). "Hazardous Substances" shall include,
without limitation, any hazardous or toxic substance, material or waste or any
chemical, compound or mixture which is (i) asbestos, (ii) designated as a
"hazardous substance" pursuant to Section 1317 of the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), (iii) defined as a "hazardous
waste" pursuant to Section 6903 of the Federal Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., (iv) defined as "hazardous
substance" pursuant to Section 9601 of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.),or
(v) listed in the United States Department of Transportation Table (49 CFR
172.101) or by the Environmental Protection Agency as hazardous substances (40
CFR part 302); or in any and all amendments thereto in effect as of the Closing
Date; or such chemicals, compounds, mixtures, substances, materials or wastes
otherwise regulated under any applicable local, state or federal environmental
laws.
7.2.4 There is no existing or, to the best of Seller's
knowledge, without inquiry, threatened, proposed or contemplated, litigation,
action, administrative proceeding (other than by H.U.D. as shown in Case No.
09-96-1001-8 filed October 3, 1995) or assessment (including without
limitation, eminent domain proceedings, public improvement assessments,
development
<PAGE> 10
or special benefit assessments and property tax increases) which in any way
relates to, arises out of or which would or may in any way affect the Sale
Property or the Seller's ability to perform its obligations under this
Agreement or any documents executed by the Seller pursuant to this Agreement.
7.2.5 Except as expressly set forth in Schedule 7.2.5
(attached hereto), there have been no insurance claims, incident reports,
suits, actions or proceedings filed by, on behalf of, or against the Seller
within the preceding three (3) year period, whether or not still pending,
settled or otherwise completed, which in any way arises or arose out of,
relates or related to or affects or affected the Sale Property or the Seller's
ownership, management or operation thereof.
7.2.6 To the best of Seller's knowledge, without inquiry,
the Sale Property was constructed, in accordance with the "Plans and
Specifications" (as defined below), other than modifications which are not
material, and the recommendations contained in any soils report or seismic
study prepared in connection with construction of the Improvements. All
development obligations with respect to or arising out of the development
and/or construction of the Property (including, without limitation,
construction of any required off-site improvements, dedications and payment of
in-lieu or other development fees or exactions) have been fully satisfied and
discharged. "Plans and Specifications" shall mean the final plans and
specifications for construction of the Improvements, as listed in Exhibit C to
this Agreement.
7.2.7 To the best of Seller's knowledge, without inquiry,
the Sale Property is in good operating condition and repair and no defects or
deficiencies exist in the Improvements or their structural components, the
building systems and other mechanical systems (including, without limitation,
the heating, ventilation, air conditioning, electrical, plumbing, utility,
sprinkler, and elevator systems, the roofing system and any parking or loading
areas) or in the Personal Property, except for specific individual defects
disclosed on Schedule 7.2.7 (attached hereto).
7.2.8 To the best of Seller's knowledge, without inquiry,
the Sale Property is connected to and serviced by water, solid waste and sewage
disposal, telephone, gas and electricity facilities and all other utilities and
services which are necessary or customary for the use, operation and occupancy
of the Sale Property all of which are in good operating condition and are
adequate for the present and intended use and operation of the Sale Property at
full occupancy and which comply with all applicable laws and legal
restrictions. The Sale Property was constructed in compliance with the
requirements of the municipality regulatory flood control requirements and the
civil engineering plans submitted and approved by the regulatory agencies.
7.2.9 There is no personal property, including, without
limitation, furniture, appliances, equipment, fixtures or supplies owned by the
Seller and/or utilized by the Seller on a substantially exclusive basis in
connection with the use, operation or occupancy of the Sale Property, except as
set forth on the Personal Property Inventory.
7.2.10 Seller has delivered to the Buyer true and complete
copies of all Tenant Occupancy Leases all of which are listed accurately in the
"Rent Roll" (as defined below).
<PAGE> 11
Except as specifically set forth in the Rent Roll or the documents listed
therein (i) there are no oral or written leases, work letter agreements,
improvements agreements, or other rental, use or occupancy agreements affecting
the Sale Property in force, (ii) no person has any right of possession, use or
occupancy of the Sale Property or any part of it, (iii) no unsatisfied rent or
other concessions have been granted any tenant, (iv) no rent has been paid in
advance by any tenant, (v) no tenant has any claims against the Seller for any
improvement or relocation credit or payment, or for any security deposits or
other deposits nor for interest on any security deposits or other amounts
except as listed on the Rent Roll, (vi) no tenant has any defense or offset to
rent or other charges accruing after the Closing Date, (vii) all of the Tenant
Occupancy Leases have been executed, are in full force and effect and full rent
is accruing thereunder, (viii) no default or breach exists and no event has
occurred which, with the giving of notice, the passage of time, or both, would
constitute a default on the part of the Seller or any tenant under the Tenant
Occupancy Leases, except as shown in financial information attached hereto as
Schedule 5.1 or on the Rent Rolls, (ix) the Seller has not received any notice
nor has any reason to believe that any tenant intends to terminate, breach or
fail to renew its lease, or is or may become unable to perform its obligations
under any Tenant Occupancy Lease, or that any guarantors under its Tenant
Occupancy Lease have become subject to any bankruptcy proceeding or have been
released or discharged, voluntarily, involuntarily, or by operation of law,
from any obligation with respect to or relating to any Tenant Occupancy Lease,
and (xi) no brokerage or leasing commission or other similar payment or fee is
due or unpaid or partially paid or may become due in the future with respect to
any Tenant Occupancy Lease.
7.2.11 "Rent Roll" shall means a listing of all leases of
any portion of the Sale Property in the form attached as Exhibit K which shall
be furnished to the Buyer as of Closing.
7.2.12 The Seller has delivered to the Buyer true and
complete copies of all existing "Contract Obligations" (as defined below), all
of which are listed accurately in the "List of Contract Obligations" (as
defined below). No default or breach exists under any such Contract
Obligations, nor has any event occurred which, but for the giving of notice or
passage of time, or both, would constitute a default by any party thereto.
"Contract Obligations" shall mean those contracts, agreements, commitments,
employment agreements, service contracts, utility contracts, construction
contracts, maintenance agreements, leasing and brokerage agreements and all
other contract agreements and obligations, whether or not in writing, which
relate to the ownership, operation, management, maintenance, use or occupancy
of the Sale Property, which will or may continue in effect, or which may or
could be beneficial to continue in effect on or after the Closing Date, all of
which are listed on Exhibit L to this Agreement ("List of Contract
Obligations").
7.2.13 To the best of Seller's knowledge, without inquiry,
neither Seller's execution of this Agreement nor performance by the Seller of
any of its obligations hereunder including, without limitation, the transfer,
assignment and sale of the Sale Property contemplated by this Agreement (i)
violates or shall violate any written or oral contract, agreement or instrument
to which the Seller is a party or is bound or which affects the Sale Property
or any part of it, or (ii) shall constitute or result in violation or breach by
the Seller of any judgment, orders, writ, injunction of any applicable laws and
legal restrictions; and no approval, consent,
<PAGE> 12
order, authorization, designation, filing (other than recording), registration,
notification of, by or with any judicial or governmental authority is required
in conjunction with the Seller's execution of this Agreement and performance of
its obligations hereunder.
7.2.14 The Seller is not a "foreign person" as defined in
Internal Revenue Code Section 1445, and any related regulations.
7.2.15 There is no union contract or collective bargaining
agreement affecting the Sale Property or the employees of the Seller or its
property manager.
7.2.16 The Seller has not obligated itself in any manner
to sell the Sale Property to any party other than the Buyer; the Seller has not
granted any (nor do any otherwise exist), option to purchase the Sale Property
to any other party other than the Buyer; and the Seller has not granted any
(nor do any otherwise exist) right of first refusal in connection with the Sale
Property to any party.
7.2.17 The transaction contemplated by this Agreement will
not violate or result in any breach of any other obligation or restriction of
the Seller to any other party.
7.2.18 The Seller has full power and authority to enter
into this Agreement in accordance with its terms and the corporate officers
executing this Agreement on behalf of the Seller are authorized to do so and,
upon such officers executing this Agreement, it shall be binding and
enforceable upon the Seller in accordance with its terms.
7.2.19 Without expanding or altering any of the
representations or warranties within this Agreement, none of the
representations or warranties in this Agreement, nor any descriptive
information concerning the Sale Property set forth in this Agreement, nor any
documents, statement, certificate, schedule or other information furnished or
to be furnished by or on behalf of the Seller to the Buyer in connection with
this Agreement (including, without limitation, operating and financial
statements, copies of which are attached hereto as Schedule 5.1) contains, or
will as of the Closing Date contain, any untrue statement of a material fact or
omits, or will as of the Closing date omit, to state a material fact necessary
to make the statements of fact contained therein not misleading.
8. COVENANTS AND AGREEMENTS.
The Seller hereby specifically covenants and agrees as follows:
8.1 The Seller shall timely deliver and provide to the Buyer all of
the documents and things required to be provided by or on behalf of the Seller
to the Buyer as provided in Article 4 above; and the Seller shall use its best
efforts to fulfill prior to the Closing Date, and to assist the Buyer in
fulfilling, on a timely basis with all due diligence, each of the conditions
precedent set forth in Article 4 above and all other conditions to this
Agreement.
<PAGE> 13
8.2 The Buyer shall have the right to enter onto and inspect and test
the Sale Property, and to inspect and have complete access to all leases,
maintenance records and structural information from the date of this Agreement
to the Closing Date, provided that the Buyer shall timely pay for all such
inspections and tests, discharge all liens which may arise therefrom and repair
or restore any and all damage or injury to the Sale Property resulting from
such inspections and tests and indemnify and hold Seller harmless from any and
all claims by any third party resulting from Buyer's or its agents' acts.
8.3 From the date of this Agreement to the Closing Date, the Seller
shall manage, maintain, insure, lease, operate, and service the Sale Property,
or cause the Sale Property to be managed, maintained, insured, leased, operated
and serviced in the ordinary course, consistent with past practices.
8.4 The Seller shall promptly notify the Buyer in writing of any
event or circumstance which adversely affects the Seller's ability to perform
its obligations under this Agreement in a timely manner, or the likelihood of
timely satisfaction of the conditions precedent set forth above, or the truth
of any representation or warranty contained herein.
9. BREACHES OF THE SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
9.1 Within ten (10) days after notification in writing by the Buyer
to the Seller of any breach of the representations, warranties, covenants and
agreements set forth in this Agreement other than as may be specifically set
forth, (or, if the cure or remedy thereof requires more than ten (10) days,
within a reasonable time after such notification but in all events within
thirty (30) days after such notification, provided that steps to effect the
cure or remedy have been commenced within ten (10) days and are pursued with
all due diligence), the Seller, shall undertake to cure or remedy any breach of
such representations, warranties, covenants and agreements; provided, however,
in no event shall such cure period extend the scheduled Closing Date specified
below. If, after notice of any such breach, the Seller fails promptly and in a
timely manner to cure or remedy or attempt to cure or remedy the breach the
Buyer may proceed to cure or attempt to cure or remedy the breach.
9.2 Seller's Indemnity. The Seller agrees to indemnify, protect and
defend the Buyer against and hold the Buyer (and its general partner, officers,
employees, agents and affiliates) harmless from any and all claims, demands,
liabilities, losses, damages, costs and expenses, including, without
limitation, all reasonable attorneys' fees, asserted against, incurred or
suffered by Buyer resulting from (i) any liability or obligation of the Seller
which the buyer is not required to assume under this Agreement or accruing
prior to such assumption, (ii) any personal injury or property damage occurring
in, on or about the Sale Property or relating thereto on or before the Closing
Date, from any cause whatsoever, or (iii) To the extent of the actual
knowledge of Seller's officers, the untruth, inaccuracy or breach of any of the
representations, warranties, covenants and agreements made by the Seller
pursuant to this Agreement. The Seller's obligations under this Paragraph 9.1
shall survive close of escrow or termination of this
<PAGE> 14
Agreement. Neither the foregoing nor any other provision of this agreement
shall limit the rights and remedies available to the Buyer at law or in equity,
whether by statute or otherwise, and all such right and remedies shall be
cumulative and non-exclusive.
9.3 Buyer's Indemnity. The Buyer agrees to indemnify, protect and
defend the Seller against and hold the Seller harmless from any claims, losses,
damages, costs or expenses, including, without limitation, any reasonable
attorneys' fees, asserted against, incurred or suffered by the Seller resulting
from any breach of this Agreement by the Buyer, its agents, servants or
employees, occurring prior to the Closing Date.
10. REMEDIES.
10.1 Termination; Waiver. At any time during the Contingency
Period in Paragraph 4, Buyer shall be entitled to termination of this
Agreement, for any reason, and to receive the Earnest Money Deposit and all
interest earned thereon. If Buyer does not terminate this Agreement prior to
the expiration of the Contingency Period, except as provided above in the case
of a termination of the Agreement by the Buyer as a result of a breach of or
default of this Agreement by the Seller, the Buyer's right of termination
without cause respecting the contingency shall lapse and any unsatisfied
contingency to closing (excluding contingencies for which Seller has given
written assurance of removal) shall be deemed waived, except to the extent such
unsatisfied contingency is attributable to a breach of or default of this
Agreement by the Seller.
10.2 Remedies. The Seller does hereby agree that, if the Buyer
does not consummate this Agreement in the time set forth herein for any reason
other than the satisfaction of the Buyer's contingencies within the time
provided for in Paragraphs 4 and 5, that the Seller's only remedy shall be
right to the Earnest Money Deposit. That said Earnest Money Deposit shall be
liquidated damages in full satisfaction of any and all damages which the Seller
may suffer. Buyer does hereby agree that if Seller fails to transfer the
property at close of escrow, Buyer's only remedy shall be the return of its
Earnest Money Deposit. Each party specifically waives its rights to any other
damages or right to specific performance.
10.3 Costs and Fees. If either party brings an action, after
termination of this Agreement as herein provided, to obtain an adjudication
regarding such termination and the parties' rights hereunder, or to foreclose
the right, title and interest of Buyer in the Sale Property, the prevailing
party shall be entitled to ordinary costs of suit, the expense of searching
title to the Sale Property, and reasonable attorneys' fees, to be entered in
any final judgment in such action.
10.4 Waiver, Extension. No waiver of any breach of any agreement
or provision herein contained shall be deemed a waiver of any preceding or
succeeding breach thereof or of any other agreement or provision herein
contained. No extension of time for performance of any obligations or acts
shall be deemed an extension of the time for performance of any other
obligations or acts.
<PAGE> 15
11. BROKER'S COMMISSIONS.
The parties hereby acknowledge that Stuart Mixer Commercial is a
Broker to the Seller and that the Seller will pay the brokerage fees to Stuart
Mixer Commercial, and the Seller agrees that it shall indemnify and hold the
Buyer harmless with respect to any claims for brokerage commission or finder's
fee made by any other person or entity claiming through the Seller. The Buyer
agrees that it shall indemnify and hold the Seller harmless with respect to any
claims for brokerage commission or finder's fee made by any other person or
entity claiming through the Buyer.
12. NOTICES.
All notices, demands, requests, consents, approvals or other
communications (for the purposes of this Paragraph 12, collectively called
"Notices"), required or permitted to be given hereunder or which are given with
respect to this Agreement shall be in writing and shall be delivered by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
To Seller: OASIS RESIDENTIAL, INC.
4041 East Sunset Road
Henderson, NV 89014
Attention: Scott S. Ingraham,
President
With a simultaneous
copy to: Herbert L. Waldman, Esq.
4041 East Sunset Road
Henderson, Nevada 89014
To Buyer: SIEFERT INVESTMENTS
140 South Decatur Boulevard
Las Vegas, NV 89107
With a simultaneous
copy to: Jeffrey D. Conway, Esq.
Conway & Connolly, LLP
330 South Third Street, Suite 603
Las Vegas, NV 89101
or to such other address as such party shall have specified most recently by
like Notice. Notice mailed as provided herein shall be deemed given on the
actual receipt or the date so mailed.
<PAGE> 16
13. GENERAL.
13.1 Time of Essence. Time is of the essence in respect of each
and every particular in this Agreement.
13.2 Entire Agreement. This Agreement contains the entire
agreement among the parties and supersedes and replaces all prior agreements
and understandings with respect to the subject matter hereof. No
representations are made or relied on by any party other than those expressly
set forth herein. No agent, employee or other representative of any party is
empowered to alter any of the terms hereof, unless done in writing and signed
by an authorized representative of the respective parties hereto. The
paragraph headings appearing herein are for the convenience of the parties and
are not to be used to construe or modify the terms of this Agreement in any
fashion.
13.3 Multiple Counterparts. This Agreement may be simultaneously
executed in several counterparts, each of which when so executed shall be
deemed to be an original and such counterparts together shall constitute one
and the same instrument, which shall be sufficiently evidenced by any such
original counterpart.
13.4 Nevada Law. This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with the laws of the State of
Nevada applicable to agreements made and to be performed wholly within the
State of Nevada.
13.5 Further Assurances. Seller and Buyer each agree to do such
further acts and things and to execute and deliver such additional agreements
and instruments as the other may reasonably require to consummate, evidence or
confirm the sale contemplated hereby.
13.6 Tax Deferred Exchange. In the event the Seller wishes to enter
into a tax deferred exchange for the Sale Property, or if the Buyer wishes to
enter into a tax deferred exchange with respect to property owned or previously
owned by it in connection with this transaction, each of the parties agrees to
cooperate with the other party in connection with such exchange, including the
execution of such documents as may be reasonably necessary to effectuate the
same. Provided that: (a) The other party shall not be obligated to delay the
closing, (b) All additional costs in connection with the exchange should be
borne by the party requesting the exchange, and (c) The other party shall not
be obligated to execute any note, contract, deed, or other document providing
for any personal liability which would survive the exchange, nor shall the
other party be obligated to take title to any property other than the property
described in this agreement. The other party shall be indemnified and held
harmless against any liability which arises or is claimed to have arisen on
account of the acquisition of the exchange property.
IN WITNESS WHEREOF, the parties have hereunto executed this Purchase
Agreement the day and year first above written.
OASIS RESIDENTIAL, INC., a SIEFERT INVESTMENTS, a Nevada
Nevada Corporation Limited Partnership
By: its Sole General Partner:
TONA, INC., a Nevada corporation
By: /s/ Robert V. Jones By: /s/ Robert L. Margison, Jr.
----------------------------- -------------------------------
Robert V. Jones Robert L. Margison, Jr.,
Chairman of the Board Chief Executive officer
By: /s/ Lee A. Siefert
-------------------------------
Lee Siefert
President
<PAGE> 17
EXHIBIT "A"
LEGAL DESCRIPTION
A PORTION OF THE SOUTHWEST QUARTER (SW1/4) OF THE SOUTHEAST QUARTER (SE1/4) OF
THE NORTHWEST QUARTER (NW1/4) OF SECTION 23, TOWNSHIP 20 SOUTH, RANGE 60 EAST,
M.D.M., CITY OF LAS VEGAS, CLARK COUNTY, NEVADA, MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
COMMENCING AT THE SOUTHEAST CORNER OF THE NORTHWEST QUARTER (NW1/4) OF SAID
SECTION 23; THENCE ALONG THE SOUTHERLY LINE THEREOF, SAID LINE ALSO BEING THE
CENTERLINE OF LAKE MEAD BOULEVARD (100.00 FEET WIDE), NORTH 89#13'45" WEST
849.73 FEET TO A POINT ON SAID SOUTHERLY LINE; THENCE DEPARTING SAID SOUTHERLY
LINE, NORTH 00#15'47" EAST, 50.00 FEET TO THE POINT OF BEGINNING, SAID POINT
ALSO BEING A POINT ON THE NORTHERLY RIGHT OF WAY LINE OF SAID LIKE MEAD
BOULEVARD; THENCE ALONG SAID RIGHT-OF-WAY LINE OF SAID LAKE MEAD BOULEVARD;
THENCE ALONG SAID RIGHT-OF-WAY LINE, NORTH 89#13'45" WEST, 455.17 FEET TO A
POINT OF CURVATURE; THENCE DEPARTING SAID RIGHT-OF-WAY LINE NORTHWESTERLY,
ALONG THE ARC OF A CURVE TO THE RIGHT, CONCAVE NORTHEASTERLY, HAVING A RADIUS
OF 25.00 FEET, THROUGH A CENTRAL ANGLE OF 89#23'53", AN ARC DISTANCE OF 39.01
FEET TO A POINT ON THE EASTERLY RIGHT-OF-WAY LINE OF JAMES BILBRAY DRIVE (60.00
FEET WIDE); THENCE ALONG SAID EASTERLY RIGHT-OF-WAY LINE, NORTH 00#10'08" EAST,
260.53 FEET TO A POINT ON SAID RIGHT-OF-WAY LINE, THENCE DEPARTING SAID
RIGHT-OF-WAY LINE, SOUTH 89#11'58" EAST, 480.38 FEET; THENCE SOUTH 00#15'47"
WEST, 285.02 FEET TO A POINT OF BEGINNING.
ALSO DESCRIBED AS:
ALL UNITS IN ALL BUILDINGS OF LIGHTHOUSE COVE CONDOMINIUMS, AS SHOWN BY MAP
THEREOF ON FILE IN BOOK 55 OF PLATS, PAGE 93 AND RECORDED MARCH 9, 1993 AS
DOCUMENT NO. 00903 IN BOOK 930309, OFFICIAL RECORDS, CLARK COUNTY, NEVADA.
TOGETHER WITH AN UNDIVIDED 60/60THS INTEREST IN AND TO THAT REAL PROPERTY
DESIGNATED "COMMON ELEMENT" ON SAID MAP.
ALSO TOGETHER WITH EXCLUSIVE EASEMENTS FOR USE OF THAT REAL PROPERTY DESIGNATED
"LIMITED COMMON ELEMENT" AND DESIGNATED AS APPURTENANT TO EACH UNIT ON SAID
MAP.
<PAGE> 18
PERSONAL PROPERTY LIST
<TABLE>
<CAPTION>
Office
- ------
<S> <C>
7 chairs
1 sofa
1 desk Shop
----
1 small refrigerator
1 telephone 1 key kit
1 key machine
Fitness Center 1 ladder
- --------------
2 shovels
1 leg press 1 rake
1 torso/leg machine Miscellaneous small repair parts
1 vertical ab board
1 military bench press Apartment Units
---------------
1 curl/bank machine
1 Lifestep 60 dishwashers
1 Lifecycle 60 gas ranges
1 slant board 60 refrigerators
1 sit-up machine 60 microwave ovens
1 StarTrac treadmill 60 washing machines
60 dryers
Pool
- ----
7 lounge chairs
4 chairs
1 table
1 lifering
1 life extension pole
1 50' vacuum head
1 16' extension poles
2 ComfortZone pool/spa heaters
</TABLE>
EXHIBIT B
Page 18
<PAGE> 19
OASIS REEF (LIGHTHOUSE COVE)
LIST OF ARCHITECTURAL PLANS
<TABLE>
<S> <C> <C>
S1.1 - Site Plan
S1.2 - Landscaping Plan-Block Wall Elevation
S1.3 - Trash Enclosure
A1.1 - Foundation Plan - 2 Br. 8-Plex Bldg.
A1.2 - Foundation Plan - 2 Br. 12-Plex Bldg.
A1.3 - Foundation Plan - 3 Br. 16-Plex Bldg.
A1.4 - Foundation Details
A2.1 - Flr. & Roof Framing Plans - 2 Br. 8-Plex
A2.2 - Floor Framing Plan - 2 Br. 12-Plex Bldg.
A2.3 - Roof Framing Plan - 2 Br. 12-Plex Bldg.
A2.4 - Floor Framing Plan - 3 Br. 16-Plex Bldg.
A2.5 - Roof Framing Plan - 3 Br. 16-Plex Bldg.
A2.6 - Shear Wall Diagrams
A2.7 - Shear Wall Details
A2.8 - Miscellaneous Details
A2.9 - Miscellaneous Details
A3.1 - Structural General Notes
A4.1 - Overall 1st & 2nd Flr. Plans - 2 Br. 8-Plex
A4.2 - Overall 1st Floor Plan - 2 Br. 12-Plex Bldg.
A4.3 - Overall 2nd Floor Plan - 2 Br. 12-Plex Bldg.
A4.4 - Overall 1st Floor Plan - 3 Br. 16-Plex Bldg.
A4.5 - Overall 2nd Floor Plan - 3 Br. 16-Plex Bldg.
A5.1 - 2 Br. Unit Floor Plan
A5.2 - 3 Br. Unit Floor Plan
A6.1 - Exterior Elevations - 2 Br. 8-Plex Bldg.
A6.2 - Exterior Elevations - 2 Br. 12-Plex Bldg.
A6.3 - Exterior Elevations - 3 Br. 16-Plex Bldg.
</TABLE>
EXHIBIT C
Page 19
<PAGE> 20
OASIS REEF (LIGHTHOUSE COVE)
LIST OF ARCHITECTURAL PLANS
<TABLE>
<S> <C> <C>
A7.1 - Building Cross Sections - 2 Br. 8-Plex
A7.2 - Building Cross Sections - 2 Br. 12-Plex
A7.3 - Building Cross Sections - 3 Br. 16-Plex
A7.4 - Wall Sections
A7.5 - Stair Plan, Section & Details
A7.6 - Fireplace Plan, Section & Details
A8.1 - Roof Plan - 2 Br. 8-Plex Bldg.
A8.2 - Roof Plan - 2 Br. 12 Plex Bldg.
A8.3 - Roof Plan - 3 Br. 16-Plex Bldg.
A9.1 - Room Finish Schedule
A9.2 - Door & Window Schedules & Handicap Unit Plan
A9.3 - General Notes
A10.1 - Foundation Plan & Details - Rec. Bldg.
A10.2 - Roof Framing Plan - Rec. Bldg.
A10.3 - Floor Plan & Details - Rec. Bldg.
A10.4 - Interior & Exterior Elevations - Rec. Bldg.
A10.5 - Building Cross Section - Shear Wall
Diagram & Details - Rec. Bldg.
A10.6 - Reflected Ceiling Plan & Details
A10.7 - Roof Plan & Details - Rec. Bldg.
A10.8 - Door, Window & Room Finish Schedules
A10.9 - Electrical Plan - Rec. Bldg.
E1.1 - Overall Elec. 1 & 2 Flr. Plans - 2 Br. 8-Plex
E1.2 - Overall Elec. 1 Floor Plan - 2 Br. 12-Plex
E1.3 - Overall Elec. 2 Floor Plan - 2 Br. 12-Plex
E1.4 - Overall Elec. 1 Floor Plan - 3 Br. 16-Plex
E1.5 - Overall Elec. 2 Floor Plan - 3 Br. 16-Plex
E2.1 - Electrical Floor Plan - 2 Br. Unit
E2.2 - Electrical Floor Plan - 3 Br. Unit
</TABLE>
EXHIBIT C
Page 20
<PAGE> 21
LEASES
Leases as listed on Rent Roll Reports dated August 20, 1996,
September 20, 1996, October 20, 1996, and November 20, 1996, attached hereto.
With regard to Paragraph 7.2.10(iii) of the Purchase
Agreement, please be advised as follows:
The following persons are granted a rent concession of $50.00
per month during the term of their lease as a leasing promotion:
<TABLE>
<CAPTION>
Apartment No. Name
------------- ----
<S> <C>
102 Al Rodriguis
107 Michael Winders
116 Gerando Celis
124 Melissa McFarland
214 Dexter Thomas
217 Linda Kelvinger
225 Tabbath Driggers
</TABLE>
The following persons are granted rent concessions as
employees or family members of employees of Oasis Residential, Inc.:
<TABLE>
<CAPTION>
Apartment No. Name Amount Relationship
- ------------- ---- ------ ------------
<S> <C> <C> <C>
118 Angela Pryatel $163.00 Employee
128 Tammy Bondurant $155.00 Employee
212 Jeffrey Harris $169.00 Employee
221 Jeff Waldo $140.00 Employee
</TABLE>
EXHIBIT D
Page 21
<PAGE> 22
With regard to Paragraph 7.2.10(iv), the following tenants
have prepaid rent in the amounts indicated:
<TABLE>
<CAPTION>
Apartment No. Name Amount
------------- ---- ------
<S> <C> <C>
102 Al Rodrigues $95.00
111 Cheryl Reep $ 4.00
114 Mark Iriarte $25.00
124 Melissa McFarland $15.00
225 Tabbitha Driggers $ 6.00
</TABLE>
With regard to Paragraph 7.2.10(ix), the following tenants
will vacate the units indicated for the reasons indicated:
<TABLE>
<CAPTION>
Apartment No. Name Date Reason
- ------------- ---- ---- ------
<S> <C> <C> <C>
114 Mark Iriarte 11/30/96 Moving out of state
118 Angela Pryatel 12/08/96 Moving to Oasis Vintage
229 Darren Coyne 11/12/96 Moving to another unit
</TABLE>
EXHIBIT D
Page 22
<PAGE> 23
GRANT BARGAIN, SALE DEED
THIS INDENTURE WITNESSETH: That: __________________________________________
____________________________________________________________________________
in consideration of $ the receipt of which is hereby
acknowledged, do hereby Grant, Bargain, Sell and Convey to
________________________________________________________________________ all
that real property situate in the _____________________ County
of______________, State of Nevada, bounded and described as follows:
SUBJECT TO: 1. taxes for the fiscal year
2. Rights of way, reservations,
restrictions, easements and
conditions of record.
Together with all and singular the tenements, hereditaments and appurtenances
thereunto belonging or in anywise appertaining.
Witness _____ hand this _____ day of _____________, 19___ .
STATE OF NEVADA )
)ss:
COUNTY OF CLARK )
On this _____ day of_____ ,19__ , personally appeared before me, a Notary
Public in and for said County and State, , known to me to be the person(s)
described in and who executed the foregoing instrument who acknowledged to me
that executed the same freely and voluntarily and for the purposes therein
mentioned.
______________________________________________
NOTARY PUBLIC in and for said County and State
EXHIBIT "E"
Page 23
<PAGE> 24
BILL OF SALE
This Bill of Sale is made as of _____________, 1996, by OASIS
RESIDENTIAL, INC., a Nevada Corporation ("Transferor").
FOR VALUABLE CONSIDERATION, as set forth in that certain
Purchase Agreement dated ____________, 1996, (the "Agreement"), Transferor
hereby sells, transfers, assigns and delivers to SIEFERT INVESTMENTS, a Nevada
Limited Partnership, any and all personal property (the "Personal Property")
located within or used in connection with that certain improved real property
commonly known as 6500 West Lake Mead Boulevard, Las Vegas, NV 89108 (the "Real
property"), as more particularly described on Schedule 1 attached hereto. The
Personal Property shall include, without limitation, the items described in the
Personal Property Inventory attached hereto as Schedule 2.
1. Transferor hereby assigns all warranties,
guarantees and indemnities, whether those warranties are express or implied,
and all similar rights which Transferor may have against any other manufacturer
or supplier of the Personal Property or any portion thereof or against any
seller, engineering, contractor or builder, in respect of the Personal
Property.
2. Transferor warrants that each item of the
Personal Property is in good condition, order and repair and suitable for its
intended purpose on the date of this Bill of Sale and that Transferor has good
and marketable title to the Personal Property, free and clear of all liens,
charges or other encumbrances.
3. Transferor at any time at or after date of
this Bill of Sale shall, at its own expense, execute, acknowledge and deliver
any further deeds, assignments, conveyances and other assurances, documents and
instruments of transfer reasonably requested by Transferee, and shall take any
other action consistent with the terms of this Bill of Sale that may reasonably
be requested by Transferee for the purpose of granting and confirming to
Transferee, or reducing to Transferee's possession, any and all of the Personal
Property. If requested by Transferee, Transferor further agrees to prosecute
or otherwise enforce in its own name for the benefit of Transferee any claims,
rights or benefits included in the Personal Property that require prosecution
or enforcement in Transferor's name. Transferor also hereby appoints
Transferee as its agent to act in Transferor's name and on Transferor's behalf
to take any action necessary to effect the transfer of any of the Personal
Property to Transferee, or prosecute or otherwise enforce any claims, rights or
benefits included in the Personal property in Transferor's name, including
bringing suit in Transferor's name.
EXHIBIT F
Page 24
<PAGE> 25
4. This Bill of Sale shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
Dated as of the date and year first above written.
TRANSFEROR:
OASIS RESIDENTIAL, INC., a Nevada corporation
By
----------------------------------
Title:
----------------------------------
EXHIBIT F
Page 25
<PAGE> 26
SCHEDULE 1 TO BILL OF SALE
See Exhibit A attached hereto - Legal description of Property.
EXHIBIT F
Page 26
<PAGE> 27
SCHEDULE 2 TO BILL OF SALE
PERSONAL PROPERTY LIST
Office
- ------
7 chairs
1 sofa
1 desk
1 small refrigerator
1 telephone
Fitness Center
- --------------
1 leg press
1 torso/leg machine
1 vertical ab board
1 military bench press
1 curl/bank machine
1 Lifestep
1 Lifecycle
1 slant board
1 sit-up machine
1 StarTrac treadmill
Pool
- ----
7 lounge chairs
4 chairs
1 table
1 lifering
1 life extension pole
1 50' vacuum head
1 16' extension poles
2 ComfortZone pool/spa heaters
EXHIBIT F
Page 27
<PAGE> 28
Shop
1 key kit
1 key machine
1 ladder
2 shovels
1 rake
Miscellaneous small repair parts
Apartment Units
60 dishwashers
60 gas ranges
60 refrigerators
60 microwave ovens
60 washing machines
60 dryers
EXHIBIT F
Page 28
<PAGE> 29
ASSIGNMENT OF LEASES
This Assignment (the "Assignment") is made as
of December ___, 1996, by OASIS RESIDENTIAL, INC., a Nevada corporation
("Assignor").
FOR VALUABLE CONSIDERATION, as set forth in
that certain Purchase Agreement dated December __, 1996, (the "Agreement"),
Assignor hereby assigns and transfers to SIEFERT INVESTMENTS, a Nevada Limited
Partnership ("Assignee"), the following:
A. All leases for occupancy (collectively, the
"Leases") of the real property commonly known as 6500 West Lake Mead Boulevard,
Las Vegas, NV 89108 and more particularly described on Schedule 1 attached
hereto (the "Real Property"). The Leases are more particularly described in
Schedule 2 attached hereto. This Assignment includes, without limitation, all
rents and monies to become due under the Leases on and after the date of this
Assignment;
B. All equipment leases, service and/or
maintenance agreements and contracts relating to the Real Property
(collectively, the "Contracts"), as more particularly described in Schedule 3
attached hereto;
C. All permits, licenses, consents,
registrations and other similar approvals applicable to the Real Property
(collectively, the "Approvals"), which Approvals are more particularly
described in Schedule 4 attached hereto;
D. All plans and specifications for: (1) the
Real Property; (2) any and all improvements used in connection with the
operation or occupancy of the Real Property or located upon the Real Property
(the "Improvements"); and (3) any and all personal property owned by Assignor
located within or used in connection with the operation of the Real Property
and Improvements (the "Personal Property), (collectively, the "Plans"); and
E. All warranties of which Assignor is the
beneficiary (the "Warranties") with respect to the Improvements or Personal
Property, including, without limitation, the warranties more particularly
described on Schedule 5 attached hereto.
This Assignment shall not supersede the
Agreement and, in the event of conflict between this Assignment and the
Agreement, the Agreement shall control.
EXHIBIT G
Page 29
<PAGE> 30
This Assignment shall be binding upon and
inure to the benefit of Assignor and Assignee and their respective heirs,
executors, administrators, successors and assigns.
IN WITNESS WHEREOF, Assignor has executed
this Assignment as of the date first above written.
Assignor:
OASIS RESIDENTIAL, INC.,
a Nevada Corporation
By
-----------------------------
Title:
-----------------------------
ASSUMPTION
Assignee does hereby assume all of the
obligations, liabilities and duties under and pursuant to those items set forth
in paragraphs B & C above.
Assignee:
SIEFERT INVESTMENTS, a Nevada
Limited Partnership
By:
-------------------------------
Title:
-------------------------------
EXHIBIT G
Page 30
<PAGE> 31
SCHEDULE 1 TO EXHIBIT G
See Exhibit A attached hereto, Property Description.
EXHIBIT G
Page 31
<PAGE> 32
SCHEDULE 2 TO EXHIBIT G
Description of Tenant Leases.
Those leases, copies of which are attached hereto.
EXHIBIT G
Page 32
<PAGE> 33
SCHEDULE 3 TO EXHIBIT G
See Exhibit L to Purchase Agreement, Contract Obligations.
EXHIBIT G
Page 33
<PAGE> 34
SCHEDULE 4 TO EXHIBIT G
Licenses and permits, copies of which are attached hereto,
described as follows:
1. Certificate of Occupancy dated July 8, 1992;
2. City of Las Vegas, Nevada, Business License
No. AO7-01186-1-052063;
3. Clark County Health District, Las Vegas,
Nevada, Health Permit for swimming pool -
Permit No. 12876-HGW-01;
4. Clark County Health District, Las Vegas,
Nevada, Health Permit for spa - Permit No.
128676-HGW-02.
EXHIBIT G
Page 34
<PAGE> 35
SCHEDULE 5 TO EXHIBIT G
Manufacturer's Warranty: York Air-conditioning Units
EXHIBIT G
Page 35
<PAGE> 36
ASSIGNMENT OF INTANGIBLE PROPERTY AND CONTRACT OBLIGATIONS
This Assignment (the "Assignment") is made as
of December __, 1996, by OASIS RESIDENTIAL, INC., a Nevada corporation
("Assignor").
FOR VALUABLE CONSIDERATION, as set forth in
that certain Purchase Agreement dated December __, 1996, (the "Agreement"),
Assignor hereby assigns and transfers to SIEFERT INVESTMENTS, a Nevada Limited
Partnership ("Assignee"), all Intangible Property and Contract Obligations used
in the operation, ownership and occupancy of the real property described on
Exhibit A attached hereto other than the use of the name Oasis Reef Apartments
or the use of Oasis or Reef with any other name, but including the name
Lighthouse Cove; excluding all copyrights, trademarks, tradenames or service
marks used by Seller in the operation of the land, improvements, ownership or
occupancy, but including the plans and specifications for use on the land only
in connection with the present structures, the engineering, soils, pest control
and other studies or reports relating to the Land, the Improvements and/or the
Personal Property, all telephone exchange numbers identified with the Land or
Improvements, all awards or payments to be made for or with respect to any
taking in condemnation or eminent domain (including awards or payments for
damage resulting from change of grade or impairments of access) of any part of
the Land, the Improvements and/or the Personal Property on or after the date
hereof, all rents, issues and profits therefrom and to the extent, if any,
approved in writing by the Buyer pursuant to the terms of this Agreement, all
consents, licenses, franchises, permits, purchase or construction warranties or
guarantees and other rights owned by the Seller relating to the operation,
ownership or occupancy of the Land, the Improvements and/or the Personal
Property.
This Assignment shall not supersede the
Agreement and, in the event of conflict between this Assignment and the
Agreement, the Agreement shall control.
This Assignment shall be binding upon and
inure to the benefit of Assignor and Assignee and their respective heirs,
executors, administrators, successors and assigns.
EXHIBIT H
Page 36
<PAGE> 37
IN WITNESS WHEREOF, Assignor has executed this Assignment as
of the date first above written.
Assignor:
OASIS RESIDENTIAL, INC.,
a Nevada Corporation
By
---------------------------
Title:
---------------------------
ASSUMPTION
Assignee does hereby assume all of the obligations,
liabilities and duties under and pursuant to those items set forth above.
Assignee:
SIEFERT INVESTMENTS, a Nevada
Limited Partnership
By:
-----------------------------
Title:
-----------------------------
EXHIBIT H
Page 37
<PAGE> 38
LETTER TO TENANTS
December 18, 1996
Dear Resident:
We are pleased to announce that as of the
date mentioned above, Oasis Residential, Inc. is no longer the owner of your
apartment community. We further advise you that Oasis Residential, Inc. has
transferred to the new owners all of your security deposit, under an pursuant
to your lease agreement, which has also been assigned to the new owners.
Stout Management company, 2320 Paseo Del
Prado, Las Vegas, Nevada 89102, 646-5797 has been chosen by new owners as the
Managing Agent for Oasis Reef Apartment Homes.
You are hereby directed until otherwise
notified by the new owners to make all future rental and other payments
required under your lease to Carmel Cove. You may continue addressing rental
payments, service requests and all questions to the leasing office during
normal business hours.
We understand that many of you have questions
and concerns regarding this transition. Stout Management company will be
contacting you in the near future to answer any questions or help with any
needs you might have. In the meantime, please feel free to call the leasing
office and talk with the manager if you have any questions.
Very truly yours,
Oasis Residential, Inc.
EXHIBIT H
Page 38
<PAGE> 39
AFFIDAVIT OF NON-FOREIGN STATUS
To inform SIEFERT INVESTMENTS, a Nevada Limited Partnership,
("Transferee"), that withholding of tax under Section 1445 of the Internal
Revenue Code of 1986, as amended, will not be required upon transfer of certain
real property to Transferee by OASIS RESIDENTIAL, INC., a Nevada corporation,
("Transferror"), the undersigned hereby certifies the following on behalf of
Transferror:
1. Transferror is not a foreign person, foreign
corporation, foreign partnership, foreign trust, or foreign estate (as those
terms are defined in the Internal Revenue Code and the Income Tax Regulations
promulgated thereunder);
2. Transferror's U.S. employer identification
number is as follows: 88-0297457;
3. Transferror's office address is: 4041 East
Sunset Road, Henderson, NV 89014.
Transferror understands that this Certification may be
disclosed to the Internal Revenue Service by Transferee and that any false
statement contained herein could be punished by fine, imprisonment, or both.
Transferror understands that Transferee is relying on this
Certification in determining whether withholding is required upon said
transfer.
Transferror hereby agrees to indemnify, protect, defend and
hold Transferee harmless from and against any and all obligations, liabilities,
claims, losses, actions, causes of action, rights, demands, damages, costs and
expenses of every kind, nature or character whatsoever (including, without
limitation, attorneys' and paralegals' fees and costs and court costs) incurred
by Transferee as a result of: (i) Transferror's failure to pay U.S. Federal
income tax which the Transferror is required to pay under applicable United
States law arising in connection with the subject transaction; or (ii) any
false or misleading statement contained herein.
EXHIBIT J
Page 39
<PAGE> 40
Under penalty of perjury, I declare that I have examined this
Certification and to the best of my knowledge and belief, it is true, correct
and complete, and I further declare that
I have authority to sign this document on behalf of Transferror.
Dated this _____ day of December, 1996.
OASIS RESIDENTIAL, INC.,
a Nevada corporation,
By
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
EXHIBIT J
Page 40
<PAGE> 41
RENT ROLLS
See Rent Rolls dated August 20, 1996, September 20, 1996,
October 20, 1996, and November 20, 1996, attached hereto as Schedule 1.
EXHIBIT K
Page 41
<PAGE> 42
CONTRACT OBLIGATIONS
1. Network Multi-Family Security Corporation
14275 Midway, #440
Dallas, TX 75244
Alarm Services Agreement entered into on
October 7, 1991 for a period of ten and one-half
(10 1/2) years.
Attached hereto as Schedule 1
2. Protection One (Successor to Contracts of
A-Able Lock & Alarm, Inc.) 1911 East
Charleston Las Vegas, NV 89104
731-0005
Alarm Services Agreement for Office
Monitoring and quarterly inspection
($50.00 per month)
Agreement entered into on June 29, 1992 for
five year period, and automatically renews
yearly unless terminated in writing at least
30 days prior to the anniversary date.
Attached hereto as Schedule 2
3. Cerberus Pyrotronics (successor to Ellis
Industrial Electronics) 731 Pilot Road, Suite
J Las Vegas, NV 89119
453-5900
Fire Alarms for individual apartments
Agreement entered into May 21, 1992,
automatically renews on anniversary date.
Attached hereto as Schedule 3
EXHIBIT L
Page 42
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 3,397
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 798,467
<DEPRECIATION> 53,049
<TOTAL-ASSETS> 774,773
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
42
<COMMON> 162
<OTHER-SE> 372,008
<TOTAL-LIABILITY-AND-EQUITY> 798,467
<SALES> 92,843
<TOTAL-REVENUES> 95,999
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 51,323
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,334
<INCOME-PRETAX> 28,342
<INCOME-TAX> 0
<INCOME-CONTINUING> 28,342
<DISCONTINUED> 0
<EXTRAORDINARY> (1,403)
<CHANGES> 0
<NET-INCOME> 29,383
<EPS-PRIMARY> 1.23
<EPS-DILUTED> 0
</TABLE>
